Baseball: America’s Pastime & Commercial Real Estate’s Favorite Analogy

October means baseball. Meaningful, dramatic, high-energy, playoff baseball. In our world, analogies to baseball are frequent, because Commercial Real Estate is apparently best understood in Read more

Trick or Treat...Recourse or Non-Recourse?

By: Scott Lynn Metropolitan Capital Advisors has brokered billions of non-recourse commercial real estate loans over the years that have been placed with banks, conduits, Read more

Dallas is the Nation’s Top Real Estate Market & Other Musings from Urban Land Institute's Fall Meeting

By: Justin Laub I spent the past week attending meetings and discussion forums in San Francisco at the annual Urban Land Institute (ULI) Fall Meeting. Read more

Single Family…….We have a Problem!

By Todd McNeill In a recent report from the Texas Association of Realtors, Texas ranked #2 in the nation for relocation moves.  According to the Read more

My Kids Asked for a Treehouse and Got a Lesson in Value Add Real Estate Investing Instead

--By Jeffrey Reder, CenterSquare Investment Management A few weeks ago, my son declared that he wanted me to build a treehouse in our backyard. My Read more

The Bad Taste of Basel III

--By Scott Lynn, Director / Principal As commercial real estate financiers, we are constantly faced with a variety of evolving banking regulations that are changing Read more

Rising Multifamily Rents - Can Renters Afford the Sticker Shock?

By Sunny Sajnani, Director / Principal As a real estate professional in one of the fastest growing markets in the country, I am constantly hearing Read more

2015 Tour De Dallas: Opportunity & Growth Abound

by Kevan McCormack For the Dallas-Fort Worth Metroplex, growth is not a foreign concept. In 1980, SMU was beginning its most successful era in the Read more

The Changing Landscape of the Development Cycle in a Basel III World

By Brandon Wilhite Similar to virtually every other market, the commercial real estate market goes in cycles. Throughout much of the country, most product types Read more

Your Pad (Site) Or Mine?

By Charley Babb What once was an outlier real estate play has now become a significant commercial real estate asset class. Pad sites are much Read more

Cash Flow Management in Commercial Real Estate: CMBS Markets Post Great Recession

By: Josh Siegel The sub-prime mortgage crisis and recession of 2008 triggered a comprehensive restructure of the commercial mortgage-backed securities (CMBS) market. Between 2005 Read more

A Developer’s Best Friend: Tax Increment Financing (TIF)

By Duke Dennis Overview: What is a TIF? Tax Increment Financing (TIF) is a form of subsidy offered by municipalities to encourage and support private development Read more

Single Family Rentals: Commercial Real Estate’s Newest Frontier

By Justin Laub For those unaware, a new asset class has come into being in commercial real estate: single-family rentals.  Prior to the Great Recession, Read more

What is the Deal with FNMA and Freddie Mac??

By Todd McNeill There has been a lot of speculation going around on the current status of FNMA and Freddie Mac in the marketplace.  As Read more

RECON / ICSC 2015 Takeaway

By Scott Lynn What was the "MOOD" in Vegas this year? That is the #1 Question that colleagues and friends ask following the annual trek Read more

Retail Tenants in Mixed-Use and Lifestyle Developments: An Underwriting Paradox

By: Brandon Wilhite With the resurgence in interest in living in denser, urban walkable environments, development patterns across the country are shifting from single-use developments, Read more

The IRR Waterfall: Splitting Real Estate Profits - Lenders, Investors, and Developers

How can equity investors in commercial real estate transactions shield themselves from downside risk, provide enough incentive for the development partner, manage the upside, Read more

How to Turn a Dud into a Stud: Using Legislation to Reduce the Liability and Costs Associated With Groundwater Contamination

By Duke Dennis What do parties to a real estate transaction think when they hear that the property acquisition they have been working on has Read more

Mile High City’s Industrial Real Estate Hits New “High”

By Charley Babb The vacancy rate for commercial real estate industrial space in Denver is hovering at just over 4%, which is a historically low Read more

How Can MCA Make You a Better Sales Broker?

Here at Metropolitan Capital Advisors, we get asked all the time by our clients if we broker the sale of commercial property. The answer Read more

The Shifting Landscape of CMBS Power

By Todd McNeill The balance of power is moving around the CMBS playing field in 2015, and loan originators seem to find themselves with the Read more

Commercial Real Estate Capital Markets Are Liquid; Development Accelerates during 2014

By: Scott Lynn The recovery of the commercial real estate capital markets has gone full cycle since the depths of the Great Recession in 2008.  Read more

Borrowers Are Not A Commodity

By Kevan McCormack Commercial Real Estate development by all accounts is a simple business concept (over simplified below): 1)    Find a Location; 2)    Design a Building; 3)    Secure Read more

Metropolitan Capital Advisors Arranges $5,375,000 Equity JV & Interim Construction Financing For A Retail Shopping Center in Huntsville, Texas

DALLAS, DECEMBER 2014 — Dallas, Texas-based Metropolitan Capital Advisors (MCA), a financial intermediary specializing in the exclusive representation of investors, developers and property owners Read more

Is Blackstone Calling the Top Again?

by Charley Babb Blackstone Group, the private equity giant, appears to be revisiting its pre-recession game plan of acquiring undervalued real estate assets and then Read more

Baseball: America’s Pastime & Commercial Real Estate’s Favorite Analogy

October means baseball. Meaningful, dramatic, high-energy, playoff baseball.

In our world, analogies to baseball are frequent, because Commercial Real Estate is apparently best understood in those terms. It is common to hear things like, “What was the company’s batting average this year?” or “Which brokers are aiming to be heavy hitters?”

It’s true the vast majority of Americans still consider baseball to be America’s pastime. It is the all-American sport and, while the game has changed over the decades, baseball is still growing and popular around the globe. Being a passionate fan of the game and a former high school and college player, I couldn’t help but find myself drawing parallels to my job off the field while watching the World Series this fall. Turns out, baseball and Commercial Real Estate are more similar than I would have immediately thought.

It’s a Long Season

Although pitchers and catchers report to spring training every offseason in early February, the final out of the World Series isn’t typically recorded until mid to late September. It goes without saying that baseball’s 8–month, 162-game regular season is long. Extremely long. So long, in fact, that a growing number of progressive-thinking minds in the game – including baseball’s commissioner – have considered shortening it. The record books are full of players who come out strong in April only to fade and be forgotten by August. This is also true in real estate. Phenoms who scored big during bullish market rallies have disappeared when markets turn south.

Commercial Real Estate development, too, takes a very long time. Often delayed by months or years, real estate transactions require an increasing number of moving pieces to align in order for them to be successful. For developers, the long season means preparing your properties for development, including securing all the necessary entitlements, building, fixing, and inspecting. Why is real estate development so risky? High front end costs and long lead time. And in real estate, time equals money and time equals risk.

For investors, the long part of the season involves watching the fluctuation in spreads, touring real property, finding investors, seeking new avenues to raise capital, and lots and lots of legal negotiations.

The common denominator in all of these things is time. Significant amounts of time.

It’s a long season.

It’s a Team Game

Sure, professional baseball players sign individual contracts and real estate professionals will typically get compensated based on an individual performance but, simply put, it takes a team to win games.

The best baseball managers will develop their line-up of role players – each with a completely unique skillset – over the course of the season. They tweak what doesn’t work, and adjust rosters based on performance, injury, and trades.

Players, too, rely on teamwork to find advantages in games.

Power hitters rely on the on-base guys in front of them so they see better pitches during their at-bats and have more Runs Batted In (RBIs). Bullpens rely on starting pitching staff to put them in a position to turn a 7th inning lead into a win. Rookies rely on veterans. Managers rely on assistant coaches.

Similarly, Commercial Real Estate transactions utilize a multitude of individuals who perform in a number of functional silos, including legal, environmental, marketing, finance, management, operations, engineering, architecture, and construction to get a deal across home plate. The best real estate professionals will have the experience to put these teams together to facilitate the dissemination of information to all the right people.

Teamwork is critical in baseball and it is critical in real estate.

It’s a team game.

It’s in the Details

Why do the world’s best players spend every spring practicing a game they’ve played their entire lives? Because the margin between good and great is razor-thin.

Three hits out of ten at-bats will likely get you to the All-Star game while two hits will get you a bus ride to the team’s AAA affiliate.

The same attention to detail goes for real estate professionals. Those who spend the extra day modeling cash flows – the ones who stay after hours to make extra production calls and read due-diligence materials – they are the ones who reap the biggest benefits long-term. Luck exists, but in baseball and real estate, luck is the product of a good strategy, good habits, and superior execution.

commercial real estate and baseballReal estate and baseball are both littered with complex statistics and metrics designed to help “way through the long season.  Real estate professionals determine how prevailing market-cap rates and market conditions affect borrowers’ returns; likewise, baseball statisticians attempt to build winning teams using metrics like “WHIP” (Walks plus Hits per innings Pitched), “OPS” (On Base plus Slugging Averages), and “WAR” (Wins Above Replacement).

Knowing how to use these tools

It’s all in the details.

The author, Josh Siegel, is an Analyst at Metropolitan Capital Advisors. When Josh isn’t analyzing deals, he is a passionate Baseball fan and proud supporter of his hometown team – the Colorado Rockies.  Feel free to email Josh at or contact any of Metropolitan Capital Advisors’ senior directors ( to learn more about how our firm can help facilitate your commercial real estate capital requirements.

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Trick or Treat…Recourse or Non-Recourse?

By: Scott Lynn

Metropolitan Capital Advisors has brokered billions of non-recourse commercial real estate loans over the years that have been placed with banks, conduits, life insurance companies, pension funds, etc. But does a non-recourse loan mean the Borrower and/or the principals of the Borrower are entering into a risk-less transaction whereby the Lender’s only recourse if things go bad is to take the property?

Answer: usually not. Most so-called non-recourse loans are subject to what is widely referred to by capital markets industry participants as the “Standard Non-Recourse Carve Out Guarantees” that include:

1) Promises not to commit fraud, misrepresentation or misappropriation

2) Promises to keep the property well maintained and in good condition

3) Promises to be responsible for any environmental issue that might arise

4) Promises not to put the property in bankruptcy as an attempt to avoid foreclosure.

pumpkin patchAnd it is not just the property or the Borrower that is required to make these promises, but rather the Carve Out “Guarantor,” which in most cases these days is a “warm body”… a real live person standing behind the promises not to do the above and if you do, you become personally liable for the loan. If drafted properly, most good people have no problem making promises not to intentionally do what is promised and as a result, trillions of dollars of non-recourse deals get done on this premise.

Sometimes circumstances exist where Borrowers and its principals have to provide additional carve-out guarantees to cover risk that is inherent to a specific property and those issues are usually disclosed and negotiated as part of the agreement before any loan documents are drafted. However, our firm has seen a recent trend by some Lenders (more so their attorneys) to expand standard carve-out provisions by adding other events, reasons or definitions the loan can suddenly become recourse/full liability.

As they say, “the devil is in the details,” which may very well be in a big fat stack of ghostly loan documents that don’t get properly read, reviewed or explained. For example, we recently worked on a deal where two carve guarantors became personally and individually liable for the full loan if either one of them died during the 10-year loan term. This included the dead guy’s estate … that’s just plain SPOOKY. Another example is property condition. If you’re not careful, the loan might become full liability if someone slips and falls or you sell a piece of obsolete maintenance equipment without asking for Lender consent. BOO, gotcha!!!!!

Don’t get too scared in the Pumpkin Patch. You can always pick where to go Trick or Treating as there are plenty of lenders doing deals the right way and only asking for promises that are reasonable and in line with what is viewed as a “standard carve out”. The best way to protect yourself from wasting time, money and effort is to request the Lenders carve out language up front as part of the Term Sheet, Loan Application or Loan Commitment. That way you can see any unusual requirements for yourself with no surprises later on down the road.

MCA has extensive expertise in arranging true, industry-standard, non-recourse financing in all shapes, sizes and property types. For further information, contact one of our Senior Directors in our Dallas or Denver offices or visit our web site at

The Author, Scott Lynn, is the founding principal of MCA. Email Scott at

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Dallas is the Nation’s Top Real Estate Market & Other Musings from Urban Land Institute’s Fall Meeting

By: Justin Laub

dallas top real estate market

I spent the past week attending meetings and discussion forums in San Francisco at the annual Urban Land Institute (ULI) Fall Meeting. Each year, ULI announces a list of the nation’s top investment locations for commercial real estate. This year, the number 1 spot went to Dallas/Ft. Worth. As a Dallas-based real estate investment banker, the news was good. And just so I don’t get accused of stretching the truth, I’ve posted the source chart above. It’s plain for everyone to see. The top real estate minds around the country – from investors to developers to lenders and financiers – agree that the Dallas-Ft. Worth Metroplex is currently the single best real estate investment market in the country.

The list of top investment locations is derived from an extensive survey of nearly 1,500 of the nation’s leading commercial real estate professionals. There are a few usual suspects in the above top 10 list, including San Francisco, Los Angeles and new kids on the block, Austin and Denver. Conspicuously absent are major markets like New York, Boston and Washington D.C., a sign that the nation’s institutional investment professionals believe these markets are too richly priced relative to the returns, job growth, population growth, etc.

Investor sentiment has turned squarely in the direction of the nation’s secondary cities, such as Dallas, Austin, Denver and Nashville. This suits me just fine, as Metropolitan Capital Advisors is based in Dallas, has an office in Denver and is a close flight or drive from Austin. I do almost all of my business in markets not located in the primary cities of New York, Boston, D.C., LA or San Francisco. It’s nice to know that capital will continue to flow into the markets where I am most active, and that it is set to ramp up even more during the next couple of years.

For some, it is hard to believe that even more capital is justified coming into the commercial real estate space. Values have already appreciated since the Great Recession, cap rates have compressed rapidly and there is no shortage of debt or equity capital for good deals. But we live in a globalized world where information moves rapidly and institutional investors are increasingly turning over every pebble to find yield in today’s market. Commercial real estate in the U.S. continues to be a highly attractive asset class.

The U.S. economic engine seems to have stabilized (despite everyone’s continued anxieties) and is chugging along at a steady clip, albeit a bit slower than normal. Outside of the U.S., the rest of the world is a crapshoot. China is having its first major economic hiccup (long overdue and expected), and the rest of the so-called BRIC countries (Brazil, Russia, India and China) are having their own unique struggles. Western Europe has growth problems, so does Japan, and the Middle East remains a tinderbox. In short, the U.S. is, somewhat surprisingly, the one major bright spot in the world, and commercial real estate has come roaring back as an even more desirable asset class than it was pre-recession.

From my vantage point, it appears that the flood of capital into U.S. commercial real estate will continue unabated. Capital sources that previously restricted themselves to the confines of primary cities are now pivoting toward secondary and (good heavens!) tertiary cities in search of incremental yield. That’s all music to my ears. Rest assured, I’ll be here carefully guiding these capital sources towards my client’s developments, acquisitions, etc., over the next few years.

If you are in search of capital for your next commercial real estate investment, you can reach Justin Laub, Senior Director, at Or visit the Metropolitan Capital Advisors website at

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