Urban Standard Capital has intensified its business relationship with a major bank from Arizona. The company has expanded its aggregate financing capacity for commercial transitional real estate loans with Western Alliance Bank – a Phoenix-based regional bank with US$90 billion in assets – to US$200 million through three separate funds. This development was first reported by Commercial Observer.
The two financial institutions began their business relationship in 2020. Seth Weissman, founder and managing partner of Urban Standard Capital, a New York-based commercial real estate private credit firm, explained that the coordinated lending capacity has steadily grown from US$40 million to US$125 million over the past six years. He expects this credit facility to continue to support his company in originating loans to sponsors for bespoke financing projects, typically in the US$15 million to US$20 million range.
Weissman elaborated that this capital partnership allows his company to reduce capital costs and respond more flexibly to client needs, ultimately improving service for clients. It helps provide borrowers with speed and flexibility and increases lending capacity. Weissman could not provide an exact number of loans provided through the credit facility, as the facility is re-utilised each time previous loans are repaid. He estimates that the capital is likely turned over four times, which would mean lending approximately US$800 million over the entire term of the agreement.
Since its founding in 2014, Urban Standard Capital has provided US$2.3 billion in loans for over 260 real estate projects. Weissman emphasised that this progress did not happen overnight, but was achieved through consistent performance, disciplined underwriting, and adherence to commitments made.
Ian Hawk, New York Market Manager for Western Alliance Bank, reaffirmed in a statement the strong relationship built with Urban Standard Capital over the past years. He described the agreement as a mutually beneficial business relationship. Hawk expressed his bank's pleasure in continuing to support the company's growth as it expands its lending platform and offers flexible, competitive financing solutions to commercial real estate borrowers nationwide.
This partnership also underscores the complex relationship between commercial banks and private lenders in today's market. Weissman explained that his company achieves lower capital costs through the partnership, while Western Alliance Bank gains greater security for its deposit base in lender financing. This is accomplished by leveraging Urban Standard Capital's expertise in originating its own loans.
Conceptually, it is safer for the bank to lend to Urban Standard than to provide the same loan directly to end borrowers. Weissman referred to his bank's over ten years of experience in lending and managing large sums. He manages the entire process for Western Alliance Bank, which consequently has lower liability risks and a lower risk profile. For example, if he invests US$20 million in a real estate deal and US$10 million of that comes from Western Alliance, the bank receives its US$10 million back first before he receives his own money back.
Weissman also stressed that the partnership reflects two broader macroeconomic trends: commercial banks prefer lending to other lenders, and these banks prefer lending to experienced borrowers. From a risk perspective, this is less risky as there are two layers of borrowers and the bank enjoys priority in repayments. There are many opportunistic players in the private credit sector, but a bank like Western Alliance does not want to work with inexperienced market participants; instead, it wants to enter into partnerships with players who have a proven track record.
