1 | APRIL 29, 2016

American Airlines is looking to refinance its longstanding special facility revenue bonds tied to the lease and construction of the eight-year-old Terminal 8 at John F. Kennedy International Airport. But before debt replacement can fully take flight, the Fort Worth, Texas-based airline must clear a runway full of bureau-cratic hurdles.

As the financing faces maturity this summer, government documents show that American is looking to refund 11- and 14-year-old bonds issued by the New York City Industrial Development Agency, or

IDA, and replace them with new ones issued by a state-run counterpart. The board of gov-ernors for the Port Authority of New York & New Jersey, which controls the land at JFK,

voted on April 28 to give its consent to refinance as well as to tweak condi-tions of the mortgage on the terminal’s ground lease.

American has $882 million in bonds (still due to shareholders) that

funded its long-standing ground lease at the site and demolition of the previously existing

An affiliate of Tishmam Speyer is look-ing for tax breaks in connection with the con-struction of a $706.7 million two-tower Class A commercial project in Queens, according to the company’s benefits application with the New York City Industrial Development Agency.

Tishman Speyer is seeking $65 million in city tax exemptions and deferrals, NYCIDA documents indicate. Of the $65 million, $8.3 million are NYCIDA benefits, a NYCIDA spokesman explained, and $56.6 million are Industrial and Commercial Abatement Program, or ICAP, benefits provided through

Tishman Speyer... continued on page 3American Airlines... continued on page 3

Tishman Speyer Seeks Tax Incentives for $707M LIC Project

The LEAD

In This Issue

5 RXR Recapitalizes Debt on 61 Broadway With $290M Loan5 Citi Funds $102M Refi of Ohio Power Center7 Sears Closings Pose Threat to CMBS, Retail Operators7 Harbor Group International Seals $59M HQ Refi With CIBC9 Taconic, Clarion Land $110M Capital One Loan for Massive Bronx Portfolio9 Lightstone Launches Program to Fund Entrepreneurial Deals11 Macklowe Properties Refis UES Resi Condo With $53M Loan11 Bronx Multifamily Acquisition Funded With $61.5M Signature Loan

“We keep expanding and growing. One of the interseting

results of the credit crisis is that we get a shot at amazing talent.”

—William David TobinFrom Q&A on page 14

The Insider’s Weekly Guide to the Commercial Mortgage Industry

FINANCE WEEKLY

American Switching Flights on JFK $882M

in Bond Debt

2 | APRIL 29, 2016

3 | APRIL 29, 2016

28-10 Queens Plaza South.

the New York City Department of Finance.The money would contribute to the acqui-

sition of the 71,692-square-foot site at 28-10 Queens Plaza South and the erection of the development. Of the $706.7 million, $10.8 mil-lion is allocated for land acquisition, $388.4 million is for construction hard costs, $72.7 million is for soft costs and $23.4 million is for development fees.

Construction is slated to commence next year and the project should be open three years later.

The 26-story property will contain 1.1 million square feet of office space, 20,000 to 40,000 square feet of retail space and a 388-space, 80,000-square-foot parking ga-rage, according to the cost/benefit analysis by the NYCIDA, a division of New York City Economic Development Corporation. WeWork signed a lease for 285,000 square feet in one of the buildings, The Real Deal previously reported.

Tishman Speyer is also looking to raise $145 million in EB-5 financing for the two structures, dubbed One and Three Gotham Center, TRD noted.

Meanwhile, as Commercial Observer pre-viously reported, Tishman Speyer and H&R Real Estate Investment Trust are devel-oping Two Gotham Center, the 1.2-million-square-foot, 1,789-unit rental complex across the street, on a parcel of land bound by Queens Boulevard, Jackson Avenue, Orchard Street and the Sunnyside Yards.

NYCIDA will hold a public hearing on the tax incentives on May 5.

LICPost first reported news about Tishman Speyer seeking tax incentives.

A spokesman for the developer declined to comment.—Lauren Elkies Schram

Tishman Speyer...continued from page 1

buildings there, as well as construction of a new 1.4-million-square-foot terminal that opened in 2007 and was fully finished a year later, according to government documents. Along with American Airlines and subsidi-ary American Eagle, the 35-gate terminal handles flights from airlines including Air Berlin, Finnair and Qatar Airways.

The airline originally borrowed $1.2 bil-lion for the development. That breaks down as follows: American first took out $500 bil-lion worth of tax-exempt bonds in 2002 through IDA, a New York City Economic Development Corporation subsidiary, to fund work on the JFK project, which cost a reported $1.3 billion. Part of that debt was re-tired in 2012, Port Authority documents in-dicate. That was followed up in 2005 with a $700 million issuance through the agency, according to a press release from EDC at the time. The second set of bonds was uninsured and carried a fixed rate, trade publication The Bond Buyer reported in 2005.

The combined debt is now slated to ex-pire this August, according to Port Authority documents. American plans to refund it with

new bonds issued by the New York State Transportation Development Corporation, a wing of Empire State Development that helps fund major transit projects.

The Port Authority’s consent was re-quired for the new transaction to go through. American will pay the agency a one-time fee of $3.2 million in the refinancing process as it will update the leasehold mortgage on the air-line's ground lease. The agency will amend its lease with American at Terminal 8, which cur-rently expires in December 2036, so that the leasehold mortgage on the land indicates that the bonds have been issued by the state and not by the city, Port Authority Executive Director Patrick Foye said in a post-meeting press con-ference. “Right now the leasehold mortgage runs in the interest of the bond holders who bought under the debt that was issued through the [NYCIDA] conduit,” Mr. Foye said. “That leasehold mortgage then will run through debt issued through the [ESD] conduit.”

NYS Transportation Development Corporation board of directors voted earli-er this month to approve documentation and hire lawyers in preparation for the approxi-mately $900 million bond issuance, according to an agenda for its April meeting. The board is

expected to vote to approve the documents at its May meeting, the agenda indicates.

The Tax Equity and Fiscal Responsibility Act requires that a hearing be held when certain bonds are refunded and the issuer changes—in this case going from the IDA to the NYS Transportation Development Corporation. Gov. Andrew Cuomo is also required to sign off on the issuance once the board approves the financing.

A spokesman for ESD said a hearing had not yet been scheduled, but one should be calen-dared in the near future.

Going through the city or the state to issue bonds is not an uncommon practice for com-panies doing major infrastructure projects at airports. LaGuardia Gateway Partners, the group of developers building a new terminal building at LaGuardia Airport, is seeking a similar issuance for its project, which is expect-ed to cost more than $4 billion. The consortium is looking for about $2.5 billion in special fa-cility bonds, which will also be issued by NYS Tranportation Development Corporation, to fund its work at the airport, according to cred-it rating agencies.

A representative for American did not return a request for comment.—Terence Cullen

American Airlines...continued from page 1

4 | APRIL 29, 2016

California loans will be made pursuant to a Finance Lenders Law License from the Department of Business Oversight.

www.walkerdunlop.comCommercial Real Estate Finance

California loans will be made pursuant to a Finance Lenders Law License from the Department of Business Oversight.

www.walkerdunlop.comCommercial Real Estate Finance

POWERING YOUR

PROSPERITYJohn Gochberg

Steve MacyMichael Frazzetta

Zach GoldmanTGM AssociatesAvid Outdoorsmen

Walker & Dunlop borrower since 2012

5 | APRIL 29, 2016

EXCLUSIVE

Scott Rechler sure must have been filling out a lot of paperwork recently.

On April 21, his real estate company RXR Realty took a $290 mil-lion mortgage from Bank of China and SL Green

Realty Corp. on 61 Broadway in Manhattan’s Financial District, Commercial Observer Finance has learned.

While a spokesman for RXR declined to comment on the financing, a source with inti-mate knowledge of the transaction confirmed that Bank of China originated a $240 million mortgage and SL Green provided a $50 mil-lion mezzanine loan to recapitalize the prop-erty. The new financing replaces $200 million in debt that HSBC provided on the property at the time of the acquisition.

RXR simultaneously sold a 49 percent stake in the 33-story FiDi office tower to an affiliate of China Orient Asset Management, retain-ing 51 percent for itself.

The sale price of the stake in the building was roughly $215.6 million, and was based on a gross valuation of $440 million. Commercial Observer first broke the news in December 2015 of RXR’s contract to sell a stake in the property, which is located between Rector

and Morris Streets, to an overseas investor. JLL brokers Scott Latham, Richard Baxter, Anthony Ledesma, Stephen Shapiro, Jon Caplan and Yoron Cohen negotiated the deal.

“We are thrilled to have China Orient join us as our new partner and are pleased that we were able to create meaningful value by up-grading 61 Broadway and executing more than 100,000 square feet of leases at extremely at-tractive rents,” Mr. Rechler said in prepared re-marks provided to COF. “We look forward to executing the next level of value creation as we recapture space and release it at higher rents to the dynamic 21st-century tenants that 61 Broadway is now attracting.”

Tenants at the building include Bjarke Ingels Group, which occupies the penthouse, law firm Godsky & Gentile and securitization company Samuel A. Ramirez & Co. Think tank Human Conditional Global recent-ly signed a lease at the building for a full floor of just over 24,400 square feet and data gover-nance firm Collibra signed on for more than 12,000 square feet.

Roy Chen, the managing director of China Orient, said in prepared comments, that 61 Broadway’s fundamentals are consistent with its U.S. strategy of acquiring assets with

value-add opportunity and locally-based operators.

Mr. Rechler’s Long Island-based firm pur-chased the 787,000-square-foot building in May 2014 for $330 million, property records indicate.

A spokesman for SL Green declined to com-ment. A representative for Bank of China de-clined to comment. Representatives for JLL did not respond to comment.—Danielle Balbi

RXR Recapitalizes Debt on 61 Broadway With $290M Loan

61 Broadway.

Citi Funds $102M Refi of Ohio Power Center Real estate development firm Stark

Enterprises received a $102 million mort-gage from Citigroup for a multi-tenant strip

mall in North Canton, Ohio, Commercial Observer Finance can first report.

The debt from Citigroup will be securitized in the commercial mortgage-backed securi-ties market, and carries a 10-year term with a rate of 4.75 percent, a source with intimate knowledge of the deal told COF.

The retail property, The Strip, is at 6338-6765 Strip Avenue NW and has one mile of frontage along Interstate 77. The stores total 786,000 square feet with tenants in-cluding Wal-Mart, Lowes, Old Navy, Bed Bath & Beyond, Starbucks Coffee and Panera Bread, according to marketing ma-terials from Stark. The shopping center is fully leased.

Meridian Capital Group’s Drew Anderman and Ben Nevid negotiated the deal on behalf of the borrower.

“CMBS lenders competed for this loan

after Meridian made a market for this credit by highlighting the quality of the fully leased asset and sponsorship,” Mr. Anderman said in prepared remarks.

Stark, which is based in Cleveland, has more than 7 million square feet of retail,

office, hotel and multifamily properties in its portfolio.

A spokesman for Citigroup declined to comment. A spokeswoman for Stark did not respond to a request for comment.—Danielle Balbi

The Strip in North Canton, Ohio.

EXCLUSIVE

6 | APRIL 29, 2016

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7 | APRIL 29, 2016

Sears Closings Pose Threat to CMBS, Retail Operators

Harbor Group International Seals $59M HQ Refi With CIBC

Morningstar Credit Ratings has identified $56.9 million in debt across five commercial mortgage-backed securities deals that could be adversely affected by Sears Holdings’ closure of 78 stores nationwide. In a report released on Monday, the rating agency identified an addi-tional five CMBS loans with elevated risk of term or maturity default related to the closings. The retailer announced the decision to close 68 Kmart and 10 Sears stores last week.

The greatest risk is posed to the $32.2 mil-lion mortgage on the 354,762-square-foot Midland Mall in Midland, Mich., according to the Morningstar report. The note com-prises 1.7 percent of the Lehman Brothers-sponsored LBUBS 2006-C6 CMBS deal. Sears is the second-largest tenant and oc-cupies 17.7 percent, or 62,700 square feet, of the mall. Although the property generated $3.2 million in cash flow in 2015, and had a debt service coverage ratio of 1.17x, the loss of Sears could drive the loan’s DSCR closer to

break-even and push the loan-to-value-ratio nearer to 100 percent.

“The closings are going to have a meaning-ful impact on CMBS deals with significant ex-posure to Sears and Kmart, as an economic impairment to these securities will be felt should these underlying loans with exposure default,” a CMBS bondholder who declined to be named, told Commercial Observer Finance. Additionally, the source explained, as Sears and Kmart are considered “anchor tenants,” a “dark” or vacant store could trig-ger co-tenancy provisions in the leases of surrounding tenants causing damage to the finances of the center.

The source also offered further concerns regarding CMBS deals with exposure to both Sears and Macy’s stores; both retailers are often anchor tenants, and both are in the pro-cess of shuttering several stores in 2016. Sears officials did not return requests for comment. —Cathy Cunningham

Norfolk, Va.-based Harbor Group International completed a $59 million re-financing of its Dominion Tower head-

quarters with lender Canadian Imperial Bank of Commerce on April 21,

Commercial Observer Finance has learned.The financing replaces HGI’s previous

mortgage from Bank of America, which was set to mature on May 1. The loan is now refinanced out of the BACM 2006-2 com-mercial mortgage-backed security and the change will be reflected in the May remit-tance report, a source with intimate knowl-edge of the deal told COF. Given the size of the loan, it is likely that it will be contribut-ed into a new CMBS deal, the source said, al-though no further details could be gleaned at this time.

Located at 999 Waterside Drive, in the primary financial district for the Hamptons Road region of Virginia, Dominion Tower has 360-degree views of Elizabeth River and the Norfolk skyline. The structure is the tallest building in Norfolk and is named after the state’s nickname, “The Old Dominion.” It

borders the entrance to the city’s main high-way, Interstate 264.

The property was built in 1987 from steel and granite, and has floor-to-ceiling insulat-ed glass panels. The 26-story office building is 436,000 square feet, 403,276 square feet of which are rentable. The attached eight-level garage has 1,255 spaces, 372 are dedicated to the neighboring Sheraton Hotel. Building

amenities include conference rooms, a YMCA, multiple stores and a restaurant, VINTAGE kitchen.

The tower’s other tenants include Wells Fargo Advisors and Palladium Partners.

Officials at HGI did not respond to re-quests for comment. A representative for CIBC declined to comment.—Cathy Cunningham

EXCLUSIVE

Dominion Tower on the Elizabeth River.

8 | APRIL 29, 2016

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Taconic, Clarion Land $110M Capital One Loan for Massive Bronx Multifamily Property

Capital One lent $110 million against Taconic Investment Partners and Clarion Partners’ 118-building apartment complex in the Bronx, records filed with the city on April 21 indicate.

Paul Kesicki, a senior vice president at the bank’s commercial real estate group, led the deal, which carries a 30-month term with the option to extend for 30 months in six-month intervals, a source with close knowl-edge of the deal told Commercial Observer Finance. It is being used to replace $86.5 mil-lion, which New York Community Bank

provided to Taconic and Clarion in March 2007 for the acquisition of the buildings. HFF served as the broker on the transaction.

The two firms scooped up the multifami-ly complex, Eastchester Heights, for $133 million from Urban American, a New Jersey-based rental property owner.

The residential buildings range from four to six stories and span five blocks bound-ed by Eastchester Avenue to the north, Boston Road to the east, Wilson Avenue the south and Hicks Street to the west in the Williamsbridge neighborhood of the Bronx.

The buildings were built in 1935 and include studios and one-, two- and three-bedroom units, according to the property’s website.

Earlier this month, NYCB refinanced an-other large Bronx multifamily portfolio. The bank provided $148.6 million in financing to Greenwich, Conn.-based Morgan Group for 21 apartment buildings throughout the bor-ough, as COF previously reported.

Representatives for Taconic, Clarion and HFF did not respond to a request for com-ment. A spokesman for Capital One declined to comment.—Danielle Balbi

Eastchester Heights.

Lightstone Launches Program to Fund Entrepreneurial Deals New York City-based development firm

Lightstone has started an “incubator fund,” which it will use to finance real es-

tate-focused investments pitched by entrepreneurs, Commercial Observer

Finance has learned.“Well you see, internally, a lot of what we

do is entrepreneurial,” David Lichtenstein, the chairman and the chief executive officer of Lightstone, told COF. “Why not give the opportunity to others who might not have the means to do so?”

Mr. Lichtenstein explained that as a com-pany, Lightstone places focus on “coming up with where real estate is going to be as op-posed to where it is today.” Ideal projects for the fund can range from $1 million to $50 million, and researchers at Lightstone will

vet any suggestions that come in to deter-mine feasibility and market need.

Lightstone has not set a limit on how many deals it will invest in, and if an idea comes in that the firm likes, it will move for-ward using capital from itself or investment partners, Mr. Lichtenstein said. “If there are good deals, between us and our partners there’s capital available,” he said.

The company has already started to place advertisements in real estate trade publi-cations so individuals can start submitting their investment pitches, and two individu-als are already in the interview process. “It’s the first of its kind,” Mr. Lichtenstein said. “It’s about people who have an idea and op-portunity and don’t have the money. We’ll write the check.”

He explained that the newly launched

fund fits in with the types of deals Lightstone tends to do. He pointed to its work with Marriott International to bring Moxy Hotels, a trendy micro-hotel chain that started in Milan, Italy, into the U.S. Now, there are Marriott Moxy hotels in New Orleans and Tempe, Ariz., and seven currently under construction across the globe, including in Nashville, New Berlin and London.

In January, Lightstone landed a $330 mil-lion financing package from Square Mile Capital Management to develop a Moxy location at 485 Seventh Avenue in Times Square. And as far as developing off the high streets, Lightstone recently completed a rental building at 365 Bond Street direct-ly adjacent to the Gowanus Canal, a super-fund site in Brooklyn.—Danielle Balbi

EXCLUSIVE

10 | APRIL 29, 2016

“Non-agency commercial mortgage-backed securities issuance for first-quarter 2016 came in at an underwhelming clip, totaling just $16.5 billion,” said Sean Barrie, an analyst at Trepp. “That figure is down 34 percent from first-quarter 2015’s total. For March 2016, the office sector led the way with $2.34 billion of issuance, or 28.7 percent of March’s $8.16 billion issuance total. The office sector’s March total was aided by a $526.4 million pool of properties and a $426 million refinancing for 787 Seventh Avenue in Midtown.”

Source:

The Takeaway

CMBS Issuance March 2016

COMMERCIALOBSERVER.COM

PropertyType Code

AmountNumber of

LoansPercentage of

Origination Volume

OFFICE $2,342,594,067 34 28.70 percent

INDUSTRIAL $1,243,379,875 21 15.23 percent

MIXED USE $1,242,194,990 9 15.22 percent

RETAIL $1,199,675,326 62 14.70 percent

LODGING $978,466,813 38 11.99 percent

MULTIFAMILY $681,180,488 31 8.35 percent

SELF-STORAGE $299,318,596 20 3.67 percent

MANUFACTURED HOUSING $124,389,605 12 1.52 percent

CO-OP HOUSING $39,128,800 14 0.48 percent

OTHER $11,667,648 2 0.14 percent

TOTALS $8,161,996,209 100 percent

11 | APRIL 29, 2016

Harry Macklowe’s Macklowe Properties secured a $52.8 million mortgage from First Republic Bank to refinance the recently developed residential condominium at 737 Park Avenue, according to mortgage docu-ments made public on April 21.

Mr. Macklowe’s firm originally used a $164.5 million construction loan from Dublin-based Talos Partners in August 2011 to convert the rental units in the 20-story residential building into condos, city records indicate. Almost three years later, in March 2014, Macklowe Properties had paid the debt down to $62.3 million and split it into two notes, the first being $8.5 million and the sec-ond totaling $53.8 million, which the new loan from First Republic is replacing.

New York City-based Macklowe Properties and New York City-based partner CIM Group first acquired the property between East 71st and East 72nd Streets in August 2011 for $360 million, as The Real Deal re-ported at the time. The partnership redevel-oped the building, which was constructed in 1940, and launched sales for the newly con-verted condos in April 2013.

A one-bedroom, 1,316-square-foot condo is

currently listed for $3.6 million, while a sev-en-bedroom, 6,111-square-foot unit is priced at $25 million, according to the building’s website.

Representatives for Macklowe Properties and First Republic did not respond to requests for comment.—Danielle Balbi

Macklowe Properties Refis UES Resi Condo With $53M Loan

737 Park Avenue.

Bronx Multifamily Acquisition Funded With $61.5M Signature Loan

Signature Bank has provided a $61.5 mil-lion loan to FBE Limited for the acquisi-tion of 1600 Sedgwick Avenue, a 25-story multifamily building in the Bronx, accord-ing to a source with intimate knowledge of the transaction.

The fee and leasehold mortgagors, listed in public records, are Riverview Development Company and HP Riverview Housing Development Fund Company, respective-ly. The $61.5 million loan has a fixed rate of

3.375 percent for five years and a rate adjust-ment for an additional five years, the source told Commercial Observer Finance.

The property, also referred to as Riverview House, is located in the Morris Heights area of the Bronx. It is comprised of 383 apartments, 316 of which are rent-as-sisted under a Housing Assistance Program contract. The remaining 67 apartments are rent-stabilized.

According to public records, Riverview

Equity Group, a subsidiary of Spencer Equity Group, was the seller of the apart-ment complex. Signature Bank also pro-vided Riverview Equity Group with a $54 million mortgage on Aug. 19, 2015, accord-ing to public records.

Representatives for FBE Limited and Signature Bank declined to comment. Officials at Riverview Equity Group and Spencer Equity Group could not be reached for com-ment.—Cathy Cunningham

12 | APRIL 29, 2016

WorkforceFortress Exec Joins Lightstone

Alan Liu, a managing director at Fortress Investment Group, has been appointed as a senior vice president and the head of alternative investments at Lightstone, the company announced in a press release.

Mr. Liu joined Fortress by way of its 2015 acquisition of Mount Kellett Capital Management, where he served as the co-head of North America real estate. He was responsible for investing in property and identifying emerging industry trends.

In his new role, Mr. Liu will oversee the development and execution of alternative investments for Lightstone, which com-pany Chairman David Lichtenstein told Commercial Observer Finance will involve looking for business opportunities beyond core Manhattan properties and off the high street.

“In order to remain a top real estate in-vestor and developer, Lightstone must stay creative and innovative in our pursuit of new investment opportunities,” Mitchell Hochberg, the president of Lightstone, said in the release. “Alan has proven to be among the best in the business not only at identifying strategic deals, but at manag-ing them through to completion. By pair-ing Alan with Lightstone’s resources, we are excited to see what new opportunities emerge.”

Online Crowdfunding Firm Takes on New CEO

Former Oaktree Capital Management executive Paul Deitch has joined online real estate marketplace Patch of Land as chief executive officer.

Jason Fritton and Brian Fritton founded Patch of Land in October 2013.

With the appointment of Mr. Deitch, Jason was promoted to executive chairman from CEO, the firm announced in a press release on Monday.

Mr. Deitch served as a managing director at Oaktree Capital and oversaw the compa-ny’s operating infrastructure, investment strategies, acquisition of other firms and leading of its initial public offering in 2012.

“We are excited to have someone of Paul’s caliber and experience join Patch of Land as we push past $100 million in lending activity,” Jason said in prepared remarks. “Paul brings executive experi-ence from multi-billion-dollar companies in both banking and investment manage-ment running at scale and has deep expe-rience across a broad range of functions including technology, operations, risk management, product development, mar-keting, finance and compliance—all of the ingredients we will need as we successful-ly grow our firm.”

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13 | APRIL 29, 2016

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14 | APRIL 29, 2016

Q+A

Commercial Observer Finance: How did you get into real estate?

Mr. Tobin: I majored in medieval and renaissance English literature, which has nothing to do with real estate. Coming out of school I spent a winter in Colorado with a buddy working in Aspen and quickly real-ized I didn’t want to be a ski bum—as much as I love skiing, it’s my passion—and I want-ed to actually make money. I had had a lit-tle carpentry and house-painting business in college and I had studied architecture as a minor that I didn’t finish, so I was very much interested in real estate. [A friend of a friend] worked at a bank called Dime Savings Bank [of Williamsburgh]. He alert-ed me to an interview opportunity and I went and I really didn’t know anything about real estate—I had taken a real estate salesperson’s class. We spent five minutes talking about real estate, but the woman in-terviewing me was a literature buff and so we spent the rest of the interview talking about Mario Vargas Llosa and Charles Bukowski and all sorts of weird literature stuff. I had three or four other rounds of in-terviews, but English literature helped me get my first job.

How has Mission Capital progressed since it was founded in 2002?

We keep expanding and growing. The team has gotten bigger and bigger. One of the interesting results of the [last] credit crisis and the sort of declining relevance of investment banks and big banking prin-cipal investments is that we get a shot at amazing talent—kids that [may have ended up] at an investment bank and stuck in a black hole of 18-hour days, with no ability to move up because [those firms] are down-sizing. We get better and better talent ei-ther coming out of college or coming out of banks who are just disillusioned with that lifestyle and that career prospect. We have an office in Newport Beach, Calif., and we’ve had kids in New York that say New York’s nice, can’t afford it, it’s too oppres-sive. We’ve had people move out there.

What challenges have met you along the way?

One of the biggest issues across all of our businesses is compliance and IT security.

We were ahead of that because we have con-tracts with the government. The Federal Deposit Insurance Corporation was sort of a leader in pushing all that stuff back in 2007 and 2008. Some of our bigger clients were into it back then and now it’s everybody. To work for a bank, whether you’re selling real estate assets or loan portfolios or doing valuation or consulting, you have to have a very deep audit, dive and IT security process. At first I hated it because it was just oppressive to have to go through that stuff and change your systems and add security, but it’s become a huge issue with banking with the explosion of the inter-net and data breaches and data thefts. It keeps out everybody that can’t comply with those things. It actually has been a great way to bat-tle against larger firms and win out over small firms that haven’t made those investments.

We were growing from 2002 to 2006, we were setting up a great team as we started, and then when the credit crisis hit we were per-fectly positioned. We started getting contracts with the FDIC; we had a business of valuing assets and had a great business of selling as-sets. All during the downturn, we were in the perfect business and then in 2009 we added a debt and equity team from Ackman-Ziff—Jordan Ray and Jason Cohen—and that team is now 25 people strong around the country. They did $1.75 billion or $1.8 billion of loans—75 dif-ferent transactions—some really cool stuff like the Soho House in Chicago and the Freehand Hotel in Miami.

David TobinPrincipal of Mission Capital

David Tobin.

FINANCE WEEKLY

1 Whitehall Street, New York, NY 10004

212.755.2400

Cathy Cunningham Finance Editor

Danielle Balbi Staff Reporter

Terence CullenLauren Elkies Schram

Contributing Writers

Cole Hill Copy Editor

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Laurence Rabinowitz General Counsel

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