Executive Spotlight: Alex Cohen, Liberty SBF
- Aug 22, 2014
As a global traveler with an interest in concept restaurants and hospitality, it’s safe to assume Alex Cohen has discerning taste. As co-founder & CEO of Philadelphia-based Liberty SBF, he applies his good judgment to small-balance loans for commercial assets, including a focus on the limited/select-service hospitality market.
Attention to niche products has helped Liberty grow quickly and capitalize on post-recession opportunities in multiple sectors. With forays into owner-occupied commercial, multi-family and capital improvement projects, Liberty has become an expert in finance for the $3 million to $15 million space. When it began lending in 2011, there was immense opportunity.
“So many of the players—particularly in the non-bank, specialty finance sector of the market—were either put out of business, converted into banks or acquired. And as a result there were fewer players, less competition, and it presented an opportunity for Liberty to come into the market and take market share.”
Three years later, the space is again becoming crowded.
“We’ve started to see a lot more competition and the implications of competition, such as spread compression, in an already tight interest-rate environment. It’s presented a really competitive landscape in the commercial real estate market,” said Cohen. But that hasn’t slowed down the Liberty team.
“We’re launching a number of national programs right now. We have five originators across the country currently, and one of our big goals for 2015 is to be originating $500 million a year in loans across our platform,” he said.
CPE: How did you get into real estate?
Cohen: I think one of the reasons I have always been attracted to commercial real estate is that it is tangible. I spent a good deal of my life living in and around New York City. It’s a great city, and even as a kid I was always attracted to urban environments, especially cities where I lived like New York and other great cities, including Paris. A lot of the business is dollars and cents and looking at cash flow and spreadsheets. But at the end of the day, I like that these are tangible assets that really define the urban and suburban landscapes in which we live.
CPE: What is your professional background?
Cohen: I have been in the real estate business for over 10 years now. I started my career at M&T Bank in their New York City commercial real estate group, where we were doing long balance sheet lending and CNDF lending. Later on in my tenure there, when I ran the discretionary portfolio, I was more involved in the secondary aspects of commercial real estate debt, both securities like CMBS as well as whole loans that were being originated by M&T and we were selling into the secondary market.
CPE: What differentiates Liberty SBF?
Cohen: One of the differentiating factors about Liberty is that we really are a true niche lender. We started a company focusing specifically on SBA-504, which is a loan product focused on owner-occupied commercial real estate. We were making loans between $1 million and $10 million. Since 2012, we’ve really expanded our product line, both in perm and bridge financing. Another thing that differentiates Liberty is that we try to focus on a smaller part of the market. There are a lot of competitors who are looking at $50 million loans and above. The Wall Street players and a number of funds and certainly finance companies and REITS out of the Northeast are competing for that business.
We truly do understand the $3 million to $15 million space very well. One of the things that I think differentiates us is that because of our early work in owner-occupied, we have a very strong hospitality practice. We’ve continued to do hospitality lending even when many banks, and even the specialty finance non-bank lenders, have continued to shy away from that space. We’ve been able to pick our spots, and we’ve picked winners.
CPE: What challenges have you overcome?
Cohen: We had a lot of challenges, which is incumbent on being a startup in the financial services industry. You’re competing against companies that are tremendously capitalized, with funding and talent, and have been in business for a long time. It’s forced us to be very scrappy in the way that we use our time, and we’re out trying to take market share in order to compete against behemoth-size companies. While those challenges have been great, the fact that we have been able to overcome those challenges is a testament to the considerable work at Liberty, my management team and all of our originators and our administrative staff.
CPE: What inspires you?
Cohen: There are a lot of things that make this business challenging. You rely on your core group of business partners. What’s been really inspiring to me is that while we each independently face challenges taking a company from inception to a more mature stage in its growth, I’ve been able to rely on the help of my immediate business partners, who bring very different things to the table. It’s been a real source of inspiration to me, and I wouldn’t have been able to do it without them.
CPE: What would you do if you weren’t in real estate?
Cohen: I would own a hotel. I guess that is the real estate industry. But I’m thinking not of the real estate aspect of it but the service and hospitality aspect. Even during college, when I worked in restaurants and as a bartender, I loved the service business. It brings its own set of challenges, but I think if I could do anything, owning a hotel in the Caribbean would be fun.
CPE: What do you like best about living in Philadelphia?
Cohen: One of my big passions is food and restaurants. One of the things that has been great about living here in Philadelphia is the breadth of restaurants and the unbelievable talent of the chefs in this city. There are always new food-concept restaurants opening across the city. Creating that type of experience, I think, would be very interesting.