The Jazz of Commercial Real Estate Financing
“Just like jazz” seems to be an unlikely, but fitting way to describe Canada ICI’s internal processes. The secret to the company’s success is in its market-leading systems, policies, and procedures, but a built-in fluidity allows it to evolve and adapt to market conditions.
Even when starting out as an analyst with Canada ICI seven years ago, William Yu, now Vice President of Asset Management Operations, had an acute vision which meant he could see how to structure commercial financing deals using simple, elegant frameworks that are scalable and effective. He began to read the patterns of transactions in different departments, noticing the pitfalls which lay on either side of the path to success. Armed with a strong ambition to make things better, he took on the task of perfecting Canada ICI’s internal processes.
Breaking Down the Melody — One Parameter at a Time
William’s approach to refining procedures started with the end in mind. It was simple. The question was: “What are the elements of a successful transaction?” William says they created “reporting parameters in order to make informative decisions.” These basic requirements had to be satisfied in a specific order and at specific times to ensure the company made timely and accurate decisions.
By formalizing the basic requirements of reporting into systematic policy and procedure, William created the basis for an internal report, which helped keep investor clients and stakeholders informed at every stage of the transaction process.
Every investor has unique needs and wants when it comes to reporting. It was important for us to develop a robust system that allowed us to provide customized reporting tailored specifically to their needs.
Process Makes Perfect
William went on to explain how Canada ICI has always been driven by a robust process. While it was helpful to have a process established and outlined, William and his team took it to the next level by critically detailing the factors that could break down a transaction at each step along the journey of a financing deal. They went on to develop a unique strategy to remediate each of those potential risks, leaving nothing to chance.
Striking the Right Chord with Structure and Flow
William acknowledges that while internal procedures create a framework for successful completion of a transaction, the only way to do this consistently is to regularly review the process and update it alongside changes in the industry.
That’s not just changes to rules and regulations; it also includes changes in the market. In the world of commercial real estate, no two transactions are ever exactly the same. William recognizes that the origination team needs space to structure transactions that are accretive for borrowing clients and not constrained by internal processes. Managing risk is also about understanding that present conditions vary and so do the risk factors which impact a successful transaction.
It’s a balancing act that William feels they get just right. Canada ICI regularly redefines its risk mitigation and strives to perfect policies and procedures. “It’s a highly illustrative and interactive review process,” says William. “In order to get it right, you need the entire company working together, working to protect the interests of our investors and their capital.”