DJM Realty’s former founding partners, Andrew Graiser and Emilio Amendola, have launched A&G Realty Partners, a Greater New York City commercial real estate consulting, advisory and investment group.
A&G Realty Partners will offer patient capital in all facets of commercial real estate, allowing for an unconventional approach and innovative solutions to bring about successful outcomes. A&G will invest in real estate assets, including retail, restaurant, warehouse, office and industrial, and will purchase or co-invest in mortgages, with a focus on adding value to the overall portfolio.
This way, the firm will be able to create immediate liquidity to ensure optimal asset performance, nonetheless holding the majority of their assets as long-term investments. A&G will invest in joint ventures with local developers, and will help overleveraged owners and developers by providing timely capital solutions.
Amendola and Graiser have been working together for two decades, mitigating over $4.5 billion of lease liability, renegotiating more than 10,000 leases, selling more than $1 billion of owned real estate and valuing more than 20,000 locations.
Amendola and Graiser have brought about more successful out-of-court restructurings than anyone else in the real estate industry and have managed the successful disposition or renegotiation of over 200 million sq. ft. nationwide. They managed the largest retail dispositions in the country, including Circuit City, Borders, Linens and Things, Comp USA, Blockbuster, Sbarro, Winn Dixie, Heilig Meyers, as well as many other national and regional retailers.
NREI talked to A&G Co-president Andrew Graiser about the future for big-box stores, the challenges in the industry now and how the firm plan to use patient capital.
An edited transcript of that interview follows.
NREI: How are big-box stores working to get smaller in a market glutted with retail square footage—and what stores are taking up that extra space?
Andrew Graiser: There is a misconception about the glut of retail space for the 10,000-sq.-ft. and over category. With no new development and retailers growing, the spaces are filing up. If you want to say that small shop space is a problem, I would agree.
Some big boxes have announced downsizes and after factoring in construction costs and remaining lease terms—some short-term in nature—and new contract rent and downtime a subtenant needs, the ROI for a developer does not always pencil out for ato get done. Putting this aside, there are a number of retailers in virtually every category who are growing and taking over surplus real estate. For example, Forever 21, HH Gregg, TJ Maxx, Concepts, Dollar Tree, Dollar General, CVS & Walgreens, Wawa & Sheetz in the convenience store sector, Subway, 7-Eleven and many of the fast food retailers.
NREI: How can brick and mortar companies continue to respond to the growing e-commerce environment?
Andrew Graiser: This is a very challenging issue. E-commerce and all online retailing is growing at an incredibly fast pace. In addition, companies like Amazon are growing in many categories, which affects retailer sales. Today, landlords are limiting their risk by redeveloping their existing real estate with better credit tenants by having leases fully executed before the redevelopment occurs. You can’t predict the impact of e-commerce, you just have to manage your risk.
NREI: You mention in the announcement that the industry is filled with “seemingly insurmountable challenges.” What is one of those challenges and how can it actually be conquered?
Andrew Graiser: We talk about a lot of problems in the marketplace and the need for patient capital. Many small developers are having lots of problems refinancing their properties at the same level of debt they previously had. In addition, there is more equity required when purchasing good real estate. It’s no longer possible to get 95 percent financing. Good pieces of real estate need patient capital or additional debt to achieve the best outcome for the respective centers, to overcome these obstacles.
Other problems that exist are with retailers who want to do some healthy house cleaning of their portfolio, but do not have the capital available to do it. Retailers who are behind in e-commerce will have to make some very tough decisions regarding their company and their respective portfolios.
Other problems: Mom and Pop retailers, which make up a lot of shop space, are under a lot of pressure to try to stay in business either from problems with their lender or big box retailers able to cut prices on similar merchandise. Amazon getting into food will have an impact on both the local grocer and the large format supermarket. It seems like everyone is selling food and more aisles are being dedicated to food in a non-food retailer. This will continue to impact supermarkets.
NREI: You say that your firm will specialize in “patient capital.” Give us an example.
Andrew Graiser: Say a big-box retailer has a problem dealing with an underperforming location and we step in and help fund the redevelopment and/or purchase of the center or mortgage to help solve a problem.
Another example is this: A growth retailer wants to expand through acquisition, but only wants a select group of stores. We have the ability to come in and buy a company and do a very orderly wind-down of the remaining inventory, fixed assets and real estate and deal with all the tax and employee issues. The growth retailer or investor participates with us in the upside as we use our capital to ensure the best recovery of the assets without having to liquidate/fire-sale everything in 90 to 120 days. There generally are some good real estate gems in any portfolio, which, in turn, need time to ensure that optimal value is received.
Industry Vet Ken Stockton Dies
Ken Stockton, a long-time leader with NorthMarq Capital, passed away in Houston on Thursday at age 68.
Stockton was one of the founding members of Houston mortgage banking company Stockton, Luedemann & French, which later became Stockton, Luedemann, French, Jackson and West (SLFJW) and was acquired by NorthMarq in 1998.
Stockton, Bill Luedemann, Kerry French, Dan West and John Burke founded their firm in 1985 after careers with another mortgage banking firm in Houston. SLFJ&W was the first of 13 acquisitions that NorthMarq made between 1998 and 2005, resulting in doubling of the offices and increasing the number of employees from 130 in 1998 to 360 in 2005.
Stockton was involved in the financing of many Houston landmarks, including 1001 Main, One Shell Plaza and Two Shell Plaza Office Buildings, and The Galleria-Houston. His clients included Gerald Hines Interests, Trammell Crow Company, Weingarten Realty, The Finger Companies and a number of other prominent Texas investors.
Prior to the formation of SLFJ&W, Stockton was employed for 13 years by the commercial mortgage banking firm of Ben G. McGuire & Company in Houston where he served as senior vice president in charge of loan production and then as president of the firm. He also had experience in the real estate area of The Travelers Insurance Company. His professional affiliations included the Mortgage Bankers Association of America, the Urban Land Institute and the Texas Mortgage Bankers Association.
Trammell Crow and GLJ Partners Merge
The Dallas-based multifamily real estate firm Trammell Crow Residential and GLJ Partners, the development and construction company located in Carlsbad, Calif., have merged, effective July 1.
The GLJ development and construction teams’ new focus will be to lead the expansion of TCR’s operations in the West from GJL’s current base in Southern California.
GLJ principals Garth Erdossy, Luke Daniels and Tony Ditteaux will join TCR, along with almost 20 associates in the firm. The newly created entity will operate as Trammell Crow Residential.
Taylor to Take Reins from Blocher at Federal Realty
Executives at Federal Realty Investment Trust have announced that James M. Taylor will succeed Andrew Blocher as chief financial officer.
Blocher will serve as the Trust's chief financial officer through August 14 and is expected to remain with the Trust through February 2013.
Taylor spent nearly 15 years at Eastdil Secured Wells Fargo and it’s predecessor companies, most recently as senior managing director and head of real estate investment banking. During that time was responsible for more than $100 billion in real estate capital markets and advisory transactions.
Blocher has been with the trust since 2000 and has been its chief financial officer since 2008.
Laurus Names Chief Investment Officer
Austin Khan was named chief investment officer at Laurus Corporation, the private real estate investment and development firm headquartered in Los Angeles.
Khan brings more than 13 years of experience in commercial real estate investment and finance to Laurus. He will oversee all investment activities for Laurus, including identifying opportunities that fit the firm’s investment acquisition criteria while managing the underwriting process.
Prior to Laurus, he was vice president of acquisitions for TRT Holdings, a diversified private investment firm with over $4 billion in real estate holdings, where he led global sourcing for new investment deals. There, Khan led the firm’s global real estate investment platform that included the acquisition of the Amelia Island Company, development of the 1,000-room Omni Dallas Convention Center Hotel and recapitalization of the 720-room Champions Gate Resort in Orlando.
Lightstone Names President in Securities Division
The Lightstone Group named the president of the company’s securities division and also expanded the division with six appointments.
Christian Gabrielsen will oversee sales, marketing and national accounts for Lightstone as president of the division. He comes to Lightstone from Thompson National Properties, where he served as executive vice president and national sales manager, raising capital for leading financial services companies in separately managed accounts, variable annuities and real estate.
Also joining the division are the following:
Greg McGowan is senior vice president, Eastern sales. McGowan joins Lightstone with more than 20 years of experience as an advisor and wholesaler with various firms, including AXA Distributors, Lincoln Financial and Lehman Brothers.
Brendan McLaughlin is senior vice president, central sales. McLaughlin has more than 20years of experience in the financial services industry and having previously served as national director of business development and senior regional vice president at several of the industries' top REIT, mutual fund and annuity/life Insurance companies
Matt Peoples is vice president, national accounts, joining Lightstone with 15 years of experience managing national accounts within the wire as well as bank and independent planner channels. He has held a variety of roles within sales administration and management.
Josh Rubinger is vice president, national accounts. Rubinger has more than 10 years of experience building relationships with broker-dealer executives and securing sales agreements. Prior to joining Lightstone, he served as senior vice president of national accounts at Thompson National Properties.
John Coon, regional vice president, Southwest sales. Coon joins Lightstone from Thompson National Properties, where he was a top wholesaler, sales desk manager, and former investor services representative.
Kimberley Barry Duran, director of marketing, was previously the director of marketing and education at Thompson National Properties. At Lightstone, Kimberly will be responsible for coordinating and overseeing all corporate and sales related marketing activities including: strategic planning, brand management, creative design and web development.
David Burkards Promoted at MB Real Estate
MB Real Estate promoted David Burkards to senior vice president from vice president within the firm’s corporate services and tenant advisory group.
Burkards joined MB Real Estate in 2002 as an associate and quickly rose within the organization based on his expertise and transaction volume. He has completed approximately 2 million sq. ft. in leases from Chicago to Brazil for clients that include Astellas US Holdings, Piper Jaffray & Co., Barack Ferrazzano Kirschbaum & Nagelberg LLP, U.S. Bank and the American Cancer Society. Most recently, Burkards represented Coyote Logistics with its headquarters relocation and subsequent expansions totaling nearly 150,000 sq. ft. in Chicago.
New SVP at Quantum
Quantum Real Estate Advisors Inc. named Tim Franz senior vice president.
Prior to joining Quantum, Franz spent five years at Zifkin Real Estate Group where he focused on disposition, acquisition, and product leasing.
Gunderson Joins J.F. McKinney
J.F. McKinney & Associates hired Mark Gunderson as senior vice president and principal.
Gunderson, who has leased more than 5 million sq. ft. in his more than 25-year career, will focus on new business development and specific office leasing assignments.
Since 2009, Gunderson has been a senior vice president at the John Buck Company where he focused on new development projects and leasing. He has worked on a variety of landmark towers in downtown Chicago, including 111 S. Wacker, 155 N. Wacker and The Rookery Building (209 S. LaSalle). Notably, he led the leasing of more than 350,000 sq. ft. at 155 N. Wacker, bringing the building from 60 percent leased when construction was completed in 2009 to 94 percent leased in 2012.
New Office, SVP for SRS Real Estate Partners
SRS Real Estate Partners opened a new office in St. Louis, bringing on Tom Weiler, who will serve as senior vice president and market leader.
Weiler has been in the commercial real estate business for more than 22 years and specializes in retail leasing, development, and acquisitions. During his career, Weiler has been responsible for the leasing and development of more than 10 million sq. ft. of shopping centers throughout the Midwest.
Before joining SRS, Weiler worked with Foundation Commercial and represented tenants such as Menards, Buffalo Wild Wings, Crazy Bowls, Texas Roadhouse and Wendy’s.
New VP at Walker & Dunlop
Walker & Dunlop Inc. hired Michael B. Vaughn as senior vice president and head of the company’s FHA Finance Healthcare department.
Vaughn will manage origination, underwriting, and quality control of all healthcare loans.
Prior to joining the commercial real estate finance company, Vaughn held several positions at HUD. Most recently he was director of the Office of Residential Care Facilities, part of the Office of Healthcare Programs. While there, he was directly responsible for origination and asset management activities related to the $17.5 billion portfolio of Section 232 insured mortgages on skilled nursing and assisted living facilities.
In the private sector, Vaughn was a senior vice president of the Bank of New York’s Fannie Mae/Freddie Mac multifamily lender, ARCS Mortgage.
Wall Joins NAI Capital
NAI Capital, the Southern California commercial real estatewelcomes Bob Wall to the company’s Encino headquarters as vice president specializing in investment properties.
He founded the brokerage real estate firms Wall Street Properties and Wall Enterprises, which syndicated, developed, counseled and managed income properties.
Hines Expands Third-Party Property Management, Hires Two Execs
Hines, the international real estate firm, is expanding its third-party property management platform in the Southwest Region, which includes Texas, Colorado, New Mexico and Arizona. Almost half of the firm's current 135 million-sq.-ft. portfolio is managed for others.
Industry veterans Lee Wallis, vice president property management, and Rob Bridges, director of property management, have recently joined Hines in its Denver office to lead the expansion of Hines' third-party platform. Prior to Hines, Wallis and Bridges have had extensive third-party property management experience with Grubb & Ellis and CBRE.
New Managing Director in Philly for JLL
Jones Lang LaSalle added Jim Vesey to serve as managing director and lead its capital markets platform in Philadelphia.
Vesey will focus on investment sales in an effort to enhance the firm’s capital markets business in the region. Vesey is a seasoned industry veteran who brings more 20 years of owner and investor, and brokerage experience to the firm.
Vesey joins Jones Lang LaSalle from Vesey Capital, a real estate investment company based in Pennsylvania that he founded in 2008. Prior to that, he spent 15 years as the head of capital markets for Cushman & Wakefield in Philadelphia. During his career, Vesey has completed more than $4 billion of transactions.
HFF Brings on New Managing Director
HFF welcomes Brad Black to the firm as a managing director in its Los Angeles office.
Black will focus primarily on debt transactions in Southern California. He has more than 20 years of financial experience in capital markets and the commercial real estate lending industry. Prior to joining HFF, Black worked for Pacific Star Capital as a managing partner. He also worked as a senior vice president at Countrywide Capital Markets in the commercial real estate group and as a director at Wachovia Securities in the real estate capital markets division.
Promotion at Principle
Principle Valuation LLC, a leading valuation company serving the healthcare and seniors housing industries, promoted vice president Thomas J. (TJ) Griffith to head the firm’s seniors housing division.
Griffith will be responsible for all business development activity and project work for the team, which provides valuations and advisory services for all seniors housing facility types. Griffith has been in the appraisal industry for 10 years. Prior to joining Principle Valuation, he worked at Wellspring Valuation, which was subsequently purchased by Huron Consulting Group.
New Senior Development Director at Bainbridge
Joseph S. Torg has joined The Bainbridge Companies as senior development director - Northeast. He is based in Bainbridge’s new Westport, Connecticut office.
Torg has almost three decades of real estate development experience and has participated in the development of more than 7,500 multifamily units in the Northeast and Florida. He will lead the firm’s development and acquisition expansion into Boston, New York, New Jersey and Philadelphia.
Most recently, Torg was senior managing director for Trammell Crow Residential/Mill Creek Residential Trust. He headed TCR’s regional development operations, executing multifamily projects in northern New Jersey, Jersey City, Long Island and Boston and headed the eastern region of MCRT’s acquisition group.
Plaza Welcomes Director
Plaza Companies welcomes Carol Kleinberg as director of strategic alliances for the commercial real estate, senior living and biotechnology sector firm in Arizona.
Kleinberg will assess marketing opportunities and target markets, gather intelligence and help generate and secure leads and provide for property management, leasing services and construction management contracts for the company.
Previously, Kleinberg has worked worked with McCarthy Cook, Transwestern, SPV Real Estate Services and Trammel Crow and has procured a total of 2 million sq. ft. of leases valued at $175 million. She has also procured $160 million worth of sales in office projects, shell industrial condos and buildings and land.
Kleinman Joins McKenna Long & Aldridge
McKenna Long & Aldridge LLP has brought on Justin B. Kleinman as a partner in the real estate and finance practice in the firm’s New York office.
Kleinman’s practice is focused on acquisitions, dispositions, mortgage and mezzanine loan financing, joint venture and preferred equity investments, debt restructuring, workouts and distressed transactions.
Kleinman has nearly a decade of experience representing privately and publicly held corporations, REITs, private equity funds, financial institutions, joint ventures and other investors and operators in the acquisition, financing, development and sale of commercial property and other real estate-related assets. He has extensive experience in financing and debt restructuring of multi-asset portfolios on behalf of widely recognized lender/investor clients and owner/developer clients in the U.S. and abroad.
Fred Gallo Joins Bingham McCutchen
Bingham McCutchen LLP hired Fred Gallo as a partner in the firm's real estate practice group in New York.
Gallo comes to Bingham McCutchen from the New York office of Katten Muchin Rosenman and concentrates his practice in the areas of real estate development, acquisitions, dispositions, preferred equity investments, joint ventures, and construction and mezzanine financing on behalf of both borrowers and lenders.
Gallo's clients include banks, insurance companies and other lenders, real estate investment trusts, developers, opportunity funds and other investors who are involved in commercial real estate transactions throughout the U.S., Mexico and the Caribbean. Gallo has extensive experience in loan workouts, enforcement proceedings, restructurings, the disposition of distressed real estate assets and commercial mortgage-backed securities financing transactions of all types.
Two Attorneys Join Butler Snow
Butler, Snow, O’Mara, Stevens & Cannada, PLLC added two more members, bringing the total number of attorneys to 41 in Nashville and almost 100 in Tennessee.
Michael W. Sheridan joins Butler Snow’s banking, real estate and financial services and Junaid A. Odubeko joins the firm’s commercial litigation group. Sheridan will focus on business planning and operations, corporate finance, mergers and acquisitions, business structure and capitalization and data privacy and information protection. Odubeko will focus on commercial litigation and governmental law.
Sheridan previously served as general counsel for Ceridian Corp., a global human resources, payroll, benefits and payment solutions company. Odubeko has served as legal counsel to Gov. Phil Bredesen. In this role, he was responsible for coordinating the legal affairs of the executive branch for the governor and advising him on legal matters on a day-to-day basis.
New Counsel at Russo Development
Russo Development appointed Christopher H. Minks as assistant general counsel.
Minks joins the legal team with 18 years of experience in commercial transactions, land use and real estate development. Most recently he was an equity partner with the law firm of Winne, Banta, Hetherington, Basralian & Kahn, P.C., Minks also brings extensive experience appearing before municipal, county and state planning and zoning boards, which will enhance Russo’s entitlement capabilities.
BOMA Honors Executives
The Building Owners and Managers Association International honored executives at its 2012 Every Building Conference & Expo.
The awards were given at a ceremony in Seattle in late June. The 2012 recipients are:
Dan Chancey was given the Chair’s Award. Chancey is a vice president, senior asset manager with Commercial Advisors Asset Services LLC in Memphis.
Karisa Johnson was named the Southwest region outstanding member of the year. She is vice president of management services at Transwestern and a member of BOMA/Austin.
Cybele Thompson was named the Pacific Southwest region outstanding member of the year. She is the director, client services at Cushman & Wakefield and a member of BOMA/Greater Los Angeles and BOMA/San Diego.
Luci Smith was named Southern region outstanding member of the year. She is a senior property manager at EastGroup Properties and a member of BOMA/Orlando.