Marc Belsky on Raising Equity in Post-COVID World
Some call him the equity whisperer, and for good reason. After 20-plus years in the trenches of the capital stack, Marc Belsky recently formed his own platform, Marc Belsky Ltd., with a focus on helping clients raise additional equity for their investment strategies.
Honing in on the $5 million to $50 million middle-market space, Belsky and his team raise both joint venture and preferred equity for predominantly multifamily transactions across the U.S., leveraging relationships with more than 500 institutional, limited-partner investors focused on that same middle-market space.
The company was founded in September 2020, at the height of COVID-19, but Belsky hasn’t looked back since. In fact, he’s found that a global pandemic was exactly the nudge he needed to take the plunge and branch out on his own.
Commercial Observer: How did you get your start in real estate?
Marc Belsky: I got my start in this business, gosh, in 1999. So, 22 years ago. I started on the residential side, then I spent the summer as a broker at Meridian Capital Group, which opened my eyes to the commercial side of the business. From there, when I finished school, I segwayed into the principal side and spent about 15 or 16 years working for a few different companies: a real estate developer, a family office, and Thor Equities.
At some point, I left all that behind and started to buy my own real estate. I was talking to a lot of private equity firms at the time, and I approached my friend Ira Zlotowitz [president of Eastern Union] and ended up starting a company called Eastern Equity Advisors with him, which was the equity raising arm of Eastern Union. At the time, I saw a void in the market for middle-market equity investments. Then, COVID happened.
So, you then started your own company?
Yes, and what I started — and what I’m doing now — is basically a continuation of what I was doing. A great line that someone once gave me is, Pan Am once had an ad that said: “A new airline with 40 years of experience.” And, so, when I started my company in my own name last September, it was a new company but I’d already spent seven years doing equity brokering.
So you’re the Pan Am of the real estate world?!
Definitely not [laughs], but my point is that my primary business was, and is, raising equity. I focus on $5 to $50 million in equity check sizes, and exclusively from private equity funds. I don’t source equity from individuals, I don’t do syndications, I don’t do retail, I don’t do family offices — I focus almost exclusively on private equity. And I say almost exclusively, because, a lot of times, people call me when they have 1031 money, because they know that I have deal flow. So, the times that it’s not directly private equity, it’s because somebody called me and had 1031 money to invest, and I connected them with a sponsor.
How extensive is your network today?
I’m in touch with hundreds of private equity firms. I’m fairly confident, humbly, that we have a pretty extensive network and one that most other people don’t have — and we pride ourselves on continuously expanding our network. That’s really our secret sauce.
You launched your firm in September 2020. Why was that the right time?
There’s never a good time to leave a company and start your own business. COVID gave me that — I don’t want to say blessing — but it gave me a push, because there were no deals happening. I decided to focus on the middle-market space, and also decided it was the right time to extrapolate myself and go out on my own.
After COVID, I needed to restart my business anyway, because COVID stopped it in its tracks. Most of what I do today is acquisitions, and there were no acquisitions for six months. As a matter of fact, I can tell you from April to September , I didn’t close a single deal.
I don’t think you’re alone there.
Right. But, since then, I’ve closed 26 equity deals and 12 debt deals. I joke that I don’t know if I was just in the right place at the right time, or maybe everyone got busy after Labor Day, but all I know is that, from the day I opened the doors, it was insane. In the last quarter, we didn’t have a minute to breathe. The first quarter of 2021 slowed down a little bit, but, thank God, it picked up and we’re super busy today.
Is there such a thing as a typical transaction for you today?
The quick answer is no. Two weeks ago, we closed a deal where the check was $2.8 million of equity and, three weeks ago, we closed a deal where the check was $65 million of equity. So, there is no typical deal. But, if you look at the median, so to speak, it’s probably in the $8 million to $22 million range. More than 90 percent of commercial deals in this country are $50 million or less. So, when we talk about the equity check size being, say, $16 million, that falls right into that $50 million space.
Do you find that you’re routinely raising equity for certain asset types or within certain markets?
As a firm, we’re geography agnostic. We’re doing deals right now in Connecticut; in San Antonio, Texas; in Atlanta, Georgia … I was just in Tampa, Florida, yesterday. Most of the money is going to high-growth states and cities specifically in the Southeast.
Most of what we do is multifamily, but not all of it. We’ve done two ground-up, self-storage deals, and are working on one right now, where a client is taking a warehouse and converting into self-storage. I would say 95 percent of what we do is multifamily, and it’s more by default than it is by design.
Multifamily continues to be the belle of the ball, it seems.
It’s on fire. You keep thinking it can’t get more expensive, that cap rates can’t go lower and prices can’t go higher, and it just keeps going on. Something you bought a year ago and thought was expensive looks cheap now.
What’s key to your business today?
Having the right product, the right sponsor, the right deal, and the right story. And I have to tell you, 90 percent of what I do is storytelling and the ability to share key information, break through the noise, get people’s attention, and understand what it is they’re looking for. Everybody is very busy, so you have to break through. We’re very active, but for every deal we do, there’s 100 deals we pass on, so we’re talking to people all day long.
I’ll tell you a funny tidbit. A [sponsor] called me once but didn’t want to hire me, because he said, “I think I have the relationships. I don’t need you on this one.” I said, “No problem.” Two days later, he calls me back and says, “Do you know this person? Because I sent him the deal and he’s not picking up my call. Can you tell him to call me back?”
Looking back over the past 11 months, how would you describe Marc Belsky Ltd.’s first year?
I think for a non-brand name, we’re a fairly active shop. I don’t know what a typical broker at JLL does, I only know what I do and what we’ve accomplished. And I can tell you it’s not always easy. I read somewhere recently that everybody wants to do what you do until they actually have to do what you do — and that’s the truth.