Calling All Idealists in CRE

Not to get too sappy, but as I ponder my next career move, I think about how much value I've gotten over the past 2-3 years from this forum. Between the exposure to daily banter between some very knowledgeable monkeys, somebody sending me an excel test prior to the final round of an interview, as well as simply general advice- I am grateful to this community.

Admittedly I've posted some questions/comments that lacked coherency (especially when I had little-to-nowork experience), but now I want to posit a simple question:

Describe to me the perfect financing broker. What do you wish certain producers who you've come across had done differently? I know a lot of the time, it is hard to justify the large fees. However, I know (because I see it firsthand) that there are truly brokers (particularly on the debt side) who have as good of an understanding of not only the capital markets, but of risk/reward and are able to think exactly like equity players.

We know that all the super successful D/E guys are going to have amazing networks, likely are very ambitious, have the "gift of gab", and will be reliable in terms of communicating. But in addition to these qualities, have you guys had experiences with particular brokers who you felt deserved an even bigger fee? Who truly added value with the "advisory" aspect?

I think that as capital structures become more complex, the best D/E guys have relished the opportunity to provide value that a debt broker couldn't have as little as 10 years ago.

Any and all comments welcome- thank you in advance.

Comments (11)

Feb 11, 2019

Interested as well.

@Mandelbaum_Mandelbaum you might find this article interesting about Lotus Capital Partners

"The three most harmful addictions are heroin, carbohydrates, and a monthly salary." - Nassim Taleb

Feb 11, 2019

Thanks man. Had actually read this when it came out but just reread- very interesting.

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Feb 11, 2019

Our guy at HFF who runs our account literally busts his ass to source deals for us. He will take a fee on debt or equity if we need him to help raise, but he finds ways to help turn deals in our favor when they are highly competitive. He makes calls that we simply can't (or should not) as principals, and has a way of helping the other side see things our way. It helps that we carry a strong business card, but it's nice to know that he isn't sitting there waiting for the phone to run so he can slap debt or equity on our deal. Very enjoyable guy too.

Feb 12, 2019

Do you mind elaborating on how he turns a deal in your favor or what kind of calls he makes for you?

Feb 12, 2019

Interested in this as well.

Feb 12, 2019

I would assume he is either advocating on their behalf with the listing brokers on the sponsor's ability to perform, or he is directly putting them in touch with other sellers and allowing them to consummate deals direct - in turn, he gets hired to arrange debt/equity. If this is, in fact, the case... it seems very common.

If you're a broker you need a toolbox (lawers, enviro guys, appraisers, deal flow, leasing relationships, etc.) for your clients otherwise you're just a commodity and they will offer someone who can give them more resources and access.

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Feb 11, 2019

As a lender, I REALLY like it when I receive the information I'll need upfront rather than being forced to request what I need.

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Mar 21, 2019

Bumping this thread b/c of another relevant question: those of you working at lenders, what are your thoughts on the financing memorandums you receive from different brokerages (particularly for construction/bridge deals)?

I've been at a couple brokerages where the debt teams work vastly differently in terms of preparing these books, so was just curious what you all prefer. More fluff the better or the opposite? For construction, what have you seen/not seen that you'd like to more often in the OM?

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Mar 21, 2019

Think this depends on the shop. Institutional groups would prefer more fluff so that they more highlights to pull from for their lengthy memos. Leaner teams, or family offices don't need the fluff / crap.

Mar 21, 2019
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