Origination
Join us as we delve into the world of multifamily and commercial real estate, engaging in insightful interviews with industry-leading loan originators and salespeople. Discover the secrets that set apart these top performers from the competition as we uncover the strategies and skills that drive their success.
Origination
Epiosde 23: Rob Rubano, Vice Chairman Cushman Wakefield Los Angeles Office: The Importance of What Happens "Off the Field," What Acting Teaches About Sales, The Importance of Data, How to Win Trust, 2022 Capital Markets Trends, and More ,
Rob Rubano of Cushman & Wakefield joins Mordecai Rosenberg on the Origination Podcast for a lively discussion ranging from Rob’s soccer stint in the Olympic Development Program, selling products as a mechanical engineer, acting in Los Angeles, and commercial real estate. Mordecai digs into Rob’s experiences on the advisory side and what keeps bringing clients back, as well as current capital markets trends. Please enjoy this initial episode celebrating the new partnership between Greystone and Cushman & Wakefield.
Timestamps:
2:00-8:00 Early Sales Experience
8:00-14:00 Relationships in Real Estate, Adding Value
14:00-22:00 Lessons as a Kid, Facing Rejection
22:00 - 38:00 The Current Business, Setting Yourself Apart
38:00 -40:00 Importance of Transparency
40:00 -44:00 How to be a Good Lending Partner
45:00-53:00 How to Handle Multiple Larger Financial Institutions
53:00 -56:00 Trends and Changes in the Last 20 Years
lenders, market, people, loan, client, equity, selling, deals, screen protectors, year, calls, rates, business, borrower, easy, long, sales, chase, interest rates, debt
Hey, it's Mordecai. Welcome back to the Origination podcast where we speak to the top originators and salespeople in the multifamily and commercial real estate industries to try to understand what separates the top performers from the rest of the packs. On this episode, I'll be speaking with Rob Rubano. Rob is the vice chairman in the Los Angeles office of Cushman and Wakefield. As you may have seen at the end of last year Greystone and Cushman formed a partnership. And I'm really excited to have Rob on the show. He's the first person that I'm having from Cushman and I'm excited about all the other talented salespeople be able to access for our podcast listeners. Rob has been responsible for financing transactions to more than 70 billion, that's billion with a B. How does someone accomplish such staggering numbers? Well, let's find out. So, without further ado, let's talk to Rob. Rob Rubano, welcome to the origination podcast. It's a delight to have you.
Rob Rubano:Thanks, Mordecai. It's great to be here.
Mordecai Rosenberg:All right. Well, Rob, I'm really excited about this episode, because we recently announced the joint venture, the acquisition by Cushman of 40% interest in Greystone and so there's a lot of exciting partnerships happening. And you're the first Cushman guy that I've had on the on the podcast, I'm really excited about it. So thank you for for inaugurating.
Rob Rubano:Well, I'm honored and looking forward to our conversation today. And yeah, there's a lot of excitement around the new partnership, I think, clearly a lot of energies to be captured between the platforms. So there are a lot of reasons to be to be excited about it.
Mordecai Rosenberg:That's right. But this episode is about you, Rob. So let's talk about you. Alright. So I'll start the way I usually start, which is to ask you, if you think back to your earliest sales experience, and maybe it's when you were in grade school, or high school, college, maybe after college, but what come what comes to mind as far as early sales experience?
Rob Rubano:Yeah, sure. It's such an interesting question. You know, I think when we think about sales, the mind immediately goes to selling products, selling services. And the reality is, we're all selling, you know, selling everyday, you're selling yourself. And so, yeah, I mean, I think back to when I was young, probably maybe a little bit counterintuitive, but it really probably revolves around sports. I was a soccer player, that was my passion growing up, and I played competitively from a young age. Now remember, you know, it's probably going back to like, 12 13, 14 years old, at that time, there was something called the Olympic Development Program, ODP, for short, and ODP was kind of the training ground to go through to get into what they call the national pool to make the national team and playing in the Olympics and all that stuff that. To get into that Olympic development program, you know, its merit based, right. It's based on ability and skill set. And once you get into it you have a lot of guys, a lot of kids, a lot of what's going on what age you are around the country there, by and large at a similar level, right? So then there's more of a political component to it, if you will. And I remember being very cognizant of that from a very young age, because it was something that I viewed as just advantageous for me. I didn't have older siblings that have gone through, you know, you're meeting a bunch of coaches, you don't know, but other kids, you know, have had interaction or dealings with it, whether it was them or their parents with a lot of nepotism, that sort of thing. So, always remember, you know, I've vivid memories of being that young and always thinking about how to sell myself, or how to differentiate myself when you have all these other players. The other kids are bigger than us, some are faster, but by and large, everyone has a pretty similar ability. So, you know, you're off the field. And I remember taking every advantage to try to show the tangible, right, whether it's leadership, work ethic, whatever I can do to kind of sell myself and that's probably kind of the first thing that comes to mind, and, you know, it was certainly within a competitive environment. I think I've always benefited from that competitive perspective when it comes to selling--whether you're selling products or services, you are selling yourself. Now more conventionally I think then, you know, my first real job probably fast forwards to 17-18 years old. I remember working at a local mall, the County 8, it was a teen store, I don't know if it's still around. Because, you know, it's just like selling jeans. And, you know, I wasn't particularly good at it. I certainly wasn't passionate about it, but I was comfortable doing it right. Sales is about connection to people. Right. And so that was something that's always been fairly comfortable for me, you know, just meeting new people and finding ways to create conversation and find common ground and connection. So those are probably kind of my my early memories when it comes to thinking about selling.
Mordecai Rosenberg:Yeah, really interesting. So I totally get, you know, with the soccer tryouts that feeling of could be hundreds of kids there. And at the end of the day, how much real time do the coaches get to see you play? Right. And so what did you do, as far as other things that you tried to do to distinguish yourself? What were some of those things?
Rob Rubano:Yeah, I mean, you try to find time, right, when you're off the field. It's one thing when you're on the field, and you're playing in scrimmages, and they have you doing drills, but it's a whole other thing. The day when you're in the ODP camp, you're spending the majority of time actually off the field, right. So you're with coaches, whether it's in meetings, whether it's in the cafeteria, having lunch, or dinner, right, and I just remember, I mean, I found time to get face time, right, and kind of be a little bit methodical about finding opportunities to communicate things that I wanted to come across. I remember doing that from very, very early age. I guess I was maybe a bit strategic. I think back, I don't know that I was so conscious or aware of it at the time, but it was kind of one of those things that it grew, Mordecai, out of necessity, right? I felt like I was at a disadvantage. And my mind was kind of, how do I try to even the playing field or whatever. At the end of the day, it worked out and then went on, and played in college, but, you know, it was just a good life lesson, I think. Right? You know, I grew up in Pittsburgh, my parents were both born in other countries, and I'm a first generation American now. And there was not a lot handed to my sister and I kind of growing up. So, you know, for me, it was always that feeling of needing to sell myself. I have memories of that from a very young age.
Mordecai Rosenberg:Yeah. It's interesting to think about what it means to be off the field, you know, those things that let's say, in our business, right, where your people know what the sale looks like, right? When you're in front of the client presenting, and maybe it's the email to the client, but it's interesting to think about the things that are off the field, so to speak, right, that the client may be paying attention to.
Rob Rubano:Well, I mean, think about it, right? I mean, especially in real estate. Real estate is such a relationship business, right? And there's a lot of relationship businesses out there, but real estate as much as any. And you tend to do business with people you like, right, with people you find connection with, with people you find common ground with. So, I would actually argue that a lot of our business, right, like we all perform at a very high level. Right. So there's certainly skill set involved. But at the end of the day, assuming you have the right people around you, and you have the skill set, which it's a competitive industry, right, from top to bottom, then the ability to kind of find interpersonal connection, I think is key. It's the key to success to have longevity in our business. Yeah, especially kind of, with what I do, you know, a little bit more specific on on the institutional side. That's really kind of a foundational element to have--a longer term spirit, they can build a real business.
Mordecai Rosenberg:Yeah, I remember a number of years ago, probably going back at least 10 years, but I was chasing a large tax exempt bond. It was like $60 million of bonds, which was a big deal. And I became friendly with the secretary. Right. And so I'd always talk to her and ask her how her weekend was, and I established a very good rapport. I was just kind of nice. And then I would talk to the sponsor, and I had a good conversation with them. Well, unbeknownst to me, the Secretary was actually the sponsor's wife. And so when it came down to them making a decision on who to choose, you know, David, the sponsor says, well, you know, my wife said, "You got to go with Mordecai. He's just so nice and kind." Right. And that's it. So that's an interesting example of like that off the field. behavior. Yeah, you just never know what has an impact.
Rob Rubano:For sure. Look at your combination of factors, right? I mean, at the end of the day, you got to add value, right, you add value to your clients, whether you're selling services products, you know, working purely in an advisory capacity. So that's where it all starts, right? Like, how do I add value? How do I help my client make more money? How do I help them make strategic decisions that are gonna be advantageous to growing their business? Right, and there's a lot of obvious fundamentals, build the foundation, but at the end of the day, I don't know, I've always found that generally speaking in an all SQL situation, people gravitate towards business with people that they find connection with, common ground, want to spend time with, and obviously have trust and confidence.
Mordecai Rosenberg:Yeah. That's really great. Really interesting insight. So as far as your path to commercial real estate. What did that look like? Did you start going out of school? Or how did you get--
Rob Rubano:Yeah, yeah. So I went to college, undergrad, back east, and I actually have an engineering degree, undergrad. I have a mechanical engineering degree. So it was somewhat of a circuitous path. So after school, I worked as an engineer, I was in DC. And there's a sales job, actually, I worked for a company called the Texaco Lubricants company. And I sold products, lubricant products to manufacturing facilities, steel mill, and an automotive manufacturer, right. It was these products they would use for their equipment. So it was a sales job. So I started the sales route, it was cool. I did that for a few years. But I've always had a varying amount of interests, pretty diverse interests. So I moved, I wanted to get out to the West Coast. And I moved out to LA, basically in 1999 -2000. I left the strobe. I knew I didn't want to stay in engineering and in sales, in that capacity. I did some other things, I kind of did the entertainment thing for about three, almost four years. On the acting side. Yeah, I studied a lot of theater as well in school, in addition to playing soccer. So I did some theater, actually, when I was in DC, and then decided to kind of make a go of it and came to the realization after about three years, I wasn't very good, nor was I very passionate about it. I had a little bit of a self reflection period. Do I really want to foil around for the next 10 years trying to figure out if it's something that a lot, and I made, probably the most important decision in my kind of mid to late 20s, which was to go back to school. And so I ended up going back to the Anderson School at UCLA. And that was the conduit for me to go to commercial real estate. So a concentration in finance, in real estate. And then after Anderson I spent a little over a year actually working for a homebuilder. I was buying lambs, what's called land acquisition in that in that business, and then I really transitioned into finance side in 2005 to a company, which was then called Secured Capital, which was acquired by Eastville-- became Eastville Security and I was there for a long time before moving to Cushman about three years ago. The last 17 years I've been just focused on commercial real estate.
Mordecai Rosenberg:Yeah. So the acting stint is interesting. So was that a dream that you had as a kid, to take up acting?
Rob Rubano:No, not really. I didn't grow up around the theater. My parents didn't really take me to the theater. No, didn't really have much in a creative based family. I was actually in college, you know, as playing soccer and taking engineering classes, and I was dating a girl from my sophomore year, and she really knew she wanted to get this particular class. And I was like, I don't really have a lot of interest and she kept pushing me so finally we we both ended up signing up to take this class. And it was really shielded, I'm not getting in the class, I guess it was a fairly oversubscribed class, and I ended up getting into it. Just because I played soccer, we had kind of preferential scheduling, because we have to schedule around practices and games, etc. So I have taken the class and actually loved it. And I found that I actually had some aptitude for it, according to some of the teachers that I had at school. And so that was kind of what launched a desire, if you will, in that I did, like I said, I did some theater and you talk about, you know, talking about sales, talking about selling yourself and Mordecai, no, when I think back on it, it was actually an extremely important stepping stone for me, right. As an actor, you know, it's all about rejection, right? I mean, you are your own corporation, right? It was Rob Incorporated. And you're working on your craft, obviously, and your instrument, everything from your voice. And, you know, you doesn't matter who you are, you start to develop a thick skin, you have to, right, to survive, to have perseverance, I think in that business. And I learned a lot about myself, and it was something that I would not change in a million years. It was a short part of my life, but a really significant learning experience, from a personal perspective. And I think I benefited from it, right, from everything from public speaking, when I'm speaking to large groups to just the confidence, right, that when you're selling services, advisory services or products, having an underlying confidence in what you're doing, I think always is an important ingredient for success. Right. You know, people want to believe that you have command over what it is you're selling. And so that was actually them. It sounds silly, but it was an important part of my evolution, I think, ultimately, in business, and on a personal level.
Mordecai Rosenberg:Yeah, I could see a couple of things coming out of that, first, the idea of being all about yourself, right and getting used to rejection, you're acting in some ways. I've never thought about this, but really it's the ultimate accountability. Right? You know, if I'm selling a product, I can always blame something else. I can blame that oh, yeah, look at my product, you know, the product isn't great. What do you want me to do? Or maybe my underwriter messed up. But if you're acting, and you're on stage, trying out, it's just you. Right? And sometimes they're going to say no, right? So you have to develop that idea of well, that's okay. And it may not be the right fit, but it doesn't mean that I am a bad actor or salesperson. Right? That it just wasn't right. It just may not have been the right fit.
Rob Rubano:There's a business side to it as well, right, as an actor, especially when you're starting out, you're trying to build a career, right? I think there's the ability to kind of strategically create opportunities for yourself. So I was actually really good at the business side of it. I worked for a casting director over that time, one of the most prominent film casting directors in Hollywood, and that created opportunities. I got a couple of small TV things from that. But I actually had some fairly significant opportunities. I just wasn't good enough. Right. That's the bottom line. I just wasn't, I really wasn't. I mean, I was very candid with myself, in terms of self reflection, and having self awareness, which ultimately was the driver for me to make the decision quite quickly, right, after only a few years. Maybe I can hone my craft and get a lot better, which I had full confidence that I could do if I committed to it for long enough. But I had no idea how long that would take. That would take two years or 10 years. And I wasn't willing to make that bet. Right. I wasn't willing to take that risk. But I have a significant amount of admiration for for those who succeed in that business because it is tough. It's not easy. I mean, yeah, commercial real estate a cakewalk comparison.
Mordecai Rosenberg:Yeah, I get that. Another thing that I think is interesting about acting is that, look, people are very attracted to confidence. You know, and you don't always feel confident. Right? But sometimes you have to fake it right? Which is not to say that you have to, if you don't know something, it's okay to say that you don't know. But you still have to come in and appear confident. I remember when I was dating--I'm married a second time now and one practice, and then I got it got it right. But I remember when I was dating my now wife, that lots of times, I wouldn't feel confident and I would ask myself like, well, what would Clint Eastwood do? Yeah. And just try to act. And so I would kind of act confident and eventually, if you act that way, you start to feel that way. Does that resonate? As far as like your sales experience also?
Rob Rubano:Maybe early on, like, really kind of early, I think, oh, for me, as I developed my career, right, in turn to really advance it, it becomes equally important, well, probably more important to ultimately have mastery over what you're doing. Right. I mean, sure, operate at a high level again, today, like I said, the real single most important thing, in our business is adding value. Right, is being an advisor. Right? And that's ultimately what people pay you fees to do in our business. So yes, I think when you're, you know, when you're meeting with people for the first time, or transacting on them on, you know, you're talking about obviously, significant investments, oftentimes with with very tight timelines. Yeah, I mean, exuding confidence that you have the ability to execute and advise them, to help them be successful is key, but you got to back it up. Right, you have to be right back it up time and time again. So you know, which one's more important, the probably equally important, but I think, over over time, have real longevity, you know, the ability to execute and, you know, having the skill set necessary. Probably trumps it, but yeah, I mean, I think confidence is not I mean, it transcends sales, or, you know, just, I think, confidence in general, there's, you know, people are attracted to those to have an air of confidence about, right, because it makes them feel, you know, we're kind of more secure that they're in grants.
Mordecai Rosenberg:Right. So, right. Yeah. So, let's talk about your current business, because I think in some ways, there are similarities to trying out for that soccer team. Right. And that, you know, there's lots of so you are a an advisor, right to owners of real estate, across all asset classes. So multifamily office, industrial retail. So, when you're sitting down with an institutional client, right, and they say, Well, look, there's two dozen advisors that we have access to, what do you do differently from anyone else? What do you say?
Rob Rubano:Yeah, I think first of all, we're in the advisory side, right, whether you're selling assets, or financing assets, like I am, or selling loans on the secondary market. Number one, we're in the data point this, right, so, you know, access to understanding what, what are the most aggressive terms out there that are getting done? You know, that there's the first part, which is the ability from a structural perspective, just to understand, I tend to focus on larger stuff, right. So we do a lot of single asset will borrower securitization portfolios in large single assets. Right. So there's a whole kind of formulaic part to being able to understand how to size those fields, right, from, you know, tranche them out and backlog for all the bond levels are trading better, right? So there's that component, but if you take a step back from that, right, at the end of the day, having access and an understanding of data points that are in the market, so it's almost like a self fulfilling prophecy right, once you have created more flow, right, and you have billions of dollars in the market at any one given time, like we are fortunate to have, it helps, right, because you have such an understanding of exactly where the market is at any given time for different types of profiles, right, that can be for a transitional office building that maybe someone just converted to a more creative office and they're at least up to a hotel that's coming up out of COVID. Maybe it's still kind of a more urban CBD type of convention type hotel to, you know, a stabilized multifamily. Right. And so I think that's one key differentiator, right, because, you know, not everybody has access to the same amount of data, that's current real time in the market. And then I think the other the other thing for me, when I made the move over to Cushman, right, the thing I was most focused on was building the team around me. Right, and, you know, making sure that the team I felt have, you know, the necessary skill set to traffic and what it is we, we specialize in, be focused on, right. So, um, I think those are all differentiators. Right? You know, you guys on my team? You know, they all pretty much most most books, most come from investment banks, right, not from traditional brokerage world. And so, yeah, I think it's, I think it's a combination of factors with how you try to differentiate yourself. And then, you know, obviously, the platform that you work with him is is obviously a component of that as well. Right. And, you know, for, for me, the vast majority of our business, repetitive clients, right at the clients, we transact on an ongoing basis. And so for us, every deal is about 30 of execution, right, every deal about performing for that client, right, in the day, you know, you're kind of the old and you're only finished your last deal, right? There's truth. Right? I think that becomes ultimately a differentiator, right? When you have, you know, the ability to consistently transact, you're in you're out, transact with larger institutional clients, that in of itself becomes a differentiator. Right. So I think, right, we kind of break it down. fFr me, I always kind of go back to things question, which is, you know, how do you add value for this client? And I think, I think if you can do that on a consistent basis, then you, you know, you could have successes starting to build a bigger?
Mordecai Rosenberg:Yeah. So let's say, we asked one of your clients, right, why do you keep on going back to Rob, right, like, what do you like, what, what does Rob do? Like, what's his special sauce? Right, that keeps you coming back? And not in terms of trade secrets, but what I find is that really all salespeople have anyone in the sales industry, they've got their own unique way of going about it. Sometimes they don't even realize it, but anything come to mind as far as like, because your book of business is tremendous, you know, you've done 10s of billions of dollars of transactions, which not a lot of people can say, so there's got to be some magic there.
Rob Rubano:And I appreciate that. Yeah. I mean, honestly, it's not. Right. I mean, I think when you're kind of working within the world we're working, you know, candor, right, is everything. The ability to be able to advise clients. I mean, they're making big decisions, right. They're, oftentimes making significant acquisitions. Right. And they have to underwrite, that was a big part of ultimately realizing their return profiles, and they have a certain amount of diligence time before they have to make big decisions going on or fundable on, sometimes hundreds of millions of dollars. Right. So, you know, it's not about at that point selling, it's about understanding, what is the most efficient way for them to meet their objectives? Right, and how to execute? And then ultimately, you have to deliver on that. Right. So that's the first thing first and foremost, and then once you're going through the process of transacting, we try to take it to another level in terms of communication with clients. Right. And, you know, it's a significant amount of communication, collaboration. Always having the climate is different clients are different borrowers act differently in terms of how involved they want to be in the process, so that there's some variability or range there. But I think most clients, for the most part, like to be well informed. Right? And so we tend to be pretty hands on with bias. And then I think at the end of the day, it's just again, it's having the team in place that has the ability to execute on a consistent basis at that high level. So I think all those are all ingredients that make up the special sauce for us that you're talking about.
Mordecai Rosenberg:Yeah, so I'm gonna just like dig in a little bit more, if you don't mind. So, let's say, you know, if someone's in the industry, let's say they're at a, you know, an Eastville or CBRE or JLL, like us. So there's a presumption that if they're doing business that they know the market, right, so they have data. Right? So how do you get that first shot? Right? If they say, look, we've been closing with this other firm, like, we've had a good experience, so thanks, but clearly you're making inroads. So how do you get that first bite of the apple?
Rob Rubano:I mean, look, I think the reality is it can come in a number of different ways, number of different forms. Right? I have the advantage of working within a platform that has a number of different business lines, that many of our clients access, right, whether it's hiring us for all assets, hiring us to properly manage their assets, hiring us to lease their asset, hiring us to do construction services on their assets, hiring us to value their assets with appraisals. Right. So oftentimes, there's multiple touch points, you need to be strategic about how to access those. So sometimes it's a new client, our ability to access that client originally came from another touchpoint within the firm, right, and oftentimes, we're pretty strategic about how we access those other touch points, right? There's that component of it, and as you know, that goes hand in hand with a sales platform, right, obviously, you know, in your lending business, on the multifamily side, right. So, when we're selling assets, a big part of our job is to make sure that we're helping our sales team ultimately deliver to their client, which their job is to sell at the highest price, right? So that is oftentimes a key component of maximizing value, right? So we play a significant role in helping to drive maximum value when assets are being sold. And that's obviously an inroad into buyers, right. So sometimes new borrowers, clients of ours come from the fact that we sold them assets. Other times, we're fortunate that we have a fair amount of inbound inquiries, a lot of that is based off of transactions that we've had in the market. I'll give you an example. We recently did a fairly complicated portfolio financing for what I would call an outdoor lodging brand, a kind of a rising company within kind of the the outdoor lodging space, and that kind of outdoor destination now seems to be something with significant interest, both equity and on the debt side as well. And because we transacted on that, we have another sponsor that come to us with another kind of floor business plan, although different, more entertainment oriented destination, real estate, and got engaged to work on their behalf. Right. So I don't, and then there's other times where it's just business that we pursue, right, and we, you know, we knock on doors, and, you know, we, you know, we work ourselves to create an opportunity to get in and pitch business, right. So it can come from any one of those avenues. I think the key is, you have to be good at all. Right. You know, and you have to pursue all of them. I mean, you know, that you got to work but I think maybe you said like what ultimately, you know, the key to success. In most businesses, a lot of it revolves around work ethic and hustle, right? I mean, I could possibly since I was six years old. And so if you try to do it strategically, you try to use your time wisely in the time of your team. I mean, fortunately, for all of us, for many of us, within the sector right now, just given where capital flows are and how much capital is looking to be deployed both equity and debt. You know, there's enough to go around, and a lot of people continue to be quite busy. Going back into 2022.
Mordecai Rosenberg:Yet, so you make a good point about the source of transactions. Yeah. And it dawns on me that you really have a number of different clients that you're managing, right? Because you're on the one end, you have the owner, right, who's the borrower. You also have the lender, and you have to interact with them. And I'd like to go into that in a couple of minutes. And then the third one is you have your internal potential your internal salesperson. And in some ways, like the internal broker, or salesperson, that person in some ways can be the toughest client, because they're now going out on a limb, right? Because let's say, if they're representing the sale of an asset, right, that they can control. But as soon as they let someone else into the tent, and now if you're not able to come through for the buyer, now they're gonna blame you for not being able to close on time. Right? So there's exposure. So how easy is it to kind of build trust? How do you do that? How do you build trust internally and get them to take that risk?
Rob Rubano:You're absolutely right. You do it by executing, right? By performing. Right. And so, you know, early in my career there, without question, there's that trust building. I mean, oftentimes, you have investment skills, folks who are working on behalf of very important clients, they transact with a lot. And what I said, you're only as good as your last deal, right. So that component is critically important. And so, fortunately, kind of hopefully past that point in my career, but I've been through it, right, where, you know, you build that trust over time by executing, and ultimately adding value, right, you ultimately add value to your colleague, by helping them add value to their clients. Right. Yeah. So again, it goes back to that kind of initial comment that I had, where I think at the end of the day, when you're in sales or advisory business, it's about adding value. And, I think that's a pretty good core tenet to start from. And you're absolutely right. And so you know, you do that by transaction. I mean, that's really, to me, the only way to build trust, you have to do it by performing, right, by executing and performing, and then the truck kind of builds on its own.
Mordecai Rosenberg:Yeah, that's great. Yeah, I think at the end of the day everyone wants to be a hero to their client. Right. And what I have realized is that when you think about what it means to be a hero, like who your heroes have been in your life, or who you've been a hero to it, often times, it comes down to clarity and confidence. And you might have had a coach in high school or younger, where maybe you had a winning season, but maybe you guys had a losing season. But the coach gave you the confidence, he showed you something about how to think about your game, and so, for you, I would imagine that the way for you to be a hero to the broker, is to enable them to be a hero to their client, right. So probably a lot of just confidence is from your ability to execute. And then clarity probably comes from that communication that you talked about, and just really keeping them informed. And to understand if there it looks, nothing is without its risks. But if you're clear about it, I think that's what people want.
Rob Rubano:Yeah, transparency is obviously always critically important. Right. And transparency helps build trust. And I think in this business, so much of it is interpersonal relationship driven and trust driven, right. So, I think one of the reasons we've been successful kind of building our platform has been this inherent fundamental philosophy, that revolves around collaboration, right, that revolves around working as a team, right? So you know, I think you think about a platform, like a Cushman, or a JLL, or Newmark, whatever it may be, at the end of the day clients want the power of the platform, right? So even if you're selling or you're hiring someone to sell a small, you know, multifamily building in Phoenix or something like that, right, you know, or maybe, maybe it's maybe it's not small, but you want the power of knowing that not only are you going to have the expertise of a local salesperson, specializes in that market. But because, look I mean, global capital is interconnected, right, and it's global in nature, right? So, you want to know that you have access to that whole national or sometimes on certain deals, global platform, and that comes from knowing that you're working with an advisor, that fundamentally works in collaboration, right. And, you know, we spend a lot of time kind of building that. And I do think in today's world, in today's environment, today's market, it's almost essential, right? It's difficult to grow a business, appreciable scale without without having that real philosophy to get that way in which you do it.
Mordecai Rosenberg:Yeah. Makes a ton of sense. So the other category of clients that you have are partners, right? Are your lenders, right? You're going out to a number of a lot of different lenders, what does it take to be a good lending partner to you? I'm sure there's some lenders that you probably keep coming back to, and there are probably others who you tried once, and then we'll never go back to them again. So what does it mean to be a good lending partner to you guys?
Rob Rubano:I think for us, it starts with a transparent process. Right, it's certainly of execution is so key in our business, that it's difficult to advise a client to select a lender, maybe it's a lender, maybe we worked in the past, we haven't, but if we don't really have a good understanding of their process, right, whether it's an approval process, their committee process, their diligence process, how they are working documentation, all those things are really critical, right? So, the lenders that we tend to transact with the most obviously have to be competitive, different types of lenders have different types of capital, but just speaking in broad generalities here are the ones who have a transparent process to what they say they're going to do. I mean, there's always, depending on the type of transaction that there's always market risk on certain types of executions, etc, you can kind of box some of that stuff in, but really a fundamental understanding that when you move forward with them, barring something from a unforeseen change perspective, they're going to execute, right, it's going to be similar to how to do look when you sign it up, or when under contract, right. So, fortunately, for us, when we do so much, when you're doing it almost 10 billion last years, you're doing that much, we have a lot of transaction history with most lenders that are out there, and it but it's true. I mean, they're there, there's no question, right, especially in a competitive environment like this one, you know, when you're sitting down with borrowers doing bid sheets that may have four or 510, well, of lenders, you know, our view on 30 of execution with those various vendors is an important component of the selection process, right? It's not just about economics. It's not even necessarily just about structure, right? It's all about if you execute.
Mordecai Rosenberg:Yeah, they have to get their deal closed. So you make sure that someone's at the finish line when you get there. That's the transparency. What about, let's say, the client experience in terms of, well, there's a couple of parts there. Right. So let's say, as far as how to speed factor in. If someone is getting you a quote more quickly, how much does speed play a role if someone is getting you a term sheet in 24 hours versus 48? Or 72? Does that make a difference?
Rob Rubano:Yeah, I think that's defined by the specific transaction timeline. Right? It's a very tight timeline. And we'll typically always have some level of timeline that we put forth to a lender. And if it's a transaction timeline, then getting it on time is going to be paramount. And the train will probably leave the station without you. Having said that, I think, if there's not that point in time, a real material threshold as it relates to the timeline. And critically, right, you want to create a market, right? And the borrower's hire us create a market right to build up and give them the ability to have leverage to negotiate ultimately, the best economics and the best terms. So generally speaking, unless the timeline takes it, I'd say it's less impactful. Right.
Mordecai Rosenberg:Yeah. That definitely does make a lot of sense. Do customers come to you who have direct relationships with banks, will they still come to you just to kind of keep them honest and make sure that they're that? Yeah, because how many banks? Can you really keep a handle on as just a developer?
Rob Rubano:Great question. Yeah. I mean, just by nature of kind of where our businesses focus with kind of larger institutional clients. The reality is, many of our clients, not only do they have a direct lending relationships, they oftentimes have people internally that manage those relationships and oversee the placement of tech on their portfolio of assets. Right. So and I think that actually speaks to the value that we add as an advisor. Right? Because we weren't often hand in hand with those internal finance people, and then a long list of clients that we work with day in and day out that have people in that role, I think that our ability to number one, create a market, right, which often times will include more than just a typical table of existing relationship lenders that one client may or may not have, and that could be dictated by the type of transaction it is timeline, etc. And then, again, to having that market just further increases the ability to negotiate, right. A lot of our Congress focused on non economic stuff, right, we kind of learned the absolute best non economic structural terms you can get in the market. And the markets move fairly significantly along those lines. And then sometimes, like, sometimes it was, you know, we play the role of bad guy, right, where we're the ones kind of doing the grinding. From a lender perspective. I mean, there's been times or times when we get hired, where, you know, we're literally hired to manage a process with a lender that's already been selected. So the answer is, yeah, I mean, I think it's much more common than not, that our borrowers have substantial lender relationships.
Mordecai Rosenberg:Yeah, I remember, again, a number of years ago, that a client of ours was a partner with a very, very large New York City based developer, and they had an existing relationship with a national lender, and they did 10s of billions of dollars of agency business with them. So, you know, our client brought us in to compete and to get another voice. And they wanted us to look at FHA as an option. And what we found was that, I mean, there's a lot of buildup in terms of the rate but you get a, let's say, you get just one number, that's the interest rate, but how much of it is servicing, guarantee, investor spread? What we found was that this lender, that was working in this, we're talking about, probably the top borrower, and one of their top borrowers in the country, they were padding it by like, 10 or 15 basis points of additional servicing fee, which it was on a $450 million loan was was was equivalent to about like $15 million in value. You know, so they ended up not selecting us, they ended up going with their the other lender, but yes, seeing that they were able to negotiate the price. Yeah, they meet their lender, match the pricing. So, no matter how intelligent someone thinks they are, it's good to get a second opinion, go to market and clear it, see what what reality is.
Rob Rubano:Yeah, I mean, when you think about it, right, is fiduciary, right? In an environment where there's so much capital looking to be deployed. It's almost difficult to justify not really creating a market, right? Because it is such a competitive environment, right, whether you're financing an asset or selling an asset. So yeah, I don't have a question, I totally agree with you.
Mordecai Rosenberg:Yeah. How do you handle, you know, one of the things that I focus on at Greystone through the G2 group is portfolio retention. And, you know, we want to make sure that when a client is paying off our loan, that they're going to use us for the refinance, right? Or if they're gonna sell the property, hopefully, now we can bring Cushman capabilities to provide sales capabilities. And if they're looking for something that's not an agency, that we can leverage your team to provide a product that we don't have. But you mentioned that you're only as good as your last deal. How do you think about just staying in touch with a client, right, so you close a loan with them? And how often do you maybe it's a 10 year loan? Right? But how do you think about just staying in touch with them? Do you have a schedule of well, you know, every client you talk to on a quarterly basis, or you try to get together with periodically, like, is there any kind of system that you have for that?
Rob Rubano:Yeah. Yeah, I mean, fortunately for us, right, the majority of our clients are larger institutional owners, right. So, if they have a stabilized office building and they want a 10 year fixed rate debt, and we put that loan on, we're typically working with them on other stuff, right? It's not like a one trick pony, where it's like, okay, let's put this in my database with a calendar reminder to call them, you know, for years to just check in, or have you read a lot of generally speaking, ongoing dialogue. And we certainly have that maturity tracking tools that we use, not only on deals that we've done, but on other aspects, to know where maturities are coming, etc. But I think just generally speaking, again, because you know, the end of the day, we're in a relationship business, and you're selling services, it's always advantageous to be in front of clients as regularly as possible. Right. And so, obviously, going through this pandemic period, where you're not traveling as much you're not seeing face to face is probably been challenging. But we have tools like that, like this, you and I are on right now, or you can pick up the phone. And so yeah, I mean, I think almost any business, like ours is much based on our ongoing communication you can have with clients, because we're always trying to share information, right? Again, you don't just because a client has debt on an app, it doesn't mature for 10 years of me, and that client doesn't know what's happening in the market on an ongoing basis, right, we have such incredible visibility into data points, that it's a really unique perch that we have, right, and it's something that we don't take for granted. And we're appreciative of. And, you know, I think that in of itself, from my perspective, and my experience, is something that gives us the ability to add value to clients on an ongoing basis, right, everybody wants it, especially when you're going through things like COVID, and, or, you know, other other kind of macro disruptions to the market, right, where, you know, it's difficult to have visibility and data points, etc. I mean, for us now, I mean, I spent almost all my time with clients talking about, you know, inflation and interest rates, because things from a macro perspective, you know, giving our view on, you know, you know, everybody won't, you know, kind of think about like, you know, with the Fed and, you know, dialing back to E and you know, how they're going to manage inflation, clearly the, you know, the benchmark rates are gonna move, what's gonna happen to spreads, what will the indexes are gapping out, you know, obviously, so much of my time is spent, you know, fundamentally, you know, advising or, you know, discussing, talking about the market from from a more of a macro perspective on kind of what our views are, is there thinking ahead to throw in portfolio strategies, you know, could be hedging strategies, you know, etc.
Mordecai Rosenberg:Yeah, that's great. So just a couple of last questions before we. And because you clear the market, I'm curious--you see a lot of the trends, like who is providing the cap, who's providing the debt, just looking at multifamily? Because that's the area that I know, if a lot of the listeners are focused on multifamily. Compared to, let's say two years ago, what are you seeing, like, what are clients looking for today compared to two years ago?
Rob Rubano:I think clearly the resonating theme of 2021 was balance sheet that right, you know, just given where Cap rates are going in yields, cash flow profiles, you know, it's been much more difficult for the agents. That's carried forward into 2022. Significant amounts of debt were floating around balance sheets. Right. So, you know, as yields have compressed, fortunately, in a lot of markets, it's been a couple of bad performance at the asset level, right, was increasing rents and property level on a wide growth, which has obviously been a huge positive. But the trend the last two years, has been the ability to try to still get a level of appreciable leverage by cap rates. Right. And that's the flooding rates slide has been much more accommodative to that. From the bank perspective, they've been able to be more accommodative by effectively just compressing their take out metrics, right. So what was five to seven and a half percent exit that yield 12 months ago, is biasing to six and a half percent takeout tend to rise further. So they're not seeing as much leverage even though cap rates are so, right, and then it's been really beneficiary for your higher yielding, splitter, it honors ie the desktops, right? To have the ability to find comfort from a credit perspective based more on, you know, kind of propelling metrics, right? What is my value? What does my loan basis look like on a per key basis, in addition to just your cash flow metrics, right, so they've been willing to take a lower going in that yield or cash flow profile, and they'll give adequate enough leverage, or a buyer of multifamily to still be competitive in a competitive process, right, because, you know, if you're in a good market for good multi, you know, you're probably competing with some level with unlevered buyers, or there's just, there's so much capital to be deployed. Right. And you can talk about a lot of things from a macro perspective. But at the end of the day, capital is maybe the most significant thing to think about in our business, right? It's a commercial real estate, right? And global capital flows into into the US. And so that in itself, even as interest rates, if, as the benchmarks have already been moving up, and well, relative compressed, in part, they haven't compressed as much as the indexes move down. So coupons have gone up. And, you know, normally that would mean that cap rates are gonna go up, right? But when you counterbalance that, with an incredible amount of capital looking to be deployed, vaccines have downward pressure on going in yields and cap rates back, they won't be seen. And that's affected multi it's affected industrial part of those few asset classes more than any other. And thus, the trend that we've seen has a lot of floating rate balance sheet debt.
Mordecai Rosenberg:Yeah. I think that's really an excellent point that people would be good to keep in mind or realize that the run up in value in multifamily. And in frankly, the other asset classes, other assets like the stock market. Yes, the fundamentals are strong. But this isn't just about the fundamentals, right. This is about capital. Right? If you look at just the capital that's being showered into the US, it's got to find a home somewhere.
Rob Rubano:Just think about the non traded REIT vehicles, non traded route vehicles, they're raising significant amounts of cash flow of capital, right on a monthly basis. Right. And then you add leverage to that capital. Right. You know, just just just that bucket level, if it's false, it's significant. In how it impacts the market, right? Yeah. Capital is king, and there's plenty of it.
Mordecai Rosenberg:Yeah. Yeah. And that's also like what I always say that when multifamily at least has gotten in trouble, at least for the last 20 years, it's really never been about the fundamentals. It's not like vacancy. You had situations in New York City where vacancy jumped in during COVID. But the policies were accommodating. In general, when multifamily has a problem it's because there's a liquidity issue. It's because liquidity is being pulled from the market. And whether or not it's the Russian ruble crisis, or Lehman Brothers or the SNL crisis, right? As a multifamily investor, it's a good investment, your risk is really your loan maturity and you just hope that when your loan happens to mature that you're not in one of those moments where liquidity isn't there. Rob, this has been awesome. I really enjoyed the conversation and some really great insights for all the listeners. So thank you for your for your time. And I think people get a lot out of it. So thank you.
Rob Rubano:My pleasure. Thanks for having me.
Mordecai Rosenberg:All right. I'll talk to you soon. Thanks, Rob. Have a good one.