AGGREGATORS ASSEMBLE - Thinktank...TOP 10 COMMERCIAL BROKERS 32 FEATURES MPA TOP 10 COMMERCIAL BROKERS 2015 THERE’S NO point pretending otherwise: Commercial broking is a …

We reconvene our aggregator roundtable for 2015

AGGREGATORSASSEMBLE

ALSO IN THIS ISSUE:

TOP 10 COMMERCIAL BROKERS OF 2015

MPAMAGAZINE.COM.AUISSUE 15.9

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TOP 10 COMMERCIAL BROKERS

32 www.mpamagazine.com.au

FEATURES

MPA TOP 10 COMMERCIAL BROKERS 2015

THERE’S NO point pretending otherwise: Commercial broking is a di� erent game, at least at the top end. The 10 brokers in this report are specialists who have vast reserves of technical knowledge and experience, and they deal with equally high-end and knowledgeable clients – the opposite end of the spectrum to mums and dads.

So why is MPA – a magazine for all top-performing brokers – running this report? The reason is because commercial broking is becoming a laboratory for serious innovation, which we believe will fi lter through to the residential side and impact your business. This Top 10 is ranked by total value of commercial settlements over the past year, as verifi ed by aggregators, and we’ve seen a stunning increase in those totals compared to last year’s report. We think it’s time residential brokers took notice.

Commercial broking drives innovation, because when a deal takes months of negotiation and strategy, the payo� for excellence can be far more noticeable. When you’re dealing with a select group of seasoned

With record-breaking settlement totals and productivity, commercial broking is moving into unexplored territory. We talk to this year’s standout performers

property developers – all of whom know each other – maintaining ongoing client relationships means far more than a monthly email. When you’re working with a team of specialists, professionalism and an advisory approach are vital to make yourself stand out. In short, there’s a huge amount of tips any residential broker could take from this report and put into practice tomorrow.

However, if you’re thinking of writing some commercial loans yourself, then check out our new centrespread, where we’ve collected useful data and advice on getting into the commercial market. Finally, thanks to all those brokers who took the time to apply in what has been a competitive and record-breaking year.

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Sponsored by

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It is our very great pleasure to be associated with the MPA Top 10 Commercial Brokers for a third year. We wish to extend our congratulations to each of the successful brokers pro� led in the pages ahead and resoundingly acknowledge their outstanding achievements this year in settling a combined $1.14bn. Indeed, special congratulations go to George Karam of Byblos Finance in Parramatta for setting the pace with 30 deals and $160.9m in settlements, a huge accomplishment in a growing, competitive and fast-paced market.

The average loan size was $2.38m, and, aided by a strong contribution from residential construction lending associated with the surge in east coast housing development activity, three members of the Top 10 averaged more than $7m per loan. Yet, at the other end of the scale, Daniel Green of the Green Finance Group in Brisbane worked incredibly hard for $115.7m across 142 settlements and an average of $815,000, while Jamie Giles from the same o� ce was only $1m behind across 80 deals.

One noteworthy observation across this select group is the contrast in commercial broking experience among them. Exactly half the Top 10 have been in commercial broking for � ve or fewer years, three of them for just two years – and it goes to highlight the enormous potential on o� er in this part of the market for all brokers.

We encourage you to read each of the stories behind those who made the list this year. Whether as a matter of general interest or as valuable case studies for aspiring commercial brokers, the following pages o� er insights into the varying traits, skills and strategies that have led to extraordinary results in the � eld of contemporary � nance broking.

The commercial property market across the country is performing strongly, lenders are striving to support the broker channel, and borrowers are turning to brokers more than ever. At Thinktank, not only are we greatly encouraged by the record results reported here, but we hold even greater con� dence for the potential within the commercial property � nance sector in the years ahead.

Jonathan StreetCEO, Thinktank Commercial Property Finance

A MESSAGE FROM OUR SPONSOR

Thinktank, not only are we greatly encouraged by the record results reported here, but we hold even greater con� dence for the potential within the commercial property � nance sector in the years ahead.

Jonathan StreetCEO, Thinktank Commercial Property Finance


FAY BAKERSky Financial Group, Merrylands, NSW

Total value of commercial loan settlements 2014–15

$73.83m

Number of commercial loans settled

27

Average commercial loan value

$2.73m

Years as a commercial broker

12


10


FEATURES

Fay Baker is a credit advisor, insurance advisor and fi nancial advisor who set up Sky Financial Group in 2003, having previously worked in fi nancial services. She prides herself on providing a stress-free and rewarding service to her clients, and also was featured in 2013’s Top 10 Commercial Brokers.

MPA: What distinguishes you from an average commercial broker?I am skilled in identifying the issues faced by clients and fi nding the quick solutions to overcome the complications. I keep myself well informed of all relevant fi nancial products and market updates. I am highly experienced when it comes to arranging funding for large, complex transactions that require an in-depth understanding of client business.

MPA: Do you focus on any particular area of commercial lending? Why? With many years of lending experience across a broad range of lenders, I work with all kinds of commercial loan customers across all parts of Sydney. I specialise in arranging lending solutions for commercial, industrial, retail, and residential or commercial developments; restructuring existing debts; and consolidating borrowings.

MPA: From your experience, is it essential to have run a business in order to succeed in commercial broking?Not necessarily. In my opinion, to succeed in commercial broking, you need to have the skills with the highest moral, ethical and professional standards.

MPA: Is every loan di� erent, or are there similar scenarios you frequently encounter? Each client has specifi c needs in relation to their fi nance. Solutions structure is on individual deals, according to the client’s need.

“In my opinion, to succeed in commercial broking, you need to have the skills with the highest moral, ethical and professional standards”

MPA: Do you see opportunities in your area of broking over the next 12 months, or is it time to consolidate?Forming a relationship with customers that includes the highest moral, ethical and professional standards o� ered will assist to continue providing fi nance broking solutions to meet clients’ needs.

MPA: What is your advice for brokers looking to enter the commercial market?Build relationships with experienced commercial bankers. Keep yourself informed with the commercial fi nancial products that are made available to market, and team up with an experienced commercial broker if you don’t have commercial banking background.


Sponsored by

JASON ARNOLDQuattro Commercial Property Finance, St Kilda, VIC


$84.61m


36


$2.35m


15


Jason Arnold has been writing commercial loans for 15 years, but 18 months ago established Quattro Commercial Property Finance with business partner Belinda Gibson. Quattro specialises in the commercial property fi nance market and assists clients to restructure debt and fi nd solutions for both simple and complex commercial loans.

MPA: What distinguishes you from an average commercial broker?• Fifteen years of experience specifi cally in commercial

property and development fi nance • Strong relationships with a vast array of bank and

non-bank lending institutions in both the senior and mezzanine markets

• Strong relationships with property industry experts• Regularly consulting experienced fi nance and

property industry mentors

MPA: Do you focus on any particular area of commercial lending? Why? Construction fi nance and structured investment lending. It is a satisfying process watching and experiencing a project start from a set of plans on paper to a completed product, whether that be apartments, shopping centres or o� ce buildings. Finance is a large part of this process and involves ongoing communication and networking with various consultants, including developers, investors, builders, architects, lawyers, accountants, quantity surveyors, project managers, etc. Learning never stops.

MPA: From your experience, is it essential to have run a business in order to succeed in commercial broking?[It’s] helpful but not essential.

MPA: Would you term yourself an advisor? How do you present yourself to clients?

For certain clients, my role is debt advisor – typically on larger transactions where more extensive analysis on existing positions and proposed debt structures involving senior, mezzanine and equity options from bank and non-bank lending institutions is required.

In the mainstream and specifi cally the sub-$10m debt market, it is more a commercial broker model, where the banks are the primary lender and the role involves comparing the most suitable loan facilities for the client’s needs and settling in an e� cient and e� ective manner.

MPA: Is every loan di� erent, or are there similar scenarios you frequently encounter? Each loan has its own intricacies and should be treated independently.

MPA: Do you see opportunities in your area of broking over the next 12 months, or is it time to consolidate?Opportunities exist to provide a whole [range] of relationship solutions – i.e., commercial loans, home loans, equipment fi nance and insurance.

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FEATURES

MARK CHURCHILLAllfi n Finance, South Melbourne

Mark Churchill specialises in commercial fi nance for the healthcare market, including pharmacies, dentists and doctors. He set up Allfi n Financial Services in 2010 after a decade of healthcare fi nance at NAB and then Commonwealth Bank.

MPA: What distinguishes you from an average commercial broker?Allfi n are predominately brokers to the healthcare segment. In order to compete in the market, we have had to be specialists – not only just in general healthcare, but also in modalities under this banner. We started with specialising in pharmacy predominately, and only when we got that right did we move to dental and now general medical. Each modality has its challenges, but the theory remains the same across the board, so what we learn in one modality we can adapt to another.

MPA: Do you focus on any particular area of commercial lending? Why? Most of our lending begins with the goodwill component of the business. We have set up a systematic approach where we can look at any healthcare business and understand the security value of the business and serviceability based on cash fl ow to determine the likely bank appetite for the transaction.

The attraction to the client is that we can review any new business purchase without the client having to go through the cost of engaging accountants and valuers in the initial stages, while insuring speed to market so the client can make a confi dent bid for the business.

Engaging the client at the early stages not only gives them confi dence, but also allows us to ensure that the transaction is set up properly from the start so we can move the process through to settlement in a timely manner. This builds confi dence with the client and allows us to build a long-term relationship, which in turn gives us the opportunity to review their other facilities.

MPA: Would you term yourself an advisor? How do you present yourself to clients?I believe we now have to be more than an advisor, given the long-term relationship we want to build with the clients. It’s not just about advising them on the initial acquisition or refi nance, but to be there when their covenant reporting is due, in which case you become a business coach, negotiator and advisor.

MPA: Is every loan di� erent, or are there similar scenarios you frequently encounter? In theory, most transactions will follow the same methodology, but essentially every transaction has its own intricacies. There is no such thing as a ‘cookie cutter’ approach anymore in an ever-changing regulatory environment, but I guess that is why [brokers] will always be valuable contributors to the industry.

MPA: Do you see opportunities in your area of broking over the next 12 months, or is it time to consolidate?I still see plenty of opportunity, and there are segments that are calling out for commercial brokers; however, there may be a need for some consolidation so that we have the capital to fi nance these segments.


$95.96m


78


$1.24m


4

8

consolidate?I still see plenty of opportunity, and there are segments that are calling out for commercial brokers; however, there may be a need for some consolidation so that we have the capital to fi nance these segments.



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FEATURES

WHAT AN ELITE COMMERCIAL BROKER LOOKS LIKE IN 2015

In addition to satis� ed clients, we asked our Top 10 which were their most valuable sources of referrals. Accountants emerged as the top choice, although industry specialists also were mentioned.

In terms of where their clients come from, it seems this year’s Top 10 are relatively localised, particularly those specialising in property development. Those involved in equipment � nance and with specialties (i.e. healthcare) tended to have a wider national reach.

REFERRAL SOURCES AREAS OF INFLUENCE

Accountants

Lawyers Developers

Quantity surveyors

Architects

Sales agents

Other commercial brokers

Financial planners

My city ............................. 40%

My state .................. 20%

Australia wide ........... 40%

International .....................0%


Sponsored by


Our brokers were almost evenly split on how long an average loan takes to settle, with half picking 1–3 months and the other half picking 3–6 months. Only one said the average loan takes longer to settle.

Interestingly, there doesn’t appear to be any clear correlation between the type of business a broker is writing and how long a loan takes to settle. For example, Daniel Green, who wrote 142 loans over the past year, noted that an average loan still takes 3–6 months to settle.

Whilst this survey focused on commercial property broking, we asked our Top 10 what other services their brokerage provides. The popularity of equipment � nance and leasing is to be expected, but it appears that more than half of these brokers still o� er home loans. However, it should be noted that in many cases, another broker in the brokerage deals with residential lending.

If you’re thinking about moving into commercial broking, then have a look at a selection of advice from our Top 10 brokers. The overriding emphasis is on developing a specialty, which will help you stand out from competitors.

SERVICES OFFERED

CONSIDERING COMMERCIAL?

TIMELINE OF A COMMERCIAL LOAN

Home loans

Equipment � nance and leasing

Personal loans

Financial planning

Insurance

Other*

*Car buying service and real estate services

6

3

2

2

2

6

“Do your research. The transition from residential to commercial is hard work. Find a mentor – a broker with a proven track record in the space, someone who is willing to help you develop your understanding. If you decide to go your own way, pick a specialty area or industry and focus, focus, focus. You can always diversify later. Pay attention to building relationships with other professionals working in the same industry (i.e., accountants, solicitors, quantity surveyors, business brokers) and develop your networks with a view to being able to o� er your clients a better service.”Daniel Green

I think specialisation has been a big piece to making our business a success. If you look closely enough at the Australian market, there have to be business segments that are looking for commercial brokers to become specialists. By specialising, you can spend less time and money on marketing; you can concentrate your impact through industry bodies and also gain a reputation with the lenders, which makes it easier to place � nance. It does limit your market, but at the end of the day, once you master one segment, it can be used as a stepping stone to associated segments.” Mark Churchill

“My advice would be the same for anyone entering into any new market: Take time to understand the market. Develop relationships with the right people who know the market (such as bankers) and speak with people who are already in the space (brokers). I have found that brokers are happy to share their knowledge and feedback with others, and that will be the quickest way to get up to speed.” Marshall Condon

1Months

2 3 4 5 6

50%50%

One said the average loan takes longer than 6 months to settle.


MARWAN RAHMEKanebridge, Sydney

Sydney broker Marwan Rahme is making the most of all Australia’s boom town has to o� er, moving up to seventh after coming in eighth in 2014’s Top 10. The Kanebridge group of companies specialises in all things property, from development to capital fi nance.

MPA: What distinguishes you from an average commercial broker?Having an understanding and speciality in property development. We have a unique skill set in this area as we develop in our own right, as well as arranging fi nance for other developers. For many developers, we are their fi rst point of call not only for fi nance, but also for assistance on the acquisition and which are the best planning consultants to use for that given area.

Having such a developed network both in fi nance and other consultants such as planners, architects, valuers, quantity surveyors, tra� c, etc., is where the most value is gained from using our services. Our vast network in development and planning means that most of our clients get increased values in their development the moment they start dealing with us.

MPA: From your experience, is it essential to have run a business in order to succeed in commercial broking?Unless you have worked in all facets of residential development, you will encounter hurdles you don’t know how to get around. We also have a number of commercial brokers who get us to assist them with their loans, as they don’t have enough experience in this area.

MPA: Would you term yourself an advisor? How do you present yourself to clients?We are more than an advisor – we are like a partner with our clients. We are an open book; we help our clients where we can because we know the more we are able to assist them upfront with every aspect, they will continue to keep coming back.

MPA: Is every loan di� erent, or are there similar scenarios you frequently encounter? Every loan, every property is di� erent, and that is a mistake many others make. Each property is unique and has its own set of rules; tailoring a loan to that property is what increases the success of that development.

MPA: Do you see opportunities in your area of broking over the next 12 months, or is it time to consolidate?There are always opportunities in any market, and it’s about being fi nancially prepared to get the best out of it. I think this is where we specialise, as we always take a longer-term view with our clients, as opposed to a shotgun approach of just getting the one loan approved. We are preemptively gearing up and ensuring that our back-end systems and structures cater to the increasing growth in Sydney.

MPA: What is your advice for brokers looking to enter the commercial market?Know your game inside and out. Our specialty is residential properties for development, so if you want the very best residential deal, it’s a good idea to talk to us.


$110.58m


13


$8.50m


15


most of our clients get increased values in their development the moment they start dealing with us.

Unless you have worked in all facets of residential development, you will encounter hurdles you don’t know how to get around. We also have a number of commercial brokers who get us to assist them with their loans, as they don’t have enough experience in this area.

Would you term yourself an advisor? How

We are more than an advisor – we are like a partner with our clients. We are an open book; we help our clients where we can because we know the more we are able to assist them upfront with every aspect, they will

enter the commercial market?Know your game inside and out. Our specialty is residential properties for development, so if you want the very best residential deal, it’s a good idea to talk to us.


FEATURES

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Sponsored by


JAMIE GILESGreen Finance Group, Hawthorne, QLD


$114.6m


80


$1.43m


2

6

Joining the Green Finance Group in 2013 after a career at Westpac, Jamie Giles also brought over his specialist skills and network in the area of healthcare fi nance. As head of the bank’s Queensland healthcare arm, he managed a combined lending portfolio of $1.2bn, and he continues to specialise in equipment fi nance and leasing for healthcare professionals.

MPA: What distinguishes you from an average commercial broker?I basically deal with clients that I know a lot about; that’s my understanding of the healthcare sector. Primarily 95% of my business is done within that particular specialisation, and it’s what I know, and what my contacts know me as.

MPA: Do you focus on any particular area of commercial lending? Why?Most of my business is with the medical centre, dental practice and pharmacy areas of healthcare. It’s equipment fi nance; there’s a commercial property lending aspect to it, and also goodwill lending – i.e., cash fl ow – parts.

MPA: From your experience, is it essential to have run a business in order to succeed in commercial broking?Most defi nitely. Without having commercial acumen yourself, you can’t go in and expect, just because you’re talking to people, to make a living out of this sort of thing. You need a high level of commercial acumen to run your own business because otherwise, why would other people come to you asking for advice on how to run their own businesses appropriately?

MPA: Would you term yourself an advisor? How do you present yourself to clients?I don’t give advice; my role is a consultancy type role, and I basically guide them through certain processes

and make sure they go to the specialists, the professional partners – the external business partners, you could call them – in order to get advice.

MPA: Is every loan di� erent, or are there similar scenarios you frequently encounter? I think every loan is di� erent, because people are looking to fund for di� erent reasons; however, the familiarisation of the industry is always the same.

MPA: Do you see opportunities in your area of broking over the next 12 months, or is it time to consolidate?I’m still in a growth phase with my business. The market will most defi nitely still be there over the next 12 months.

MPA: What is your advice for brokers looking to enter the commercial market?The best piece of advice I could give would be that it’s not only important to have a network, but it’s also important for you to be able to leverage o� that network and makeit a commercially viable proposition.

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FEATURES

DANIEL GREENGreen Finance Group, Hawthorne, QLD

Whilst most of this year’s Top 10 pride themselves on big-money deals, Daniel Green has achieved astonishing productivity in specialist markets. He set up Green Finance Group in 2010.

MPA: Do you focus on any particular area of commercial lending? Why?Whilst my lending experience spans most industries, pub and hotel fi nance is my personal specialty. I’ve worked hard over the last few years to develop my name in this space, working with a diverse range of clients, from small-business owners and family-owned local pubs and high-end wine bars to some of Australia’s largest hoteliers, developers and investment groups. It’s a dynamic industry with elements of tradition and transition, particularly as larger players continue to expand their holdings. Add in the intricacies around liquor licensing and gaming, and it makes for an interesting work environment. And yes, there are some perks of the amber variety!

MPA: From your experience, is it essential to have run a business in order to succeed in commercial broking?It’s defi nitely advantageous, and I think I’m a better broker because of it. My hands-on business experience and interests over the years (pubs, construction, childcare, food distribution) have given me a better understanding of the challenges faced by my clients, from managing sta� to cash fl ow to and everything in between. From the fi nance perspective, I am defi nitely better able to provide workable solutions as opposed to theoretical fi xes, and clients respect that.

MPA: Would you term yourself an advisor? How do you present yourself to clients?I’m not hung up on terminology. I see my role as more of a business partner. There’s more to the client relationship than the initial fi nance approval, and I’m legitimately

invested in the success of my clients’ business long term. The long-term approach sees me provide regular reviews, monitoring adherence to banking covenants, reviewing interest coverage, debt servicing and profi tability, and management strategies where needed. It’s an approach that has worked well for me, with eight out of every 10 deals referred by existing clients.

MPA: Do you see opportunities in your area of broking over the next 12 months, or is it time to consolidate?There’s always opportunity. There’s no denying the statistics, particularly when it comes to the mining sector, but there’s also no point in a doom-and-gloom approach. Rates are low, lenders are looking for business, and there are savings to be had and e� ciencies to implement. Our clients are looking at ways to work smarter. My team is growing, and we will continue to add experienced fi nance specialists who can focus on additional market segments, our latest being health, beauty and gyms. Our established in-house fi nancial planning and insurance divisions o� er e� ciency our clients appreciate and a business strategy that only strengthens our relevance.


$115.7m


142


$814,835


5


5

smarter. My team is growing, and we will continue to add experienced fi nance specialists who can focus on additional market segments, our latest being health, beauty and gyms. Our established in-house fi nancial planning and insurance divisions o� er e� ciency our clients appreciate and a business strategy that only strengthens our relevance.


Sponsored by


MARSHALL CONDONMortgage Choice, South Yarra, VIC


$118.72m


12


$9.89m


2

4

Having started mortgage broking whilst at university, and after spending time as a Bankwest BDM, Marshall Condon set up Mortgage Choice South Yarra just over two years ago. He aims to provide an end-to-end service to off-the-plan property developers.

MPA: What distinguishes you from an average commercial broker?Having access to a variety of lending options. I have developed a great network of quality bankers from a variety of banks who understand property and who work with me to obtain the desired outcome. I also have established a sound network of reputable mezzanine funders and private sources of equity that allow me to offer a structured solution for the developer.

MPA: Do you focus on any particular area of commercial lending? Why? We have targeted the construction and development space, as this has been a growing area. To mitigate the market risk, we have relationships with long-standing developers, and their site locations and product are of such quality that they will continue to develop when the market is not as buoyant.

MPA: From your experience, is it essential to have run a business in order to succeed in commercial broking?I think parts of running a business assist in commercial lending. Commercial lending has its own segments within the broad name. You have construction, you have property investment, and you have cash flow lending. For the latter, it would be important that you have a sound knowledge of financial statements and that you can analysis a profit & loss and balance sheet to determine the strength of the business that you’re lending

against. This is, in my opinion, a business skill that one would need to successfully run a profitable business.

MPA: Would you term yourself an advisor? How do you present yourself to clients?Yes and no. I present myself to clients as a partner in the project and ultimately as a source of finance. I will show them different structured options for them to consider and let them make an informed decision. I find that by being seen as part of their team and another resource to their business, I have a deeper relationship with my customers.

MPA: Do you see opportunities in your area of broking over the next 12 months, or is it time to consolidate?In my space, there is certainly going to be reduction in the amount of construction, thus reducing the need for finance, as APRA continues to monitor investment lending. In saying that, the developers that I assist developed through the GFC, and, as mentioned above, the type of product they deliver will always have a level of demand.




FEATURES

DANIEL ZADNIKHawthorn Finance (Bentleys Group), Hawthorn, VIC

After 18 years at ANZ, Daniel Zadnik joined professional services fi rm McLean Delmo to establish its fi nance division. Now part of the national Bentleys Group of independent accountancy fi rms, Hawthorn Finance’s relationship with other professional service fi rms is a key part of their o� ering.

MPA: What distinguishes you from an average commercial broker?We treat all our clients in a professional manner, whether they are large or small. Relationship managers come and go at banks, but we are always there for our clients, and if we do our job well, we ultimately become the ‘relationship team’ for our clients. That is, our clients ring us fi rst for advice, and we negotiate the deal with the bank on their behalf. Being part of the national Bentleys Group provides us with access to fi nancial information and some incredibly knowledgeable accountants in the fi elds of tax, property, industry specialisation, etc. We stay involved with our clients at annual reviews, etc., so we don’t just write the deal and forget about the client.

MPA: Do you focus on any particular area of commercial lending? Why? We provide a wide range of commercial lending, ranging from working capital and cash fl ow solutions, property investment lending, as well as construction and development fi nance. Our asset fi nance business has continued to grow, and we can o� er our clients a wide range of options in this highly commoditised space. Our commercial lending expertise also has really assisted our residential lending business. Once our commercial clients are completely satisfi ed with the solution we have found for them, we then assist the directors and employees with their residential lending needs.

MPA: From your experience, is it essential to have run a business in order to succeed in

commercial broking?I don’t think it is absolutely essential to have run a business in order to succeed in commercial broking. I ran regional businesses for ANZ with large sales teams and high revenue targets; however, in banking, you are largely insulated from the cost side of the business, being part of a publicly listed company.

When you run your own business, you learn very quickly that every expense incurred comes straight o� the bottom line. That said, it is largely common sense, and the commercial and residential broking models are extremely attractive businesses when you get the model right.

MPA: Do you see opportunities in your area of broking over the next 12 months, or is it time to consolidate?We see the opportunity to continue to grow organically through the Bentleys network; however, the commercial broker segment does seem to be an ageing demographic. We would defi nitely consider acquiring or consolidating the business if we found the right business partners. At the end of the day, this business is all about having the right people.


$131m


42


$3.11m


7

3

commercial broker segment does seem to be an ageing demographic. We would defi nitely consider acquiring or consolidating the business if we found the right business partners. At the end of the day, this business is all about having the right


Sponsored by


JAYDEN VECCHIODiscovery Finance Group, Brisbane

Total value of commercial loan settlements 2014-15

$136.74m


19


$7.19m


2

Whilst studying for a degree in business and information technology, Jayden Vecchio got matched with a mentor to show him what ‘real world’ business was like. That mentor happened to be MFAA chairman and Vow Financial CEO Tim Brown, then at Macquarie Bank, who helped Vecchio get started in the industry. Since then, he’s had a rapid rise, featuring in MPA’s Young Guns and Top 10 Commercial Brokers 2014. He maintains a blog on broking, Top Broker, and has just fi nished writing a book on the subject.

MPA: What distinguishes you from an average commercial broker?I think having worked within the banks for a few years, I have a good understanding of what they are looking for on applications, how they want information presented and the types of clients they will take – and the ones they don’t.

MPA: Do you focus on any particular area of commercial lending? Why? Development fi nance and some commercial property investment.

MPA: From your experience, is it essential to have run a business in order to succeed in commercial broking?No, not at all – it is more about having an understanding of the asset class you are lending against and having access to the banks and bankers that also specialise in that area – in commercial lending, it’s not only what you know, but who you know in the banks!

MPA: Would you term yourself an advisor? How do you present yourself to clients?No, I consider myself a fi nance broker. Really I just present myself as a specialist.

MPA: Is every loan di� erent, or are there similar scenarios you frequently encounter? Yes, they are all fairly unique.

MPA: Do you see opportunities in your area of broking over the next 12 months, or is it time to consolidate?I think there are always going to be opportunities for those willing to take them. For example, in the residential broking side of things, even though some banks are tightening criteria and LVRs on investment lending, I think this could present a terrifi c opportunity for brokers because suddenly customers’ banks are going to be unable to help them achieve the outcomes they are seeking.

MPA: What is your advice for brokers looking to enter the commercial market?If you’re going to do it, make sure you do it properly. Learn the products, make the contacts in the banks, and understand the various asset classes, fi nancial structures, lease requirements, etc., because you aren’t going to be able to give your clients the service they require if you try to do it in halves.

2




FEATURES

GEORGE KARAMByblos Finance, Sydney

Australia’s top commercial broker for 2015 hasn’t appeared from nowhere. You might recall George Karam from last year’s list, where he reached fi fth place in what itself was a competitive year. The intervening 12 months have not only seen Karam move up four places, but he’s almost doubled his annual settlement total, from $83m to a stunning $169m. So what has changed?

Byblos Finance is a di� erent brokerage than it was last year, but Karam is arguably still the same broker. He’s still insistent about his value proposition: “We’re a property broker – we don’t do local business banking; we don’t do cars or leases, or that sort of thing.” And he’s still based in Parramatta in Sydney’s fl ourishing west; most of his developer clients come from the surrounding area.

Karam wasn’t responsible for the area’s property boom – and doesn’t claim to be – but he did plan for it. “We are in the right place in the right time, but having said that, we were kind of preparing from 24–36 months out for an improvement in the market conditions,” he says. Preparation has meant taking on four extra sta� , including administrative sta� and ex-business banker Matthew Patterson, taking the total team to seven.

Understanding Byblos Finance means understanding its clients. “Our service and our o� ering are aimed at high-net-worth groups, individuals, families and established people who are looking for a better way to conduct their loan banking than they would be able to do themselves,” Karam explains. “They’re the type of guys who don’t really need an introduction to the bank, but what we try to do is add value to the way they’re used to dealing with the fi nancier.”

For Karam, adding value means involvement across the entire development process. Karam described

himself as a ‘private property banker’ in last year’s survey and has adopted an account-management structure for dealing with clients. Right from the start, he advises on project feasibility, equity return and how much cash a client will need, in order to “show them what the loan is likely to be like before they’ve even acquired the site”.

In essence, Karam adds the fi nancial perspective to the team of advisors required by any large-scale property developer. Karam maintains relationships with professional solicitor, quantity surveyor and valuer

associations, and is himself one of the founding members of the Western Sydney Developers Forum. His contacts in the construction industry provide a steady stream of referrals without the need for fees. “Our referrers refer to us because they know their client is going to be looked after; they’re going to get a value-added service no matter what,” he says.

Byblos’ success owes much to Karam’s relationship with banks,

and again, it comes down to a ‘value-add’ approach. “Using our own expertise, we’ll do as much of the credit preparation work for a lender – not just do the introduction and wait for them, but actually execute the deal,” Karam explains. “The way I run the business is we see ourselves as an extension of our preferred lenders, and we try to integrate as much of their supply chain as we can.”

Looking forward, Karam is positive about western Sydney’s property market and believes the number of returning clients shows his time spent working on the business is paying o� , allowing him to resume a full client-facing role. Nevertheless, preparation remains at the core of his strategy: “As our business is growing, we’re again investing for the next 12–24 months out. We think there’s going to be a further increase, and that’s what I’m preparing for.”


$169.69m


30


$5.65m


15

1

“What we try to do is add value to the way our

clients are used to dealing with the fi nancier”


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MPA’s Top Commercial Broker for 2015, George Karam (right), is presented the trophy by Peter Vala, head of sales and distribution for Thinktank.


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