Efficient Banking Partnership Allows Niche Commercial Real Estate Developer To Scale Its Business
A Conversation With Jim Dillavou, Principal and Co-Founder, Paragon Commercial Group
Business Snapshot
Paragon Commercial Group is a fully integrated retail development firm, formed more than 15 years ago by an institutional team of retail executives to capitalize on opportunistic investment into value-add retail acquisition and tenant-driven development opportunities.
Business Leaders
Mark Harrigian, Erwin Bucy & Jim Dillavou
Principals and Co-Founders
Headquarters
El Segundo, California
What are the biggest challenges you face as a business?
One of the biggest challenges we face relates to our sub-institutional transitional development projects. The size of these projects means that our financing needs are sometimes smaller than traditional “big bank” lenders like to provide. Furthermore, these projects typically have multiple moving pieces that require bespoke financing solutions. We are never just purchasing a stabilized property — we add value by repositioning, which often means there will be limited cash flow until repositioning is complete, additional funds to complete the repositioning and future funding upon stabilization.
Both the complexity and the size of our transactions make it challenging for us to find a strong and willing long-term lending partner. There isn’t a deep bench of knowledgeable lenders in the retail space.
How did Enterprise help solve these challenges?
Our unique needs were a sweet spot for the Enterprise team. Enterprise’s willingness to engage on the value-add nature of our transactions, understand the moving pieces of the project and structure the financing made it possible for us to get our first project together across the finish line.
We are able to continue to partner together on multiple initiatives because the team understands our business and works closely and efficiently with Paragon's team.
What is the impact on your business?
The impact on efficiency is the greatest part of having a long-term, go-to lending partner that understands the nuances of our business. We can grow a lending relationship as we scale further sub-institutional projects without the need to educate new lenders each time we have a new project. The fact that Enterprise is willing to invest in us as we are in them is symbiotic and creates mutual value for both teams. That's the goal.
