by Scott Lynn
During the month of June, Metropolitan Capital Advisors (“MCA”) celebrated its 20th Anniversary. With 1,000 plus closed deals representing $8.6 billion of transaction volume, twenty years seems like a blur.
The decision to start the firm was the easy part…create a real estate finance intermediary focused on the representation of entrepreneurial developers and investors, with an allegiance to the users of capital rather than the providers by using a true investment banking approach to the placement of transactions. In 1992, this was still a novel concept as the majority of the industry remained entrenched in the traditional mortgage banking model….correspondent lending on behalf of a host of life companies, agency providers and specialty lenders that needed to plug into deal flow. The MCA model evolved to fill in the blanks for all the other components of project and property capital requirements, such as construction financing, bridge loans, equity placements and mezzanine products.
Once the mission and goals were defined, the hard part started. First there were the “uncontrollable” factors. Try starting a firm in the middle of the 1992-93 Recession, followed soon after by the Russian Debt Default, The Tech Boom & Bust, 9/11, Hurricane Katrina and the 2008 Economic Collapse.
Then try recruiting talent to a style of finance brokerage that was practically nonexistent at the time. It was equivalent to recruiting athletes to compete in a newly created sport…they had to be trained from the ground up, one pro at a time. Today, MCA has seven senior directors, all of whom have been organically trained and grown. The average tenure of our bench exceeds ten years.
Our firm had to build its Closing Department from scratch. For that matter, no one even knew what a Closing Department was let alone what a closer did. MCA’s Closing Department was set up to proactively assist clients with the myriad of detailed paperwork and information requirements capital providers demand in order to fund deals. MCA had to develop a whole new professional discipline that eventually was not only embraced by the client side of our business but moreover, capital providers were delighted there was finally someone at the helm to get things done so deals could close. For MCA, having a Closing Department provided a service differentiation that separated our firm from its competitors and substantially increased the probability of a successful closing.
Building a well-grounded team to originate and close transactions was, most certainly, a proud accomplishment. Even more satisfying was witnessing the theory of our business practices correlate into the creation of a loyal client base that not only returned for repeat business, they insisted our firm become their “download” finance department or alter ego financial psychiatrist. Many of these clients started as former leasing agents or CFOs turned developer. Some clients were heirs to legacy real estate families where daddy had the guts to say, “I gave you college and knowledge….now go do it the way I did…use other people’s money.” No matter where our clients came from, the recurring theme was they are all hard-driving entrepreneurs that are loaded with a passion to create value in the commercial real estate world.
Over the past twenty years, our firm has also had the pleasure of developing relationships with folks, many of whom started as analysts fresh out of college working for capital providers. Today, many of these friends are chief executive officers or chief credit officers at major lending and equity platforms. I have waited an entire career to have close relationships at the very top of the decision ladder.
Staying relevant in the CRE finance intermediary market over a twenty-year span takes an intense adherence to a core set of values, work ethic and discipline. The challenges of changing technology, competition and the evolving capital markets environment simply means good service providers have to be on their toes with their ears to the ground at all times. It can be a bit of a beat down when you control very little, and uncontrollable factors can squash your deal in an instant. What makes it all worthwhile, and All That Really Matters, is the great relationships that get established with clients, capital providers and colleagues. Doing deals would be a lonely wasteland but for the friendships that come with successful closings and the people that keep you going day to day. Repeat….That’s All That Really Matters.