Real Insight. Real Estate.

Two years ago, when Llenrock Group was founded, we saw an opportunity to step into a niche role as a small investment bank that focused exclusively on small to mid-size commercial real estate transactions.  Shortly after we started, markets fell off a cliff.  As a result, the need for specialized I-Banks has become more obvious, and a lot of new players are jumping on the opportunity.  Crain’s New York Business published an article yesterday highlighting this opportunity and the I-Banks that are ramping up their teams to give the big dogs a run for their money.  What is the focus of these I-Banks and what differentiates them from the juggernauts on Wall Street?

The Crain’s article mentions that most of these new I-Banks are propping up to help clients restructure debt, raise capital, create partnerships, and dispose of portfolio assets.  Isn’t that that what the real estate teams at Morgan Stanley and Goldman Sachs have been doing for years?  Well, yes, but real estate markets have changed.  Restructuring debt, raising capital, creating partnerships, and disposing of portfolio assets effectively in this market means something totally different than it did just two years ago.  The new real estate I-Banks on the scene are setting up shop on the premise that they are putting together teams that are better suited to address clients’ needs in an upside down real estate market.  Sounds like a pretty good strategy to me.  But where are these new shops getting the new talent they need to serve the needs of a new marketplace?

Alex Rubin, Formerly of Citi

As the Crain’s article cites, the new players are pulling Managing Directors from JP Morgan, Lehman, etc.  So the talent leading these new shops is not new at all, but rather the same people who were advising owners, investors, and developers in the real estate market of yesterday.  Let’s see if a new brand and tagline will be enough to convince owners and investors that Wall St. bankers are the best advisors for their real estate transactions.

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