MO February 2013

FEBRUARY 2013 | $10

The M.O. talks to WomenWorking in CRE Finance: What Are

the Challenges? The Rewards?

The WomenOur Inaugural

Women’s Issue

Starwood Property TrustCOO and GC Andrew Sossen on LNR Buy

In-Depth LookWith a Record Number of

Visitors in 2012, Financing Hotels in New York Is

a No-Brainer—Or Is It?

POWER PROFILE

ROSEMARYVRABLIC

Basis PointSam Chandan on Flying

Monkeys, Lending Outlook

529 BroadwayLong a Family Jewel,

the Spot Has a Rich History that’s About

to Get Richer

Q&A The M.O. Talks to Hunton & Williams’s

Laurie Grasso

TMO.0213.CS3.COVER.indd 1 1/31/13 7:38:05 PM

Columbus Square500,000 Sq. Ft. Retail Condominium Portfolio

$280,000,000 New York, NY

B&L Portfolio25 Buildings Multifamily Portfolio

$160,000,000New York, NY

350 Park Avenue585,000 Sq. Ft. Office Property

$300,000,000New York, NY

568 Broadway350,000 Sq. Ft. Office Property

$200,000,000New York, NY

1 Battery Park Plaza New York, NY 10004 | 212-972-3600 | www.meridiancapital.com

In 2012, Meridian proudly advised on financing for the following transactions:

220 Water Street134 Units Multifamily Property

$52,000,000Brooklyn, NY

Harrison Station275 Units Multifamily Property

$49,950,000 Harrison, NJ

West 14th Street61,000 Sq. Ft. Mixed-Use Property

$55,000,000New York, NY

Eastgate Tower186 Rooms Hotel Property

$50,000,000New York, NY

Steelworks Lofts110,000 Sq. Ft. Mixed-Use Property

$28,400,000 Brooklyn, NY

Lexington Avenue10,130 Sq. Ft. Retail Property

$17,700,000 New York, NY

The Berkshire93 Units Multifamily Property

$33,000,000Hoboken, NJ

Kings Highway60,800 Sq. Ft. Retail Property

$20,200,000Brooklyn, NY

Commercial Mortgage Observer - YE Review .indd 1 12/19/12 4:16 PM

Untitled-49 1 1/28/13 3:51:32 PM

321 West 44th Street, New York, NY 10036212.755.2400

Carl GainesEditor

Jotham SederstromEditorial Director

Alessia PiroloSta� Writer

Sam ChandanJoshua Stein

Columnists

Michael StolerContributor

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Barbara Ginsburg Shapiro Associate Publisher

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February 2013 / Contents

Editor’s Le� er 02

News Exchange 04Mortgage originations, note sales, investments and industry researchu Starwood Property Trust and Starwood Capital Group to Acquire LNR Property for $1.05 billionu DekaBank Loan Set to Replace Short-Term Seller Financing on Jamestown’s Milk Building Acquisition u 529 Broadway: A Family Jewelu The Largest Loans of the Month

In-Depth Look 08Is There Money for Hotel Financing?by Michael Stoler

Scheme of Things 10Monthly charts of commercial real estate fi nancings in the boroughs

Stein’s Law 12It’s Complicated, but Is It Right?by Joshua Stein

The Basis Point 13Flying Monkeys: Tail Risk and the Outlook for Lendingby Sam Chandan

Work Force 14Hirings, promotions, defections and appointments

Power Profi le 16Rosemary Vrablic of Deutsche Asset & Wealth Managementby Carl Gaines

Day in the Life 20Morris Betesh, director at Massey Knakal Realty Services, lets us tag along for a day by Alessia Pirolophotos by Will O’Hare

The Women of CREF 22by Damian Ghigliotty and Alessia Pirolo

Q&A 28Laurie Grasso from Hunton & Williamsby Cody Lyon

Culture 30NYCREW’s Night Out

The Sked 32Our picks for the month’s must-attend events

Cover Photo by Michael Nagle

1630

20

1

08

TMO.0213.ContentsCS3.indd 1 1/31/13 7:40:28 PM

2

Editor’s Letter / February 2013

Writing about commercial real estate finance, it’s hard to not notice the lack of women in the industry. They seemed few and far between at the industry events that we attend, and even when inside firms, it can sometimes be a challenge to spot one.

So, for our inaugural Women’s Issue, we decided to talk to some we did know—working in the industry as brokers and bankers, across a variety of institutions. It’s not a ranked list, but rather a selection of 10 women whom writers Damian Ghigliotty and Alessia Pirolo talked to about a range of issues, from their focus at work to the challenges associated with getting into the business. What they found is that challenges and roadblocks are there, to be sure, but a positive attitude and hard work go a long way toward pushing past them.

Then I interviewed Rosemary Vrablic,

a managing director in Deutsche Bank’s asset and wealth management division. Rosemary provides a wide range of services for her clients, but with real estate an area of focus, it was interesting to hear how essential private banking can be during tough times for getting financing for ultra-high-net-worth individuals.

Rosemary also echoed what we heard from other women about breaking into finance: work your hardest and value what you do, and the opportunities will come.

Lastly, we were excited to have Alessia Pirolo tag along with Morris Betesh, a director in the capital services division at Massey Knakal, and a top producer there.

Getting Ahead

TMO.0213.EditorsLetterCS3.indd 2 1/31/13 7:39:36 PM

Untitled-49 1 1/28/13 3:54:18 PM

4

SpotlightNews Exchange / February 2013

» Jamestown is working to close on a $168 mil-lion loan led by DekaBank to finance its recent pur-chase of the Milk Studios building at 450 West 15th Street. The spot borders the High Line and is home

The Deal

Starwood property trust and Starwood Capital group to Acquire lNR property for $1.05 Billion

» Greenwich, Conn.-based REIT Starwood Prop-erty Trust and private investment firm Starwood Capital Group have agreed to buy LNR Property, a real estate investment, finance, management and de-velopment firm, for $1.05 billion in cash.

“We have been in discussions with LNR over the past nine months, and we recognized immediately that LNR would diversify our revenue sources, add significant scale to our operating platform and ex-pand our origination capabilities,” Andrew Sossen, Starwood Property’s chief operating officer and gen-eral counsel, told The Mortgage Observer.

LNR Property, founded in 1969, has over 550 em-ployees in 12 offices throughout the U.S. and Europe and operates several real estate-related businesses, including a proprietary database on the performance of over $400 billion of commercial real estate loans and underlying assets.

Starwood Property will pay $856 million for LNR’s U.S. special servicer—the country’s largest, with over $131 billion in loans—its U.S. investment securities portfolio, Archetype Mortgage Capital, Archetype Financial Institution Services, LNR Europe and 50 percent of the company’s ownership interest in Auc-tion.com, the popular online real estate marketplace.

Starwood Capital Group will pay $197 million for LNR’s U.S. commercial property Ggoup and the other 50 percent of LNR’s ownership interest in Auction.com. The two entities will acquire all of LNR’s existing employees, assets and proprietary information.

“Our plan is to operate LNR on a stand-alone basis, so it is business as usual. LNR’s clients will continue to conduct business directly with the company,” Mr. Sossen explained. “Starwood Property Trust will pay its portion of the transaction consideration in cash. We have obtained commitments from Citigroup and Credit Suisse for a $300 million bridge loan facility.”

LNR Property is currently co-owned by Aozora Bank, Cerberus Capital Management, iStar Finan-cial, Oaktree Capital Management and Vornado Re-alty Trust.

“Having successfully transformed the company through new management and new strategic direc-tives, we are pleased to realize on that investment and grateful for the dedication of all the LNR employ-ees that enabled this outcome,” Jay Sugarman, LNR’s

chairman as well as chief executive and chairman of iStar Financial, said in a written statement.

The acquisition, which was first announced on Thursday, Jan. 24, is ex-pected to close during the second quarter of 2013. Starwood Property Trust, which had an IPO in August 2009, expects the LNR business seg-ments to add to earnings and cash flow in 2013—be-fore transaction expenses—and in 2014.

“Through this deal, we gain a proven conduit origi-nator with a fully functioning in-place platform and team, a small-balance commercial real estate loan platform, as well as unmatched CMBS underwriting capabilities,” Mr. Sossen said. “The counter-cyclical nature of special servicing and CMBS ownership re-sults in a natural hedge, allowing us to drive revenues regardless of the economic environment.”

iStar Financial, based in New York, said it expects to generate $220 million in net proceeds from the sale of its 24 percent ownership in LNR. Vornado Re-alty Trust, also based in New York, said it expects to generate about $241 million in net proceeds from its 26.2 percent stake in LNR.

Shares of Starwood Property were $25.64 as of 12 p.m. on Thursday, Jan. 31. The company’s stock has risen about 25 percent in the past year.

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are

DekaBank Loan Set to Replace Short-Term Seller Financing on Jamestown’s Milk Building Acquisition

to an eclectic mix of tech, fashion and creative ten-ants. Michael Phillips, Jamestown’s chief oper-ating officer, told The Mortgage Observer that he expects the financing to be finalized in the next few weeks and that it will replace a bridge loan provid-ed by the seller, Stellar Management.

Seller financing, which is more commonly as-sociated with smaller and residential real estate deals, was used in this case to close on the deal be-fore the year’s end in order to avoid the pending increase of capital gains taxes. This relatively un-common tool became more popular at the end of 2012, when the fear of higher taxes and the result-ing rush to sell were peaking, experts said.

A spokesperson with Stellar Management de-clined to comment for this story.

Jamestown closed on the 325,000-square-foot office building in just six weeks. The net price was $285 million. Stellar Management and Rock-point bought the building in 2008 for $161 million. Jamestown also owns the Chelsea Market, located just across the street. The addition of the building to Jamestown’s portfolio confirms the company’s commitment to the area, Mr. Phillips said.

During the negotiations, Jamestown was in talks with DekaBank to provide the financing. In 2011, the bank was among the lenders that pro-vided a loan of approximately $120 million to fi-nance Jamestown’s acquisition of a portfolio of retail properties in Boston, Mass. Nonetheless, closing the new loan before the year’s end was not doable. To overcome the financing issue, Stellar provided a $150 million loan with a 120-day term. “We expected to replace the loan within three months,” said Mr. Phillips. The deal is proceed-ing faster than initially expected, and Jamestown currently plans to close on a new seven-year loan within weeks.

Seller financing is “usually used as an incentive to help selling the building,” said Howard Krams, a partner at the accounting firm Anchin, Block & Anchin. In many such cases, sellers use the so-called “installment method,” a tool that gives tax-payers the opportunity to defer taxable gains. The goal of many sellers at the end of 2012 was avoid-ing this year’s increased taxes, and so they elected not to use the installment method, reporting all the gain as income in the year of the sale.

In another such deal, the California-based Mat-teson Companies’ $28.2 million acquisition of Langara, a 134-unit rental property outside Seat-tle, Wash., was closed by the year’s end thanks to short-term financing provided by the seller.

Andrew Sossen

TMO.0213.NewsExchangeCS3.indd 4 1/31/13 7:41:17 PM

Delivering on the Assignment

Here at HKS Capital, we understand how invaluable our clients are.We recognize and give thanks to all who contributed to our successful year,

cheers!

We look forward to notifying you of our 2013 closings!

127 West 24th Street, 2nd Floor, NY 10011(212) 254 1600 • www.hkscapitalpartners.com

A Selected few of our closings

Construction/Conversion Financing ofOffice to Hotel in Midtown Manhattan

New York, NY

$50,000,000

Acquisition Financing for 5 Mixed-use Buildings14 Stores & 100 Residential Units

Greenwich Village, Lower East Side, NoLIta, New York

$33,560,000Acquisition Financing Of a Multi-Family Asset

in the UWS of ManhattanNew York, New York

$32,000,000

Acquisition Financing Of AMulti-Family Dwelling

Brooklyn, NY

$11,000,000A 409,360 sq. ft. Industrial Complex

Jersey City, NJ

$13,600,000

TCAPITAL PARTNERS LLC.H

K

S

Untitled-49 1 1/28/13 3:53:14 PM

6

News Exchange / February 2013

UpS & DowNS

From the vault

Starwood Property trust/ Starwood Capital GroupBarry Sternlicht’s outfits agreed to buy LNR Property Group and Auction.com (see page 4) in a bid to diversify their revenue sources. Mr. Sternlicht, Starwood Property Trust’s chairman and CEO, added that the purchase would add “significant scale” to its operating platform and expand its proprietary origination capabilities.

CitigroupAccording to The Wall Street Journal, Citigroup grabbed the top spot among equity underwriters for REITs in 2012—taking Bank of America Merrill Lynch’s position. Sony Corp.The company has reached a deal to sell its U.S. headquarters at 550 Madison Avenue for $1.1 billion, a strong price that shows how investors are bidding aggressively for top Manhattan properties. The buyer is a consortium of investors led by the New York-based Chetrit Group.

morgan StanleyThe bank beat expectations for the fourth quarter of 2012—reporting earnings of $481 million, according to a New York Times DealBook report. On the news, the bank’s shares rose almost 8 percent.

BlockbusterOn Jan. 22, 2013, Dish Network—Blockbuster’s parent company—announced plans to close roughly 300 Blockbuster stores. According to the latest edition of Morningstar Alerts, 173 of those stores are securing 162 CMBS loans with an unpaid principal balance of about $3.2 billion. Bank of america and CitigroupMore than four years after the financial crisis, many big banks have regained their footing. But these two, in some ways, have remained stuck in the past, according to a New York Times DealBook report. The two banks revealed that substantial legal costs had cut into their fourth-quarter 2012 earnings—expenses that arose from settlements involving their mortgage businesses.

529 Broadway

529 Broadway: A Family JewelAUGUST 1964The building at 529 Broadway, at the corner of Spring Street in Soho, was built around 1940. However, the first mortgage mentioned in city records is a $55,000 loan, dated August 1964, provided by East River Savings Bank to Mayer and Henrietta Mandel, then residing at 340 East 64th Street. The troubled East River Savings Bank would be acquired by ADCO in the 1980s.

FEBRUARY 1983Zoltan and Rosalia Goldstein, residents of 137 Keap Street in Williamsburg, buy the property for $275,000. In May 1985, the Merchants Bank of New York provides the couple with a $275,000 loan. In 2000, the bank would be merged into Valley National Bancorp.

OCTOBER 1987 The value of the property increases quickly. Only four years after their purchase, the Gold-stein family takes a $1.4 million loan from Home Savings Bank (today Hometown Bank).

SEPTEMBER 1996 Home Savings Bank assigns the mortgage to Morgan Guaranty Trust Company of New York, which would be acquired by JPMorgan Chase Bank in 2001.

APRIL 2004 Via the family-owned company Goldstone Real-ty, Zoltan Goldstein takes out a $6.1 million loan from Merrill Lynch. Two years later, Deutsche Bank enters 529 Broadway’s financing story for the first time. The German bank provides a $16.1 million loan on the property, only to assign it soon after to Wells Fargo.

DECEMBER 2012Soho is now a hot area for New York retail, and 529 Broadway has many suitors. Finally, a joint venture between Jeff Sutton, Joe Sitt’s Thor Eq-uities, the Adjmi family and Bobby Cayre’s Au-rora Capital purchases the building for $150 million. Deutsche Bank provides $100 million in time to close the deal by the year’s end.


7

February 2013 / News Exchange

7

The Largest Loans of the Month

Affinia Manhattan

L o a n s m a d e p u r s u a n t t o C a l i f o r n i a D e p a r t m e n t o f C o r p o r a t i o n s L e n d e r s L a w l i c e n s e .

(212) 871-8902 Raphael Fishbach

A Portfolio Lender You Can Bank OnCenter 78

$40,700,000Office

Warren, NJ

1752 Shore Parkway

$29,200,000 Retail

Brooklyn, NY

Birch Creek

$14,000,000Industrial

Bridgeport, NJ

80 Broad Street

$65,300,000Office

New York, NY

465 Broadway

$42,000,000Retail

New York, NY

Bethesda Marriott

$65,000,000Hotel

Bethesda, MD

64 New York Avenue

$95,600,000Office

Washington, DC

320 East 22nd Street

$32,250,000Multifamily

New York, NY

$15 million to $150 million

Competitive pricing

No minimum DSCR

$2.0 Billion First Mortgage Balance Sheet Lending Program

www.MesaWestCapital.comL o s A n g e l e s N e w Y o r k

Flexible prepay

Non-recourse Competitive pricing Competitive pricing Competitive pricing

No minimum DSCR No minimum DSCR No minimum DSCR

$15 million to $150 million $15 million to $150 million $15 million to $150 million $15 million to $150 million

Competitive pricing

No minimum DSCR

A Portfolio Lender You Can Bank OnA Portfolio Lender You Can Bank On

$2.0 Billion First Mortgage Balance Sheet Lending Program$2.0 Billion First Mortgage Balance Sheet Lending Program

Flexible prepay

Non-recourse Non-recourse Non-recourse

Non-recourse

$15 million to $150 million $15 million to $150 million $15 million to $150 million $15 million to $150 million $15 million to $150 million $15 million to $150 million $15 million to $150 million $15 million to $150 million Flexible prepay

Non-recourse

Every Friday, our weekly newsle� er Mortgage Observ-er Weekly brings stories to your e-mail inboxes about the most interesting deals across the country, Here are some of the largest deals we covered in January 2013.

IN NEW YORK$410 MILLION Manha� an Collection PortfolioBORROWER: Pebblebrook Hotel Trust and Denihan Hospitality Group LENDER: Goldman SachsGoldman Sachs provided a fi ve-year loan on this six-hotel portfolio and plans to securitize it in a stan-dalone CMBS deal. The fi nancing is an inter-est-only, non-recourse secured loan at a fi xed annual interest rate of 3.67 percent. The hotels are Affi nia Manha� an, Affi nia Shelburne, Affi nia 50, Affi nia and Affi nia Dumont.

$315 MILLIONCarlton House Conversion, 680 Madison Avenue

BORROWERS: Angelo, Gordon & Co. and Extell De-velopment on the residential part; Thor Equities on the retail partLENDERS: M&T Bank and Bank of America

$300 MILLIONSt. John’s Center, 340 West StreetBORROWERS: Fortress Investment Group, Atlas Capital Group and West-brook PartnersLENDER: Goldman Sachs

ACROSS THE COUNTRY$2.5 BILLION LINE OF CREDIT, $750

MILLION TERM LOANArchstone portfolioBORROWER: Equity ResidentialLENDERS: 25 fi nancial institutionsEquity Residential has secured new fi nancing ahead of its planned acquisition of Archstone in the fi rst quarter of 2013. The fi nancing allowed for the

termination of a $2.5 billion bridge loan facility that Equity Residential had obtained when the Archstone deal went into contract in November 2012.

$1.3 BILLIONPortfolio of retail centers in New York, New Jersey, California and ArizonaBORROWER: MacerichLENDERS: Wells Fargo, Bank of America, JPMorgan and others


8

In-Depth Look / February 2013 A comprehensive take on CRE finance trends

by Michael Stoler

Everyone wants to visit New York City. According to a Dec. 31, 2012, announcement by Mayor Michael

Bloomberg, the Big Apple welcomed a record 52 million visitors during the year, a new all-time high and a 2.1 percent increase over 2011. Visitors to the city had an estimated $55.3 billion economic impact on the city’s economy, with direct spending reaching $36.9 billion.

In addition, New York City sold a record 29 million hotel-room nights and generated $504 million in hotel tax revenue.

At least 35 three-, four- and fi ve-star hotels are in various stages of development in the fi ve boroughs. However, even though the hospitality industry has experienced positive results, construction fi nancing has been limited to experienced developers with well-capitalized and -planned developments.

“Construction fi nancing remains available, although the sizable pipeline of new properties has lenders easing up on the gas pedal somewhat,” said Sean Hennessey, founder and chief executive o� cer of Lodging Advisors LLC. “Loan terms are generally 60 percent to 75 percent of cost, with interest rates over Libor or prime. There is much buzz about the prospects of EB-5 based fi nancing, but it is not yet a mainstream option.”

Last year, Felcor Lodging Trust announced plans to raise $45 million through EB-5 fi nancing as part of its capital for the planned $230 million redevelopment of the Knickerbocker Hotel in Times Square. Later in the year, nightlife impresario Sam Nazarian announced plans to build an SLS Hotel on Park Avenue South with EB-5 fi nancing.

Barry Stein, principal at Woodbury, N.Y.-based Rohman & Stein Associates, concurred with Mr. Hennessey, saying “construction and permanent fi nancing is available in the metropolitan area for hotels with franchises well planned and capitalized.” Loan-to-cost ranges between 60 percent and 65 percent, he said, with fi nancing rates for construction in the 4-to-5-percent range.

Ronald Levine, a managing director at Meridian Capital Group, arranged over half a billion dollars of hotel fi nancing in 2012. According to Mr. Levine, “permanent fi nancing for established hotels has eased, especially with all conduits considering

hospitality as an accepted asset class to fi nance. Nevertheless, hospitality fi nancing is still a di� cult task.”

UBS Real Estate Securities, one of the conduits active in hospitality fi nancing, closed a $180 million non-recourse fi rst mortgage on the Hudson Hotel, located at 353 West 57th Street. According to reports, the loan bears interest at Libor plus 8.40 percent, with a 0.50 percent Libor fl oor. It matures in 2014, with a one-year extension option.

Several foreign banks and fi nancial institutions continue to be active in construction and permanent fi nancing for hotels. So do fi nance companies and real estate investment funds such as Starwood Capital Group. Insurance companies, including Prudential Mortgage Capital Company, have returned to providing long-term permanent fi nancing for low-leveraged assets.

“Permanent hotel fi nancing will continue to be more accessible in 2013,” predicted Mr. Hennessey, “but not yet to the point where borrowers have a sizable negotiating advantage.”

In October 2012, Starwood Property Trust and Starwood Capital Group (on behalf of Starwood Distressed Opportunity Fund IX) co-originated a $475 million fi rst mortgage loan and mezzanine loan for the acquisition and development of a 10-story retail building at 701 Seventh Avenue at the corner of 47th Street in Times Square. The loan’s initial funding was $375 million, with $100 million of future funding for redevelopment costs, and also it contains an equity participation right for the lender. The primary sponsors are The Witko� Group, New Valley LLC and a subsidiary of Winthrop Realty Trust. Plans include 120,000 square feet of retail, a 31-story hotel tower and 22,000 square feet of LED signs.

A week after the closing of the fi nancing, Starwood Property Trust and Starwood Capital Group sold a 25 percent participation in both the fi rst mortgage and the mezzanine loan to Vornado Realty Trust.

Hospitality REITs like Hersha Hospitality Trust—one of the largest owners of hotels in the metropolitan area—have been able to fi nance construction by tapping Wall Street. In November, Hersha closed on

a new $400 million senior unsecured credit facility that is expandable to $550 million. The credit facility consists of a $250 million senior unsecured revolving line of credit and a $150 million senior unsecured term loan. A portion of the term loan paid o� balances on mortgage loans at six hotel properties.

Lenders on the facility included Citigroup Global Markets and Wells Fargo Securities.

Before the close of last year, Pebblebrook Hotel Trust announced that its JV with Deninhan

Hospitality Group, which owns six New York City hotels, had executed a new $410 million, interest only, non-recourse secured loan at a fi xed annual interest rate of 3.57 percent. The loan has a term of fi ve years and is secured by a fi rst mortgage on the A� nia Manhattan, A� nia Shelburne, A� nia 50, A� nia Gardens and The Benjamin—comprising a total of 1,491 rooms. According to reports, Goldman Sachs provided the loan and plans to securitize it in

a standalone CMBS deal. Regional lenders—among them Investors

Bank, Berkshire Bank, Bethpage Federal Credit Union, Peoples United and Sovereign Santander Bank—are exploring and providing hospitality fi nancing. Representatives of Berkshire Bank told The Mortgage Observer that they provided the construction fi nancing for limited-service hotels in Midtown Manhattan as well as the 65-key Clarion Hotel in the Borough Park section of Brooklyn.

M&T Bank recently provided a $51 million construction loan for the conversion of an o� ce building at 170 Broadway. The property is being converted into a 245-room Residence Inn by Marriott that will be owned by a joint venture of Highgage Hotels, the Carlyle Group and Tribeca Associates.

While fi nancing seems to be easier to secure for hotel projects, most lenders said that, though hospitality has turned around in the metropolitan area, one should proceed with caution. Borrowers must have the fi nancial capacity to provide between 35 percent and 45 percent equity, accept some form of personal guarantee and have an experienced operator. In general, the property should also be fl agged with a major brand.

Is There Money for Hotel Financing?

TMO.0213.CS3.InDepthLook.indd 8 1/31/13 5:45:26 PM

� �� Wells Fargo Bank, N.A. All rights reserved. MC-��

Learn more. wellsfargo.com/realestate

We offer flexible, unparalleled access to capital, liquidity, and investment opportunities through the largest, most comprehensive commercial real estate lending service platform in the U.S.

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Untitled-49 1 1/28/13 3:48:48 PM

14TH ST

10

Scheme of Things / February 2013 Monthly charts of commercial real estate financings across New York City

The end-of-year rush that we started to see in November 2012’s data increased in December—with sales, across the boroughs we looked at, up to 629 for the month, from 471 the month previous. As many investors scrambled to sell off properties to avoid changes in how capital gains taxes are collected, financing activity held strong as well. The Mortgage Observer found that a familiar spot—Williamsburg—was tops.

Mortgage Charts

757572

228 318

NOV DEC

REFINANCES NOV DEC

PURCHASES

Refinances vs. Purchases

Top 10 Lenders

Total Sales by Borough

NOV DECALL

NOV DECMAN.

NOV DECBRONX

NOV DECBROOK.

NOV DECQUEENS

BANK NOVOBER 2012 BANK DECEMBER 2012

471

131

66

181

93

629

207

66

252

104

Most Active ZIP Codes—Financing

New York Community Bank 88 New York Community Bank 69

Signature Bank 63 Signature Bank 61

M & T 59 JPMorgan Chase 57

JPMorgan Chase 58 Capital One 51

Dime Savings Bank of Williamsburgh 45 Investors Bank 29

Astoria Federal Savings Bank 40 Dime Savings Bank of Williamsburgh 27

Investors Bank 28 Astoria Federal Savings Bank 25

NCB 28 Flushing Savings Bank 23

Sovereign Bank 25 NCB 17

Wells Fargo 24 Sovereign Bank 17

ZIP CODE NOV 2012 ZIP CODE DEC 2012

11211 34 A 11221 27

10011 23 B 11215 23

10065 22 C 11237 21

10024 22 D 10011 18

11101 20 E 11211 17

11201 20 F 10013 17

G 10452 17

H 11226 17

Data courtesy of

Purchases continued to rise during December 2012, though the volume of refinances slowed.

Once again, the Brooklyn neighborhood of Williamsburg retained the top spot for financings during the month of December—with several high-profile developments planned or underway along Wythe Avenue, fast becoming a nightlife destination.

Sales boomed as an end-of-year rush to sell seized investors. Manhattan saw the largest uptick, with the Bronx the only borough that remained unchanged.

Around the Block: In Williamsburg, December’s activity included a $21.75 million loan arranged by Eastern Consolidated for an entire block along Wythe Avenue. Owner Heritage Equity Partners plans a mixed-use development there.

A steady volume of smaller transactions, like a $5 million first mortgage it originated for 436-438 West 52nd Street, helped New York Community Bank close a total of approximately 69 loans during the month of December.

A

G

F

H

E

B

D

C

TMO.0213.CS3.SchemeOfThings.indd 10 1/31/13 6:51:53 PM

www.walkerdunlop.comCommercial Real Estate Finance

FHA Bridge

Fannie Mae Freddie Mac

CMBS Life Company

Your PropertyOur Financing

Drew AndermanSenior Vice President, Multifamily Finance

[email protected]/953-7301

Steven HellerSenior Vice President, Multifamily Finance

[email protected]/833-3203

Untitled-49 1 1/28/13 3:49:21 PM

12

The M.O. Columnists / February 2013

Stein’s Law

Joshua Stein

It’s Complicated, But Is It Right?

Smart lawyers can always get it right. No matter how complex we make a business relationship, and no matter how many

players get involved, if we think hard enough, we can cover every eventuality and always get to the right answer. Our documents get longer and longer, but that’s just because we are so smart, so sophisticated and know so much.

That seems to be the general view of the commercial real estate financing world. Particularly in the run-up to the recent financial crisis, commercial real estate financing structures and documentation became steadily more complicated, with ever more special provisions for special cases, negotiated outcomes that had to be reflected throughout a document set, contingent provisions for hypothetical eventualities and a list of players that grew ever longer.

We all know what happened next, particularly in the world of inter-creditor relationships—junior and senior participations and relationships between mortgage lenders and mezzanine lenders.

Our exquisitely complex, layered and well-thought-through documents didn’t always turn out the way we expected. Under the harsh light of litigation, the very long and complex sentences over which so many lawyers had toiled for so many hours turned out to produce surprises.

Even when a document dwelled at great length on every possible eventuality, sometimes the one eventuality that ultimately occurred was the one that the document didn’t dwell on at all, or

addressed in a very shorthand and incomplete way, or addressed inconsistently in two or three different ways that tripped over one another.

The marketplace saw these dynamics play out in the Stuyvesant Town debacle and other “tranche warfare” situations in which mezzanine lenders turned out to have more or less leverage than many players anticipated. Language that seemed to address one eventuality turned out to mean something else in some other context—and that

meaning wasn’t necessarily what was intuitively expected—because it turns out that judges didn’t necessarily know what the parties were really thinking.

In the world of nonrecourse carve-out guaranties, the meanings sometimes asserted in litigation were fundamentally inconsistent with the very nature and essence of the transaction that the parties actually contemplated.

In ordinary borrower-lender loan documents, the “standard” language in a promissory note dealing with default interest turned out not to require the borrower to pay default interest at all in the single clearest possible circumstance in which a default could arise—failure to pay the loan on maturity. That’s because the note required the borrower to pay default interest upon acceleration. If the borrower failed to repay on maturity, that didn’t amount to an acceleration; hence, no default interest. No one noticed the anomaly. Yet the language in question probably still appears in thousands of commercial mortgage loan notes, including new ones. The language in

question sounds fierce, and “standard,” and ever so complex, serious and legalistic, but no one ever bothered to figure out exactly what it means. Now we know. And it doesn’t mean what we thought it meant.

In my recent work as an expert witness, I have seen dozens of surprises like these, in everything from loan documents to ground leases to joint venture waterfalls. Very often, complex language that was expected to produce a particular result turned out to produce some other result that seemed bizarre and entirely inappropriate, based on how the facts and the history played out. The parties to the transaction couldn’t have possibly meant what the document seemed to say, but layers of complexity masked the anomaly until the facts just happened to play out in the worst possible way, and someone managed to find the anomaly and seize on it.

In some cases, the courts interpret and apply the documents precisely as written, even if the result seems absurd, at least to anyone familiar with how these deals are “supposed to work.” In other cases, the courts don’t have patience for bizarre results triggered by intricate parsing and interpretation of interacting snippets of incomprehensible prose. The net result: surprises on all sides.

Based on these and many other similar experiences, perhaps the industry should rethink the trend toward making our deal structures and legal documents ever more complex and sophisticated. Perhaps we should recognize that we aren’t as omniscient as we may think. Complexity in and of itself creates risk. This would suggest that we should try to keep documents short, simple and comprehensible, and try to trim back some of the encrustation of tedious detail that gets in the way of understanding what the documents actually say.

Of course, it may be too late for that. The industry may expect certain documents to look, sound and feel a certain way, even if that way masks comprehension and increases the likelihood of surprises. And documents only get longer, never shorter, as lawyers identify new issues and new concerns.

Even against that backdrop, it probably makes sense to ask “dumb questions” about a document, and to test particular possibilities to confirm that the document will produce the right result if they ever arise. If one is smart enough to imagine and think through every future possibility, then perhaps one is smart enough to get the document entirely right. Recent experience suggests, however, that this is not as easy as it may sound.

Joshua Stein is the sole principal of Joshua Stein PLLC. The views expressed here are his own. He can be reached at [email protected].

TMO.0213.CS3.Columnists.indd 12 1/31/13 5:46:58 PM

13

February 2013 / The M.O. Columnists

The Basis Point

Sam Chandan

Flying Monkeys: Tail Risk and the Outlook for Lending

Iran’s defense ministry announced in late January 2012 that it had launched a monkey into space. Apart from the anachronism, the

most remarkable detail of the story was that the unsuspecting patriot returned to Earth alive and apparently no worse for wear. It remains unclear if Iran’s intent was to advance its nuclear ambitions, as is widely believed, or simply to underline the absurd terms of its relationship to civil societies everywhere.

Whatever Tehran’s motives, stories about flying monkeys—on the cover page and above the fold, no less—should remind us of something we are otherwise inclined to forget. Primates in space suits, like black swans, are rarely expected. But our lack of anticipation does not make them any more or less probable. That has implications for commercial real estate lending and the way we think about risk.

Fourth-quarter 2012 trends, based on Chandan Economics’ tracking of balance sheet originations and the smaller pool of mortgages targeted for securitization, indicate that the outlook for commercial real estate lending is improving. The agencies and life companies remained vigorous sources of credit in the final months of the year, albeit with little overlap in their activities. A larger minority of banks with significant commercial real estate platforms increased their exposure to the sector, principally through lending on multifamily transactions. Across capital sources, the competition to win apartment lending opportunities and the troublesome issue of crowding out showed no signs of abating.

Off the balance sheet, hiccups in conduit lending

gave way to late momentum that has carried over into the new year. CMBS volume is expected to increase somewhat in 2013, even if well-supplied bond markets clear at marginally wider spreads. In principle, a sustained uptick in CMBS activity helps to address ongoing shortfalls in credit availability to smaller assets and property types that do not enjoy apartments’ combination of start status and public subsidy. It presents challenges at the same time, since the conduit as we know it relies on a robust stream of retail properties. Feeding that pipeline in support of higher issuance goals requires a wider net than professed underwriting standards permit.

Interest rates on long-term fixed-rate loans declined across the board in the fourth quarter of 2012. Spreads are not alarmingly narrow for the median loan, but the consensus spreads analysis is flawed where it fails to account for the ongoing and deliberate distortion of Treasury yields. Going-in risk metrics require context. Even though debt yields inched lower in the quarter, debt service coverage increased as income trends rose from their nadir for a larger tally

of assets. The weight of credit risk is tilted toward maturity and away from ongoing principal and interest obligations.

The lending floodgates will not be thrown open entirely in 2013. Some segments of the market are already saturated with capital. In these quarters, competition among lenders in an environment of historically low rates is exerting independent pressure on asset values. Broader access to financing will have its most positive impact outside of gateway markets’ trophy inventory.

Borrowers pursuing noncore assets and those in many secondary and tertiary markets remain underserved, even if they meet institutions’ underwriting criteria. They will be the primary beneficiaries of the baseline trend.

But what about that monkey? Like the broader economic recovery, the current trend in property lending remains unusually susceptible to both foreseeable strains and unexpected shocks. Risk management does not require that we know the precise sources of stress on value and cash flow ex ante. Loss mitigation starts at origination either way. But for lenders and borrowers alike, potential deviations from baseline projections demand more careful consideration than is evinced by the latest trends in mortgage underwriting. The increasing frequency of initial interest-only periods and diminishing protections against inevitably higher interest rates are two cases in point. Too many fourth-quarter loans, attractive for their exceptionally low rates and more-limited amortization, are treating very plausible stress cases as black-swan events.

Pricing along a path to perfection is conspicuous in fourth-quarter 2012 apartment trends, in which an availability cascade has been at work for some time. Rate spreads for the most contested multifamily market segments have narrowed to a degree that leaves little margin for error in forecasting cash flow or the terms of exit. That follows from a recency bias, in which disproportionate weight is assigned to the most recent observations of strong cash-flow growth in shaping expectations for asset valuations’ resilience to higher exit interest rates.

Default risks of recently originated loans are weighted toward the exit, for apartments and commercial properties. That timing exacerbates defects in conventional risk models, which are falling prey to hyperbolic discounting that has been left unaddressed in the wake of the financial crisis. Whatever culture of risk management has emerged from the Great Recession, it still seems weakly matched for the cognitive biases that remain embedded in our thinking about risk. Antediluvian risk-analytics tools are failing to compensate.

It is important to acknowledge that most market participants will see things differently. Conditions are improving, and one of the primary errors of the last credit cycle—underwriting to prospective rather than in-place cash flow—is not a feature of current originations. The first RELA/Chandan Survey of Lender Sentiment captures expectations of higher lending volumes in 2013 at still-conservative underwriting standards. Of course, the risk is not in what we expect. At least not according to the monkey.

Sam Chandan, Ph.D., is president and chief economist of Chandan Economics and an adjunct professor at the Wharton School. The views expressed here are his own.

TMO.0213.CS3.Columnists.indd 13 1/31/13 5:47:12 PM

Auction.com, the world’s largest online real estate market-place, announced in early January 2013 that Bruce Felt had been named executive vice president and chief fi-nancial officer.

“Bruce has guid-ed several successful technology companies through rapid growth and expansion,” said Mon-te Koch, the company’s co-chief executive offi-cer. “His experience is an important addition to Auction.com’s executive management team and will support our ongoing efforts to drive trans-parency and utilize technology and marketing to transform the way commercial and residen-tial real estate is bought and sold.”

“I’m excited to be a part of the Auction.com team, with its deep domain expertise in real estate married with an aggressive use of tech-nology to change the way real estate is trans-acted,” added Mr. Felt. “The real estate industry is ready to be brought online, and Auction.com will be the company to make that happen.”

Prior to joining the firm, Mr. Felt served as the chief financial officer of SuccessFactors.

Starwood Property Trust and Starwood Capital Group agreed to buy Auction.com late last month as part of the purchase of LNR Property.

LRES, a national provider of commercial and residential valuations and asset management has appointed Paul Abbamonto as chief opera-tions officer.

“Paul is an industry veteran who has decades of experience managing and growing financial services companies,” said Roger Beane, chief executive officer of LRES. “His leadership, vi-sion and extensive background working with large institutions position him perfectly to help with LRES’s successful execution of business strategies for company products and services in commercial and residential markets.”

Mr. Abbamonto’s responsibilities will include day-to-day operating activities and meeting the company’s financial goals. He had previously served as a senior vice president of default ser-vices at a national title company.

Massey Knakal Realty Services has an-nounced that Omar Ferreira will be transitioning to an associate role in the capital services division. Mr. Ferreira had previously served as an intern for the division.

Mr. Ferreira will work alongside direc-tors Scott Aiese and Morris Betesh, who focus on Gramercy, Murray Hill, Union Square and Midtown East.

Coldwell Banker Commercial Alliance has named April Michelle Simmons as marketing director.

“We are delighted to have someone with April’s extensive marketing background as a member of our team,” said Peter Sabesan, prin-cipal and co-founder of CBC Alliance. “She rep-resents a new era for our firm that also includes an in-house analyst and other professionals able to provide up-to-the-minute information and services to our brokers.”

Ms. Simmons will be responsible for provid-ing marketing support to the brokers, helping design reports and overseeing the firm’s public relations programs. She previously worked as a client support specialist at LexisNexis Law Firm Marketing Solutions.

Evan Elias will join Coldwell Banker Com-mercial Alliance as a senior fi nancial analyst. Mr. Elias’s roles will include providing brokers with property analyses and long-term projections for leasing terms. He will also oversee the compilation of data for periodic reports.

“With Evan’s expertise, our brokers will have the tools to provide clients with accurate assess-ments concerning potential leases, relocations, expansions, acquisitions and disbursements, and much more,” said Richard Selig, princi-pal and co-founder of CBC Alliance. “This is a service generally associated with national con-glomerates. So as a midsize company, it gives us a tremendous advantage, especially as office market experts with long-term relationships.”

Mr. Elias previously spent 16 years as a senior financial analyst at Cushman & Wakefield.

HFF has hired Christopher Carroll as a managing director in the fi rm’s Chicago of-fi ce. Mr. Carroll will fo-cus on debt placement transactions in the Midwest.

“Chris is widely re-garded as one of the top mortgage bankers in the

Midwest, and he will be an invaluable resource in terms of expanding HFF’s debt placement platform and providing value to our clients in the Midwest and beyond,” said Michael Ka-vanau, co-head of HFF’s Chicago office.

Prior to joining the firm, Mr. Carroll served as a managing director for Cohen Financial. He has over 20 years of experience in the commer-cial real estate finance industry.

Newmark Grubb Knight Frank has added three new employees to its rapidly growing ho-tels group. The firm has named Joe Weinberg-er as managing director, Jonathan Kule as vice president and Rachel Cohen as an associate.

“These new members of our group add in-valuable capability and depth of hospitality ex-pertise,” said Michael Lehrman, global head of real estate at BGC Partners Inc.—a NGKF par-ent company.

Mr. Weinberger previously worked as the founder and CEO of Two by Two LLC, a hos-pitality investment and advisory business. His work experience also includes serving as a prin-cipal and chief operating officer of JF Capi-tal Advisors and as a senior associate at Inlet Capital LLC. He holds a bachelor’s degree from McGill University and an MBA from Colum-bia Business School with a concentration in finance.

Mr. Kule, a graduate of the University of Michigan and New York University, will focus on sourcing business opportunities across real estate assets in hospitality, student housing, re-tail and multifamily.

Ms. Cohen will assist clients in a variety of capacities, including acquisitions and disposi-tions, portfolio transactions, management com-pany and brand evaluations, capital markets advisory services and property-specific capital raising. She holds an MBA from the Wharton School at the University of Pennsylvania.

14

Work Force / February 2013 Hirings, promotions, defections and appointments

Changed jobs recently? Heard of a move?

Email [email protected] to be featured in Work Force.

Bruce Felt Omar Ferreira

Christopher Carroll

TMO.0213.WorkForceCS3.indd 14 1/31/13 5:48:09 PM

w

$42,000,000Permanent Loan Portfolio

Gramercy Park &West Village NYC

A 16-property portfolio containing 106 apartments with 8 stores and 2 townhouses

David Sessa and Stephen Katz, Senior Associates,arranged the fi nancing for this transaction

GCP Capital Group , LLC60 Cutter Mill Road, Suite 600 • Great Neck, NY 11021

Phone: 516-487-5900 • Fax: 516-487-5944www.gcpcap.com

GCPFEB.indd 1 1/28/13 5:02:34 PM

16

Power Profile / February 2013

TMO.0213.CS3.POWERPROFILE.indd 16 1/31/13 5:49:41 PM

17PHOTO BY MICHAEL NAGLE

Got a chunk of change lying around? With a book of business north of $5.5 billion, Rosemary Vrablic, a managing director in the asset and wealth management division at

Deutsche Bank, can help. Private banking is loosely defi ned as personalized fi nancial

services o� ered by banks to their high-net-worth clients. And the top providers are largely holding steady, according to 2011 year-end results from U.K.-based private wealth management consultancy and research fi rm Scorpio Partnership.

The fi rm places Deutsche Bank’s global assets under management in this area at $348.6 billion at the end of 2011—no small achievement for a German-based bank at the height of the European debt crisis and during a year that saw the United States riled by its own debt ceiling debacle.

“In 2008 and 2009, I saw real concern—even from our wealthiest clients. They were in the most defensive position I have seen in all of my career,” Ms. Vrablic told The Mortgage Observer one recent winter morning at the bank’s Park Avenue o� ces. “What we’ve seen in the last two years is less defense from an ’08, ’09 standpoint. And I do believe that they feel that valuations have either stabilized or increased, particularly in real estate.”

For the commercial real estate fi nance market, growing optimism is signifi cant, due to private banking’s historical role as the go-to source for fi nancing during troubled times. When other sources dry up, qualifi ed customers with the right banking relationship can turn to it. And real estate, Ms. Vrablic said, is her “deep dive” as well as the area in which, she estimated, 40 percent of her some 50 clients have earned their wealth.

Though she declined to reveal names from that roster of clients and relationships, citing confi dentiality, over the course of reporting, a few became known and were willing to discuss some of the qualities that make Ms. Vrablic their go-to private banker. One, Indiana Pacers owner Herbert Simon, confi rmed that private

banking has been a source of fi nancing that he has used during this most recent economic downturn.

“It’s probably four years,” Mr. Simon estimated when asked how long he’s been a client of Ms. Vrablic and Deutsche Bank. “When she came into the picture, it was a tough time to get money, and she was able to be very creative and get us what we needed. In the toughest times, she was very creative, which made me very impressed with her.”

He said that most bankers hide when the tide is turning against the client, while “Rosemary went right up there and batted for us and got us the kind of loans that we needed to continue operations.” The Indiana Pacers owner and part-owner of the Reno Aces—who ranked No. 218 on the most recent Forbes 400, with a net worth of $2.2 billion—said Ms. Vrablic has handled sports investments.

Ms. Vrablic, who started her career in private banking in 1989, has been at Deutsche Bank since September of 2006 and runs a team of nine bankers there.

“Rosemary is widely recognized as one of the top private bankers to the U.S. ultra-high-net-worth community,” Thomas Bowers, then head of U.S. private wealth management, said upon her arrival from Bank of America.

Though Mr. Bowers left abruptly at the end of the year, Deutsche Bank has steadily grown this arm of its business in the U.S., with the addition of several additional private bankers. The bank has also acknowledged that it is committed to strategically growing its private wealth management footprint in the U.S.

Ms. Vrablic has traveled a long road to her current perch in the industry, though one gets the impression that the journey was undertaken with a positive and upbeat attitude.

A native New Yorker, Ms. Vrablic graduated from Fordham University, where she studied economics and political science. When she graduated, the fi nancial industry was in crisis—with savings and loan institutions losing money and the country in recession. Jobs in the fi nancial sector, and elsewhere, were hard to come by.

But, she remembered, “Sometimes out of failure, good things

ROSEMARY VRABLIC

by Carl Gaines

High TouchReal estate has remained a focus for this

private banker to the country’s elite


18

Power Profile / February 2013

come.” A chance encounter on a stalled Metro-North train and a conspicuously capable nature turned out to be serendipitous allies.

En route to Scarsdale, where she lived with her parents at the time, she found herself talking with a fellow passenger. “We were just talking, and two hours later I get o� the train, and he said, ‘You just gave the best interview of your life,’” she remembered. At the time, she was working as a bank teller. The man, Howard Ross, was then the chief credit o� cer at Bank Leumi.

For his part, Mr. Ross said that he remembers seeing light bulbs going o� as they chatted. He went on to introduce Ms. Vrablic to the Bank Leumi team, where she was hired and became an analyst. He said that he’s not at all surprised by how far she’s gone or what direction her career has taken.

“In order to be a very good private banker, you have to be a very good credit banker, and she wears both hats well,” Mr. Ross, now the executive vice president and chief credit o� cer for the United States at Bank Hapoalim, remembered. “She was asking me questions about credit, and she was picking up very quickly on what I was reading. It was clear to others when she came in for the interview, and we hired her on the spot.”

By the late 1980s, she was a junior banker and a trainee at Republic National Bank. The roles and ranks of women in the U.S. workplace were shifting. According to the Bureau of Labor Statistics, the number of women in the labor force increased at an annual growth rate of 2.6 percent between 1950 and 2000—rising to 66 million workers. But asked if there were other women in positions that she could aspire to, especially in those early days, Ms. Vrablic said that there were precious few.

“The only woman boss I had was the branch manager at the bank where I was a teller,” she said. “She was the only senior woman I had ever dealt with for many, many years—until, quite frankly, I got to Citibank in 1989.” From 1982 to 1989, she estimated that 98 percent of the bosses and senior people she interfaced with were men—with a few women in areas like human resources.

Still, colleagues like the branch manager taught lasting lessons.

“She was an older woman, who had been through 33 years of a career at that point, so she was a great role model for me,” Ms. Vrablic remembered. The perspective was that, for her, that was the ceiling. She knew she was never going to get past that, “but she ran a great branch, took great pride in that, and she was very Margaret Thatcher-like. That was the era.”

At Republic National Bank, she said, she met another important mentor—the head of the middle-market-lending group. “‘You’re going to

make mistakes, and I’m going to be here to help you,’” she said she was told. “‘But there is nothing that I’m going to put you in a position to do that will hurt you or hurt the bank.’” The message had an impact, and mentoring became something that Ms. Vrablic herself loves to do. “It all attributes back to him, because I believe that, since I got that gift, I should be passing that gift on.”

Private banking came calling—literally—when a recruiter contacted her and asked her to interview at Citibank. It was a jump that she was reluctant to make.

“I visited the head of the private bank at Citibank and it was, at a minimum, six interviews. They were convinced that I was good for the position, that I could do it,” she recalled. “I wasn’t convinced, because I had never done selling on my own. I had been a junior, attached at the hip to my mentor.”

Asked what was most daunting about making the move, she referenced the heightened profi le—being the face of the process—as well as the delicate balance of skills that it would require.

“I knew I had the skills. I knew I understood clients,” she said. “But doing that and being a good salesperson is a huge gap. There are a lot of people who are good bankers but not necessarily good salespeople, and I think you have to be both.”

A colleague at Deutsche Bank echoed this, and added that strong relationship management skills are a vital part of Ms. Vrablic’s toolkit as well. “She’s a really good client advocate, but also someone who can balance the interests of the institution,” the person said. “She combines that with a very strong and deep skill set—across products.”

In the course of making phone calls and conducting research, in fact, the mere mention of her name yielded descriptors you’d probably want in someone handling your money. One source said she was “tickled pink” to meet Ms. Vrablic and spoke of her in glowing terms, emphasizing her down-to-earth nature. “It was like talking to a friend,” she said.

Anyway, after some convincing, she headed o� to Citibank in 1989, where she had a front-row seat, in the early 1990s, to the value that private banking could bring to commercial real estate transactions during tough times. “Many banks, including Citibank in the real estate department, had shut down and reduced the fi nancing,” she said. “Private banking became the only place to get real estate loans, and so from 1990 to 1993, I had tremendous growth in my portfolio.”

It was a period of growth for her business at Citibank, despite the di� cult economic times. She stayed until 1995, when NationsBank recruited her away. “Then in 1997, NationsBank came to me and said, ‘We just bought Montgomery Securities in California—it’s a brokerage group, and we’d like

you to go out and set up a loan production o� ce there for us,’” she said. “I moved out there for 18 months, from 1997 to 1999, which was great. I was there for a tremendous amount of wealth being created for the IPO guys.”

Still, New York had exerted its familiar pull, so when Bank of America merged with NationsBank on Sept. 30, 1998, she took the opportunity to move back East and return to New York to run Bank of America’s private wealth management o� ce in New York.

Related Companies’ chairman and founder Stephen Ross said that it was around this time that he fi rst met Ms. Vrablic and became a client.

“She brings knowledge—and the fact is that if she tells you something, you know it’s going to get done,” Mr. Ross said, when reached by phone. “We’ve really grown as a company, and me as a person, in terms of my business career. She’s been there and seen it grow.” He added that the majority of the real estate transactions Ms. Vrablic has secured for him have been for him personally, as opposed to Related Companies, which he founded in 1972. These included acquisition fi nancing for land and properties and short-term cash.

Deutsche Bank called in 2006, and she left Bank of America.

With growth being a stated mission of the division, Ms. Vrablic said that she’d like to “add new names, new relationships every year”—ideally two new relationships, though each relationship can include several di� erent clients. This was enough, she reasoned, to grow the portfolio of names while giving each the feeling she calls a “high touch.”

“You want them to believe that they’re the only client when they call up, and I think if you get too big, you can’t do that,” she said.

Asked what it is she likes about private banking, Ms. Vrablic didn’t hesitate. “I think I have the best job in the whole world,” she said. “I love my job, and if you love your job, you’re probably really good at it.” She most values the client relationships, she explained—the direct access to the decision-maker.

“We deal in relationships, so it’s sitting across from someone and saying, ‘So what’s important to you? Tell me why you’re doing this,’” she said. “That’s what’s interesting about my job. I take what the bank wants, because the bank has its requirements and their products, and the client has what they want and what they need. And I’m sort of the fi lter trying to make that happen. That’s kind of fun, because I get the best and the brightest ideas from the bank, and I have the best and the brightest people that I deal with. And that’s my job.”

Ms. Vrablic's past clients include Observer Media Group publisher Jared Kushner.


19

February 2013 / Power Profile

You want them to believe that they’re the only

client when they call up, and I think if you get too

big, you can’t do that.’‘

PHO

TO B

Y M

ICH

AEL

NAG

LE


20

Day In The Life / February 2013

Day inthe LifeAt just 25 years old, Morris Betesh is a director in the still-newish capital services division at Massey Knakal Realty Services. We were curious as to how the rising star, who closed over $50 million in just his first six months with the company, spends an average day. So, one recent Thursday, we tagged along. reporting by alessia pirolo. photos by Will o'hare.

9:40 a.m. Phones start ringing. Mr. Betesh tells a new client that he has already sent him a financial book to review. He checks on another client, who is drafting the budget for a construction loan. He asks a bank if the appraiser for a deal has been hired.

10:39 a.m. Good news for the owner of a retail building in New Jersey from a local bank: a $1.5 million refinance got the credit committee’s approval, subject to appraisal. “It’s a good story,” Mr. Betesh tells the client on the phone.

7:45 a.m. Brokers are at work, but the office is quiet. Mr. Betesh starts the day by going through his pipeline. Roughly

$90 million in loans are expected to close in the next 60 to 90 days. “I spend probably 70 to 75 percent of my time working on loans in the pipeline and making sure that our clients are

getting the best loan terms and the best execution.”

6 a.m. The alarm goes off in Midwood, Brooklyn, where Mr. Betesh lives with his wife. “We are in a business where the more time you invest, the more money you make, so people work as long as they need to,” he says. He reads papers on his iPhone during the one-hour commute on the F train.

TMO.0213.CS3.PhotoEssay.indd 20 1/31/13 5:53:13 PM

21

12:36 P.m. Mr. Betesh and Massey Knakal’s Director of Sales Clint Olsen meet developer Arjuna Sunderam at Park Avenue Tavern for lunch. They are working on a $7 million construction loan for an Upper East Side property that Mr. Sunderam is building. Over hummus, crab cakes and salad with salmon, they chat about the city’s future hot areas and recent impressive real estate deals.

11:30 a.m. After postponing a phone call several times, a client finally

gets back to Mr. Betesh and Garrett Thelander, the managing director of

the capital services group. It’s a delicate conversation on an over-$100 million

distressed debt workout.

3.20 P.m. Back to the office. In a meeting with Massey Knakal’s

brokers, Ed Petti, a managing director at Cantor Commercial Real Estate, introduces its CMBS program. Part

of the job, at least once a week, Mr. Betesh says, is “meeting with banks, learning more about their programs

and how their lending appetite is changing—because it’s always

changing—and it’s very important for us to know who to selectively go to for

every transaction.”

4:30 P.m. Again at his desk, Mr. Betesh works on a new financial

book for a portfolio of 10 mixed-use properties in Manhattan. After the

client’s approval, he will start to market it to his list of banks for a

loan of approximately $40 million. But this is work for next week.

6.45 P.m. Time to jump back on the F train and head home.

subway photo by Daniel barry/Getty imaGes; park avenue tavern by shao-yu liu

TMO.0213.CS3.PhotoEssay.indd 21 1/31/13 5:53:51 PM

Women / February 2013

22

Lissa Baum

Executive Vice Presidentand Chief Lending Offi cer

IDB Bank

Lissa Baum, chief lending officer at IDB Bank, oversees a portfolio that includes busi-ness loans, asset-based loans and real estate loans. Between 20 and 25 percent of that portfolio is commercial real estate, she said.

Still, Ms. Baum has been working with developers and property owners throughout her 31 years in banking. When she joined IDB in 1990, she became a member of the bank’s credit committee, where she voted on every loan that went out the door.

“The whole notion of real estate as a stand-alone business is misleading, because very often the businesses you are lending to own their properties, and those properties be-come part of the loan,” she explained.

Ms. Baum said her greatest accomplish-ment has been helping maintain IDB’s integ-

rity throughout the financial crisis so that the bank could continue

to support its borrowers when many other banks could not. “We were able to fund our customers through that whole

down period,” she remembered, noting that she has seen the size

of the bank’s portfolio quadruple over the past two decades.

Ms. Baum received her B.A. in finance from McGill University in Montreal and later re-ceived her MBA from NYU. Prior to joining IDB, she worked at Chemical Bank, leaving before it merged with Chase Manhattan.

In addition to the generational changes she is seeing among her customers, she said, she is noticing more women in real estate finance.

“Apart from looking at a particular property and business plan, the role of a lender is to make an assessment of the operator,” she said.

“Very often, women have strong intuitions, feelings and instincts about customers. That’s helpful, because you’ve got to be working with the right people to do good business.”

Brooke Cianfi chi

Team Leader of Commercial RealEstate

M&T Bank

Brooke Cianfi chi, team leader of commercial real estate at M&T Bank, was the relationship manager on the Helmsley Carlton House deal, which the bank began negotiating in early 2012 and closed on Dec. 28, 2012.

M&T led a group of lenders in the $315 mil-lion fi nancing on the condo and retail portion of the 680 Madison Avenue property. Ms. Cianfi chi worked to make sure everything lined up perfectly, “so there were no hiccups when the deal closed,” she told The Mortgage Observer.

“That was a tricky deal, and meant no sleep for a couple of months,” she said. “It was a team ef-fort and I was thrilled to be involved.”

She joined M&T through its management de-velopment program after graduating from SUNY Bu� alo in 2004 with a B.A. and a master’s degree in fi nance. She later received a second master’s

Not so long ago, from 2004 to 2006, when Shari Linnick was a student at the NYU Schack Real Estate Institute—where today she is an adjunct professor of capital markets—about 90 percent of her classmates were men, she recalled. Things haven’t changed that much. “For every 20 students that I have, about two or three are women,” said Ms. Linnick, who is also a vice president at Trepp and the president of NYCREW, the New York chapter of the Commercial Real Estate Women’s Network.

In 2010, a research report on women in commercial real estate by the Cornell University Program in Real Estate—with sponsorship from the CREW Network—indicated that in the previous fi ve years, the percentage of women specializing in fi nancial and professional services had dropped from 39 percent to 36 percent. Moreover, 68 percent of women earned less than $150,000, while 60 percent of men earned more than $150,000.

On the other hand, Ms. Linnick said, “even if we are not represented by large numbers, we are very well-represented.” She is right, at least based on the women The Mortgage Observer met during a series of

interviews for our inaugural Women’s Issue. We did not look for the most powerful or the most famous women in the business. We wanted to present a mix of portraits of successful professionals with diff erent backgrounds and experiences who happen to be women. Even while acknowledging that they still play in a “boys’ club,” none of them la-

mented a lack of opportunities. Asked about advice to give to younger women at the beginning of their careers, many mentioned the importance of having a good education, fi nding mentors and networking.

NYCREW, with about 60 members in New York and ac-cess to thousands more across the country, is one organi-

zation facilitating all-important networking. “What is your plan? How do you get there? How are you spending

your time?” are the questions that every woman should ask herself, said Laura Walker, a senior vice president at Citibank and NYCREW’s president-elect. “Women need to manage their careers and take risks,” she said. Opportunities are out there, the women in these pages told us, and they've worked hard to get them.

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24


degree in economics from New York University, taking night classes while working at the bank.

“Even when I was graduating from NYU, and people asked ‘What’s your next step?’ I would say I have no plans to leave commercial real estate financing or my current employer,” said Ms. Cianfichi. “My job is meeting and working with great people and families in New York, and I never wanted to take my stock out of that.”

Opportunities for women in commercial real estate banking, especially in New York, are plen-tiful, she said.

“Commercial banking is a relationship-focused business," she said, “and while I don’t like to gen-der stereotype, women are very often comfort-able and capable in that kind of role.”

Patricia Goldstein Vice Chairman and Head of Commercial Real Estate

Emigrant Bank

Patricia Goldstein started her career as one of the first women in the credit program at Citicorp, and she reached, literally, the top of the world, becoming division executive in the Citicorp global real estate division. In the mid-1990s, she had responsibility for a $23 billion real estate portfolio and managed offices in the U.K., Canada, Spain, Italy, France, Germany, Poland and Japan. For almost 10 years now, Ms. Goldstein has been the head of commercial real estate for Emigrant Bank, where she is a vice chairman in charge of credit decisions for the real estate group as well as Emigrant’s other lending franchises. The bank has $12 billion in assets and $1 billion in real estate balance sheet loans.

Ms. Goldstein was also executive vice presi-dent and chief operating officer of M.J. Raynes and senior vice president and treasurer of Olympia & York. “I’ve worked on the owner sides, for developers, as a banker, and now for a privately owned bank,” she said. “I do everything—new business, marketing, workout management.”

In 1970, at the beginning of her career, she was “a little bit ahead,” she said. “I was among the first women to go to the credit program. Before, they didn’t allow women.” In the 1970s, she saw the doors of the commercial real estate financing world slowly opening to women. Still, even today, she admits that CREF remains an

all-boys network. “Men don’t seem to allow women to do investment,” she said. Further-more, the recession, she pointed out, hit women even harder than it did men.

To women who want to start a career in the business, she said, “the only advice I can give is to get a higher education and work very hard.”

Sophia Haliotis Senior Vice President

Popular Community Bank

Sophia Haliotis, head of commercial banking and CRE at Popular Community

Bank, took on that position over the summer to grow the bank’s presence in com-

mercial real estate financing as well as middle-market and community lend-ing. Ms. Haliotis said she “learned real estate from the dark side of the business.” After graduating from the

City College of New York in political science, she started her banking career

in 1984 at Greenpoint Savings Bank and then joined European American Bank.“My introduction to the real estate business

was working problem loans out,” she told The Mortgage Observer. At the time, EAB was working through issues with regulators and doing minimal lending.

“I was a corporate finance person, and my man-agers told me, ‘You need to go into real estate,’” she said. “I replied, ‘But I don’t know anything about real estate,’ and they said, ‘You don’t have to. You just call up the client and tell them pay off their loan.’”

Ms. Haliotis later joined Washington Mutual, which Chase acquired in 2008. She stayed through that transition for a few years.

In August 2012, she joined the New York offices of Popular Community Bank, which is headquar-tered in Puerto Rico and has close to $9 billion in assets in the States. She expects to grow her team from 20 to about 35 people this year.

“Coming to Popular gave me a certain level of autonomy and direct contribution to the bank’s performance that I didn’t have at the bigger finan-cial firms,” said Ms. Haliotis.

“Finance has always scared women a little bit. But now I see a lot more young women coming into the field,” she said. “When I started, I was the only woman in my group. Now that’s no longer the case.”

Helen Hwang Executive Vice President Capital Markets Group

Cushman & Wakefield

Helen Hwang jumped from a farm in Kyung-Gi-Do, the South

Korean village where she was born, to dealing in iconic Manhattan sky-scrapers such as the MetLife Build-ing, 666 Fifth Avenue and the Park

Avenue Tower. An executive vice president in the capital markets group

at Cushman & Wakefield, she currently co-heads the New York investment sales team.

“Women in general could take more risk and be more courageous. Sometimes it pays off to jump in and take risks,” Ms. Hwang told The Mortgage Observer. When she was 13 and didn’t speak any English, her family decided to move to the U.S. She simply faced the challenge. Within one year, she had mastered the lan-guage. Today she has about 12 mentees, whom she reminds not to be afraid to fail.

A graduate of the Cornell University School of Hotel Administration and of New York Uni-versity’s Schack Institute of Real Estate, Ms. Hwang has been at Cushman & Wakefield for her entire career.

When she was offered her first job at the firm, she asked about her growth potential there. “You can make nothing, or you can make a lot—it’s up to you,” she was told. “It was a very scary thing at that age to hear, but at the same time, I believed in myself. If it’s up to me, I’m going to do well,” she said.

Over her career, Ms. Hwang has executed over 50 institutional sale and recap transac-tions exceeding $18 billion in value. Asked about her recent accomplishments, she men-tioned the $3 billion in transactions closed by her group in 2012 and the well-established syn-ergy between the firm’s different teams, which now work together on each and every deal.

"SometimeS it PayS off to

jumP in and take riSkS"


25

February 2013 / Women

Carina Kalaw Senior Vice President and Head of Real Estate Loan Syndications

Capital One

Carina Kalaw, senior vice president and head of real estate loan syndications at Capital One, has helped the bank take a stronger leader-ship position in the syndication market during her two years there.

“When I started, we weren’t the lead agent on any syndication deals,” she said. “The bank wanted to make a shift, leading our own deals and selling them to the other banks.”

Ms. Kalaw, who grew up in the Philippines, has developed a reputation as a builder of commercial real estate syndication platforms over her nearly 20-year career.

“That was part of the reason Capital One hired me,” she said. “In my first

year, we did more than 10 deals with a team that wasn’t really formed until the latter half of 2011. I’m a builder, which is what real estate is all about.”

She graduated from Boston Col-lege in 1994 with a bachelor’s degree in

marketing and joined Chemical Bank for a six-month real estate training program, where she rotated through various departments—REO work-out, valuation, origination, syndication and CMBS.

The bank placed her in its CMBS group, but Ms. Kalaw had her sights set on other areas of the busi-ness, and she eventually settled in syndication. When Chase Manhattan and Chemical merged, she went to work for Fleet Bank, UBS and three other European banks.

During a three-year stint at Germany’s Eurohy-po AG, she worked on the $950 million financing deal for 15 Central Park West. “We handled that

from the land loan phase to the construction loan after,” she remembered.

Ms. Kalaw attributes her accomplishments to having learned how to be more assertive. “If you don’t speak up, your employer is going to assume you are happy with what you are doing,” she said.

Amy Levenson Executive Vice President Capital Markets Group

Avison Young

In the mid-1980s, when Amy Leven-son was the only female corporate bond trader at Paine Webber, her colleagues kept telling her that, as a woman, she would not last. Nonetheless, “I have great feelings for them,” Ms. Levenson said recently. Her career has spanned more than 25


26


years—13 of which were spent at Goldman Sachs. She joined Avison Young’s capital markets group as an executive vice president in May 2012. “They gave you a hard time, but who cares—they gave you an opportunity,” she said, pointing out that the firm was ahead of its time in hiring a woman at all.

A graduate of Barnard College and the Colum-bia Business School, Ms. Levenson joined Gold-man Sachs in 1991, where she served as the head bank note trader, trading the debt of banks, finan-cials, retailers, homebuilders and REITs. In 1996, she moved into fixed income sales, where her work was recognized with the Top Cross Product Award Goldman Sachs North America, among several other awards.

“Currently, I source and place debt, structured debt and equity opportunities and then bring in the optimal Avison Young team for best execu-tion,” she said, talking of her role within a team that has closed over $3 billion of refinances, loans, REO sales and recaps in the last three years.

At the moment, she has exclusives to sell six properties in five states, for a total value of about $35 million, and a pipeline of approximately $50 million in transitional capital financing.

Wendy Schwartzberg Director, Real Estate Syndicated Finance Group

Wells Fargo Securities

Wendy Schwartzberg is a director in the real estate syndicated finance group at Wells Fargo Securities, the first commercial real estate lender in the U.S., which she joined in 2006. This past fall, she syndicated a $250 million loan secured by the 51-story Olympic Tower at 641 Fifth Avenue.

In each step of a career that has been built at some of the most important CREF companies, Ms. Schwartzberg has been pivotal in creating something new. In 1997, she joined Chase to help it expand its securitization program to include new securitization products.

Later, she was at Greystone when it was a pri-vately owned company, and at Gramercy Capital when it was a startup. “Looking back, by taking my skills and experiences and looking at them in dif-ferent ways, I’ve been able to put on many different hats and have repeatedly been able to use my skills and experiences to help companies start something new, which is a real accomplishment,” she said when asked about her greatest achievement.

Ms. Schwartzberg earned a B.A. in economics and business from Lafayette College and an MBA in finance from NYU’s Stern School of Business. Prior to joining Chase, she was a director and cred-it officer at Standard and Poor’s, evaluating RMBS, CMBS, and tax-exempt housing bonds.

Today, women make up about one-third of her real estate syndicated finance group team. “Work as hard as you can, meet as many people as you can” is her advice to women who want to start a career in this business—as well as in probably any other business.

Carol Shelby Vice President

Meridian Capital Group

In 2012, Carol Shelby, a vice president at Meridian Capital Group, closed over 160 transactions for just under $1 billion. When asked about her next career goal, she answered without hesitating: “To close over $1 billion.”

Ms. Shelby started working at Meridian just out of high school, 21 years ago. “There’s

nothing before Meridian,” she said with a smile, speaking of her back-ground. Meridian opened in April 1991, and she joined it as a secre-tary that August. “I started as a

secretary, but I was lucky enough to be in a company that was very ag-

gressive, very knowledgeable. I learned hands-on.” Pretty soon, Ms. Shelby proved

her talent, and in less than three years, she was a licensed broker.

Among some of her most recent deals, she ne-gotiated a $59 million loan for a 450,000-square-foot office and retail property in Philadelphia and a $49.5 million loan on a four-building multifam-ily portfolio in New York. “There are people that focus primarily on one sector,” she said. “For me, it’s like one-stop shopping. A client can come in being in multifamily and then decide to add a re-tail piece,” she said. “I know where to go.”

On a personal level, she said, her biggest ac-complishment is having raised her five children while working full-time and being there for her clients 24/7. Moreover, in her late 30s, Ms. Shelby is probably among the youngest grandmothers in CREF. To juggle everything, she has always fol-lowed advice she received at the beginning of her career: “Everybody will need you. Your work will need you, your children will need you, your hus-

band will need you. So you need to focus on who needs you the most at that moment.”

Jane Silverman Vice President, Community Development Banking

JP Morgan Chase

Jane Silverman, vice president of community development bank-

ing at JPMorgan Chase, structured and closed the New York City Acquisition

Fund for affordable housing develop-ment in August 2006.

That fund has financed 37 project loans through Sept. 30, 2012, at a

total of $155 million. In December 2010, she closed a deal for a senior hous-

ing facility in Queens that provides indepen-dent living services for over 100 moderate-income residents.

Since 2005, Ms. Silverman has worked with a team of community development bankers at Chase that structures deals for subsidized hous-ing. “Chase is very much an industry leader and has been doing very innovative lending that other banks weren’t doing when I joined,” she said.

Ms. Silverman started her career in 1987, after she saw a classified ad in The New York Times for opportunities in subsidized housing development under former Mayor Ed Koch. “It was a big half-page ad that read: ‘Come Participate in Koch’s 10-year housing plan,’” she remembered.

After seeing that ad, she went to work for the city’s Housing Department for seven years, doing co-lending with banks. Under Mayor Rudy Giu-liani, she went into banking, as the government’s role in financing housing was becoming increas-ingly privatized.

Ms. Silverman, who holds a B.A. in international relations and an M.S. in energy management from the University of Pennsylvania, joined Dime Sav-ings Bank of New York in 1994. She stayed there for eight years before Washington Mutual acquired the company. She left WaMu for Chase, three years before Chase absorbed the struggling bank.

“There are a significant number of women in senior positions throughout the major banks,” said Ms. Silverman. “The place where I can see more growth is within the real estate development com-panies, which are typically family- owned. But the next generation of daughters are slowly coming into that field.”


Untitled-49 1 1/28/13 3:52:24 PM

28

Q&A / February 2013

Laurie Grasso

by Cody LyonThe Mortgage Observer: What types of deals have you been busy with since arriving at Hunton last April, and where is the most activity? Laurie Grasso: Our group at Hunton is divided into two halves, which we think make the perfect whole. The finance side is doing a lot of large loan originations and CMBS deals. On the other half—where I sit, on the development-equity side—we’re starting to do development again. We’ve had some projects that we worked on for years that were sort of waiting for the prime opportunity to come back to surface, and that time is now. It looks as if financing is finally available for many of these development projects. It also looks like people are very interested in tapping back into the condo market. That’s because there hasn’t been a lot of development in that sector over the past few years, so there’s definitely a deficiency in that market.

Are you seeing any risk-taking coming back into how deals are structured? If so, how?

I think the hardest part about development deals now is that, although lenders are clearly lending, they are requiring much more recourse than the last cycle. That’s the hardest part of putting together a deal—who is going to be on the guarantees, who’s going to be able to provide the credit support. So I guess that’s probably the riskiest part of putting together a deal: trying to figure out who is going to step up and put up the guarantees.

How about mezzanine financing activity?I represent a number of funds that over the next

year or two would like to come back into the mezz financing market. There’s a lot of discussion about what type of deals they’d want to find themselves in. I’m not seeing a lot of mezzanine deals yet, but I definitely think it’s on the horizon. I did a lot of mezz financing the first time around. I think it’ll come back.

How robust is current CMBS activity?My finance partners here at Hunton are extremely

busy and have seen increased CMBS activity over the last six months and into 2013. In large part, that’s been caused by the tightening of interest-rate spreads over the second half of last year and into this year, which has made CMBS lending shops able to offer borrowers better pricing relative to more traditional portfolio lenders.

As an attorney, what would you advise both buyers and sellers to be watching most closely in the coming months?

If you’re a seller and you’re actually contemplating selling your product, you should get in the market. The pricing and competition is so fierce right now. There are so many people coming into the New York City market that have never been in this market before, so pricing is really out of control. If you’re a buyer, it’s so competitive on the buy side. We look at a lot of deals for clients that, they think they are at the right price and they think they’re going to get the deal, but it turns out that they’re just not. That’s a hard question to answer for the buy side.

How did you get your start in law? Did you always know you wanted to focus on commercial real estate?

I really thought I was going to be a sports agent. I was an athlete in college. Out of law school, I fell into a firm that had deep ties in real estate. After a few months of doing real estate closings, I really got hooked. I became obsessed with the art of negotiation. I’d study businesspeople, the opposing counsel—really anyone trying to figure out how you win points in negotiating deals. It wasn’t the plan of my life to be a real estate attorney. I just sort of fell into it.

What interests you most about this market?To be a part of this market—and I say this to

junior lawyers all the time—although you’re a lawyer, you have to love real estate. So much of what we do—the structuring, the sitting down with plans, taking the time to understand how we’re

going to map out a client’s vision of what they want to do—you just have to love your deals. You have to be a deal junkie. You also have to understand that some of these deals might take years and years. You have to appreciate that, while some other deals can be done in days.

Do you think that there were any challenges inherent in pursuing this genre of law as a woman?

I think there are certainly more influential women in the industry today than when I first started. On the legal side, the business side, definitely on the broker side, some of the top brokers in this city they are women. It’s wonderful to see those women get so many accolades. Overall, though, I think, at the end of the day, you just have to work hard. If you work hard and are capable and have the relationships, you’re going to succeed. I’ve been fortunate to have hooked up with some really good mentors over the years, and they weren’t all necessarily women. I don’t think you have to have a mentor that’s a woman. You have to have a mentor that’s going to believe in you, teach you and guide you.

Do you or your firm do any mentoring to bring more women into the practice of commercial real estate law? Do you even think that’s necessary in 2013?

I do a lot of mentoring. I spoke on a panel a couple of weeks ago, and there were women in the audience who came up to me afterward, and we’ve been emailing since. They’ve been asking for advice, and I’ve been in contact with them. Within the firm, we have some juniors—many of whom are women—who I’ve been helping along the way. As for Hunton, we have added 17 real estate attorneys in New York City since April 2010 and, given our robust business, we will continue to grow with top talent.

Laurie GrassoHunton & WilliamsThe Mortgage Observer spoke to Hunton & Williams partner Laurie Grasso for February 2013—touching base on a variety of issues, from a resurgent condo market to the current landscape for female attorneys looking to break into commercial real estate law.

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30

Culture / February 2013

NYCREWOn Jan. 29, 2013, about 60 women and a few men gathered at the o� ces of UBS Financial Services on the Avenue of the Americas for the fi rst event of the new year held by the New York chapter of the Commercial Real Estate Women’s Network. While glasses of white wine and canapés were being enjoyed, The Mortgage Observer witnessed a slightly unusual phenomenon for a networking event: actual networking. Shari Linnick, president of NYCREW, and Laura Walker, the president-elect, welcomed the new attendees. Women chatted nonstop, moving from career plans to relationships. Then Douglas Elliman’s Faith Hope Consolo made an entrance as the “Queen of Retail” that she is, fi elding greetings, hugs and kisses. “It’s the fi rst networking group in which I don’t stay in a corner,” one woman was overheard saying. “I actually speak to people.” Ironically, the speakers on the night’s panel, “Global Real Estate Trends in 2013,” were men: Jonathan Woloshin, of UBS and Dennis Yeskey, of Yeskey Real Estate Consulting and Investments.

NYCREWNew York chapter of the Commercial Real Estate Women’s

and Laura Walker, the president-elect, welcomed the new attendees. Women chatted nonstop, moving from career plans to relationships. Then Douglas Elliman’s Faith Hope Consolo made an entrance as the “Queen of Retail” that she is, fi elding greetings, hugs and kisses. “It’s the fi rst networking group in which I don’t stay in a corner,” one woman was overheard saying. “I actually speak to

Trends in 2013,” were men: Jonathan Woloshin, of UBS and Dennis Yeskey,

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TMO.0213.CS3.CULTURE.indd 30 1/31/13 6:05:00 PM

UPCOMING MORTGAGE OBSERVER ISSUES:

APRILMultifamily Lending

3/14 3/18 3/26 OCTOBERO� ce Lending

9/12 9/16 9/24

MARCH50 Most Important People in CRE Finance

2/21 2/25 3/5 SEPTEMBERHotel Lending

8/15 8/19 8/27

MAYConstruction Financing

4/18 4/22 4/30 NOVEMBERTwenty on the Rise

10/17 10/21 10/29

JUNERetail Lending

5/16 5/20 5/28 DECMEBERPrivate Banking

11/14 11/18 11/26

Issue Reservations Materials Issue Date Issue Reservations Materials Issue Date

JULY - AUGUSTTop Mezanine Lenders

6/13 6/17 6/25

The Mortgage Observer

The Mortgage Observer is a monthly glossy magazine inserted

into 11,000 copies of The Commercial Observer. With profi les of

industry giants and mortgage charts tracking the most active

lenders and neighborhoods, and contributions from columnists

Joshua Stein and Sam Chandon, The Mortgage Observer

is your go-to for the most comprehensive coverage of the

commercial mortgage industry.

The Insider’s Guide to the Commercial Real Estate Financial Industry

The Mortgage Observer is a monthly glossy magazine inserted

into 11,000 copies of The Commercial Observer. With profi les of

industry giants and mortgage charts tracking the most active

lenders and neighborhoods, and contributions from columnists

The Insider’s Guide to the Commercial Real Estate Financial Industry

JANUARY 2013 | $10 JANUARY 2013 | $10

Making Waves: European Banks Exit, Asian Banks Sail On

Q&A The M.O. Talks With M&T Bank’s Newly Promoted

Peter D’Arcy285 Madison Avenue

The SL Green Financing Behind RFR Holding’s Buy

In-Depth LookBanks Weigh in on Their

2012 Results, but Are They Satisfi ed?

Stein’s LawJoshua Stein on Prepping

for the Next Boom

Knickerbocker HotelOnce Home to Italian Tenor

Enrico Caruso, the Site Has a Mortgage History That Sings

TMO.0113.CS3.COVER.indd 1 1/3/13 7:24:43 PM

Mortgage Observer WeeklyCompanion to The Mortgage Observer, providing industry

updates and news to 12,000 real estate insiders. Mortgage

Observer Weekly is a new weekly PDF newsletter emailed

directly to industry players every Friday morning.

To receive Mortgage Observer Weekly, please visit

commercialobserver.com/mortgage-observer-weekly-signup

For advertising information please contact Barbara Ginsburg Shapiro, Associate Publisher, at 212-407-9383, [email protected].

ComMortgObs_FullPage_9.875x10.5_01.indd 1 1/31/13 2:34:02 PM

32

The Sked / February 2013

The Sked: February

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3-6What’s a Super Bowl party if there aren’t several

families under the same roof? The Mortgage Bankers Association’s Commercial Real Estate Finance/Multifamily Housing Convention & Expo 2013 kicks o� with a Super Bowl tailgate.

MBA’s CREF/Multifamily Housing Convention & Expo; Manchester Grand Hyatt, 1 Market Place, San Diego, Calif. Visit events.mortgagebankers.org/CREF2013 for more information.

11-12Want to know what’s really a great real estate

workout? Running along the beach admiring the hotels along the shore on a sunny Florida day.

IMN’s Third Florida Bank & Financial Institutions Special Asset Executive Conference on Real Estate Workouts; Ritz Carlton, 1 North Fort Lauderdale Beach Boulevard, Fort Lauderdale, Fla. Visit www.imn.org for more information.

12Didn’t spend your early 20s in New Haven?

Now is your chance to bust down the door of the blue-awning club. Join the CEO of Jamestown Properties, Matt Bronfman, for a Real Estate Lenders Association breakfast at the Yale Club.

RELA New York Breakfast featuring Matt Bronfman; The Yale Club, 50 Vanderbilt Avenue, New York, N.Y., 8 a.m. to 9:30 a.m. Visit rela.org for more information.

18-20Don’t let the smog bog you down! Head

over to Hong Kong to attend the Pacifi c Cities Sustainability Initiative, a joint venture between the Urban Land Institute and the Asia Society. The event will address the challenges of producing sustainable communities. Please note that the event is invitation-only.

Pacifi c Cities Sustainability Initiative: Tomorrow’s City Today; 9 Justice Drive, Admiralty, Hong Kong. Email [email protected] or visit www.uli.org/event/pcsi for more information.

28Remember to download the 2013

Developer of the Year nomination form—due today!—and nominate a developer who has completed great work in 2013. The panel will judge based on outstanding quality of projects and services, active support of the community through NAIOP, fi nancial consistency and stability, ability to adapt to market conditions, and support of the local community.

Visit www.naiop.org/en/About-NAIOP/Awards-Programs/Developer-of-the-Year.aspx for more information.

Don’t let the smog bog you down! Head to attend the Pacifi c Cities

Sustainability Initiative, a joint venture between the Urban Land Institute and the Asia Society. The event will address the challenges of producing sustainable communities. Please note that the

stability, ability to adapt to market conditions,

Visit www.naiop.org/en/About-NAIOP/Awards-Programs/Developer-of-the-Year.aspx for more

TMO.0213.CS3.TheSked.indd 32 1/31/13 6:00:46 PM

Untitled-62 1 1/30/13 12:17:39 PM

HEADQUARTERS New York 212.697.3333 Boston 617-371-2427 Miami 305-503-1107

$400,000,000 Senior Debt & Mezzanine

Office New York

$95,000,000 Debt

Condo Construction New York

$79,758,544 Debt

Hotel Construction New York

$64,000,000 Debt Retail

District of Columbia

$60,300,000 Debt Hotel

Florida

$60,000,000 Senior Debt & Mezzanine

Multifamily Chicago

ONE FIRM

Capital, fueled by innovation

Untitled-60 1 1/30/13 12:03:04 PM

Documents

MO February 2013