Russ, you’ve had a strong year despite many headwinds in real estate, how have you been advising clients through this time?
Up until the last few months, this year was great. Rates were relatively low, and I was proactively advising clients to take advantage of the market while it was tame. However, since the market has taken a turn, it has been even more important to advise clients in a way that is transparent and focused on their specific goals. Knowing your client and knowing what their goals are will allow you to help them during a time when the market is great, and conversely at times when the market is not so great.
After experiencing the market taking a severe hit in the last few months, it has been important to advise my clients truthfully and to be fully transparent with them. For example, we recently had a meeting with a client about the opportunity to close on a very large deal, however determined it didn’t make sense for our client to do that deal at that time. Although we would have made a commission on the loan, we knew it wasn’t in the best interest of our client and advised them as such. In this case, we will do the deal several months down the line when it makes more sense, and will have established a trust with our client that will be mutually beneficial for future endeavors.
Advising clients to stay on top of their deals and encouraging them to share their goals with you will lead to long-term, sustainable success as a broker, and you will gain clients who can trust you in any market. My advice is to be on top of the deals and rates, track patterns in the market, and advise clients accordingly. Not every deal makes sense to do, and it is very important to distinguish that.
What are the most effective financing strategies you’ve been employing on behalf of your clients?
The most important strategy would be to listen to every individual client’s needs. There may be one client who finds leverage important, and another client who has no interest in leverage in the deal. It is imperative to listen to what your clients want and customize a deal based on their goals and interests; customize a deal for what they want, not for what you think they would want.
Another effective strategy is to really go out in the market and explore each deal that comes up. If you are covering the market, you will be made aware of small banks that you may never have heard of who are doing deals right now.
For example, I recently discovered a small bank that was underwriting interest-only, which I didn’t know existed until I put my ear to the ground to understand what kinds of deals are happening right now. This recent discovery was a small regional bank in South Florida that we would never have thought to turn to in the past. But they understood the market, and after some conversation, we brought our clients in to meet with them and we got the deal done.
Which lenders are the most active and why?
As stated previously, if you really explore and get to know the market, you will find the right bank for your client and can structure a very good deal. Seeking out smaller, regional lenders is key to getting deals done in a difficult market.
Which property types have been the easiest and the most challenging to finance?
The easiest property types have been multifamily — despite the hit to the market, everyone needs a place to live, and deals are still getting done. Office and retail (such as shopping centers) have lingering difficulties after taking a big hit during Covid. I would have to say that office and retail have still not fully recovered, and those deals have been more difficult to achieve.
What investment strategies are your clients focusing on and how are you helping finance them?
On the multifamily side, people are trying to find a needle in a haystack — even though rates are much higher, we’re trying to find deals with enough upside to be able to still make some money. The thing is, you cannot bet on anything right now — you have to look into the future. What’s happening with this market is teaching us a lot of lessons — it is showing us the value of long-term debt. When you have long-term deals, you don’t have to scramble as much when the market takes a hit. Don’t focus on short-term yields, focus on long-term.
Russ Drebin
Senior Vice President
732.301.3208
