Eastern Union Funding, the country’s 8th largest commercial mortgage brokerage, has cultivated a strong brand as the country’s most trusted debt brokerage. The company is witnessing the trust by a huge influx of new clients each month, adding to a base of clientele entrusting the firm with advice on purchases – even when they’re off market.
With the number of acquisition loans at an all time high, Eastern Union’s sophisticated structure of loans for every size deal, and subsequent confidence among clients that their acquisition loans will close, the company has expanded its debt service. That expansion is an equity division, with a database of hundreds of qualified and vetted potential investors and new ones added daily.
Armed with this platform, the new division sources LP money and feeds an increasingly-apparent hunger in the real estate market.
The equity platform started with a database full of high net-worth individuals who are eager to invest equity in commercial real estate as a limited partner. Rather than just sourcing institutional money, which Eastern Union has been doing up until now, Eastern Union introduces clients that are seeking investors to invest as little as $50,000 ranging well into the millions. Introducing clients to these potential investors, the firm is complementing its execution of mortgages and giving new meaning to its trusted advisor position.
To illustrate the demand for its product, Eastern Union need only point to the surging popularity of crowd funding, wherein stakeholders enter a deal with an all-time low barrier of entry. Eastern Union is meeting the same demand, however unlike crowd funding, where the investors give their money to various crowd funding platforms – who in turn invest on their behalf – the mortgage company introduces investors to sponsors directly.
In addition, Eastern Union has an unparalleled advantage: a 14-year real estate background, a corporate structure – as opposed to a largely ungoverned crowd sourcing platform – and $3 billion in annual transaction volume. With thousands of deals scheduled each year and a growing market share, the company is in prime position to source LP equity and meet the demands of clients and investors alike.
“We broker money; we don’t get tangled up in other business ventures which you see happening a lot these days. This is a natural extension of our debt-service and the feedback from our clients couldn’t be better,” said Eastern Union President Ira Zlotowitz.
Eastern Union has secured office space in midtown Manhattan and recruited industry veterans Marc Belsky and Charles Fishof. Both have worked at Carlton Group under Howard Michaels, and both have been involved in billions of dollars worth of transactions in markets nationwide, working for some of the industry’s biggest players.
Those two lead a robust lineup of real estate professionals in the equity division. They have spent the better part of a year working with Eastern Union’s clients, sponsors, and investors to understand their exact needs.
"This division will not only allow real estate sponsors and developers to expand their networks, but will also introduce them to professionals outside of the real estate industry, investors who are focusing more on cash flow and overall IRRs as opposed to preferred returns” Fishof said. “It will also boost returns to high net-worth individuals and family offices who are currently dabbling in real estate investing but now will be able to take part of the action, getting in on those deals that have always been just beyond their reach.”
With two seasoned executives leading a highly qualified team, Eastern Union opened up this division – and the real estate know-how of its new executives – to its clients in order to leverage and grow its debt business even further. In addition, what makes this truly unique from any other equity platform, is it will offer its clients the option to pay the costs for the time and introductions as opposed to a commission on the actual equity raising.
"If you look at the pace investors are signing up, we are clearly satisfying a crazy appetite," Zlotowitz said. “As the industry’s most trusted adviser, combined with our in-depth deal-structuring knowledge and experience, we are uniquely positioned to provide mutual value to sponsors and investors for their equity needs.” Belsky adds this is a logical next step in the mortgage business, where debt is a commodity and equity isn’t.
"We're not reinventing the wheel," Belsky said. "We're taking something that exists and making it better, and we're doing that because we are deal guys, we have billions of dollars of closed transactions to point to, and we're providing clients with all of this when we make introductions. That's how we differentiate ourselves."