Power Finance 2022: How Greystone, Cushman & Wakefield Partnership Blended Together
‘Magnetic attraction’ between lender and broker leads to power partnership.
In early 2021, when Cushman & Wakefield (CWK) decided it wanted to add a debt platform to complement its longstanding brokerage business, the choice quickly became clear.
C&W hired a consultant to gauge the market for firms that would provide it direct agency lending capabilities. C&W quickly honed in on Greystone, an established multifamily lender, which in turn saw its own benefits to creating an alliance. A deal ultimately came together in less than six months, culminating in C&W and Greystone forming a strategic joint venture last October that set up both firms for commercial real estate growth.
“We definitely recognized the importance of an alignment with an investment sales firm,” said Stephen Rosenberg, founder and CEO of Greystone. “As soon as it happened it just made so much sense, but to give credit where it’s due, the spark came from Cushman reaching out to us.”
The transaction, which closed in the fourth quarter, involved C&W making a $500 million investment to acquire a 40 percent stake in Greystone’s agency lending and servicing business. Greystone is using that capital for new product offerings that can position it for future expansion.
Greystone has long been one of the most active multifamily bridge loan providers and originators of Fannie Mae Delegated Underwriting and Servicing (DUS), Freddie Mac Optigo and U.S. Department of Housing and Urban Development debt products. Rosenberg said the joint venture gives the lender new access to thousands of C&W brokers who are constantly in touch with real estate owners that may be seeking new debt solutions.
“It was almost like a magnetic attraction,” Rosenberg said. “Cushman was probably the largest real estate service provider that didn’t have a debt platform, and we were probably the largest private lender that didn’t have an investment sales platform.”
Prior to the deal, Rosenberg said there were around 100 brokers in 26 offices through the company’s Greystone Real Estate Advisors brokerage platform. Now, with the C&W partnership, Greystone’s sales advisory reach is in excess of 1,000 professionals.
John O’Neill, president of C&W’s U.S. Multifamily Capital Markets, said Greystone was a cultural fit in addition to making business sense. He stressed that Rosenberg’s steady leadership at Greystone for the past 34 years since founding the firm in 1988 played an instrumental role in C&W deciding to team up.
“We have a desire to be the No. 1 multifamily business in the United States as does [Rosenberg], and we needed that debt capability to help us achieve that plan,” O’Neill said. “We got that, plus we got a great partner in the process.”
C&W’s Greystone partnership came nearly two years after its acquisition of Pinnacle Property Management Services, the nation’s third-largest multifamily property management firm with 175,000 units under its oversight.
O’Neill said C&W will target multifamily deals on a national level with a particular focus on growth markets such as Denver and Texas.
While the partnership’s initial focus is targeting the multifamily market, Rosenberg stressed that it could expand into other commercial real estate sectors.
“I see our relationship with Cushman as across asset classes being the debt platform for the entire company,” Rosenberg said. “If we do this right, my sense is that every investment sales broker at any company should want to be at Cushman because we can provide tools to them that others don’t.”