Interest Rate Derivatives – Michael Rosenfeld

We’ve probably done six or seven trades at least, maybe it’s closer to ten times that we’ve worked with Derivative Logic. Jim is incredible. Every single time all of the information that is preloaded into DocuSign is right. It’s just quick, quick, quick, finished and done. Our attorneys, all the right people are always included in the emails that come from him. I don’t have to forward stuff around. It’s almost as if he’s sat in the real estate operator’s seat for a while before he founded Derivative Logic. He gets who his audience is and makes it really easy to deal with. We’re very happy with him.

Michael Rosenfeld: Principal, Olive Tree Holdings

Olive Tree first started working with Derivative Logic in October of 2017. It was basically our first conventional Freddie Mac mortgage that required a rate cap. We’ve also worked with Derivative Logic with private balance sheet lenders. The experience we’ve had with Jim means we work exclusively with Derivative Logic. We’ve done every single rate cap trade with them.

Jim makes the process so incredibly easy to deal with. Every deal, whichever State it’s located in, however the lender’s legal is, which counterparty is involved, Jim takes the administrative and operational hassle totally away from the borrower. He communicates with lender’s counsel. He gets everything beautifully teed-up with DocuSign.

We get pricing updates from him, it helps us with our underwriting. As we come up to the rate cap day he makes the process incredible easy and painless. Because, for a lot of real estate owner/operators, the rate cap trade is not their core business and it’s a requirement that you have to do. He makes it very easy so everybody else can focus on the other aspects of the closing.

We always laugh about Jim thinking we must never sleep. He is West Coast based and we’re here in New York City and he is responsive on email 24/7. He always has a fast response. He’s ready with updated information or there to answer a question, which is great. He really helps facilitate everything on our side and certainly takes a lot of the worry of any rate cap trade, making sure that we close on time. Problems never have anything to do with Derivative Logic.

Jim and his partner Rex met with us, with my partners and some of my team. We talked about the interest rate environment and the future, what SOFR looks like, about replacing LIBOR over time. So he’s done client education as well for us, preparing for life after LIBOR. We think Jim is great.

We also get their weekly emails (DL Monitor) about the interest rate environment. We use their projected LIBOR curves and always update our own models with that information. They definitely play a role in our business. The projected LIBOR curve is something we are always overlaying and updating in our underwriting models, including deals we’ve already closed. We can accurately forecast based on Jim and their team’s experience.

Eventually we could have looked for ways to cap our interest rate exposure, but it was initially born out of a compliance need. As we’ve grown the need is not just with Fannie or Freddie, but a lot of other private lenders want rate caps as well when you have floating rate mortgages. So it’s a necessary beast, but certainly Jim does an incredible job of making it easy and painless and streamlined. The calls I have with him to execute rate cap trades are probably not even three minutes.

We’ve probably done six or seven trades at least, maybe it’s closer to ten times that we’ve worked with Derivative Logic. Jim is incredible. Every single time all of the information that is preloaded into DocuSign is right. It’s just quick, quick, quick, finished and done. Our attorneys, all the right people are always included in the emails that come from him. I don’t have to forward stuff around. It’s almost as if he’s sat in the real estate operator’s seat for a while before he founded Derivative Logic. He gets who his audience is and makes it really easy to deal with. We’re very happy with him.

We loved when Derivative Logic came in to talk to us. I know that Jim is always willing to get on the phone. Or to meet with us when he or his colleagues are in town. To be honest, our relationship is transactional with regard to the rate caps. The education, we appreciate it and we take them up on it. But I think it’s the quality, the transparency, the ease of execution with the rate cap trade that’s certainly my favorite part.

Our whole company is a big Derivative Logic fan, big Jim Griffin fans in particular. I always think it’s very special that we have Jim, who’s a co-founder and incredibly competent, and he’s personally doing all of our cap trades. We love having somebody like Jim, at his level of competency, being our counterparty. It’s great.

Olive Tree Holdings
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