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
Episode 38: Henry Stimler, Executive Managing Director at Newmark
SUMMARY:
On this episode, I had the pleasure of speaking to Henry Stimler who is an Executive Managing Director at Newmark. Henry certainly knows how to go hunting for whales. Yeah, he actually closed new marks largest agency deal, clocking in at $1.85 billion. That's the kind of loan that every originator fantasizes about. Henry came to the country from England with foreign dollars, and no industry background, but somehow was able to land those types of deals within just about 10 years from entering the industry. So how did he do it? There are a couple of themes that I think you'll hear you're one is the enthusiasm and energy with which Henry approaches the business. Energy is attractive. energy and enthusiasm you make people want to be around you. And you'll hear that come across very clearly in my conversation with him. The other component that you'll hear is the idea of really focusing on the client and what's in it for them, how can you help them grow their business, it's not about selling a product, it's about helping them achieve their future. This is really an awesome conversation.
TIMESTAMPS:
0:00 - What separates the top performers from the rest.
1:57 - What’s your earliest sales experience?
7:46 - How to get into the world of multifamily finance.
11:14 - How he got into the real estate finance business.
16:55 - What is the best piece of advice you can give someone trying to make it?
22:10 - You can act confident even if you don’t feel courageous.
28:21 - The most important thing in the multifamily business is your ability to raise equity -.
33:21 - How to get your foot in the door -.
37:03 - What’s your approach when you’re working with an originator who doesn’t want to close a deal.
41:41 - What’s the future of fixed-rate finance?
45:29 - How do you stay in contact with clients and provide value in a non-transactional environment?
52:01 - The first thing that people lose in times of distress is their future.
lenders, market, people, loan, client, equity, selling, deals, screen protectors, year, calls, rates, business, borrower, easy, long, sales, chase, interest rates, debt
Hey guys, welcome back to the Origination podcast where I speak to top salespeople and leaders in the multifamily industry try to understand what separates the top performers from the rest of the pack. On this episode, I had the pleasure of speaking to Henry Stimler who is an Executive Managing Director at Newmark. Henry certainly knows how to go hunting for whales. Yeah, he actually closed new marks largest agency deal, clocking in at $1.85 billion. That's the kind of loan that every originator fantasizes about. Henry came to the country from England with foreign dollars, and no industry background, but somehow was able to land those types of deals within just about 10 years from entering the industry. So how did he do it? There are a couple of themes that I think you'll hear you're one is the enthusiasm and energy with which Henry approaches the business. Energy is attractive. energy and enthusiasm you make people want to be around you. And you'll hear that come across very clearly in my conversation with him. The other component that you'll hear is the idea of really focusing on the client and what's in it for them, how can you help them grow their business, it's not about selling a product, it's about helping them achieve their future. This is really an awesome conversation. And I think you may find that enthusiasm is contagious, even through the podcast. So without further ado, let's speak to Henry. All right, Henry Stimler, not only one of the largest originators in the country, but also the best dressed originater. So it's a real honor to have you.
Henry Stimler:Thank you for having me Mordecai. It's a pleasure to be on this podcast with you. It's lovely to meet you in person. Obviously, I know your family know your dad, and the unbelievable things he's done enough heard about you and the great things you've done. So really, thank you for having me.
Mordecai Rosenberg:Well, you can thank me after after the hour, you know, if you still want to. Well, and we were talking before recorded about, you know how you you came to America and got your start, but I wanted to first ask you about your earliest sales experience. And maybe it was when you're still in England and in London. But if I said your what's kind of earliest sales experience, you can remember it could be from grade school or high school or it could be you know, you're in this industry, but anything comes to mind when you think about
Henry Stimler:Yes!
Mordecai Rosenberg:Do you remember the first thing you remember selling?
Unknown:So we're from the age of 15-16, there was a jewelry salesman in gold screen, London, called Mortimore, Hance is still a great friend and my family and my parents, and he would work and selling gold and jewelry. And they would go to expos, and, and fairs. And he would take me with to kind of bring people to the booth. So I would stand outside the booth. And my job was to bring people to the booth so he could show them their wares. And I would do that with with quite good aplomb. And I would do that for a few years for him. And he would pay me for for kind of like being a herder of people. And I would use charm and smiling and happiness and laughter and try and attract people to come and view his his his jewelry. And then I did that also in Israel. When I went to yeshiva there, there was a gentleman called Jeff Seidel, who had a program that he would try and engage with the youth who are coming over from birthright to kind of enlist them into the Jeff Seidel Jewish Center. And so birthright would have would take all his birthright kids to this fair, where they would be the different booths. So if they wanted to stay in Israel they have different things. And I would work for Jeff to bring people to his booth to kind of get them interested in joining his program. So from a very young age, I kind of had the gift of the gab and little bit of pain and liking the likeable ability to bring people in and kind of get them to focus on what I want them to focus on.
Mordecai Rosenberg:It's so - and by the way, that's obvious you know that you have that let's let's talk about the jewelry first. Right? So when we go to the Expos in the city are 15 years old. So how do you get people to come to your your booth? Like what do you mean there's lots of other vendors that are there. What do you how are you approaching these, these total strangers at the age of 15?
Henry Stimler:Just walking up to them say hey guys, let me come over here. Let me show you something amazing. You've got to check this out. This is war hand jewelry. It's amazing. Come with me just just with natural enthusiasm and just airy and happy and bright and smiley and I think that's what I do today as well. Just just natural enthusiasm that kind of It permeates and resonates with other people. And it just people see it and they like it. They're attracted to it. And they want to be around that kind of good natured humor.
Mordecai Rosenberg:So they come to that they come to the to the booth. And now you need to take the next step right and try to What are you trying to do that you're trying to kind of close a sale there? Or are you? How are you? Where are you handing it off to?,
Unknown:in those days, I would hand them off to Morty and his mother, and they would bring out their wares. And then I think, at that point, once you've got them there, and then you talk about pricing, in that business, if you're competitive on pricing, and your product is good, then you're okay. And I would go back out to the front and try and usher in more people. And the busier the booth got, I think the more the better he did, because once you have that natural busyness and people are buying, and people are handling, so it kind of inspires more people to come to the booth. So we just had to pack the place. And I think that's so funny. I've never really thought about that. I've always been a promoter. You know, when I when I left finance, in between 2010 and 2014, I became a promoter. I was a nightclub and restaurant owner. And that was also promoting and bringing people and filling the place. Never really. This is the first time putting that together. Yes. So I did that then, as well. Young. And then again, in my in my late 20s, early 30s.
Mordecai Rosenberg:Wow. So you were promoting? How old? Were you at first thing you were doing promoting?
Unknown:So after the crash of 2008, I was in finance in 2008. And it took me two years to wind up my business and from 2010. I didn't want anything to do with finance. And I went into nightlife promoting and I promoted different places in New York City. Place call Winston's at the Gansevoort hotel, this will Provocateur and then ultimately, my own place is a place called Jezebel Madame Wong's Red Egg and the Raven.
Mordecai Rosenberg:Wow. So how did how did that go? So what is promoting actually mean? In practice? Where How are you getting people to come?
Henry Stimler:So twofold. So when you're promoting for somebody else, your job is just to cultivate a crowd and bring the right crowd to the space. That means bringing bottle buyers, bringing beautiful people bringing the odd celebrity or two, when you're promoting at your own place, it's different than promoting for somebody else, because now you've got the job of just filling the whole place. So your own place. But when I was promoting for other people, I just had to bring 10, 15, 20 people, which I would do, and then when I had to promote in my own place, I would try and fill the place up with as many people as possible.
Mordecai Rosenberg:So it seems like one common theme here. First of all, like that, that idea of enthusiasm, right, because I think people are attracted to they're naturally attracted to enthusiasm, right, your energy attracts more, more more energy. And then also kind of creating the idea of being promoting is very interesting, because the idea is like, if we get the right group of people there to start, right, then other people will want to be with those people. So it's, you know, at a booth, right? It's, it's kind of that old joke of like, I never want to belong to a club that would have me as a member, you want to get to the place where if there's, if there's a big crowd there, right, where you're not gonna get any attention, right? That's where you want to, that's where you want to go.
Henry Stimler:Right? You want to, you want to go to a place where you've got the fear, you may get rejected at the door. That's the site, the place that you can always get into. It's kind of a little bit boring. You want to have that kind of, can I talk my way behind the velvet ropes? Can I get in where everybody else is getting in? Where it's a little bit toughest? That's the law. I think of these places these these hard to get into places is the fear and excitement. And then wow, I'm in. And then once you're in everybody that's in things, okay, if you're in you must have something decent about you. So I can talk to you because you're part of the crowd that got in.
Mordecai Rosenberg:Right. There's also another part of that, which is that if there is a crowd, and you can get to the front of the line, that feels very good. Right? If you're recognized, and in the crowd, oh, you know what, you come up, come up here. And off the field.
Henry Stimler:Yeah, that's great. There's a huge line in front of a place and the dot, the gatekeeper or the doorkeeper. Is, is Bethany over and telling the bounce of open the rope. You feel like a million dollars.
Mordecai Rosenberg:Yeah. So you do the club promotion for a few years. And then at some point, you kind of get into I don't know if you're doing real estate finance before, but I'm curious when we talk about this idea of enthusiasm, and crowd. So I'm curious how you how you make your entree into the industry, right? Because you start out everyone starts the same widget which is which is with zero. Yeah, and you probably have a phone and In a computer, maybe, yeah, and, and you have to kind of make your own your own future. Right? So how do you bring that? Do you apply that enthusiasm in in your, in making that entree into the, into the world of multifamily and commercial real estate.
Henry Stimler:So I got really lucky. So let's go back in it. So just to kind of give the timeline 22, come to New York, go into asset backed securities, basically insurance build, my own company, do that, till the crash of 2008. 2008, the crash comes along, wipes me out, wipes out everybody else that is in heavy business that needs a ton of money. So get wiped out 2008 to 2010, to kind of wrap up that business and then decide I want nothing to do with finance lost all this money. Basically, broke as can be, but decide, I've always loved going out, I've always loved having a good time. Let me go into something that I enjoy doing that doesn't have any of the pressures of asking people for money or investing money or anything basically, just just as far away as you can get away from finance, do that for a couple of years. And my wife, my then girlfriend, now wife says enough of this nonsense, You're too talented to be out till five in the morning, promoting and owning nightclubs, you've got to go get yourself a normal job. Try my hand to work for my father for a little bit, didn't really enjoy what I was doing my dad. And my wife says go see a guy called Anthony also. And he also is pretty much a legend in the real estate finance business. He ran Credit Suisse, at the time he was the head of counter commercial real estate. Go see Anthony. Anthony says I can't give you a job. You don't have any qualifications to work in real estate finance, you don't have a degree. You've never interned for us. But what I can do is I can give you a non paying internship, I can't give you an email. But you can come and hang out and see what you can do here. And by the way, we've just bought Berkeley point, which is our Freddie Fannie business, and the multifamily business is very much dominated by the Orthodox Jewish community. See if you can break in to those guys. Tell them that instead of going to a brokerage, like a meridian or an Eastern union, who takes your deal to, to an agency lender, come direct to us? He said no. And he came up with a very unique idea. He said, Talk to rabbis. Talk to all the rabbis because rabbis have a unique relationship with their congregants, tell the robbers what you're doing and tell the rabbis anybody that they make an introduction to you will give your, your 10% or 20% of what you make to them. And so I love that idea. And I always been very close with how bad rabbis and I went out to a bunch of bad rabbis and I told them I this is what I'm doing. And they started to make some introductions. And I sat in the cantor offices and I listened to what guys were were saying and doing. I knew nothing about multifamily. I knew nothing about Freddie, Fannie, I knew nothing about nothing. And I just listened and learned and just threw myself into it. And suddenly cold calling people and talking to people learning on the job and pulling people to the phone call and listen to how they spoke on the call. And ultimately, I got very lucky. One of the introductions was to a gentleman called Gershon Einhorn, who was a big buyer of multifamily in Connecticut, and he used Eastern union. And he didn't want to keep paying a second party broker fee to something that he could go direct. And Anthony was kind enough to come down to Crown Heights to meet with this gentleman. And he was doing 567$8 million deals at the time. And we just got into a groove of doing his Freddie Fannie business for him. And the rest they say is history. And from that one guy, I learned the business and I learned on the job and started doing agency deals, and started to really drive and bring in new clients to Cantor Fitzgerald, slash Berkeley point. And the internship turned into a real job. And I taken a leap of faith I again, have very little money in my name, just started there, just started doing that. So that's how the business started. And the rest came along. And then and he paired me with Bill Webber, who was very technically savvy and brilliant and had been doing this for a long time and that lent legitimacy to me. And between the two of us, we started to build a real real business. And then a lot of amazing things happened along the way. Things like that you will never believe it's like kind of a movie. I'll give you an example. My friend soakin right call me up said John Sloan is doing a harbor group symposium at the Natural History Museum. Would you like to go I didn't know who Jordan was, I didn't know Harbor Group was this is right in the beginning. And he took me along to the harbor group presentation. And I took one of the Harbor Group books back with me. And I came the next morning, I said, How come we're not doing anything with Harbor Group? They did $3 billion. And this isn't this is in 2018 19. And then they said, Well, he's very wedded to Meridian. So I put the book, The Harbor Group book by the side of my bed, and I said, I'm going to, I'm going to get them to become clients of ours. And a few weeks later was national multi Housing Conference. So again, I went with no cancer email, Henry Stemler, no affiliate to anything, just this kind of third party guy that was trying to push Berkeley point. And I see Jordan, at a party standing by the bar at one of the Jewish parties and national multi housing, and I made a beeline for him. And I said, Jordan, I've got one question for you. You said, What's that? I said, how you did $3 billion last year and multifamily. How come? We've done none of it. And who, who's we Berkeley point cantor? So he looked at me smiled. He said, because maybe we haven't found the right guy there yet. I said, maybe you haven't. But maybe now you have. And so we exchanged numbers. And a few minutes later, he left the party, and he ran into Anthony. And he said, I just met a lovely boy that you hired. That was very, was very compelling. I followed up with Jordan, I brought him into the office. And I just stayed on top of it. And then we did our first deal. Jefferson, we did a deal in Texas and that snowballed and we've done thank God billions and billions of dollars with with Harbor Group. So lots of little things happened to get the success but I think me being out there and, and willing to walk up to people and pick up the phone and cold call people and, and do all that has led to the success that we have today.
Mordecai Rosenberg:Yeah, so I mean, that's an amazing story. I think they're also I want to just just dive into that a little bit. Because, yeah, I remember like when I was starting, I mean, I did origination for about a dozen years before, you know, it was that I ran our fhe platform and then headed up our whole debt platform for a bit. When I when I started out like to go to NMHC conference was like the most like the scariest thing that that I could do. I mean, I'm a kid, you know, in my 20s. You have all these, like very senior, the top industry players in the in the country. And it's a room just it's just full of people. Everyone seems like everyone knows everybody. Right? But you don't know anybody. It's so so how do you? There's probably Yeah, there could have been 50 people that came up to Jordan, Justin that day, to try to get his attention. Why does he get like, what why if I, if we said to him, like, why did you? Why'd you respond to your to Henry, right? Like, what is Henry do differently than others, that allows for, for someone to want to continue a conversation?
Henry Stimler:See, I think that's the that's the mistake that so many people think I think it's the same thing that you when you've got a beautiful girl by the ball, right? Everybody's intimidated to go up and talk to her. And I think that's the same thing with a lot of these guys. People are scared to make that approach. I spoke on Monday at an MBA thing, which is so funny, because again, I never finished high school, they asked me to come address an MBA program for Georgia University. And the last question they asked me was, what is the best piece of advice you can give someone trying to make it and I said, Have courage, have the courage to go up to that person have the courage to make that phone call, have the courage to say what you want to say, like a lot of people can do the work and do and do everything, but they don't have the courage to say, if I do this for you, I need this. Or if I deliver, then you're going to do this you've got it takes courage to do all of these things to even to even say what you want to achieve takes courage. You're scared to upset someone's just got to seem too aggressive to out there. But it without courage, you're never gonna get what you need to do. You have to have bravery. You have to have the belief in yourself and you have to have the courage to articulate what you're trying to achieve. So with I'll give you another example. So so when we were selling Aragon and I think this is a great story of courage when we were selling Aragon, the Aragon portfolio was a $2 billion sale that that that was assigned to new markets at Springer got the this the assignment to sell 14,000 units. And I wanted, I want to have a group to win obviously. So I got on a plane. I spent time with Larison client, the seller of this portfolio, and I just became his buddy and just hung out with him because I wanted my client to win the pool. folio. And they did when the portfolio we got to finance it was over a billion dollar finance deal. It was the largest deal that Newmark has ever done. On the multifamily sale side. It was amazing. One of the bridesmaids was a gentleman called Pat Carroll from Carroll he, he had been the bridesmaid, but I didn't cover Pat Carroll I covered harbor. So my intent was only to get it for harbor. But after it was awarded to harbor, my next thing was, well, I need to get Pat Carroll as a client, because if he has the ability to be close to $2 million in our portfolio, I want to convert him as a client. So I reached out to Carol's office and I sent him messages on LinkedIn and and I was having no no success in tracking this guy down, couldn't get a response from him, called it their system a million times was was impossible. I saw that he was flying to New York and going for and I follow him on social media. And I saw that he was at Cipriani, his downtown. I was sick in bed that day. And I didn't didn't matter. I got up, got dressed, put on a suit and a tie, walked into Tripoli, Arnie's walked up to his table, pulled a chair pulled up a chair next to him and said, I'm Henry Stemler. We need to be doing business together. Just like that. And so I've been trying to reach you, this is what I do. This is what happened on our gone. But if you have the ability to buy a $2 billion policy portfolio, we need to be talking because while harbor got this one, there'll be other deals. We need to start a relationship. And Pat was blown away by the fact that someone had the balls to get up come to him and an ambush him at dinner saying that it still took me a year to convert that, that ambush to business. Right. He's he had his relationships. Yeah, there's people you've dealt with. He was very comfortable the guys he had done business with. But over after a year, we started financing Pat and Carol. And we've done a tremendous amount with them since that since that ambush. But if you don't have the courage to do that, you're never going to get that business. So I think the lack of fear is very important. Of course, I'm scared of course, I'm scared of rejection. Everyone's scared of rejection. But if you don't try you never know.
Mordecai Rosenberg:Yeah, yeah, I That's awesome. Yeah, I am. I'm divorced and remarried. And I remember so when I was in that period that I was divorced. So I read the book. The game. Yeah. If you ever felt like a pickup artist? Yeah, yeah. That's many years ago. That
Henry Stimler:book is like 20 years old. Yeah. Yeah,
Mordecai Rosenberg:it's not it's not recent. So maybe it's like, more than I should disclose. Oh, my God, you know, my, my credibility but, so but I remember it's, you know, a lot of it is was like, Look, you can even if you don't feel courageous, or even if you don't feel competent, you can act it. Great act. Right. And when I when I started dating him, I'm remarried down my wife. You want I was set up with her and met her. It's like she was I mean, she was more attractive than than I was. I mean, she was, you know, thank God, she's, she's, she's an attractive, young young woman. There so. And I remember like, it was feeling like, alright, you know what, I'm just going to act confident. Like even if I don't feel confident, I'm just going to act confident. Right? And just and it's amazing how like, you start to when you even if you don't, even if, because I know probably some listeners are like, Well yeah, that's great if you if you have the balls to like, you know, to go into Ceriani walk in but even if you don't, you probably at some points like you may have felt nervous but you still hurt means I've heard a quote, which is you know, fear is, is is like wetting your pants encourages knowing what is knowing how to act with wet pants. Yeah, yeah, that's true. You know, and and you can still you can you can act that way not in a way that that's that's you know, that's cocky you know, or our you know, arrogant but it's but but but just act like someone said what would the question I used to ask myself right during that period was like, What would Clint Eastwood do? Yeah. If I were Clint Eastwood moment and what would you do so now I mean, you could ask yourself what would Henry Stimler do?
Henry Stimler:I'm not in the same county and as him but yeah 100% And I'm gets I get scared all the time. You know, rejection is very real. Getting the phone slammed down on you is very real getting told I'm wedded to this guy. I'm not interested in you please stop calling me is very real. But you've got to put yourself out there and and that that goes across and especially in origination, especially when we're in a business, that there's nothing proprietary about what we do. It's really comes down to your personality and your ability to deliver. You need to have the courage to go out there and make the introduction make the call, go to the meeting setup. Meeting and push for the business and also verbalize what you want. I think a lot of times guys will do all the work and then not verbalize that if I deliver this i In exchange, you need to finance with me, you need to become my client, you know, they'll do all the entertainment client entertainment, they'll take them to ballgames and dinners and wine and dine and still never convert, because they've never made it incredibly clear. There is a trade off. I'm doing this to get this. We recently took 30 clients to Austin for Formula One. And I said, we put a lot of people together in a room that will automate could end up doing business together. And I said very clearly, I said, Guys, we put this all together, we are the middlemen here. Now, while we put you guys together, do not go direct to each other, because that would be incredibly uncouth. We need to remain in between all conversations, you want to start talking to each other, we're fine with that. We want to breed a working collaborative process here. That's why we put you together for three days. But we need to be either paid, or we need to be in the middle of it. You don't us in the middle of it. Pay us. And don't have the hospitals say that but I do.
Mordecai Rosenberg:Yeah. Yeah. How was that received? With everyone? Just like, Well, yeah, that makes sense. We're we're there. Anyone? Was there anyone who? No, I think I think I think
Henry Stimler:everyone understood that they were lucky enough to get a three day trip to to Austin. And it was I only went for the for the race day. But these guys put on an unbelievable three day trip. Everything was provided hotels, tickets to the race dinners, lunches, entertainment, they have an amazing 3d experience. That is the trade off. That is the trade off.
Mordecai Rosenberg:Yeah. So you're clearly also like, you're not you're not afraid of going whale hunting, and of going for bid for big clients with big deals. Now, the flip side of that is, you know, let's say if I had a new, a new salesperson, you know, who I was talking to, and giving me were asking for advice. Right? I would say, you know, what I might say is that yes, some of those big names, like they look really alluring. And people like to dream about landing whales. But the chances of Blackstone deciding to do a deal with you are probably like, relatively slim. And so focus on people who are more likely to sign up with with with you. Now, you seem to have been able to land those huge whales. So how do you balance like, you know, if you're talking to if you're giving advice to a younger salesperson, you know, a few years into the, into their careers, you're what's the balance, like between trying to set your sights on people who just probably won't, you know, maybe are unlikely clients, and actually just trying to go for it, right? Because there's a mean, there's a, I mean, it's amazing, you've gone for it, and you've you've you've landed it, which is you know, which which has kind of blown up my my, my theory of kind of, you know, the likelihood of flows, you know, concept so,
Henry Stimler:so So I always say from small acorns, comm big trees. So my attitude is our work on $50 million deals with the same dedication or work on$100 million deals or $200 million deals, because that guy today who's buying a $15 million deal is going to please go one day by 100 and $200 million deal. And I've seen this, I've seen this through our tenure, first at Cantor now at new mark. And we see it all the time. So guys that start small, the most important thing in the multifamily business is your ability to raise equity. Right, that let's be honest, there is no that's what I think there is no great scientific way of being a multifamily owner. It's a very fundamentally good business people need somewhere to live, you provide them somewhere to live. So be it a big operator, small operator, there is no barrier of entry to grow in this business besides your ability to raise money. So if you have the ability to raise money, and you have the ability to run a multifamily apartment building with cycle, you can scale that business. So the guy that raised$5 million, if he gives his investors a return, and shows them he knows what he's doing. They're going to keep going back to that. Well, once you hook someone on the crack, have monthly checks, they need those monthly checks, it becomes part of their DNA. So as long as you return checks to your investors, they are going to keep going back with you. So I've seen guys that started small and have just exploded, both Jewish, non Jewish, because they've just understood that thing. So I never discount a guy doing a $10 million deal. Because if he has the ability to raise money for that $10 million deal, and he's smart, he knows what he's doing. Over the next few years, please go out, he's gonna be able to raise money to buy $100 million deal. So that's my attitude, treat the same, have the same aggression, the same enthusiasm with all your clients, because you don't know what's going to happen with that client or where he's going to go. And you can help them build a business. So I love helping people build their business, I think another thing to drive great, it gets them kind of hooked on you, because you're much more than just waiting for them to come with you with a debt deal. I'm constantly bringing deals to my clients. I'm constantly making introductions to my clients. I'm constantly matchmaking my clients to help them grow their business, because as they grow their business, I grow my business. So be it, be it on the equity side, be it on the deal side being on the debt or relationship side being on the partner side, I'm currently trying to make those connections with people all the time to help them become bigger and bigger. So if there's a guy that just started out, that's buying martinis using third party management, I will say to him, Okay, this is good for now. But your ultimate goal is that you want to build out your management company. But you can't really scale without owning the management, if you're going to give management to somebody else, it's going to be hard for you to keep on raising equity. And really, you have very little control, you're basically just an acquisitions guy. So you've got to really build out a business. And once you do that, once you've bought a few properties transferred, given getting your own management business, and how do you scale your management business? And how do you find more deals. And then when you've gone from the friends and family, how to start approaching some institutional equity, I helped them put their books together, I helped make them look better. By building these marketing packages, I'll go on best and final calls with them will go above and beyond to help our clients grow. And even now, for example, now people are going to have some paid. So we did loans for people, that against our advice, they didn't take great caps, and they were going to be in trouble. Because, you know, we're so first two days they bought them were so it was 10 reps today serve as close to I think the last we checked this morning was I think it's close to fourth, right? That's where so far isn't it. So these guys need to kind of move on, they either need to put money in, I'm going to try and help them find rescue capital pref equity on top of the existing loan or, or a buyer to buy them out. And I'm not gonna let them get destroyed. Because I'm not gonna that's not what I do. If I vultures come to me say, hey, we want to we want to, we want to find deals that we can crush the guy, I'm like, you've come to the wrong place, I'm not going to help you crush it other people, especially not my clients, I'm going to look out for my client, I'm going to try to help him out. If he's in a tough spot, I'm going to do everything I can to help him out in any way I can. Because one, that's the right thing to do. And two, that's going to kind of cement our relationship that I didn't take advantage of him in a time of in a bad time. I helped him get out of that bad time.
Mordecai Rosenberg:Yeah. Yeah. Well, I mean, that's, it's interesting, right? Because I think like, the enthusiasm to me is what maybe is what gets your foot in the door, right? That's what you get, you know, that's how you get that first conversation. But what you're talking about, as if it's obvious, is really I think, kind of counter to how a lot I mean, a lot of our industry does business, it's that idea of just like, of just focusing on building like my job is just to help you build your business. Right? And if you have like rescue capital, it's like well, yeah, that's not going to be a throwing I can be I mean, it'd be a very profitable effort for you. But the bottom line is like you're here to help them grow their business and whatever that is, if it's if it's helping them with introductions to equity if it's finding them deals if it's helping them build out an investment book they put that's something that is very palpable right we can always we can feel yeah, sometimes when you're when you're meeting with people at a charitable organizations like you know, for like, for better or for worse, like you have this feeling of like, alright, like, are they actually doing really want to be my friend or are they really just warming me up to try to like ask me for, you know, for money, or whatever. That's that's just how things are done. But you can feel that you can feel it, you know, so I think that's like, probably if we ask your clients why they do business with you know, with Henry right there. Enthusiasm is probably one of the you might have been like how you got that first conversation but they probably feel it because he's, he's shoulder to shoulder with me, and growing my business.
Henry Stimler:I'm in the trenches with you. And if if, and we demonstrate this all the time, if, and again, I'll give you another example. I spoke about this a few months ago, this is just a great story and just shows how you have to be in this business. In this humanistic business, we have a client who's a fantastic client of ours, who we brought, he was in contract to buy a deal in Denver, 100. At the debt, the loan was 100 $15 million. And he was $3 million hard deposit. This was still when the bridge lenders were competitive. We brought a lender to him, it was a new lender. And we told the new lender, very important with this client Do not mess up. This is one of our largest clients. Be a man of your word, stick to your term sheet. We were meant to close on Friday, Thursday night, I'm at the Polo lounge with my wife and another couple. And my partner's Bill and Ari call me and say, Hey, step out of the restaurant, we have an issue. I walk upstairs, the Polo Club, the pool Lounge is downstairs and they tell me that the lender is retreating by 45 basis points, effectively costing our borrower another million for over the two year period. This happens, right? So what are we going to do? So first Bill and Ari try and restructure the loan so that the increase only happens in year two or year three, all the different, brilliant machinations that these genius guys come up with. But ultimately, our client was gonna have a 700 or $1,000 increase in his interest, which he wasn't meant to have. I call him up. I say, hey, we have some bad news. We've been retreated by the lender. Our fee is $740,000. We're waiving 100% of our fee. If you Yeah, if you're not, if you're going to be in paid, we're in paid. We are an extension of your business. We appreciate the business, you're and this is a huge client to get me on this one that most active multifamily buyers. But I meant and it wasn't, wasn't because I want to rescue the relationship. I'm going to stand shoulder to shoulder with my client, and how am I going to make $700,000 If he's going to be hurting for a man a million dollars, we close the deal. We'll never send another lender back to that originator, we'll set we'll go back to that shop. But that originator is effectively dead to us. Because you signed a term sheet, be a man of your word stick to the term sheet, don't do it. Again. Come to me a week before and tell me there's a problem. Don't come to me a day before closing an ambush me. So I'll never send another bit of business to that guy. That's just the way I am will send his firm I'll never team anyway, we close the deal. A week goes by the client calls me and says I don't feel right about not sending giving you any money. Here's $540,000. And he sent us$540,000 post closing? Because and that's and we've done that a few times. We've done that a few times where we've waived Feasel where the clients been retreated. We've stood there shoulder to shoulder with them and said, How can we charge our full fee, if this guy is now going out having to raise more equity do this do that, that it's just mental height. And that goes a massively long way with your client because they see it's just not it's not a fee, and they're gone. And then one more thing or we'll move on. We'll we're working with a client now. Well, we didn't do the senior loan, we didn't get the senior loan, the sealer was done by another firm. And they went back to the firm for an agency quote, but they asked us to make a market to push the agency quote. So we'll go out there tip to everybody in there anybody to try and help get them a better loan from the competitor, even though knowing full well that we're just cannon fodder. But we can't say no, because we want to help the client even though it's galling and annoying, and we're gonna piss off lenders, but ultimately, it helps the client we've done what we need to do and will not make any money and this is a monster loan. We're just going to use other bids. Fannie and or who knows just to get this guy a better deal on his current inplace loan. Each of the beast.
Mordecai Rosenberg:Yeah. Yes. So I know you said that you kind of started with Fannie and Freddie. But it also sounds like you do a lot of market clearing right and just Yeah, so So what's your a lot of originators like just do their debt product? So what's your take on that? What's your approach now is are you market clearing everything looking at all lenders we're still like a focus on on Fannie and Freddie, what's your approach?
Henry Stimler:So Bill, if he was on this podcast would tell you that that we can't that he we kind of were very much pioneers of the KKR Blackstone Aries Mac bridge products. We kind of set the market because of the volume that we did with these guys. Were All right, the first monster Harbor Group KKR deal was, was was a deal that we did. For Harbor Group with KKR. We brought KKR. to Harbor we brought KKR, to a lot of big clients that had traditionally already been agency lenders, we brought ares to a lot of guys, we bought Blackstone to a lot of guys, that typically had only been agency lenders. So we were at the forefront of that business saying that today. Really, the only game in town today is pretty much Freddie Fannie. But what we're doing, we're doing a lot of Freddie Mac, Fannie Maxia, with pref on top, because that's kind of where you're gonna be. And we find this as a shameless plug for the guys. But we found a prep lender that has the lowest hard pay, and that obviously, that's not their payment component is not floating off, or variable, it's fixed, but he has the lowest hard pay. And then we've found a prep lender that has zero hard pay components, which everything accrues to sell or refi. So you're not stressing the property. So let's say your agency because of where interest rates are as exciting to 60 65%. We've found this unique prep that we can put from 65 to 75% that has a no hard pay component at all that accrues all the way till the end. On top of that we were pioneers in bringing Korean lenders to the US to do multifamily. I spent two weeks in Korea, we have a Korean guy part of our team. So we pioneered that we brought Moray we brought KB we brought Hannah, we brought a ton of Korean lenders to the multifamily space. So we kind of pioneered that business as well. So we're constantly looking to do new and exciting things. I think right now, I think especially with smaller deals, we're going to find that credit unions, which have this very unique five year fixed rate finance, but a fully open to prepare any time. That can be something really interesting right now, for the market, because everyone knows, you don't want to be floating. But you don't also want to lock in seven year or 10 year finance because the likelihood that these interest rates stay this high for a very long time is unlikely, I don't know. But it's unlikely that we're going to be at seven 8% interest rates. Three, four years down the road, we all understand what the Fed is trying to do. We understand they're going to smash the freight train, that is inflation. So this is more kind of like a short term fix to stop inflation. How long will it last? We don't know. But credit unions we think will be very much an effective and efficient tool right now to finance because you can do fixed rate finance. But should the market turn back in your favor? You can prepay at any time. So you're not locked in you don't have your maintenance, you don't have to fees. And so we hope to see a good amount of business from from that.
Mordecai Rosenberg:And that, right? I mean, because you're right, Fannie and Freddie, they're in the market, and then they're out of the market. And if you want to be helping your clients build their businesses, then you have to be of service to them in either in either season. Is that a? Is that? How all Newmark originators are? Does everyone view themselves as kind of a clear the market service or is that a? Do you have people who are just like, oh, yeah, I'm just Fannie or Freddie.
Henry Stimler:So Newmark works in a very unique way. That kind of led us to be who we are. So typically, the investment sale teams are paired with a debt platform. So if you're in Florida, and you're selling real estate in Florida, you have an embedded with you Florida debt guys, they go on all your books, they attend many of your tours, and the job of that team is to try and convert as much of the sale people's business into debt. When we came along, we had no territory because we'd come through cantor. So it was we weren't legacy Berkeley point guys. We weren't legacy Newmont guys. And so everybody had territories, we didn't have territories. So we kind of have to think how do we build our business? So we start to do is we started to act as kind of a foward inventory for our clients. We would mine everything that the investment sale brokers was selling. So we would see everything they mentioned sales guys were selling, and then we were trying to pair up the right deal with the right buyer. So that kind of gave us carte blanche to be across the entire platform. So today we do deals in Texas, we do deals in Florida, we deal doesn't carry in, in the Carolinas deals and Arizona deals in Philadelphia because we didn't have a territory. And so we kind of went over this very unique position where we have to say how can we build a business here at Newmark so I can't speak for other firms or other teams we do a lot with other teams. We team up with a lot of other teams, but I think some guys are predominantly legacy Freddie Fannie guys. I think some guys are not. But I think today To be a good originator, you really have to have everybody, you can't just be free and the market changes so quickly. So right now, Freddie and Fannie is in vogue. Last, I would say the beginning of the year, the debt funds were crushing it, they weren't 80% it at 230, over 270 over the Koreans were incredibly strong. When we first started, they were 160 over 65%. So everything kind of moves in, you've got to be able to move with where the market is and identify the right lenders. So that's what we kind of do every day.
Mordecai Rosenberg:Yeah, it's working. You touched on this, before that we're talking about rescue capital. But yeah, I think a lot about client retention, right, and, and how to stay in front of clients so that when they're refinancing or selling that they want to they want to give using you. But that's it's one thing when you're in a highly transactional environment, like we've been in the last couple of years, but now everything has grinded to it to a halt. It's so so how did you what what changes now in terms of, of the people you're talking to everyday, like? Who are you reaching out to? How are you reaching out to them? How do you think about you? How do you stay in contact with clients and continue to provide value in a non transactional environment, or were you don't have as many transactions happening. So first of all,
Henry Stimler:I just want to say that I think there's going to be, we're going to have, we're gonna get through a period of a slowdown now. But ultimately, I think, q2, we're gonna see an uptick in transactions. Because simply put, the market has been too overheated for too long, people are buying super low cap rates, betting on rental growth, that rental growth is slowing, interest rates are up. So there's gonna be a lot of guys that will need to move on and need to sell especially guys that used MF one and Arbor in places and no disrespect. These are amazing lenders that at the time didn't require interest rate caps. So guys that didn't buy interest rate caps, they're kind of floating in the in the breeze, everything's going against them, rents are slow down. So they're going to be out of the money. So they're going to have to transact. And then the big funds, who are kind of sitting on the sidelines, they're going to come in and buy those deals, to get those guys out. And then the lenders, if they can't sell, the lenders are gonna have a problem, because they've got these loans on the books, and they're gonna have to figure out a way to sell these and sell the notes. And so I don't think we're at the note sale place, right yet, I think just, we're gonna see a lot more transactions coming, coming down the pike. And then on top of that, the sellers are still being very tough on not wanting to push cap rates to sell, they still kind of want to live in the past, when he could sell a four and a half cap, you can't sell a four and a half cap today, you can't do negative leverage, if you're borrowing Is it high fives, low sixes, then how and then on top of fees on top of everything, an iterate cap, you can't buy a four and a half cap, it just doesn't make sense, unless you're buying all cash, or unless you're underwriting or you're seeing some huge discrepancy that you can bring down expenses and push rents or someone's doing a terrible job, you can't buy those cap rates, sellers are ultimately gonna have to sell and come to the realization that those days are over, you miss the market. In order for you to sell your property, you're gonna have to be close to a six cap and six cap deals are selling. Blackstone, for example, is selling a six cap deal today. And they are Blackstone who bought a lot are selling a lot of their products kind of like fire sale, someone's going to come in and buy that stuff. That's live call at Blackstone, that's great staff and great markets. Those guys knew what they're doing. They just want to take some some stuff off the books, there's going to be biased for that. But right now we have to kind of focus on how we can help people either grow their business smart, strategically, or protect from that downside. So that means if you're on a floating rate loan and see if we can take out your floating rate loan and put you into a fixed rate loan. If you have to cash in, how can we help you cash in, we may be prayerful mez or maybe bring in an investor. There's lots of guys with 1031 deals right now that can't find places to put their 1030 ones. Maybe we can make a shift. Maybe we can make a match over there. You attend to anyone. This guy's a great property, but he needs to refi from a floating to fix he needs$3 million. Why don't you come in for the $3 million for your temporary one, do it, do it do a tick, and we'll save you or save him and you'll establish and finding a great property. So you've just got to be thinking on your toes and constantly being in front of your clients. I'm talking to my guys all the time. I'm texting with them. I'm stalking them on a Sunday. I'm giving the guys that a little bit down some physic like the younger guys. They haven't seen this. The guys in their 30s they've not seen a downturn in the market. They that kind of wobbling right now. So I'm on the phone saying you've done okay, you've bought well, you're putting good markets. You've got good rate caps, stay the course now was the time to batten down the hatches make sure you're running lean and mean and, and retention. Keep your tenants in your buildings. How do you do that? You got to be a good landlord, you got to keep you got to create a community. This is so important right now, when things are up in the air and rents are coming down and you don't go below 80% occupancy, you've got to do a really good job of running your properties. And you may not be buying at the same pace as you were. So net is the perfect time to build communities. The greatest thing that Joe Lubeck does of American landmark is he's branded his properties. You know, when you live in an American landmark property because they do things for the kids, and they do birthdays, and they do the little things and the welcome mats and the welcome baskets. Your tenants are going to stay longer, if they feel they have a kinship to the building. If they have friends in the building. If they don't know anybody. If the guy next door offers that cheaper rent, they're going to pack up their bags and go. So right now the most important thing is to batten down the hatches and focus on what you have and retain your client every time you have to turn over a unit. You got to repaint it, fix it up, release, it stays empty. Right now, in this kind of turbulence, figure out a way that your your tenant leaves, every 10 says I'm going to say why are you going let's see if I can figure something out with you. You've got a cheaper rate that let me bring your rent down. You got to be smart and strategic in this time in this in this moment. And if you're running too fast, and you have a sad if you've got six groundsman, and you can run with full, you've got to do some some hard things, you got to make some hard decisions. If you've got all your buddies working for you. And two of them are pulling the weight. You gotta say, I'm really sorry, it's time for you to move on. The good times are behind us. Now we're in for the rough ride, be it a year, two years, who knows? Now you got to be incredibly strategic. So I'm there. My partners are there. We're sounding boards. We're giving advice. We're there to help. What can we do to help? And we're just in front of these guys all the time, be it whether they're buying a lot, we are there for them?
Mordecai Rosenberg:Yeah, yeah, I recently heard the quote that in times of distress, the first thing that people that people lose is their future. Yeah, and, you know, our job, right as as salespeople is to is to restore the future for for our clients, right. And it feels like, you know, in the doom and gloom, it's like, you want to just get people just want to stay in bed, you know, and you know what, you know, why bother, but the bottom line is like, there are, you gotta keep moving, right? And there's going to, and there are opportunities. The other thing is that entrepreneurs, they want to be in motion and focused on something, right. And if you can't be key, you can't be out there buying properties now, focus on maintaining or keeping your tenants. Right, that's what we're going to focus on is in our goal is to have you know, 90% tenant retention. And yeah, I think just having that to focus on I think if it's a great, great concept.
Henry Stimler:Yeah, that's right. That's right. I told one of the younger guys, on Sunday, he called me very depressed, very upset. Do you know, he won't give the same returns to his clients? I said, don't worry about that. Right now. This is what you need to do. You need to focus on building out a brand building out a management company, keeping your your tenants happy, get down to the stuff that you couldn't focus on because you're too busy on a buying spree and raising money. You're not gonna raise money, you're not gonna buy anything right now. You have a little window to really get your, your business together.
Mordecai Rosenberg:I love it. Well, Henry, this has been your energy and enthusiasm is contagious. So I really, you know, I feel more energized and enthusiastic, you know, after at the end of the hour, so thank you so much for your for your time. You're doing great stuff. You're making magic happen. So keep keep it up.
Henry Stimler:I just want to say thank you so much. I look forward to seeing you and speaking with you more.
Mordecai Rosenberg:Sounds good. All right. Take care, Henry.
Henry Stimler:Bye. Thank you.