As she enters her 15th year in the business, commercial mortgage broker June K. Fish has learned that it is not only what you know, but who you know as well. Not to mention when you know it and where.

As a principal of Ashworth Mortgage Corp. in Newton, Fish and partner Richard B. Ashworth have teamed up to place hundreds of millions of dollars in loans for a variety of commercial properties, with a concentration on the intricate structured finance area. According to Fish, the key to succeeding in that venue is to identify the nuances of each lender, an understanding which requires constant vigilence.

“At all times, you have to keep up your relationships with the lenders,” said Fish, who has worked with Ashworth since 1987. “You always need to figure out who’s doing what at any particular point in time.”

Fish cites one current lender on the sidelines in New England because it will not loan above $100 per square foot on office product. Another is loathe to shell out more than 65 percent loan-to-value. Conduits are options for non-recourse financing, whereas bank regulations make that provision virtually impossible for those institutions. Such information can determine which lenders are likely candidates for a client’s business, Fish said, streamlining the process and increasing the chances of a successful placement.

“That’s really why someone comes to a broker,” she said.

Ashworth said the focus on structured finance is another reason the firm survived the shakeout of the late 1980s and early 1990s. After downsizing just before the downturn hit full force, Ashworth said he and Fish realized they could succeed in that business with just themselves and their support staff.

“We’ve done our share of fixed-rate financing, but by and large our niche has always been structured finance,” said Ashworth. “That has really been helpful to us.”

Interestingly, the company’s strategy has proven a benefit locally, where most of its business emanates from. The continued rise in commercial rents has increased the number of value-added plays among developers, who often hope to convert or upgrade an existing building into office, telecom or modern distribution space. Because there are strict pre-payment penalties among most traditional lenders, Ashworth’s structured finance approach appeals to many developers and investors. Funding is provided for all areas, including acquisition, interim and short-term takeout lending.

“If you’re locked in, the value has to stay in the building, and that’s not what these developers need,” said Ashworth. “It requires a more creative structure.”

For that reason, the company generally does not work with life insurers, entities which usually mandate that an asset be new before lending on it. They also tend to be fixed-rate only, and have a shorter amortization schedule than others, including mortgage conduits. A 30-year amortization offered by conduits, for example, gives a borrower more up-front capital and lower debt service. Life companies tend to limit the schedule to 25 years, Fish said.

Making Points
In any event, Ashworth Mortgage appears to have plenty of viable contacts at its disposal. Although Ashworth would not discuss specifics, the firm is expected to place more than $200 million in loans this year, headlined by a number of mega-deals. In Boston’s Allston neighborhood, for example, Ashworth arranged $55 million in bridge financing for the acquisition and renovation of a former warehouse into a 437,000-square-foot telecommunications center.

Ashworth acted on behalf of Cabot, Cabot & Forbes, a savvy private investment group for whom the firm previously helped finance the acquisition of the New England Business Center in Needham. On the Allston deal, Fish said it required a lender who needed to fully understand the project and its potential, despite being located in a market unproven for such a use.

As its reputation spreads, Ashworth increasingly is seeing a rise in its average deal size, which now is in the $20 million range. That compares to $3 million to $4 million typical during the early 1990s, said Fish, who maintains that the company’s performance has enabled that growth to occur.

“We certainly feel very comfortable with that size deal,” said Fish. In another complicated assignment completed this summer, Ashworth represented Equity Industrial Properties in its purchase of six distribution facilities previously owned by Toys “R” Us. Not only were the properties scattered throughout the country – requiring the lender to assess several individual markets – the financial source also had to be convinced of the $55 million deal’s potential despite having Toys “R” Us on only short-term leases.

Ashworth, meanwhile, has spent considerable time of late shuttling between Newton and Wilmington, Del., where the company is providing $45 million in takeout financing for a new office complex under construction. Ashworth said the owner was able to replace more expensive capital used to get the project underway with bridge financing that will be in place until a permanent loan is provided as expected upon completion.

“When you’re talking those kinds of dollars, if you can save a point a year in interest rates, it’s worth it,” said Ashworth. “When you get to three or four points, that can make a big difference.”

Not only is Ashworth Mortgage winning repeat business from borrowers, the lending community has also taken notice. The company, for example, has achieved the rare Pedestal Brokerage designation from General Electric Capital Corp., and has finished in 1998 and 1999 as one of the top two brokerages representing debis, the financial services arm of Mercedes Benz. In recognition of that achievement, Ashworth has won the free use of a Mercedes Benz for each of those years, with the firm on pace to make the top two again this year.

Fish attributes the success to the company’s proven track record and the duplication of efforts shared between her and Ashworth, whom she credits with teaching her the business after first working as an attorney for her family’s development company. The concept of using a broker was bolstered during mid-1998, she added, given that there was no retrading of several conduit loans Ashworth had been working on when the commercial mortgage backed securities market cratered. Many CMBS lenders did renege on their agreements, giving the industry a black eye that still lingers.

Conduit lenders have not disappeared from Ashworth’s plate, however, with both partners maintaining that such a source can be exactly what certain clients are looking for. Although the refinancing end has slowed, Ashworth said he believes CMBS activity will be a force during the foreseeable future.

“The ones that have survived seem to have credibility,” he said. “I think they will find a way to make it stay.”