How did you get your start?
I always wanted to own and manage real estate and I had an opportunity to work in the business as I was finishing school. I was approached by two friends of mine, Ira Zlotowitz and Abraham Bergman. They asked me to join Eastern Union, which they’d just opened six months prior. It was a small shop, four people and a secretary working out of an office in Sunset Park. A year later there were already 15 of us, and within 18 months of opening we had another office in Howell, NJ.
There was a ton of energy between us. The business was exciting, we were refinancing guys who had been paying 8 and half or 9 percent, and arranging loans in the 6 percent interest range. Rates were just beginning to come down from their peak in the 90s. We also saw in influx of new investors, because in the 90s it wasn’t swank to own real estate. Rates were high and it wasn’t easy to get a loan. So we had these new people entering the market and we made it happen. We were the new kids on the block.
What types of loans do you focus on and why?
I focus on loans in $5 - $70 million loan. I do anything from a stabilized permanent loan to structured finance and construction money. I target that range because I’m based out of New York, where the average loan size is no more than $10 million. We usually don’t have 300-unit complexes, we generally have smaller buildings due to the local building stock.
What type of borrowers do you target?
I focus on the small to midsize borrower. The guy that owns anywhere between 10 and 50 properties. While I do a lot of multifamily nationwide, my area of expertise also includes retail and office. Regardless of what I’m doing, most of my clients don’t see me as a mortgage broker. I do a lot of due diligence before they go into contract, and as a result they view me more as a consultant. If my client’s buying a property with 30 retail tenants, they’re relying on me to review all the leases for accuracy and risk, and often times will not go into contract without discussing the transaction with me. I’m able to look at things from a risk and credit perspective, but it comes down to trust. Eastern’s catchphrase has always been that we’re trusted advisors, and that’s where it originates—that due diligence means a lot.
What's the most interesting deal you've worked on recently?
I worked on an acquisition of a multifamily building in midtown. The building was half vacant, which can be challenging, but in 45 days we were able to close on the transaction, giving the borrower $18 million without recourse and 75 percent of his total capital stack.
What trends do you see in the market at the moment?
I see a lot more acquisitions and a lot more competition among investors. Everyone’s clamoring to outbid the other. There’s also a lot more mortgage brokers in the business today, and the way to overcome it is to introduce a new relationship to the borrower. Great execution and advisement are must, and there are also a lot of lenders clamoring in for a piece of the pie in the Tri-state area. As the market heats up, I’m constantly looking to introduce clients to a new lender.
For most people, rising interest rates are a big talking point, but I’m not so concerned about their spike. I think we’re in a stable market. I don’t know where rates could go, but they’ve been talking about rates moving up for years. So far I just see a ton of competition, as well as cap rate compression in the market, and much more equity invested in deals. I’m the busiest I’ve ever been in my career.