Are these streets paved with Gold? As lenders invade New York City with hall of fame bankers
Are these streets paved with Gold?-As lenders invade New York City with hall of fame bankers
Sunday is the celebration of the 47th Super Bowl in New Orleans. As the Raven’s take on the 49ers, the clash of the banking titans has began. As reported on January 29th in the BankUnited’s Earnings Call Transcript, John Kanas, Chairman, President, Chief Executive Office, and his vice chairman, John Bohlsen, Vice Chairman & Chief Lending Officer, announced “I should remind you that Friday is February 1. It is the date that all of the encumbrances of John and I fall away with regard to our non-compete in New York. We do expect this quarter to open three branches in Manhattan and one on Long Island and to begin expanding the franchise in New York. We’ve hired a number of people already that are beginning to lay out our strategy in New York, and you should look forward to seeing press releases on those issues coming up in the next few weeks.”
Mr. Kanas and Mr. Bohlsen previously served as part of the North Fork Bank management team when it was acquired by Capital One Bank. Mr. Kanas was chairman, president and CEO of North Fork Bancorporation, the sixteenth-largest bank holding company in the United States. He held this position from 1977, when he was appointed at the age of 29, until North Fork’s acquisition by Capital One in December 2006. During his tenure, the company completed 15 bank acquisitions and distinguished itself as one of the most profitable and efficient banking companies in the country.
In, February 2012, BankUnited, Inc. acquired Herald National Bank, which had three offices in Manhattan, one in Brooklyn and one on Long Island. Herald National Bank began operations in November, 2008 an independent start-up bank in New York State. The bank was founded by David Bagatelle, who served as its President and CEO.
In the same vein as professional athletics, financial institutions planning to enter the streets of New York (which many might believe are paved with gold) seek to hire experienced, well established Hall of famers. It looks like BankUnited truly wants to make its presence in real estate finance with the hiring of Sam Giarrusso.
In the earnings call with analyst’s Mr. Kanas, stated “We’re about to put out a press release, I guess in the next couple of days. The biggest hire or the most prominent hire that we’ve made is a gentleman who will head up our real estate lending activities in New York. His name is Sam Giarrusso. He was, Twenty years running the real estate lending division in New York for M & T Bank. He was our biggest competitor in North Fork, so now he’s,-we’ve got a new bade on Sam. We’re going to make that announcement formally sometime in the next few days.”
“Sam has been well known to John and I for probably 30 years or more. He’s a very strong addition to our bank. He knows the New York market like the back of his hand. He knows every one of the borrowers and has had lots of experience with them all and can identify any location, any physical location or building in New York. So Sam will make a very big contribution very quickly when you combine his market experience with that of John Bohlsen’s and mine. Sam brought two or three of his underlings with him who worked with him before in the New York market, and then we’ve hired some of the back office folks from other institutions. We are beginning-actually, we were hopeful to open our Melville office in a few days, which will be the first office, and then move on with new staff to open in Manhattan in the next few weeks.”
BankUnited is getting its bullpen staffed with other experienced real estate lenders with the hiring last year of Paul Breuer and Paul Leprohon who both worked at North Fork. It is also reported that Scott Lublin, who served as SV, Commercial Real Estate and Metropolitan National Bank, and previously with M & T Bank will be joining BankUnited.
Over the past thirteen years (or Y2K, the Year 200 problem, the Millennium bug) a number of banks entered and left the commercial real estate marketplace. Perhaps the biggest lenders to leave the market were Lehman Brothers and Bear Stearns in 2008, as well as the demise of WAMU.
European lenders were prevalent in the early days of the 21st century which included HSH Nord, Bank of Scotland, Anglo Irish, Allied Irish, Nord, Eurohypo, Hypo Real Estate and ING Real Estate.
Domestically in addition to Washington Mutual (WAMU), active real estate lenders who ceased operations including Corus, Fremont and of course Wachovia.
A number of other local players were taken over or sold including Bank of Smithtown, Liberty Pointe, Park Avenue, Millennium, Brooklyn Federal and Marathon Bank.
With the loss of lenders other lenders entered and re-entered the market including Signature Bank which began operations on May 1st, 2001. The bank has grown its assets to nearly $17 billion as well as becoming one of the preeminent real estate lenders. In November, 2007, George Klettt, joined the bank, as a Group Director, Executive Vice President and Chairman of the bank’s newly created Commercial Real Estate Committee. Klett, at that time with 34 years of experience in banking and real estate, spend the previous 12 years of his career with North Fork Bank, serving as Executive Vice President and overseeing a commercial and multi-family mortgage loan portfolio in excess of $12 billion. Previously, hew was with M & T Bank, where he organized the bank’s entry into commercial real estate lending and served as SVP and Manager of Commercial Real Estate Lending.
Also in August, 2007, Wachovia Corporation, (where he served as the regional chief executive office for Northeastern United States) veteran Michael Slocum, joined Capital One as Executive Vice President of Commercial Bank at Capital One Bank. In his capacity, Mr. Slocum lead broad lines of business including asset based lending, leading, commercial real estate, middle market banking, capital markets and investment banking. In September, 2011, he became president Commercial Banking.
In March, 2008, Mr. Slocum hired another established banker Richard Lyon as SVP of its commercial real estate business. Rick previously served at Wachovia where he led the company’ real estate banking efforts in the northeast region of the US, which included offices from Boston to Washington, D.C.
In the bull years of 2006, Sovereign Bancorp acquired Brooklyn based Independence Community Bank Corporation another very active real estate lender. The financing of this transaction was enabled thorough the selling of a 20 percent stake to Grupo Santander, who acquired the balance of the bank in January, 2009. Before the end of this year Sovereign/Santander will be called Santander U.S.
Independence bank was a major force in real estate lending in the region. In February, 2011, Astoria Financial Corporation announced it had hired the multi-family/commercial real estate lending team formerly with Sovereign Bank and its predecessor Independence Community Bank. Gary Honstedt joined to serve as SVP and Director of Multi-family/commercial real estate lending, leading a team of six seasoned multi-family/commercial real estate executives, to spearhead the Company’s re-entry into multi-family lending in the New York metropolitan area.
In 2001, Cherry Hill based Commerce Bank entered the New York City market. In March, 2008 TD Bank Group of Toronto, Canada completed the purchase of Commerce Bank. The transaction doubled TD Bank’s presence in the United State and make it North America’s seventh largest bank. Over the past five years the bank has beefed it’s presence in the commercial real estate market, especially with the hiring of Roy Chin in June, 2010 at Regional Director, Commercial Real Estate for New York and Northern, New Jersey. Prior to joining the bank, Mr. Chin served as Regional Executive at Bank of America Merrill Lynch and Managing Director Hypo Real Estate Bank International.
Bridgeport, Connecticut based People’s United Financial, Inc. entered the Long Island and New York City market with the purchase Smithtown Bancorp, the parent of another very active real estate lender, the Bank of Smithtown. In July, 2012, People’s United announced the John Costa, joined the bank’s commercial banking group as Executive Vice President expanding the bank’s commercial real estate lending activities in the greater New York metro market.
Mr. Costa joined Peoples United from Sovereign Bank/Banco Santander in New York City where he held positions for 11 years at the bank and its predecessor companies. Most recently he headed Santander Real Estate Capital where he led both new loan origination and the management of a $21 billion portfolio of real estate loans, the majority of which were secured by multi-family properties.
In the summer of 2011, a number of bankers joined Santander including Michael Corbett, Kip Sanford, Doug Marron and John Gunther-Mohr. Prior to joining Santander, Mr. Gunther-Mohr, headed U.S. real estate finance for the Bank of Scotland. Before joining Bank of Scotland, he served as the General Manager for the U.S. Representative office of Allegemeine Hypothekenbak Rheinboden Ag. Mr. Corbett previously served with Eurohypo Ag, LaSalle Bank and Fleet Bank. Mr. Sanford previously served with Eurohypo AG New York, Bank of America and LaSalle Bank. The fourth member of the team joining the Bank was Doug Marron who previously worked in the real estate department at Allied Irish Bank. Subsequently, Mr. Marron joined Raymond James & Associates Bank.
With the loss of many of the Irish banks, established bankers in addition to Mr. Marron joined new lenders entering the commercial real estate market. In November, 2011, CIT Group announced the launch of CIT Real Estate Finance. Matthew Galligan joined to serve as Executive Vice President and Group Head. Prior to joining CIT he served as Managing Director and Head of US Property Finance for Bank of Ireland where he closed more than $2 billion in loans.
Before joining Bank of Ireland, he served as Executive Vice President for Real Estate Capital Markets at DebtX. He has also worked for Fleet Boston Financial, Bank of Boston, and Chase Manhattan in executive level positions in credit, real estate lending, debt distribution and capital markets.
Joining Mr. Galligan at CIT was Meggan Walsh, as Managing Director and Christopher Niederpruem, Director, who both worked with him at Bank of Ireland.
One of the regions most active lenders in commercial real estate is Short Hills, New Jersey based Investors Bancorp. Since June 2008, the company acquired branches, banks and operations of entities including Summit Federal Bankshares, American Bancorp of New Jersey, branches of Banco Popular in New Jersey, Millenium bcpbank, Brooklyn Federal and Marathon Banking Corporation.
JP Morgan Chase is also very active in providing financing in their commercial term lending. In August 2011, Jason Pendergist moved to New York City to manage the commercial term lending for the East Coast. Previously he served as SVP-Senior Manager, regional sales manager for Commercial term lending throughout the State of California. He joined JP Morgan when it acquired WAMU in October 2008.
FirstRepublic Bank, a leading private bank and wealth management has beefed up its New York City real estate lending. In December 2011, the bank announced the hiring of Garrett Sokoloff joining the bank as Managing Director.
Prior to joining First Republic, Mr. Sokoloff worked for UBS in New York, where he was Managing Director and co-head of conduit origination in the real estate finance group.
A number of other seasoned real estate lenders have changed positions over the past year.
In the summer of 2012, Sophia Haliotis joined as senior vice president for Popular Community Bank to lead the commercial banking and real estate team’s expansion in the retail, industrial, multifamily and nonprofit refinancing sectors. Previously she was responsible for structuring and approving JP Morgan’s commercial real estate loans in the New York, New Jersey, Washington, D.C. Boston and Pennsylvania markets.
Also last year Gregory Fierce joined as Senior Vice President at US Bank. He previously served as EVP head of real estate for Amalgamated Bank. His prior experience included positions at WAMU, BNY Mellon and JP Morgan Chase.
Another lender entering the local market is SunTrust Bank who hired Paul Ragusin, as a Senior Vice President for Commercial Real Estate. He previously served for more than eight years at Credit Agrcole. His previous position in commercial real estate including positions at Bayerische Landesbank, National Bank of Canada and JP Morgan Chase.
The bullpen of seasoned bankers has orders from senior management to pursue financing for experienced, well established and capitalized borrowers. With these and other banks searching the market for business, one thing is certain; borrowers will have many more options for financing in 2013.