Breaking: We raised $5M to empower brokers to sell more NPLs at scale

We’re excited to announce our $5M seed round for our AI-powered debt trading platform that facilitates the buying, selling, origination, and syndication of commercial loans at scale.

Our network of over 1,000 US banks, institutional investors, and brokers is expanding faster than ever. Our funding facilitates our growing success as we leverage the challenges of today’s market.

The pandemic has catalyzed a wave of distressed debt opportunities, particularly for distressed commercial real estate. 

With increasing loan delinquencies, we’re meeting the rapidly growing demand for a technology-driven commercial lenders marketplace.

While the largest institutions enjoy the benefits of economies of scale, we level the playing field by using technology to streamline deal flows for banks, brokers, and financial institutions. This round of funding is a game-changer for us.

This is why we can reduce our buyers’ fees from an industry-rate of 5% to only 2% while remaining free for brokers and sellers.

We’re excited to continue to build a product that empowers brokers to sell more NPLs with much less effort. 

With our proprietary technology, we empower brokers to sell more NPLs with much less effort. 

If you’re a CRE broker, start selling NPLs for free here.

Metechi Blog

New Origination Opportunity: $42.4 Billion of Performing CRE Loans in Maturity Default

Summer 2020 has shown conflicting economic signals.  The S&P 500 is at an all time high as have both unemployment and bank loan loss reserves.  Commercial real estate has seen origination volume drop drastically and the bucket of loan maturities in need of financing is growing.

Decreases in new mortgage volume from banks and insurance companies is opening opportunities for non-bank, especially bridge lenders.  Extrapolating CMBS data, there is an estimated $42 billion of performing loans past their maturity date in need of refinancing.  

Origination Volumes
According to the Mortgage Bankers Association recent report, new origination for CRE mortgages fell 48% for Q2 2020 compared to Q2 2019 and fell 31% to Q1 2020. Comparing decreases by lender in Q2 2020 and Q2 2019, originations for insurance companies decreased 49%; commercial banks 55% and CMBS 95%. Changes in volume by property type is detailed below.

Origination Volume Q2 2020 compared to Q2 2019

Property Type Change

Source:  Mortgage Bankers Association

Matured Loans 
August data reported by Trepp cites a CMBS delinquency rate of 10.3%, or $51.4 billion for the almost $500 billion of CMBS debt outstanding.  That figure includes loans that have continued to pay their debt service and would be marked as performing, except that they have passed their maturity date and not paid off the loan.  These loans are referred to as performing maturity default or performing maturity balloon.  As of August 21, CMBS has approximately $5.67 billion of performing maturity balloon loans.  Hotel and retail make up 87% of these loans with the full property type breakdown is below. 

Share of CMBS Performing Maturity Default by Property Type

Source:  Data from Trepp

CMBS represents approximately 13% of the total $3.7 trillion market of commercial real estate debt.  Assuming the same ratio across the CRE mortgage universe, there is approximately $42.4 billion of performing loans in maturity default looking for refinance.  

Types of Default
Default generally falls into 3 categories – maturity default, term default or technical default.  Loans with maturity default have passed their loan due date without repayment.  Loans could be performing maturity default meaning they remained current (continue to pay debt service) but not paid the outstanding balloon amount at maturity.  This can be due to different reasons, including new loans taking longer to close or an asset sale falling through. It can also be due to their traditional lenders reducing their lending capacity or a perceived decline in the property’s value to support the amount of debt.  Loan to value is a good indicator of potential maturity defaults.  

When referring to term default, it is generally a non-payment of debt service or a financial default that happens prior to the maturity date.  Debt service coverage is a good indicator of potential term defaults.

Technical default is the borrower violating a non-financial term of the loan agreement. For example,  not maintaining a certain level of insurance or a zoning issue could be a technical default.  Technical default does generally happen during the term.

CRE lenders have always been savvy and kept an eye open for opportunity.  Many are now watching and waiting patiently for the wave of non-performing loans that will inevitably come as a result of the crisis.  In the meantime, lenders should take advantage of market need for origination on the estimated $42 billion of loans needing refinance.   

Metechi Blog

Sellers’ Market

It is going to be a sellers’ market.

Banks are currently preparing to sell their Non-Performing-Loans (NPLs) dealing with questions like when and where to sell. Based on the 2008 experience, the answer to the when question is really simple. The Longer You Wait the Deeper is the Discount.

And as to the where question.
Banks believe that in order to generate enough demand for their NPLs in competitive bidding they should do what they did in 2008. And also keep paying a 5% fee.

But this crisis is different.
This crisis will result in $400B NPLs that banks will need to sell. It is also reported that the Distressed Debt Funds already raised $1T to buy these NPLs.

Clearly, it is going to be a sellers’ market with many more buyers and lower expected discounts than the 2008 crisis.

Banks can choose newer platforms with confidence that the high demand will follow their NPLs wherever they are. 

Metechi Blog

The coming wave of non-performing loans is right on track

In the early stages of COVID-19 many banks were focused on a short to medium term downturn, triaging only the most affected / impacted sectors.  Then the PPP program came and went, effectively buying time for many businesses and allowing the clock to be “reset”.

As little progress has been made containing COVID-19, the realization is starting to set in that we are yet to see the worst of the economic damage.  Many banks are now bracing for a much more protracted downturn, in which most, if not all sectors will see significant credit deterioration.

Following news that the four largest US banks have effectively doubled loan loss reserves – regional banks are starting to follow suit.  In addition to increased provisioning, many are just beginning to determine a broader balance sheet strategy.  Continuing on the “wave” reference, the “crest” has not yet appeared.

Many banks are still trying to support their customers as best they can – and the likely second wave of financial stimulus will supplement this effort and reset the clock again.  Despite the warning signs, it is simply too early in the COVID-19 cycle for the determination to be made which customers will have to be cut or scaled back.

That said, this difficult decision process will come sooner than expected.  Banks will need to be prepared with a pre-conceived strategy to effectively navigate this crisis.  For many, this will be shrinking balance sheets while for others this will be adopting new strategies and technologies that were never needed before.  When this wave does crash, one thing will be for sure – the “winners” will be those who acted early to best position themselves ahead of their competitors.

Metechi Blog

The $384 Billion Question of Distressed CRE Debt

The year 2020 started off strong followed by a roller coaster of economic events in Q1 and Q2.  A pandemic left offices, hotels, malls and streets vacant as America stayed home. Unemployment reached unprecedented highs. The economy slowed but didn’t stop with the aid of government stimulus. The stock market experienced volatility, though generally showed buoyancy. Overall, companies have experienced unforeseen stress to their bottom line putting pressure on credit metrics and affecting the lending market.  

Lenders, both banks and non-banks, generally put a halt on writing loans to reevaluate their strategy and shift into loan surveillance.  Some borrowers were granted forbearance or other temporary modifications to their loans, typically for a period of three months. Now July, many borrowers are reaching the end of that period. More defaults are expected for borrowers that are still experiencing stress. Similarly, some loans that may have been in a payment grace period are starting to fall out of grace as they haven’t been able to cure their loans. Many of these distressed loans will be sold by the end of 2020 with some NPL’s coming to market now.

Tracking CRE mortgage distress, public data from CMBS gives us a window into loan defaults. The graph below shows the upward trajectory of June delinquency data reported by Trepp.


As of Q1 2020, the outstanding CMBS universe was $516 billion and the outstanding commercial mortgage universe was $3.72 trillion as reported by the Mortgage Bankers Association. Assuming the CMBS default rate is consistent with the outstanding commercial mortgage universe, there is $384 billion of delinquent commercial mortgage loans.  

Breaking down the June 2020 delinquency rate, the table below details the rate by property type.  Hotel and retail loans have shown the greatest distress so far with expectations of increased delinquency for office loans.

Hotels have the highest delinquency rate due to the lockdown on travel.  Having the shortest lease term being priced daily, hotels revenue effects are immediate.  STR expects occupancy to return to the long term average by 2023 with hotels discounting price for market share.  STR’s 2020 hotel demand projections are -35.6%.  Continued defaults in hotel mortgages are expected as hotels struggle to survive.  

The retail sector has been hard hit due to forced store closures and changes in retail behavior.  Sales have increased for online retail, supermarkets, and drugstores during the shut down.  However, that isn’t the norm for retail tenants.  According to Datex Property Solutions, 68% of national chain retailers paid their June rent.  More retail distress is expected with continued announcements of bankruptcies which will negatively impact mortgages on retail properties. 

Multifamily has been affected as well due to job losses and consumer financial strain.  According to the National Housing Council, 77% of households made a partial or full rent payment.  Delinquencies remain relatively low by comparison.  

The future of the office sector is in question with the effectiveness of work from home and the concerns of social distancing while at work.  Some argue that companies will remain remote, while others argue the loss of culture and productivity require companies work out of the office.  Similarly, tenant footprints are argued to decrease with fewer people in the office or increase giving more space per employee.  There is stress on the sector, and despite the longer lease terms some borrowers will face tenant vacancies, renegotiated lease terms and increased expenses due to the pandemic.  More distress is expected to be seen in office loans and defaults. 

The industrial sector has been less affected by the pandemic and is expected to remain stable.  The changes in the retail dynamic and online sectors have helped lessoned the stress of industrial tenants.  A stable level of default is expected for industrial loans. 

All in all, with approximately $400 billion of defaulted CRE loan outstanding and continued stress in the commercial mortgage sector, the coming months expect to bring increased loan defaults and increased opportunities for distressed debt buyers.  Lending and capital markets are showing signs of opening.  Workout specialists are busy and NPL’s are coming to market.  

Metechi Blog

Our Vision

Hi, I’m Keren. Co-Founder of Metechi.

After relocating to the U.S in 2014, we decided to build a platform that will change the way banks and financial institutions are selling and buying debt.

The Problem
We researched debt market access among banks and financial institutions in the United States and around the world. Our research showed the main problem in the market is access to deal flow, since the financial industry is relying heavily on relationships.

The Solution
After raising seed money from angel investors and from D.E.Shaw in early 2018, we started building the Metechi marketplace. We are passionate about creating new relationships between vetted participants to enable greater deal-flow for banks and financial institutions.

We believe that true value lies in the robust relationships we establish with others. That’s why we are facilitating connection-building for new business opportunities.

Metechi is fully inclusive: we bring CRE debt buyers and sellers together to enable you to build relationships with other lenders. To date, Hundreds of lenders selling and buying CRE, C&I, and distressed debt have already signed up to Metechi, and are enjoying the platform.

Metechi Blog

What is Metechi?

What is Metechi?

Metechi is The Commercial Lenders Marketplace providing lenders instant access to CRE, NPLs and C&I loans originated by banks and institutional investors. Buying, Selling, Participating, and Syndicating Loans Powered by AI Match between Lenders and Loans.


Take the driver seat with complete control of the sale process. Sell or syndicate all types of loans (CRE, C&I, NPL). Get premier access to our qualified institutional lenders, expand your relationships and run confidential competitive bidding.

Institutional Investors & Participating Banks

Get a premier deal-flow to buy or participate in CRE, C&I and NPL debt opportunities originated by banks & institutional investors. Build a diversified portfolio that excites by going beyond your reach. Connect directly with the sellers.

The Market

The CRE, C&I and NPL syndication market is dominated by personal relationships and governed by big banks. Metechi introduces AI Match of Lenders and Deals to this enormous financial market to facilitate broad access, efficient execution, and deep liquidity.

Metechi Blog

Welcome to Metechi

Metechi is The Commercial Lenders Marketplace using AI to match between Lenders and Loans. Agents/sellers get direct access to pre-screened universe of commercial lenders, and participants/buyers get a premier deal-flow of all types of loans originated by banks and institutional investors.

Metechi Blog

Banks need to decide today what to do with their NPLs

The crisis we are experiencing presents a major dilemma for banks. Many of their borrowers are facing difficulties in paying their loans on time. These borrowers are asking banks for forbearance on current due payments. Given the government 90 days forbearance programs, banks routinely grant such requests. Absent the government programs, such forbearance will lead to reclassification of a loan as a Non-Performing-Loan (NPL), thereby requiring an increase in the reserve set aside for potential losses. Indeed, the trend in the upcoming NPLs is clearly shown through the data coming out of the CMBS market. Moreover, even during the government programs, JPMorgan’s most recent financial reports show a massive increase in reserves.

Without government forbearance programs, banks need to decide what to do today.

If banks believes, as many do, that even with government help we are heading into a recession that can last at least a year, banks will need to act now. In the coming months, there will be a surge in the number of NPLs. Many banks will want to sell them. And with high supply the discount on these loans will increase.

Indeed, an important lesson from the 2008 crisis, the longer a bank waited the deeper was the discount on the loans sold.

Currently, there are more buyers looking for NPLs than sellers. To take advantage of this higher demand banks need to sell now some of their potential NPLs. Depending on the type of business—such as hospitality, retail, or multifamily—and the strength of the client’s balance sheet, it is possible to estimate the likelihood of a recovery or the soundness of a foreclosure. Selling now the loans with the higher likelihood to fail, will hedge the risk of the banks against the deeper discount expected in the future.

However, although selling the NPLs in the near future is inevitable, banks prefer to postpone this action because of potential reputation effects vis-s-vis clients, peers, and investors. Waiting and selling loans, even at deep discounts, together with many other banks does not carry the same reputation risk.

But banks need to be creative. Instead of accepting deep discounts to avoid the reputation risk, they can conduct a confidential competitive sale process. The selling bank can run an anonymous auction among the potential buyers, and reveal its identity subject to signing NDA only to the winning buyer. This process can be done even for banks who wish to sell only part of an NPL, due to a commitment to the borrower not to sell the whole loan.