Presented By: Meridian Capital Group
The Little Office That Could: Meridian’s CA Team Closed Over $1 BN to Date in 2018
The center of U.S. finance may be New York City, but the West Coast is a hotbed of activity. Seth Grossman, Senior Managing Director of Meridian’s Southern California offices, and his team of five have seen plenty of activity in 2018: Together, they’ve closed in excess of $1 billion in financing over the past year.
How did such a small team manage to close so many significant transactions? Seth spoke about the factors underlying the team’s success and some of their highlights from 2018.
The large volume of transactions – more than 60 closings over the course of the year – stems from the team’s broad focus. Their recent closings represent a wide range of property types, projects, lenders, transaction sizes, investment strategies, and geographies, including a $117 million deal for the ground-up construction of a luxury multifamily high-rise in Los Angeles. The team obtained a five-year, non-recourse, interest-only loan from a balance sheet lender on behalf of J.H. Snyder Company and OGO Associates of Wilshire.
Meridian’s Southern California office also recently arranged $89 million in financing for the Willow Creek Corporate Center, a seven-building office campus totaling 421,000 square feet in Redmond, WA, originated by team member Kovi Elkus. In this case, the team negotiated a 10-year, interest-only CMBS loan. Grossman’s team also closed “The Florida Seven,” $76 million in acquisition financing for a portfolio of seven multifamily properties. Although purchased from one seller under a single purchase and sale agreement, each was financed separately through seven-year Freddie Mac loans with fixed or floating rates and two years of interest-only payments.
Most currently, the team arranged $37 million in financing for the refinance of a portfolio of 46 noncontiguous buildings in Chicago, IL. This deal was unique as the properties were all acquired at different times, and thus had multiple existing, unrelated loans prior to refinancing. Meridian was able to pay off all of the loans and refinance the package as a whole with a significant cash-out and rate reduction.
“We thrive on the variety,” says Seth. “Many of our deals are between $20 million and $50 million, but we recently closed a loan for less than $1 million for a repeat client and have also closed several in excess of $100 million. We take equal pride in the smaller transactions and the larger ones.”
While locations and investment strategies vary widely, so too does the stable of lenders that the team works with. By consistently monitoring the market place and leveraging the broader team in Meridian’s office network, the Southern California team has closed with over 25 lenders in 2018 inclusive of local, regional, national and international banks, agency lenders, CMBS shops, life insurance companies, and a wide array of non-bank lenders.
He also notes that smaller deals often evolve into bigger ones later on. “There are several clients who we consistently close a large volume of loans for annually,” says Seth. “But we began working with these clients years ago doing $2 million and $3 million deals. It’s fun to watch that growth and it’s important to us to add any value we can along the way.”
Large or small, Seth relishes his “unique mix of clients” across many different regions. “I’m working with organizations in Canada, California, Arizona, Texas, Illinois, Florida, and New York,” he says. “I’m always on the road.”
Another factor contributing to the team’s successful year is a creative, proactive approach to challenges. “We don’t wait for clients to call,” says Seth. “If we have an idea, we tell our clients what we have in mind to help them maximize the value of their portfolios.”
The Chicago and Florida transactions mentioned earlier exemplify this approach. In the Chicago deal, the team had to figure out how to coordinate paying off multiple loans from different lenders and structure the 45-property deal. “It was like trying to move 100 balloons in a field of wind. It took tremendous team work from all parties involved,” Seth recalls.
The Florida transactions required a completely different strategy. Instead of grouping properties together, the team had to figure out how to ungroup them. Even though the loans were all supposed to close on the same day, each property was financed separately to enable maximum flexibility for the sponsor. “Challenging? Of course,” says Seth. “But both of these deals were interesting and fun.”
Commitment, a third factor, encompasses three components: colleagues, clients, and consummations.
The team’s strength stems from its cohesion. “I’m most often in front of the clients and lenders,” Seth points out, “But my team is critical. They are the engine. And we are committed to helping each other.”
On the client side, commitment is an outgrowth of strong relationships. “You become friends with the people you work for,” says Seth. “I spend a lot of time with my clients and genuinely care about them. “Consequently, they know every deal is personal for me and we’ll leverage every resource in our power to exceed expectations.”
Finally, the team is committed to getting deals done, no matter the state of the market. “We are active and our clients are active,” Seth reports.
So how does the team celebrate its hard work when a deal closes? According to Seth, the real moment of celebration comes when he wins an assignment. “It feels great. You smile for a minute and then get back to work.”
Seth Grossman, Senior Managing Director at Meridian Capital Group, can be reached at (858) 964-1151 or firstname.lastname@example.org. His team consists of Vice Presidents Kovi Elkus and Jason Kahn on the production side, with Vice Presidents Sarah Kuebler and Jackie Tran and Associate Andy Strauss on the analytics, underwriting and deal processing team.