This international marketing and investment banking company handles its work with a global touch. Facing an ever-changing and increasingly global marketplace in the mid-'90s, Simon J. Mildeeeand crew set out to create the first "truly global" real estate marketing and investment banking company in the land. And the resulting New York-based firm, The Greenwich Group International, may well be just that.
In the last 18 months, The Greenwich Group has completed or is in the process of completing $3 billion in transactions. Of those, approximately 30% to 40% has been bought or financed by overseas capital, says Mildeee chairman and chief executive officer. This heavy activity by overseas bidders helps the company achieve the best results by creating stronger competition.
"If you don't do that in the market today, you're not going to provide your client with the cheapest finance, nor are you going to get your client the highest possible price for their piece of real estate," Mildeeesays.
It was earlier foreign interest in U.S. properties that led to the formation of The Greenwich Group in the first place.
It all began when, in 1993, Mildeeeleft his position as managing partner and chairman of Jones Lang Wootton's North American operations to become president of Kennedy Wilson International.
"When I left Jones Lang Wootton, my ambition was to create a whole new global real estate investment banking andbusiness which would cater to the cross flows of debt and equity that exist in the world today," Mildeeesays.
The first step toward creating this new global company was to set up offices in the major centers from which the capital investments came. Under Mildeees leadership, Kennedy Wilson soon had offices in New York, Washington, D.C., Los Angeles, London, Paris and Hong Kong.
Later realizing that international investing wasn't just a fad, Mildeeeand others in the group bought the entire investment banking arm from Kennedy Wilson in 1995, changing the name to The Greenwich Group.
"We were fortunate to start this business at a very opportune time," says David V. Drubner, managing partner. "We perceived an opportunity in the market and, in a very short period of time, we have built this business up to be a real force in our industry."
And with the continuance of global investment interest, the company intends to not only focus on global marketing and investing, but on growing along with the marketplace.
"This is the first period in time where you can sit in the offices of Morgan Stanley, or a Lehman Brothers, or a whole host of other investment banks, and they will be just as interested in an investment in London or Paris or Bangkok as they would be in Washington or Atlanta or Los Angeles," says Mildeee
However, having business on three continents during such a strong cycle does require good organization and communication. As part of the organization, Greenwich has developed a two-fold purpose for each continent.
The U.S. business focuses on selling institutional assets, in the average range of $50 million, for institutional clients like Mutual of New York, Equitable and General Electric pension trust. Also in the States, Greenwich focuses on assisting in company recapitalizations for opportunity funds and pension funds looking to make company-level investments.
The first recapitalization for the company occurred last June. The Greenwich Group was retained by Mutual of New York to sell a portfolio of 15 suburban office properties. The advice given to potential buyers by the firm was to buy the portfolio and then build off that portfolio to acquire more assets, creating more of a partnership than just a larger portfolio.
"Since then, we have worked on about 11 of those company recapitalizations," says Drubner. "And we're just embarking on a number more right now, and they really run the gamut from residential developers to hotels and office."
The European and Asian businesses are basically set up to do the same work for each of the respective continents. The Greenwich Group directly sources European and Asian investors with the assets it is selling in the United States, and the company helps identify opportunities for opportunity funds.
Recently, Greenwich opened its own office in Hong Kong, no longer sharing the Kennedy Wilson office there.
Many Asian countries are interested in American investment, says David B. Doupeee president/North America, adding that American investors have been reasonably active in the Asian stock markets for the past 10 years, but not in real estate. "From the Greenwich Group perspective, it's an area that, given the relationship with the U.S. institutional groups, is going to be a big part of our growth," he adds.
And while the company continues expanding, communication has become extremely important for its success. So instead of having autonomous offices, The Greenwich Group considers each of its offices a member of a team working together to reach the desired end result.
"We communicate with the group, which is essentially the partners here in the States, the partners in Europe and our partners in Asia," says Mildeee "Once a week, we have a conference call. We discuss every transaction, focusing in on it from an Asian point of view, from the American point of view and from the European point of view to get the fullest input. Then we come to a decision."
This sort of constant communication with offices around the world has given The Greenwich Group a reputation that foreign investors welcome.
"Previously, overseas buyers have felt that when something has gone to market in the U.S., for example, it was shopped to domestic buyers and, if it didn't sell, then someone would say, 'Let's go to Europe or Asia with the asset,'" Drubner says. "What we do is we bring it to market at the same time in all three places. We've had tremendous success in actually selling to a significant number of buyers from overseas."
For example, the firm recently sold the Hyatt Regency Sacramento for MONY to an affiliate of a Hong Kong-based firm for $63 million.
"We were given that assignment because of our view that that property would have appeal not just to the dominant investors in the United States like Patriot American and Starwood Lodging and people of that nature, but we firmly believe that because it is aproperty, a prominent property, that we would be able to seriously attract interest overseas," says Doupee
The Greenwich Group's marketing capabilities not only sell assets for companies, but they often bring in new clients as well.
"One of the commendations that I've noticed with our firm is, time and time again, we are retained by somebody that has just done business with us or understands our approach to business to be one that they would like to have on their side," says Adrian Goldstein, managing director, who sites a $65 million sale of a San Diego property for ERE Yarmouth Prime Property Fund as an example.
The buyer of the asset was so impressed with the way the company handled itself that, afterwards, it retained Greenwich to recapitalize its entire company and its portfolio. "We can site other examples of that, but I think that is a testament to the way we market properties," Goldstein adds.
And as the globalization of today's markets takes on more and more significance, clients will seek a group like The Greenwich Group, which truly understands the marketplace as it is today and knows how to market to the world.
"We started building a company that really catered for the 21st century real estate market rather than the 20th century real estate market," says Mildee "And that is what we've been focusing on for the last four or five years; that is what we continue to focus on."