KeyCorp plans to open six commercial real estate offices by August to take the business national.

The Cleveland-based bank plans to open real estate outposts in Chicago, Boston, Dallas, Las Vegas, upstate New York, and San Francisco, said George Emmons, executive vice president for commercial real estate at KeyCorp.

The bank currently has 21 real estate offices in 15 states.

"Key is really a national bank on both a corporate and retail level, by virtue of the merger with Society Corp.," Mr. Emmons said. "Our client base has taken us to all of the country."

KeyCorp began to centralize its real estate business in January 1996. Before that, each bank in the Key system had its own head of real estate and its own underwriting practices.

Today, Mr. Emmons' commercial real estate division includes 300 executives. Last year, it originated $2.8 billion worth of loans with $675 million in sales in syndication.

For 1997, new loan production has already hit $3.2 billion. Mr. Emmons projected that sales and syndication will exceed $1 billion this year.

Key recently closed a $290 million loan financing the construction of the Palisades Power Mall, a 2.7-million-square-foot shopping mall in West Nyack, N.Y. Pyramid Cos. is developing the property.

Costs of the project total about $390 million, and developers are supplementing KeyCorp's loan with an $80 million equity piece. Tenant reimbursements will amount to $20 million.

Canadian Imperial Bank of Commerce served as administration agent on the loan, and five other banks are participating in the syndication.

"This is one of our success stories," Mr. Emmons said.

The property is over 90% preleased. Anchor tenants include Lord & Taylor, Filene's Basement, Sony Theatres, JC Penney, and Home Depot.

It is located near the New York Thruway and the Garden State Parkway. Though construction-begun in spring of 1996-has been significantly delayed due to zoning difficulties, the mall is scheduled to open this October.

"The bank's receptivity was really great," said David Nattina, a principal with Pyramid Cos., which is based in Syracuse, N.Y. "We've worked with all of the participating banks for many years, and this is an exciting project for the banks and for us."

Mr. Nattina noted a "resurgence" of bank interest in real estate lending. Banks that weathered the real estate recession of the late 1980s have "refined their underwriting criteria," rationalized their business, and established standards so it can be done profitably.

"Because banks have become more comfortable with real estate lending in the last few years, the competition to extend credit is greater and has been reflected in a reduction in spreads and the cost of money that is coming down," he added.

The Palisades project was priced at Libor plus 185 basis points, which observers said accurately reflected its risk.

"The banks' range of lending in real estate is fundamentally -from offices to hotels to shopping centers-Libor plus 100 to Libor plus 300," said one investment banker. "If it's not in that range, it's not going to get done. Banks are not looking to stretch pricing to compensate for risk."

In May of 1996, Key Bank established Key Real Estate Capital Markets Inc., a capital markets group to complement and expand its range of commercial real estate related services. The group focuses on short-term and interim financing, Mr. Emmons said, and expanded Key's businesses into conduit, securitization, and sales products.

Last year, KeyCorp put a series of mortgages, valued at $140 million, under one blanket mortgage for 12 Shiloh Hotels .

"Our clients were asking us to provide a product to place permanent mortgage loans for them through the KeyCorp conduit," Mr. Emmons said. "Through that, we are offering our developers a one-stop shop."

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