Five Brokers Just Like Frank Sinatra 1) The Matchmaker
Following up Bisnow's SuperBrokers, which we debuted in November, here are three entrepreneurial brokerage founders who can say they did it their way. Prince Realty Advisors' David Ash earned paychecks from Kaufman Org (a top broker during his four years there) and Eastern Consolidated before striking out on his own. Essentially, he tells us, he runs a matchmaking service (off market but above board), introducing sophisticated investors that have targeted investment profiles (like REITs and funds) to sellers that own properties that are just the right size, submarket, asset class, and return horizon. He's found that investors will pay a healthy price if it means they don't have to compete; in other words, auctions aren't the only way to maximize value.
David recently hired a debt and equity guy in response to client demand. His outfit did $480M last year, including Ziel Feldman's $62M purchase of Tribeca's 11 Beach St for condo conversion. He's best known for Equity Residential's $280M buy of the Beatrice apartments at 105 W 29th St last year (which we snapped, above—is it bad that cops are following us?). He's also near closing on a deal that he says will set a Downtown PSF record and will bump Prince's total transition volume to $900M.
2) The Puzzlers
Acquisitions and capital markets brokerage duo Rachel Gilbert Solomon (above) and Annu Chopra (below) launched Atalanta Advisors in 2011, closed $250M of deals in 2012, and are on pace for $300M in 2013. They do it by taking the complicated deals (the coolest: financing for the observation deck at Chicago's John Hancock tower). In fact, one multibillion-dollar private equity fund has even referred developers their way. The fund likes these promising prospects but says they need to be "institutionalized" and thinks Atalanta can show them the ropes.
The pair recently helped a developer client of two years land a $95M condo conversion on the UWS. They secured $50M acquisition and conversion debt a year ago, at which point underwriting showed a $1,800/SF sell-out for the condos. By the time they closed $30M in JV equity in August, the private equity fund that bought in had done its own underwriting with Brown Harris Stevens and was banking on a $2,600/SF sell-out. That's a 44% rise in value, which Annu says underscores the tremendous rally in residential markets and indicates that high-end homebuyers have become agnostic about neighborhood. They also just hooked up a $75M Arlington, Va., apartment community with preferred equity, drawing five tours and a term sheet, all from NY, within 10 days of their first call.
3) Brooklyn Bosses
Ofer Cohen (right) and partner Melissa DiBella (with colleagues Mike Hernandez and Dan Marks) founded TerraCRG six years ago (back in the olden days before all roads led to Brooklyn). This year, their firm of closed more than 70 commercial deals (many of them development parcels) and worked on $250M of properties. Ofer tells us development prices per SF in the hot borough have doubled in the past 18 months. Two to three years ago, smaller, distressed parcels were working out, and now the savvy owners who held bigger sites and investors who've assembled them are selling. Now that residential rents are accelerating rapidly, conditions are finally right for the borough to take advantage of Bloomberg's upzoning 10 years ago.
In Park Slope, TerraCRG sold two large sites this year: a McDonald's at 274 Fourth Ave at 1st Street ($14.8M for 60k buildable SF) and 470 Fourth Ave at 11th Street (above, in contract for $250/SF for the 86k buildable SF site). Ofer says most of Fourth Avenue's big parcels have been picked through, so what's left is for assemblers. And in Williamsburg, the north side is built out, other than a few narrow, mid-block sites. The south and east, where the team is marketing 120 Union (94k buildable SF) for $17M, are where investors can still find big-block plays. (Our bluegrass/folk/pop trio Big Block also plays there on Thursdays. No cover.) TerraCRG also is marketing 100k buildable SF at 608-614 Franklin Ave at Dean in the recently rezoned Crown Heights.