Wall Street-backed landlords are showing a greater appetite for bad mortgages as a source for cheap property as the supply of foreclosed homes declines while housing prices continue to climb. The government, lenders such as Bank of America Corp. and investment firms sold about $34.7 billion in non-performing loans last year, up from $13.1 billion in 2012, according to David Tobin, principal of Mission Capital Advisors.
Mission Capital’s David Tobin led his firm to a $4B year in 2013, supported by an expansion of its debt and equity finance group to the West Coast and a large increase in transactions from its residential group.
The numbers game is a hard one (though not as hard as a triple
Salchow). Some words to live by this year:
1) CMBS will be bigger
Mission Capital's David Tobin, whom we snapped in his company's 32 Ave of the Americas office, led his firm to a $4B year in 2013, supported by an expansion of its debt and equity finance group to the West Coast and a large increase in transactions from its residential group. In 2014, expect an increase in CMBS volume, say Mission originations ace Jordan Ray and execution expert Ari Hirt (below).
2) Banks are leaving their nests
February 4, 2014
The debt and equity team recently secured a $13M preferred equity investment for a Westchester shopping center and also is drumming up business by helping borrowers access offtheradar banks (often from Mission's loan sale biz). They secured a $38.5M nonrecourse construction loan from a NYbased lender for Miami's Garden Hotel South Beach and arranged a $44.4M non recourse construction loan from a NYbased mezz lender and foreign bank for Chicago's Soho House.
3) Secondary markets' day is coming
Investment funds are just realizing they've got to go to secondary markets to get returns, Atalanta Advisors' Annu Chopra tells us, but there's a time gap between that revelation and closing deals. Now that investors are taking those meetings, deals will start finalizing in secondary markets in Q2. She equates this part of the cycle to Q3 '11, when investors started paying attention to development opps; deals, though, didn't close until Q2 and Q3 2012.
4) Investors want to write bigger checks
Annu and Rachel Gilbert Solomon (above) say discretionary funds are racing to deploy existing capital so they can take advantage of the slowly improving climate for raising fresh capital. Those that were investing in $10M chunks want $15M or $20M deals (at typical LTVs, that's a $70M deal), and $15M investors want $30M opportunities. That means it's harder to find private equity partners for smaller deals, but for those willing to buy in on the low side, there's less competition.
More Than Just Tenant Rep
Patrick Robinson and Lindsay Ornstein are building their second NY brokerage operation together: Transwestern's NY team. (We snapped Patrick in the company's 400 Park Ave office with Kelsey Da Silva, Lauren Davidson, and Jordan Rosenlicht). The pair also built Staubach's local office, and in their third year with Transwestern, are going after the lowhanging fruit of office tenant rep while building their property management biz (they've already snagged
four MTA buildings, like its 2 Broadway office and the Jamaica Control Center) and landlord rep assignments. Lauren and Lindsay (whose No. 3 is due Feb. 28 and whom we snapped with Andrew Hawkins, Vipasha Dasgupta, William Schweitzer, Palak Raval, Peter Schubert, Stephanie Pagan, and Mike Gochman) have taken over marketing for a 30k SF, four floor retail sublease at 527 Madison and 54th, freshening up the marketing plan for space that previously sat on the market for two years despite its premier location. And Peter and Rick Rizutto have just gone to market on a mixeduse development site on a one acre, fullcity block on Brooklyn's waterfront.
We've just unearthed one last gem from last month's REBNY gala. Here's Gov. Andrew Cuomo with Bisnow's very own Miles Bloom and Fran Decamilli. (Photo: Office of Gov. Andrew Cuomo.)
Want to Be a Part of It?
Oh, New York. If you can make it there, you can make it anywhere. And we're looking for a sales pro who's made it. Big time. We'll see players with 10 years of experience (or equivalent) for a pure sales position (no management). You'll be gunning our sizzlinghot New York market for display ads and events with our awesome New York sales team. Globally, we have half a million subscribers in 22 cities with 1,500 advertisers (and counting). Your aim is to make us lose our little town blues. Compensation includes salary and bennies, plus elbow rubbing with major commercial real estate movers and shakers. We're considering only the king or queen of the hill, top of the list, A No. 1. If you know of someone just right, start spreading the news. Send resumes to firstname.lastname@example.org.