Deutsche Bank’s CMBS guru and real estate financing head honcho, Jonathan Pollack, took the No. 1 spot on this year’s 50 Most Important People list due to several colossal deals and his team’s top ranking in the global and U.S. securitized debt markets.
While the German global banking and financial services company reported an unexpected overall loss of 965 million euros, or $1.3 billion, for the fourth quarter of 2013, its real estate debt operations have continued to show clear gains.
“We have found success by being creative for our largest clients on their most important transactions,” Mr. Pollack, the company’s managing director and global head of commercial real estate, told Mortgage Observer. “We led Hilton through a reissuing of their entire capital structure using the leveraged finance, CMBS and public equity markets. We refinanced Extended Stay Hotels, creating a flexible structure that allowed the company to IPO several months later.”
Deutsche Bank had previously helped bring Extended Stay out of bankruptcy with a $2.7 billion loan in October 2010. Mr. Pollack’s team refinanced that debt with a $3.6 billion loan in February 2013. Since its IPO at the end of last year, the once struggling hotel chain has seen its stock price rise more than 30 percent from $20 per share on Nov. 12, 2013, to $26.35 per share on Feb. 14, 2014, allowing the company to retire a portion of its debt.
Mr. Pollack’s team additionally led on some of the other largest reported deals in 2013. Among those were a $485 million loan to Tishman Speyer and Singapore’s sovereign wealth fund for the Colgate-Palmolive Building at 300 Park Avenue, a $900 million loan to SL Green Realty Corp. to refinance 1515 Broadway, a $875 million loan to George Comfort & Sons to refinance Worldwide Plaza and $1 billion in securitized debt to a joint venture led by RFR Realty to refinance the Seagram Building at 375 Park Avenue.
In the fall of 2013, Deutsche Bank and Goldman Sachs originated $800 million in mortgage and mezzanine debt to a joint venture of Crown Acquisitions, Highgate Holdings, Vornado Realty Trust and Oxford Properties Group for the $1.3 billion purchase of 650 Madison Avenue, a 27-story office tower put up for sale by the Carlyle Group.
“One of the big areas of focus for us in 2013 was the theme of New York single-asset office buildings,” said Mr. Pollack, who oversees five national offices and one office in London while managing risk for the bank’s structured finance activity. Deutsche Bank declined to provide the number of employees who work directly under him.
The bank’s output of mega loans on prized office properties has not slowed down so far this year. Last month, Deutsche Bank closed and securitized a $700 million CMBS loan to a joint venture led by Related Companies for its acquisition of Time Warner Inc.’s office space at the Time Warner Center at Columbus Circle. Mr. Pollack and his cohorts brought in Bank of China for about a third of the five-year, floating-rate loan, he noted.
Globally, Deutsche Bank’s commercial real estate transactions in 2013 totaled about $20 billion, with more than $3.3 billion of that produced for New York transactions. Factoring in the CMBS deals done with other lenders, including Bank of China, Citigroup and Goldman Sachs, the bank’s global real estate activity exceeds $20 billion.
One of the largest deals his team closed overseas last year was the acquisition of a more than 400 million euro portfolio of nonperforming loans across several transactions from SAREB, Spain’s national resolution bank.
“Spain is an economy and a real estate market that a lot of the U.S. real estate and private equity firms are becoming active in and has been a growth area for us this past year,” Mr. Pollack said. “We also continue to execute securitizations in Europe, which is an interesting area that we hope will grow.”
On the domestic front, Deutsche Bank’s commercial real estate team has also widened its footprint in the past year, outpacing its biggest competitors in U.S. securitized debt deals. As Commercial Mortgage Alert reported this January, Deutsche Bank was the most-active book runner of CMBS transactions in the U.S. in 2013, with 29 deals totaling $18.5 billion, up from 14 deals totaling $9 billion in 2012. Last year, Mr. Pollack and company took the top spot for the third year in a row, capturing a 21.5 percent market share, surpassing J.P. Morgan Securities’ 15.6 percent and Well Fargo’s 13.3 percent.
“Across all regions, we aim to provide real estate debt capital into opportunities that our clients are pursuing,” Mr. Pollack said. “We are flexible in our transactions, from CMBS to bridge loans.”
Additional reporting by Gus Delaporte, Matt Egan, and Daniel Edward Rosen