Loan Survivor: HFF Vet Mike Tepedino Is Right at Home at JLL

The rationale for the $2 billion deal seemed clear enough: With roots dating to 1974, HFF was a capital markets firm through and through, and — given its Dallas headquarters — one with an especially well founded presence in the red-hot Sun Belt region. JLL, already one of the country’s biggest real estate companies, heralded the creation of “the world’s No. 1 capital markets advisory firm” in a March release touting the merger. 

But JLL already had a capital markets team — an especially headstrong one, by reputation. Gossips puzzled over what would become of Aaron Appel, Keith Kurland, Jonathan Schwartz and Adam Schwartz, the executives at the center of JLL’s New York City debt brokerage squad. In June, reports surfaced that JLL had fired Appel, a rumor that turned out to be false. But in August, amid talk that the quartet was clashing with the HFF clan, Appel and his team struck out on their own, leaving JLL behind to found a private competitor, AKS Capital Partners. (Last week, AKS announced it would be acquired by Walker & Dunlop.)

Despite the intense scrutiny that surrounded the kerfuffle, Tepedino landed in the top job in New York at the combined firm’s capital markets group — a role in which he oversees a team of 130 — without ruffling feathers or landing in real-estate newspapers’ boldface type.

That’s no mean feat.

It can’t hurt that Tepedino is the sort of man who listens more than he talks. His poker face betrays nothing as he listens to your question. That’s followed by an intimidating pause as he thinks through everything he’s about to say, as though he’s mapping out the pieces on a chess board before making his move. (Think Robert Mueller if he had gone into lending.) 

When he does speak, his voice is sometimes so soft that you have to lean in to catch every word. But his discretion is clearly an approach that serves the man well.

“We have a national platform that’s really built on collaboration,” Tepedino said of his management style. “It’s built on honesty, trust and serving our clients. We act as one singular team.”

Those qualities have made an impression on clients too.

“A lot of intermediaries are bullshit artists,” said Robert Lapidus, the president and chief investment officer of L&L Holding Company, and a longtime Tepedino client. “Mike is different. There’s a high level of credibility. When he calls lenders, they listen and take notice because they know he’s credible.”

Tepedino shepherded L&L through two of the most high-profile construction loans Manhattan has seen in the last five years. Two years ago, he coordinated the $1.13 billion construction financing for TSX Broadway, a 46-story hotel and retail building that L&L is building in the heart of Times Square, along with partners Maefield Development and Fortress Investment Group. He also sourced the $663.9 million construction loan for 425 Park Avenue, L&L’s project with GreenOak Real Estate to build one of Park Avenue’s largest new office buildings in decades.

“Mike is a pair of safe hands,” said Chris Niehaus, a partner at BentallGreenOak, as GreenOak is now known following its own merger. “He’s very careful; and careful is good. That’s his personality.”

By his own account, Tepedino has gotten ahead by putting others first. Somehow, one of the industry’s most successful brokers is also one of its least flashy.

“Our business is complicated, but it’s [also] simple,” Tepedino said. “At the end of the day, everybody wants service. And every [client] wants to know that the deal they’re working on at any moment in time is the most important thing in the world to you.”

Clients have turned to Tepedino time and time again for some of the industry’s most complex financings. In 2017, GIC, a Singaporean fund, tapped him for the $575 million financing that funded its acquisition of 60 Wall Street, a 1.7-million-square foot Financial District office tower. That same year, he coordinated the $479 million construction loan for Cove Property Group’s Hudson Commons office project on Manhattan’s West Side. His team has also overseen a pair of major finance deals on Shorenstein Properties’ 1407 Broadway in the Garment District, starting with a $270 million loan in 2015 to fund Shorenstein’s acquisition and continuing with a $330 million refinancing late last year.

Tepedino also credits his dealmaking prowess to channeling the right frame of mind, which starts with remembering what it was like to do a service job without technology and bureaucracy in the way.

“In the old days, you’d have a client sitting in your office, and a human being dealt with that client and tried to serve their needs,” Tepedino said. “These clients have now become national or international in scope, and no one human alone can serve a client who has multiple billions of dollars in real estate.”

That’s the situation that’s given huge multichannel real estate firms — like post-merger JLL — an insurmountable advantage winning institutional business, Tepedino added. But even in an increasingly corporate-to-corporate world, good business means blocking out the noise and treating the client in front of you as an individual.

“We go to meetings to listen to a client’s needs — whatever they are,” Tepedino said. “Then we can draft the five right people for that assignment and bring them in to go talk to the sponsor. And that’s a great approach.”

2020 might feel like a long way from the old days, but in Tepedino’s assessment, the fundamentals haven’t changed.

For him, the old days meant the mid-1980s, when he got his start in the business as a CRE debt originator at an insurance company. Raised in a middle-class family in Brooklyn by a father who served as a social worker, Tepedino had had his sights set on the real estate industry since shortly after finishing his undergraduate degree at Skidmore College in Saratoga Springs, N.Y. 

His first step was more classwork: He did his MBA at Fordham University in the Bronx, while working as an assistant to the school’s dean, Arthur Taylor, during the day. “All of us at some point have great mentors,” Tepedino said. “[Taylor] had been the president of CBS. I had the good fortune of having the chance to hang around him for a year and a half.”

Taylor, a generation older than Tepedino, had some things in common with the young business student. He too was from a working-class upbringing across the river from Manhattan (Taylor grew up in Elizabeth, N.J.). And like Tepedino, Taylor also saw the value of a background in finance. Before his time at CBS, Taylor had been the finance chief at International Paper.

“One day, he said to me, ‘What do you want to do?’ And I said, ‘I want to work in the real estate business,’ “ Tepedino recounted. On Taylor’s advice, Tepedino canvassed for jobs in real estate finance and wound up working on originations at Travelers, an insurance company.

That’s where Tepedino found himself during the recession that disrupted real estate capital markets in the early 1990s — the first of a handful of downturns Tepedino has weathered during his career.

“It was then that I first got to see the ugly part of real estate,” he remembered.

That experience likely got Tepedino thinking more long-term about his preferred role in the industry. In 1993, he moved to a servicing job with a predecessor of Legg Mason. Four years later, his career leapfrogged following a meeting that seemed unassuming at the time.

“In 1997 I met Mark Gibson, who at the time was the CEO of HFF. Actually, at the time, it was only H.F.,” Tepedino said. (It was called Holliday Fenoglio back then, named for two of the company’s founders.) “He said to me, ‘Hey, I’m thinking about opening an office in New York. Why don’t you help me do that?”

At the time, the capital markets firm had three offices in Texas and Florida, and just 50 employees.

“That little meeting changed my life around,” Tepedino said. “We grew the company from that little meeting: From 50 people to 1,000 people, in 26 offices.”

That stellar growth record, of course, is what piqued JLL’s interest.

“The scale does pay big dividends, because it allows you to better serve your clients,” Tepedino said. “We thought of the merger, first and foremost, as a win for our clients. And number two, it’s a win for our employees, because they have the opportunity to work [on deals] anywhere in the world.”

True to form, Tepedino handled questions about the merger deftly. He wasn’t afraid to discuss the period, but protested that he had been too busy with strategic considerations to worry much about how he personally would land when the dust settled.

“It wasn’t really [about] egos for me,” Tepedino said. “Anytime you integrate two businesses, you’re putting together two cultures. Everyone wasn’t going to be doing things the same way.”

Some dismayed JLL veterans took a slightly more negative view than that, saying in interviews at the time that cultural clashes ensued between the two teams.

But Tepedino resisted the notion that his HFF group had had any manner of problem with the JLL incumbents. Describing himself as a “player-coach” who is responsible both for management and for participating in individual deals, Tepedino said that he simply didn’t have enough time to work with the JLL team before their departure to form much of a colleague-to-colleague impression.

“I really can’t offer a comment on people who didn’t work for us,” Tepedino said, noting that Appel’s team left before the integration was complete. “If there was innuendo in the market place, I really can’t offer anything on that.”

On the other hand, he spoke admiringly of two of his best-known new colleagues — although neither, admittedly, is a capital markets officer.

“When you have a chance to work with people like [New York City leasing chief] Peter Riguardi or [JLL Vice Chairman] Mitch Konsker, who are best in class in the leasing business, it’s really helped jumpstart our capital markets business and take it to another level,” Tepedino said. 

And although some executives within JLL have sounded off anonymously about their displeasure with the deal, a gaggle of happy clients past and present had nothing but supportive words for Tepedino and his new digs.

“When you’re in Mike’s position, you need a high level of credibility,” said Michael Maturo, the president and CFO at RXR Realty. “Because of the extent of his background and the amount of transactions he’s worked on, he brings that full body of knowledge. When he talks about a solution or offers an opinion, it’s based on a deep knowledge of the current financing environment. He brings exactly that level of credibility.”

Maturo said he saw that in action when he hired Tepedino to help him finance 47 Hall Street, a 100-year-old set of commercial buildings near the Brooklyn Navy Yard that RXR transformed into commercial office space in the late 2010s. Starwood Property Trust funded the intricate conversion with a $90 million acquisition-and-redevelopment loan

“That was a pretty complicated financing,” Maturo said. “It was with Starwood, and they’re a very sophisticated group of people. There were multiple levels of issues, and there were times during the process — like with every other deal — where things got a little warm. There was a little heat to it. Mike is such a good player in terms of stepping in and understanding everyone’s position. I always tell him that he’s the guy I bring in for the hard stuff.”

Folks on the other side of the negotiating table also professed to take pleasure in batting deals back and forth with Tepedino.

“In spite of Mike’s seniority, he understands the details of the transaction. He understands the deal as well as anyone,” said Ted Borter, a senior lending executive at Goldman Sachs. “He’s a very high integrity type of guy. I’ve heard him referred to by a mutual client as a boy-scout type, and that’s a pretty fair representation. You never have to question anything with respect to Mike Tepedino. He’s not just blowing smoke.”

Tepedino manages to fly above the kind of drama that might bring down lesser brokers, according to Borter.

“There are some mortgage brokers who will just blind you on pricing,” Borter said. “But I always get the sense with Mike that he’s serving both sides of the equation. He’s representing his client, but it’s not like he’s trying to really screw the lender. He’s just trying to find a very fair deal. Because of his style, he gets people engaged.”

Tepedino insisted that’s as true of his internal team as it is of clients and lenders. 

“No one human being alone can run a business that has 130 guys in it,” Tepedino said of the capital markets platform under his dominion. “If you want it to be successful, you need the help of lots of guys. They’re all great. One of the things you’ll see — at least on the HFF side — is tenure, and very little turnover.”

Team play — and a low rate of turnovers — happen to be big themes in Tepedino’s personal life as well. His three sons are all athletes, and his greatest off-the-clock passion is coaching some of their basketball teams, as well as cheering them on when they play football, soccer and lacrosse.

“All my kids have played, so that is literally my favorite pastime,” said Tepedino, who lives in the Westchester County town of Rye, N.Y. “The purity of kids’ sports is a beautiful, beautiful thing.”

In fact, keeping his JLL team on the right track sounds like quite a similar endeavor.

“The pursuit of excellence is something that never gets old,” Tepedino said. “If you’re wired that way, it never gets old. If you keep setting the bar higher for yourself and keep adding new goals, that’s how you keep moving forward. Our goal is for JLL to be the dominant capital markets player in the U.S.”