Saturday, March 16, 2013

Financial middle men why they should be used

by Gabe Gonzalez

As the newest Senior Analyst at Metropolitan Capital Advisors, I have been handed the torch to shed some light on the inner workings of the Firm from the analyst’s perspective.

analyst-chair-commercial-real-estate-finance

The analyst role at MCA is unique in many ways; it is structured to help one grow, solve problems, and understand what it takes to be not only a reputable broker, but a trusted advisor. The analyst role goes far beyond the “data entry” you would find in a typical lending or financial institution, where underwriting guides and loan committees stifle any creativity – ultimately leading to monotony. The analyst gets directly involved in the day-to-day issues that arise in placing commercial real estate capital, as well as direct exposure to the complexity of Client relationships. While underwriting hundreds of transactions is crucial in properly analyzing a commercial real estate deal, the key understands the value-add that is provided to our Clients in solving and structuring their capital requirements. The solution is typically more advisory in nature, as MCA is focused on what is best for the Client at any given point in time.

Before my days at MCA when I was looking for a job fresh out of grad school, every big company’s recruiter would say “every deal is different and that no two days are the same” and of course, I drank the Kool-Aid. When I finally landed that coveted “job” in the middle of the recession, I didn’t have much of a choice but to work on the only asset class that was worth a damn — multifamily — and what better way to finance them via government sponsored agency programs such as Fannie Mae?! While I learned a great deal about financing apartments, I soon realized that there are only so many ways to underwrite a 95% occupied, Class “A” apartment complex. It seemed that due to the credit crunch, all my time was being focused on the credit of some rich guy in the “1%”, and less about what I love… commercial real estate!

Since joining MCA, every deal I’ve done is truly unique and I have learned something meaningful to take away from each transaction. Working under two Dallas Heavy Hitters at MCA has given me the opportunity to work on a wide variety of transactions across all property types, both stabilized and un-stabilized, and on properties in different stages of development. Moreover, MCA does not shy away from difficult deals and embraces the challenges that come with closing the transaction. This in itself not only provides one with the exposure that cannot be found at a big company, but also gives one the opportunity to bounce off ideas with veteran industry pros, which gets the creative juices flowing! I look back at various excel models and waterfalls I’ve created and modified, and no two are the same. The analyst’s learning curve never flattens, and just when you think you “get it”, Stage II begins: Learning to Manage Clients.

The system for the analyst to learn both the quantitative and the qualitative factors was set in place many years ago, and has proven to be quite successful. The MCA analysts prior to me are all Senior Brokers at the Firm and have much to show for their respective efforts, both in terms of transaction volume and experience.

All of these gentlemen went through the similar process in learning to underwrite real estate risk, being creative, managing Clients, and learning to have the empathy to understand the capital provider’s viewpoint. MCA believes in growing from within and learning from the same lineage — from a culture of hard work, character, self-reliance and Client satisfaction. MCA prides itself in managing Clients’ expectations and ensuring certainty of execution.

The experience in underwriting a multitude of transactions (coupled with the day-to-day exposure to Clients) are valuable lessons to be learned early on in one’s career and not as easily gained in a large firm or educational institution. I am fortunate to have mentors who have not only walked in my same shoes, but have actually sat in my chair and worked at my desk.