The lender loved the deal. Committee killed it in eleven minutes.
Here's how it happened.
A sponsor we know had a 64-unit value-add under contract. Good basis. Real rent comps. The loan officer was practically writing the term sheet at the property tour — that's how confident he was.
Three weeks of underwriting. Two hundred pages of documentation. Then the call: "Committee passed."
No explanation at first. Just passed.
The real answer had nothing to do with the deal
When it finally surfaced, the actual reason was almost insulting in its irrelevance: the bank had quietly hit its internal concentration limit on multifamily in that submarket two weeks earlier. The loan officer didn't know. The sponsor definitely didn't know. Nobody lied to anyone — the information simply wasn't in the room where the deal was being sold.
A loan officer is a salesperson. Committee is the buyer.
That's the lesson experienced sponsors eventually learn the hard way, usually after a decline they never fully understand. Committee is looking at things you will never see: portfolio concentration, criticized-asset ratios, regulator feedback from the last exam, how much of that loan type they've already booked this quarter. None of it is about your deal. All of it can kill your deal.
The deal didn't fail. The timing failed.
Here's the part that should actually change how you think about financing: the sponsor refinanced the same property with a different bank sixty days later, at nearly identical terms. Same borrower. Same asset. Same numbers. Different balance sheet on the other side of the table.
If the deal itself had been the problem, no bank would have said yes two months later. It wasn't the deal. It was who was sitting in the room, and what they'd already booked that quarter.
What this means for how you should be raising capital
A loan officer's enthusiasm is not underwriting. It's a good sign, and it's worth nothing on its own. The sponsors who close consistently aren't the ones with the best deal — they're the ones who never let a single lender relationship be the whole plan. They know the deal on paper and who's likely to actually want it right now, this quarter, at this bank, given what's already on that bank's books.
That's the honest reason a broad, current relationship across capital sources matters more than a single enthusiastic loan officer — no matter how good the tour went. That’s the value of breadth — see where we place deals most often.
Want your deal in front of the right committee the first time?
Tell me the asset, the basis, and the timeline. I'll tell you honestly who's actually buying deals like yours this quarter — before you spend three weeks finding out the hard way.
See SB Capital →What's the strangest committee decline you've ever gotten — and did anyone ever tell you the real reason?
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