Eastern Union Commercial has arranged $34 million in refinanced loans for a portfolio of skilled nursing facilities located in southern New Jersey and an unnamed New York City borough. Meanwhile, the commercial mortgage brokerage reported that its loans closed during the first quarter of 2012 had increased by 110 percent compared to the same period a year ago.

Financing for the nursing facilities was provided by M&T Bank and was negotiated by Abe Bergman, a managing partner at Eastern Union. It was tricky, Mr. Bergman told The Commercial Observer, due to the properties being in different stages of construction and initial loans that were coming due at different times.

“There was one loan that was coming due that had an out-of-state bank as the lender on it,” he said, referencing the loan on the facility in the boroughs, which had a due date of December 31, 2011. “But that particular property wouldn’t have appraised for what it initially appraised for when we did the original loan. It was a little bit of a challenge to get enough financing on it.”

Eastern Union negotiated a three month extension on that loan, giving it the opportunity to refinance the portfolio as a whole.

Of the four properties, three are currently up-and-running, while the fourth is now under construction and scheduled to be completed by the end of 2012.

“Three of the facilities were swapped,” Mr. Bergman said of the various rates. “Out of the three facilities that were swapped, two of them are 20-year amortizations and one of them is a 25-year amortization and the construction loan—that’s a floating rate mortgage until the construction gets completed.”

Propelled by this loan and other activity over the first quarter of 2012, the firm saw a 110 percent increase in the loans it closed, compared to the first quarter of 2011. Asked if any particular type of loan caused this uptick, Mr. Bergman said not really. “The one area there has been more of an increase is in retail nationally,” he said, “really because Wall Street is trying to lend again.”

Ira Zlotowitz, president of Eastern Union, also referenced an increase in Wall Street lending in a prepared statement about the firm’s Q1 2012 volume. “While Eastern Union enjoys excellent relationships with key banks nationwide, we have also begun closing numerous deals with Wall Street lenders offering commercial real estate loans,” he said. He added that these loans are “often priced lower than those offered by standard commercial banks.”

The firm said that it is currently placing $150 million each month in new commercial loans—many of them through Wall Street lenders.

CGaines@observer.com

Garrett Thelander, an executive at Massey Knakal who leads the company’s capital services group, was fielding offers for a financing deal he was recently arranging when he noticed many of the banks lining up to compete weren’t ones he was used to working with.

“There were a lot of players from out of town that you usually don’t see here that were competing and they were competing hard,” he said, describing it as a roughly $8 million deal for a commercial building that was owned by the building’s occupant.

People’s United, a Connecticut-based bank, wound up making the loan.

Smaller banks are moving in on the NYC market.

Because it was a low-leverage deal, Mr. Thelander said the bank differentiated itself by pushing hard to lower its rates. Regional and local banks have the flexibility to undercut competitors on interest rates because of a roughly 200 basis point spread between what banks themselves can borrow at and what they charge customers for loans.

“They were competing against the bigger banks and they got very aggressive and they stood out because of that and also because they were willing to close very quickly,” Mr. Thelander said. “I think you can tell from that their interest in pushing into this market in a bigger way.”

Given the strength the Manhattan real estate market, lenders have long vied with one another to place debt, especially in transactions that would appear to have solid fundamentals or conservative leverage levels. But with many real estate markets still sputtering or flat around the rest of the country, more banks, especially regional players who in the past may have done only a sprinkling of deals, are seeking to lend in the city.

“I do think that more regional lenders are trying to do deals here,” said Howard Applebaum, an executive vice president and chief lending officer at Sterling National Bank, a longtime local bank in the city.

“It’s the strongest market in the country and it was barely wounded over the last three years. The vacancy rate in residential buildings is less than 1 percent. It’s a very strong market and you’re going to get a lot of players coming here,” he said.

Kevin Santacroce, an executive vice president and chief lending officer for the Long Island local bank Bridgehampton National Bank, has himself been trying to position his bank’s entry into the city.

“We’re really focused on the East End of Long Island but we have been growing in the city, primarily through the relationships we have with clients,” Mr. Santacroce said. “There is such a strong tie with the Hamptons and Manhattan that we’ve been able to do a few deals there. It’s just a market that we, like a lot of lenders, want to be in.”

Though outside banks have long been interested in entering into city deals, more banks like People’s United, Webster Bank and First Niagra, according to bankers in the city, are widening their criteria to find deals, including targeting smaller transactions that in the past might have been left to local banks.

“You are seeing bigger regional banks go after smaller transactions,” said Dan Harris, an executive vice president and chief lending officer for Dime Savings Bank of Williamsburgh. “The larger guys might prefer to put out $15 million or $20 million but they’ll do much smaller deals to get a foothold here.”

Added Mr. Appelbaum: “Part of that is the number of smaller banks has shrunken because they went under during the recession, so the bigger boys are coming in because they see an opening.”

Pouring money into a cluster of deals, though time consuming for a bank’s loan officers, has an advantageous flipside.

“It’s often better to do more work and diversify,” Mr. Harris said. “It’s the old saying banking that it’s better to have 20 $1 million loans than one $20 million loan.”

But the recent uptick in activity among regional players and their desire to get into the New York market hasn’t come without pushing some boundaries of risk. Mr. Harris said he has seen competitors, particularly new entries in the market, adjust the cap rates they will accept on an investment.

“You might have a lender who wants to make sure the deal is a 6 cap and will lend, say, $1.25 million on that, but you’ll have another lender and they’ll use a 5.5 cap and come to a threshold of $1.430 on it, and a lot of borrowers always want the most money they can get,” Mr. Harris said. “You kind of just have to let those deals go. If it’s a deal where I really like this location I might say I’ll give you $1.3 million.”

No area of the market is more competitive than the multifamily sector where lenders are not only jostling against one another but the large government repositories of credit, Fannie Mae and Freddie Mac. Both offer loans that stretch ten years, longer than almost any comparable mortgage that a private lending institution would hand out amid the current period of rock-bottom rates. According to Ira Zlotowitz, president of Eastern Union Commercial, a commercial mortgage brokerage, the U.S. Department of Housing and Urban Development has also gotten into the multifamily lending business, offering 35-year fixed rate loans.

“Setting up the loans with the government is very tedious. You have to go through tons of paperwork and where it would take two months with a private lender it takes a year or more with HUD,” Mr. Zlotowitz said. “But borrowers are just starting the process earlier. It’s pushing the competition even more in that area.”

Local banks are adapting to the onslaught of regional entrants and government borrowing windows by offering flexibility and accommodating their clients.

“What we hope to sell as a community lender is that if there are problems and the borrower needs to take out a little more money, we will have a relationship and be able to work that out, whereas another bank less familiar with this market wouldn’t,” Mr. Harris said.

“We recently did a loan, it was a low leverage deal and the borrower wanted a couple of million more, and so we put a second loan behind the first and he used the proceeds to buy another property. I think those are the kinds of situations we excel at.”

dgeiger@observer.com

The end of the second quarter of 2012 saw a significant boost in deals closed at commercial mortgage brokerage Eastern Union Commercial compared to the same period a year earlier. In fact, the firm said Monday that a 150 percent increase in loans closed for the quarter took place. Firm president Ira Zlotowitz said he chalked the uptick up to not just the historically low interest rate environment, but also the firm’s approach.

“Obviously a big part in general is rates,” Mr. Zlotowitz told The Mortgage Observer. “We focused a lot more as the market changed on education of the brokers in the market—not just to be pushing deals in but to understand every transaction. That was combined with new, deeper and better relationships at the banks that we do business with. Put this all together and I think that’s what’s giving us the results.”

Among those results last quarter was an $11 million loan to refinance a mixed-use portfolio in New Haven, Conn. This group of properties included 73 apartment units and five retail spaces. Investors Bank supplied a 7-year loan to the borrower at a rate of 4.375 percent.

Also in the New York tristate area last quarter, Arbor Bank provided an $8.8 million, 7-year loan to refinance a multifamily portfolio in East Orange and Orange, N.J. The bank provided a rate of 3.9 percent.

New business, Mr. Zlotowitz said, is a big driver of recent business.

“I think the focus really for us that’s unique is the disproportionate increase in production of new business,” he said. “I would say about 80 percent or 70 percent of the deals that we’re doing are new deals—not the same deals we refinanced several years ago.”

This current quarter is off to a fast start as well. Mr. Zlotowitz predicted that July was going to be “an amazing month” for the firm, which, since July 1 has closed deals with People’s United, Investors and Chase for multifamily properties in New York City.

cgaines@observer.com

A rendering of The Avery

New Jersey-based residential developer Weiss Properties received a $46.6 million revolving construction loan for The Avery, a townhome community located at 10 Lincoln Square in Willingboro, N.J., Mortgage Observer has exclusively learned.

Shaya Ackerman of Eastern Union Funding brokered the $40 million construction construction facility, which features a $6.6 million earn-out, from Investors Bank, confirmed Joseph Orefice, head of commercial real estate lending at the bank. 

Construction will span four phases, and the loan structure allows construction funds to automatically convert to a full permanent loan at the end of each phase. The balance automatically goes into the permanent loan but the conversion is pre-approved for both seven-year and ten-year options. The facility overall has a 30-year term, Mr. Ackerman said.

“It’s pretty much eight loans packaged into one,” Mr. Ackerman said. “For a developer, this is pretty much a dream,” he added, because he or she locks in their interest rate for the long term.

The first phase has an interest rate of 4.5 percent, with the permanent loan portion set at 3.5 percent.

When complete, the development will include 450 units. The homes feature wood plank-style flooring, granite countertops and balconies, and will begin hitting the market this summer, according to the property’s website.

"From the financing end it was double play between Shaya's structuring abilities and Eastern Union's great relationship with Investors Bank,” said Eastern Union president Ira Zlotowitz in a statement from Eastern.

“This deal was the natural extension of the initial debt, and with Ackerman’s unique structure we wrapped the remainder of the project into one facility which addresses both construction and permanent financing,” Robert Weiss, the president of Weiss Properties, said in the statement, calling the deal “a custom suit [tailored] on Madison Avenue.”

220 Saint Nicholas Avenue

Of all the New York City projects to emerge from the recession in good shape, one of the more dramatic turnarounds was undoubtedly 220 Saint Nicholas Avenue, a Harlem rental project resurrected by the Gorjian brothers last year.

The pair, who together comprise the Gorjian Real Estate Group, bought the $12 million mortgage on what was then a stalled condominium project from Valley National Bank in 2011, likely at quite a discount, after developer Piper-Cadmium encountered difficulties during the credit crunch. The project and many others sat partially constructed for years when financing dried up in the darkest days of the recession. And buildings in neighborhoods—like Harlem—that were recently considered marginal were some of the first to falter. 

Now, the Gorjians have fully leased the building, including two penthouses that rented for more than the cost of a compact car—an almost perplexing sum ($7,000 per month) for the once-blighted area.

“It took a year to foreclose and another year to finish construction,” said Cobby Gorjian, who with his brother Justin runs the development firm (they are the sons of Gorjian Properties head Gideon Gorjian). "It's a challenge to take somebody else's work and turn it around."

The property also includes two commercial spaces, one of which has already been rented—to a high-end hat store, which seems an appropriate denouement for the area’s gentrification cycle—and the other of which has interested tenants, Coby Gorjian said.

“We are confident that the neighborhood has been 100 percent absorbed by the Upper West Side,” said Justin Gorjian, echoing that booster-y chorus that many developers and brokers in the area have long sung. But could it be accurate now? The project, after all, features a yuppie’s amenity selection wet dream: dishwashers, roof deck, keyed elevator entry, and wine storage.

This week, the Gorjians took out a $9 million loan from Customers Bank on the building, a transaction with a loan-to-cost (cost of the purchase and renovation) ratio of 138 percent, according to Meir Kessner of Eastern Union Funding, who brokered the loan. Messrs Gorjian originally financed the buy at 220 Saint Nicholas with their own equity, they said.

The six-year non-recourse loan was handled by Mr. Kessner and his Eastern colleague Ira Zlotowitz and has an interest rate of 3.5 percent, Mortgage Observer has first learned.

The bank was willing to grant that relatively hefty sum because of the success of the building and the bright prospects for the sponsor, according to Mr. Kessner. The funds from the new loan will be used on upcoming real estate projects.

The brothers declined to provide detail on those upcoming projects, but they appear to be decidedly ambitious. The pair recently closed on 12 Upper Manhattan properties, which they bought with Harlem-based ABJ Properties. Gorjian Real Estate is also “in contract on several more,” Justin Gorjian said.

1420 Grand Concourse

Bronx landlord Sam Applegrad bought a $19 million multifamily building in the borough with $14.25 million from Signature Bank, Mortgage Observer has exclusively learned.

The loan for the purchase of 1420 Grand Concourse has an interest rate of 3.375, according to a representative for Eastern Union Funding, which brokered the deal. The five-year loan has a one-year interest only period. 

Michael Muller and Ira Zlotowitz of Eastern Union handled the deal.

Signature Bank confirmed the details of the transaction.

Borrower Mr. Applegrad, who owns more than 30 buildings in the Bronx with his Skyc Management, is “taking advantage of the enormous growth in the Bronx lately,” said Mr. Muller. The borough is seeing “the surge that Brooklyn began to experience six or seven years ago,” he added.

The 133-unit building is rent-stabilized, Mr. Muller said, and is in the midst of $600,000 in capital improvements. It is also a block north of 170th Street, a retail corridor that offers public transportation.

The Bronx, sometimes thought as the borough that the city left behind, seems poised for growth as owners and investors seek yields, which have become increasingly unattainable in Manhattan, Brooklyn and Queens. Indeed, the Bronx has seen a 100 percent rise in financings by Eastern Union in the last year, said Matt Matilsky, vice president of communications at the firm. In 2014, the company will have brokered over 100 deals—roughly double the number in 2013.

Ira Zlotowitz

Mortgage Observer first met Ira Zlotowitz, the frenetic leader of Eastern Union Funding, last spring at the International Council of Shopping Centers conference in Las Vegas. He gave us, as he generally does any new contact, his business card: a $2 bill.

Later that evening when we needed to tip after a generous glass of wine had been provided us, we gave the $2 bill to a suitably impressed bartender. A memory of Ira was emblazoned in our brain. The shtick—literally handing out money, so that he can later source more for you—works.

Of course Mr. Zlotowitz is more than a gimmick. The 39-year-old, 17-year veteran of the industry helms a mortgage brokerage that was this year named one of New York City’s fastest growing businesses by Crain’s New York Business.

The 13-year old firm also grew even as it shed excess weight. Mr. Zlotowitz said staff dwindled from around 90 to about 45 brokers even as revenues climbed significantly in 2014—up 253 percent in the last three years, according to Crain’s. And heading into 2015, Mr. Zlotowitz is straightforward: Eastern Union could shrink its staff again.

“When people ask me if they should go into this business, I’m tell- ing them now is not a great time,” he said in a recent interview at Eastern Union's Howell, N.J. office. “I’m not down on those already in the business, but if it goes down, everyone is going to have to pick up a bigger market share. I am moving to [a focus on having] a quality shop.”

That type of candor is rare in real estate, and it could be part of what is pushing Eastern Union’s swift ascent.

In fact, Mr. Zlotowitz has a stern message for this industry, a field that classically takes a bullish tone in any but the most obviously slumping market.

“I think the market as a whole ... there’s gonna be a lot less financing in the next 12 months,” he told us on a recent morning while juggling conference calls with his new Jerusalem office and internal meetings. “I am will- ing to hole up and wait for 2017,” when 10-year mortgages that originated at the peak of the market will be coming due. “This is the first time when I am not making a projection next year to increase production.”

It’s just one way he is “less like a broker and more like an advisor”—an pproach he says characterizes his and his firm's approach to deals. Of course, that’s a cliché that plenty of brokers will invoke. But when Mr. Zlotowitz instructs his brokers he takes on an almost shamanic quality.

“I tell them, ‘Talk to [clients] as though you can- not make money off them, like if you were talking to your father.’”

Of course, profit does come into the equation.

“I want to help brokers become successful, help clients solve their problems and at the same time, make some money. What could be better?”

Mr. Zlotowitz—who wears striped socks, talks with his hands and peppers his speech with random Yiddish—grew up in Brooklyn, the son of a famous rabbi who founded one of the nation’s largest publishers of Jewish texts. He began his career as a mortgage broker with Meridian Capital Group, the prolific New York-based brokerage, where he said he was a top producer until he left in 2001.

He split off that year, ready to start his own brokerage because Meridian sold a 35 percent interest to Independence Community Bank (which became Sovereign Bank, which then became Santander Bank).

“The desire was never to own my own company,” Mr. Zlotowitz said. “I wanted to be in a situation where I represent the borrower and they pay me the fee,” and there was no entanglement with a bank or other lending institution. Mr. Zlotowitz says the split from Meridian resulted in a civil suit, where Meridian asserted that he had a verbal non-compete. Mr. Zlotowitz prevailed, he said, and the two settled out of court (he also said the matter went to rabbinical court). A Meridian representative declined to comment on the settlement.

But Mr. Zlotowitz has no bad blood at all. “It is not important; all business comes from God,” he said.

Since 2001 he has steadily built a business, start- ing off with Flatbush, Brooklyn and Bethesda, Md. offices. Three more offices—in Monsey, N.Y., Howell and Jerusalem—sprung up along the way. In September 2014, Mr. Zlotowitz decided the business was in good enough shape that he could return to the daily grind of doing deals and relinquish control of some of the management duties.

“I felt like at this time there was enough infrastructure put together that I could hand it over to an experienced CEO and say, ‘Here is a business to run,’” Mr. Zlotowitz said. He tapped Avrom Forman, formerly the head of a telecom called Vivaro Corporation, for that role in February of 2014.

Mr. Forman and Mr. Zlotowitz agree that the new division of labor allows everyone to use their talents. “It’s very hard to sit all day and make cold calls,” Mr. Forman said. “There are some people who are very good at it,” he added, a nod of the head indicating Mr. Zlotowitz.

The road to “the quality shop,” is paved with technology, in Mr. Zlotowitz’s mind. As information is more widely available, his approach, wherein a broker provides all of the information available to the borrower and tries to customize the product that fits best, is looking like the future of mortgage brokerage.

“A lot of people have a handful of clients, but Ira uses a bunch of database sources to know when the mortgages are coming due,” said Joe Orefice, head of commercial real estate lending at Investors Bank, which has had a steady relationship with Eastern Union, closing about 100 deals per year by Mr. Orefice’s estimate. “It’s a comprehensive canvassing effort. He’s quite a visionary.”

It’s an approach other brokerages have also taken. “Marrying technology and people resources—that’s the new approach,” Mr. Orefice said. “Ira has taken that and mashed it up a little bit. He’s leveraged it.”

And while Eastern Union has surely completed some larger deals, blockbuster deals are not a focus. Eastern Union this year closed a $50 million acquisition loan for a 14-building Bronx portfolio and a number of construction loans to New York developers in the $10 million to $20 million range. But Mr. Zlotowitz would rather not dwell on size.

“I’d rather shy away from those larger deals,” he said. “We focus on the below $50 million market.”

Instead, what is important to him is developing a pedagogy wherein brokers learn how to use tools like his proprietary database that tracks comps and maturities, which he says he spent more than $1 million to develop, and to augment the tools themselves.

The support the database provides is more than research. “Really, it’s full fledged underwriting,” which brokers can even access from the road, he said. Having a researcher run the numbers on a deal while they are out in the field makes brokers more responsive, and keeps them from promising they can deliver on a deal that won’t work. “Deals that should not happen—we aren’t doing them,” Mr. Zlotowitz said.

And when he does hire people, they’ve been vetted by his five-person executive team, a rotating cast of execs who need to agree on any personnel addition.

Many brokers Eastern Union hires are straight from religious high schools or college, or come from a different field. Only one current employee, to Mr. Zlotowitz’s knowledge, was a mortgage broker before coming to his firm.

When he talks about hiring, Mr. Zlotowitz is animated, delving into an involved analogy based on a Jewish parable, that, honestly, Mortgage Observer couldn’t follow. But one through line is apparent: he believes that with the right training and mutual respect, brokers and management can get through lean times and capitalize on the good times.

The analogy is just one of many instances when the intersection of busi- ness and religion came up during our interview. Many times when discuss- ing his success, Mr. Zlotowitz was sure to mention, first and foremost, that success in business “comes from God,” and he cannot take primary credit. Many of the brokers at Eastern Union observe Orthodox Jewish traditions, and while women are employed at Eastern Union, female visitors are advised that not everyone shakes hands with the opposite sex.

The firm boasts seven female brokers in its New Jersey office and three in Israel. For many social events—like the company’s 12th anniversary celebration, for which Mortgage Observer was present—separate meals for the women are served in an ancillary room.

“Religion is a private matter, but we will respect anybody’s observance,” Mr. Zlotowitz said.

Despite his perhaps bearish forecast, there are sections of commercial real estate finance that are growing, according to Mr. Zlotowitz.

“Construction is creeping up; it’s the fastest growing,” he said. The portion of their business in construction finance has grown from the single digits to about 10 percent of total volume in 2014, he said.

At the beginning of the year, in an interview with The New York Times, Mr. Zlotowitz said he thought his firm would do $3 billion in business in 2014. As of this printing, that hasn’t quite come to pass, but he said total volume would hit “$2.9 [billion] and change” for the year.

Next year looks bleaker.

“Purchases have been moving up, but I think ... when interest rates move up a drop, purchases are going to come to a halt,” he said. “It’s going to be an interesting year.”

Eastern Union Funding has launched a synergistic new business: an equity division, with a focus on smaller investments. The firm's president, Ira Zlotowitz, confirmed the creation of the new equity-sourcing arm, which he said he had been mulling for over a year, at the RECon conference yesterday.

Chaim Fishof will lead the equity division with Marc Belsky and Josh Novoseller.

The division launched on May 1.

Mr. Fishof previously worked at Deerwood Real Estate Capital and the Carlton Group, according to a representative for Eastern. Most recently, he served as vice president and director of acquisitions at Zamir Equities. From 2003 to 2009, Mr. Fishof started worked directly under David Werner of David Werner Real Estate Investments and alongside JFR Global Investments and their partners.

The other six hires hold the title of relationship manager.

The equity group will target smaller passive equity investors, such as high net worth individuals, Mr. Zlotowitz said. They will only raise equity for projects where Eastern is already raising the debt. In fact, if borrowers cover the cost of an equity raise--approximately $6,000, he said--Eastern will waive the commission for that service.

"We expect this to be a real game-changer," he said, given that there are an estimated 8 million accredited investors in the U.S. and many of them would like to invest in real estate without having to do a ton of due diligence. "Why do you think crowdfunding exists?" asks Mr. Zlotowitz rhetorically. The answer is: everyone wants in on real estate. Now, smaller investors have the opportunity to provide capital in a passive fashion, the way a larger institutional fund might.

Ira Zlotowitz has never been afraid to write his own script. As president and CEO of Eastern Union, Zlotowitz has made a name for himself as a relentless innovator, building what he founded as a two-person firm in 2001 into a still-growing company that did over $3.5 billion of business in 2017. Two years ago, Eastern Union announced it would cap fees on any deal at $135,000, a move intended to stake out territory in what Zlotowitz saw as a streamlining market. Brokers at the firm at first resisted the one-year program, but soon realized that the increase in business more than offset the lower percentages they’d make on any given deal.

Now, as he angles to double market share next year towards the $8 billion mark, the brokerage founder is focused squarely on how to move as much business through his shop as will fit through the door. The 42-year-old father of five—Zlotowitz has a foster child and a son-in-law he considers his son in addition to three of his own offspring—talked to Commercial Observer last month about building market share, organizational innovation, and his bottomless appetite for data on his own company.

Commercial Observer: How was business this year?

Ira Zlotowitz: Business is going very well, thank God. It was a great year. As a firm, we made heavy investments into better people, better relationships, data and technology. I think we’ve perfected the art of melding all three into one nice symphony. We’re seeing the results across every platform within the company.

How about the bottom line?

This year we should be up about 10% from last year, which is a pretty impressive number when the market is flat, and you’re reading articles saying that everything is flat or has gone down.

So you’re saying you’re able to outperform the market?

They say that many people in real estate play a herd mentality. I would rather try to be innovative and ahead of the curb, and try to lead. Sometimes you lead too far in advance, and then you turn around and no one’s behind you.

Give me an example.

Technology wise, we spent money and overbuilt on technology years ago, and the market wasn’t ripe for it. We built an app several years ago when you weren’t able to get enough speed on your phone, and people didn’t have unlimited data. Today, it caught up to us, in that we had the whole foundation built. Now we’re able to dust off some of the things we did in the past and utilize them.

What use does an app have for a mortgage broker?

It has amazing calculators. It gives a real estate professional the ability to do all his underwriting on the go, in many cases with better calculations than he has in his office. It has live rates. It has a newsfeed. It has contacts, and it has comps. These are the features that every real estate player needs at every time. When a broker leaves the office, he is just as efficient on the road as he was in the office. I went to Israel, and someone said, “Oh, it must take you a few days to catch up again.” No—I didn’t lose a beat while I was there.

What’s most important capability it gives you?

Every deal that’s being worked on, I am linked to every person in the office whose work is involved in the deal every step of the way. I can see who my client is, the documents, all the quotes, I can see where the loan is holding throughout underwriting.

You’ve built Eastern Union from a two-person shop to a company that employs about 120. How did you decide how the firm should be organized?

Every single person has strengths and weaknesses. Someone who’s very good—that just means that on a scale from one to 10, they’re an eight out of 10. But there are still two things that they’re usually not good at—different things. So I found an expert in every segment of the business and I built a team around that person. Now, when a broker brings in a deal, he runs it, but he needs assistance for steps two and seven. Instead of just winging it, he now has an expert in two and an expert in seven. Another broker needs help in three and five—so he has assistance in three and five.

Did you ever see it as a risk to use such an unconventional structure?

I live by the motto, “live for today, without sacrificing tomorrow.” When I first started building out these expert departments and the technology, I started with steps that would certainly help everybody. So I found someone who was great at numbers only, and I [hired that person] to offer that person’s services to every broker in my office. The only risk I took was spending money. When a broker said, “No firm does it that way,” I’d say, “OK, so don’t use them.” Slowly but surely, people started using that expert. And then I went to the next step of expertise and the next step of expertise and I kept moving accordingly.

You spoke before about leading too far ahead. Can you give an example?

The one part where I went too fast for the market was when I changed pricing models. I came up with different products regarding pricing models, that seemed to be way ahead of how it’s done. I learned it’s just that people assume.

It sounds like your guiding philosophy is to build a company where your brokers can be maximally productive.

Correct. I’m very into data analytics. So I track every the company makes, and who’s the best out of every department. I use it has a teaching thing. That’s one place we keep getting better. At the same time, [we help] brokers to spend less time on opportunities that don’t come through, because they have better support and technology helping them. The broker, he now has more time available to him, so he can now bring in, say, 13 opportunities, instead of 10. The net result is that he will double his production working the same number of hours.

And that’s translating into results?

Analysts are working smarter, and the conversion rates are getting better.

What’s your next area of growth?

I’ve been focusing my energies on areas where there is a tougher barrier to entry, and where I can provide value. So we launched a bridge loan program. And the biggest growth in the company is a service I’m providing to investment sales brokers throughout the country. We launched this a month ago, and today we’re going to break 500 sales brokers.

What’s the play there?

I was able to take all these resources available to my brokers and offer them as a free service to investment sales brokers in the hope that down the line, it will convert into business for us. We’ve taken the whole brand, and we’re leveraging it up to help sales brokers.

Is there any concern that your attention is too widely split?

We’re not going all over the place. We’re in one place. We [try to be] the trusted advisor completing the capital stack.

Is running Eastern Union ever more than you bargained for?

A very big strength of mine is delegation. I delegate before the need to delegate. Most people delegate when their days are full. You delegate so you can take on more work. I delegate to a point where some days, even if I had nothing else to do, I would delegate so that when something came my, I was available.

What kinds of people do you like to hire?

I hire potential. I hire someone with a drive and heart and a willingness to do the work it takes to succeed. Once I find the right potential, I invest. My biggest competitors, all they do it look to poach my staff. “If Ira trained the person, they’re great anywhere,” [they think]. I look for people who will be very happy in what they do.

Once someone is on board, how do you help them succeed?

I find the strengths that they have. If someone’s great at numbers, I don’t make them talk on the phone. If someone’s a great talker on the phone, I don’t make them do numbers. I make the two of them work together to cover both their strengths.

Are you saying you can take anyone and make them into a quality broker?

My mom taught me to take the good out of every person. There’s a role for everyone in this business. The ones who have a tough time making it are the ones who have an ego. I like starting with people for whom it’s their first time in the real estate business, because their ego hasn’t been developed yet. You need to have an ego here, but I’d rather their ego be a healthy ego.

It sounds like you’re endlessly introspective about how the company is doing. Do you apply that way of thinking to your personal life too?

Growing up as an Orthodox Jew, [I believe that] everything comes from God and you want to make sure you’re doing the mission of God. You always reflect back and ask yourself, if you step off course, how do you get back on?

What’s your outlook for 2018? Any concerns?

There’s not really anything that worries me on the real estate side. If interest rates go up, things will slow down. I don’t really understand the ramifications of [the proposed tax reform] and how all of that will play out.

What are your projections for Eastern Union?

From my end of it, I feel like, based on all these initiatives including our new bridge financing department and the broker affiliate division, I’m really gearing up to double market share next year. If the market does the same amount of business [overall], I’m hoping to do $7 billion or $8 billion next year. I’m very optimistic about the company’s prospects, and I think we’re really just getting started.

What are your specific goals for market share?

I always thought of the market as being $350 billion to $450 billion, so that would put me roughly at 1 percent market share. But that doesn’t really come into context, because in our industry, there is no market share leader. The number-one firm might be at 10 percent. Let’s put it this way. I think that real estate—commercial real estate—is going to finally really get hit next year with [a wave of] technology, data, and all that stuff. And I think I’m the leader in those areas.

Mark Schnurman was picked up by commercial mortgage brokerage firm Eastern Union Funding after spending five years as the chief sales officer at Eastern Consolidated, which shut down over the summer, Commercial Observer has learned.

Starting today, Schnurman, 50, is the first-ever chief sales and operating officer at Eastern Union and will manage the firm’s day-to-day sales operations and team of about 150 people.

“It’s a really exciting culture,” Schnurman told CO. “It’s young, energetic and collaborative. Most of the producers are very open to growing their business.”

Schnurman’s hire will free up Ira Zlotowitz, the president of Eastern Union, to “follow a lot of the bigger picture things,” along with “streamlining operations,” implementing training programs for brokers and recruitment.

“The whole idea is the organization is really, really good, but we want to be best in class in everything we do,” Schnurman said. “We can’t be satisfied with good or we’ll never get to that elite level.”

Zlotowitz said the company, founded in 2001, has been looking for somebody to manage the “people” side of the business to bring its “brokerage to the next level.” When Eastern Consolidated shut down, Zlotowitz asked around to find out who helped the firm increase its revenues.

“All fingers pointed to Mark,” Zlotowitz said. “I met with him and the chemistry was there.

“His culture is investing in people, treat them right and treat them fair off the board,” he added.

Schnurman began his career as a management training associate for Morgan Stanley in 1995 and became an associate vice president and financial adviser at the company. There he set a goal of making 300 calls a day and wouldn’t leave the office until he did, per a column he wrote for CO. He later worked at Wachovia Securities and GFI Capital Resources Group before he was hired by Eastern Consolidated in 2013 where he helped launched a capital advisory division—which closed more than $1 billion in transactions in the 12 months before the firm shuttered—and a retail leasing arm. He also recruited eight of Easterns’ top 10 producers.

Eastern Consolidated closed up shop in July and Schnurman said he was inundated with job offers but chose Eastern Union because of the company’s technology.

Some call him the equity whisperer, and for good reason. After 20-plus years in the trenches of the capital stack, Marc Belsky recently formed his own platform, Marc Belsky Ltd., with a focus on helping clients raise additional equity for their investment strategies.

Honing in on the $5 million to $50 million middle-market space, Belsky and his team raise both joint venture and preferred equity for predominantly multifamily transactions across the U.S., leveraging relationships with more than 500 institutional, limited-partner investors focused on that same middle-market space.

Commercial mortgage brokerage Eastern Union appointed Abraham Bergman, who has been a managing partner at the firm since its 2001 launch, as the new CEO.

The company said on Wednesday that Bergman will be only the second CEO in the firm’s history as Ira Zlotowitz had held the position since Eastern Union’s inception. Zlotowitz left the firm on Nov. 15 to start his own company, GPARENCY. 

Ira Zlotowitz is linking up with Customers Bank as a strategic partner in his newly launched company that aims to create a seismic shift in the commercial real estate brokerage industry, Commercial Observer can first report. 

The former Eastern Union founder and CEO announced Monday the official launch of his new firm, GPARENCY, which is designed to enable developers to work directly with banks without the need for a broker. Zlotowitz has raised $15 million in venture capital for the business with Customers Bank, the first of dozens of banks that he said is committed to being part of the platform.

The commission-based mortgage broker model doesn’t have the General Partner in mind, it only considers the loan amount. At least that’s what Ira Zlotowitz said after nearly three decades in the industry, including 20 years at the company he founded, Eastern Union. Zlotowitz came up with a radical new pricing model built on a subscription instead of percentage-based fees. As a result, it revolutionizes the way commercial real estate owners engage and pay for mortgage broker services, effectively saving them tens of thousands of dollars in commissions, empowering them with intel, and giving them equitable access. GPARENCY, the premier commercial mortgage brokerage firm Zlotowitz founded last November, disrupts the industry by allowing GPs to have the entire mortgage process handled within a subscription service that costs $5,000 for membership, and a maximum of $11,000 per deal. Partner Insights spoke with Zlotowitz about how GPARENCY is changing the game for commercial real estate borrowers.

For investors who are still on the hunt for their next great acquisition, GPARENCY’s newest offering, Live Listings, is the easiest way to see the most up-to-date properties on the market. This new exclusive database includes off-market properties not even listed yet. Each week at no cost, hundreds of properties are added by their in-house team and listing brokers, now ranging over 1,000 listings in the three short weeks since launch. This database is growing quickly with over 75 listings being aggregated by their team and listing brokers daily.  

“Our team is blown away by how quickly the market has taken to this new resource. The feedback has been incredible,” said Ira Zlotowitz, the founder and CEO of GPARENCY. “GPARENCY was launched to create equitable access for everyone, but with an obsession to create the greatest value for the borrower. Everything we offer and build is to take away their pain points and create the greatest leverage on their behalf. This listing database is just another way we can show it.”

GPARENCY, a premier commercial mortgage brokerage firm, has seen rapid growth in the eight months since launch, closing hundreds of millions of dollars in deals. GPARENCY has gained growing popularity for their ability to allow mortgage brokers to close financing deals at their cost of $11,000. Partner Insights spoke with Ben Schweitzer, GPARENCY’s chief product officer and co-founder, about how the firm is reinventing the value a mortgage broker can bring to the table.

Commercial Observer: Tell me about the Live Listing Page GPARENCY is preparing to introduce.