At the epicenter of the real estate crisis in the early 1990s, BankBoston Corp. and Fleet Financial Group were among the few survivors.

As the decade draws to a close, the two banking companies have emerged from hard times with sharply differing approaches to the real estate business.

Fleet gained prominence in New England after the crisis because it bought the remains of Shawmut National Corp. and the Bank of New England, both ravaged by real estate lending. Now it describes itself as a boutique, offering a broad menu of services to the industry's elite.

BankBoston, which distinguished itself in the early '90s by tackling its real estate problems more aggressively than most, is even more specialized. It focuses on corporate lending to real estate investment trusts.

Boston Properties, which develops top-of-the line office buildings in tight markets, has strong relationships with both companies. BankBoston is the REIT's primary lender and the lead agent on its $500 million unsecured credit line.

But Douglas T. Linde, senior vice president at Boston Properties, says he would never think of going to BankBoston for a construction loan.

"They're no longer a construction lender," he said. "In our eyes, they're a corporate lender." Fleet, on the other hand, does both, he said.

The corporate lending emphasis is a shift for BankBoston, which now prefers to have multiple assets backing its loans.

"The risk inherent in a single-asset deal is greater than people give it credit," said William F. Hipp, group executive of real estate at BankBoston. "Many project loans have a dubious risk-return profile. You live and die by the success of the buildings.

"Unless there's a ton of equity, I'm not sure you're getting paid for the risk."

REITs also have strict disclosure requirements, low leverage, and access to various sources of capital, Mr. Hipp said, though the severe correction in REIT stocks last year restrained their ability to raise equity capital.

Another way BankBoston finances real estate while keeping its collateral diversified is by investing in commercial mortgage-backed securities. The bank holds about $200 million of these securities, said Floyd P. Wiggins, division executive for real estate in the company's Boston office. Most are rated BB-plus, the first notch below investment grade.

Fleet is also a player in the REIT loan market. According to Loan Pricing Corp., it ranked seventh last year, with $6.55 billion of deals as agent, ahead of BankBoston's $6.335 billion. Each had a 5% share of the REIT market.

But when it comes to financing construction, Fleet prefers "the project finance discipline" over lending to a corporate entity, said Matthew E. Galligan, managing director of real estate investment banking.

"We try to lend as close as possible to the specific use of proceeds," he said. "Lending to an entity and having it downstream the funds to the project gets you a level removed from the use of proceeds."

Fleet has a busy year lined up. Already it has a pipeline of $2 billion to syndicate, and it is in discussions with borrowers on another $2 billion, said Kenneth J. Witkin, managing director of real estate finance.

And Mr. Galligan said he believes that 1999 will present many opportunities for construction deals because most markets are so tight that it is no longer cheaper to buy properties than to build.

But both BankBoston and Fleet will have to cope with an uncertain syndication market. Banks need to syndicate large loans in order to minimize their exposure to companies and industries.

In June, the Federal Reserve sent out a letter of caution to banks, singling out REIT lending as a particular area of concern. That drove many banks out of the syndication market. The problem was worsened last fall after the Russian debt crisis prompted investors to avoid any kind of risk.

Many hoped the syndication logjam would break in January. "It has not happened," said Mr. Linde of Boston Properties. "The last marginal dollar is calling the shots."

To adjust to the tougher conditions, Fleet began using "market flex" clauses in its loans late last year, Mr. Galligan said. This gives the agent the option to adjust pricing if the market changes for the worse during the syndication.

This year, he said, he expects Fleet to participate in more "club deals," in which two or three banks commit themselves up-front to underwrite the loan, rather than just one. This makes large loans easier to distribute.

BankBoston has been taking other steps to attract investors to corporate REIT loans. For example, it has been structuring the facilities with longer terms and securing them with specific properties, said Carolyn Thomas, managing director and head of loan distribution.

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