From left: Garret Thelander and Paul Massey
Massey Knakal Realty Services has tapped Anglo Irish Bank executive Garrett Thelander, who helped open the New York office of the troubled lender and grow its staff to 35, to lead its new mortgage division, it was expected to be announced today.
Thelander, 55, is once again charged with starting a new office, this time as a managing director for Massey Knakal, to hire brokers and develop the new arm, Paul Massey, company CEO, told The Real Deal.
The hiring of the bank executive comes two weeks after Massey Knakal launched a retail brokerage division, bringing in long-time retail agent Benjamin Fox for that job. At the same time, the firm has had significant defections, including a top producer for the firm, Shimon Shkury, who left with his team to open the new firm Ariel Property Advisors. And Landon McGaw, the agent who opened the New Jersey office in 2008, left this month to join Silverstone Property Group.
Massey Knakal is one of the city’s leading investment sales firms, ranked second in dollar volume in 2009 after Eastdil Secured with $627 million of buildings transactions in New York City, CoStar Group data shows.
The unit, to be called the capital services division, is expected to have 17 brokers spread among the Manhattan, Brooklyn and Queens offices covering the firms’ approximately 50 territories within three years, Paul Massey, the company’s CEO said. He added that he expects to hire six to eight brokers within the first year. None have been hired except Thelander.
Thelander, who has 23 years of experience in commercial finance, said the mortgage unit could help sellers, even though the loans would be for the buyers in a sales transaction, by allowing them to bid higher.
“It is potentially a better price and potentially a better execution,” he said.
While several real estate insiders said the mortgage business, like the retail brokerage arm, was a natural extension of the firm’s neighborhood-based business strategy, they noted potential problems as well. For instance, for years Massey Knakal referred mortgage business to other firms.
“One challenge is that the existing mortgage brokers have their existing books of clients, and it is not easy to get people to change the way they work,” Stuart Saft, a partner and chair of global real estate at law firm Dewey & LeBoeuf, said. He does not do work for or with Massey Knakal, he said.
But he praised the choice of a banker for the post, because he will not have to compete against his former colleagues.
“Bringing in a senior lender really shows that they are trying to go in a different direction,” he said. “He will know everyone even at the other banks. He will have more connections than someone who is just a traditional broker.”
The New York City commercial brokerage market is deeply fractured, with very few players dominating, Massey said.
While there was an average of $25 billion in investment sales completed over each of the last six years in the city, there was $45 billion in annual commercial mortgage origination and refinance, Massey said, citing his firm’s research of all companies in the market.
He said one company, Meridian Capital Group, has about 19 percent of the market and the next highest firm can lay claim to around 2 to 5 percent. Meridian Capital declined to comment.
“50 percent of the market is not being handled by a top-20 player,” Massey said. “It is ripe for organization.”
The division will grow in response to opportunities, not by a geographic plan, Massey said. He said the firm hoped to broker within three years up to 12 percent of total number of loans originated.
Thelander, an executive vice president at the New York Office of Anglo Irish, was hired this past Friday and will officially start his new job Feb. 14. He and Anglo Irish colleague Paul Brophy opened the New York office in 2004, and grew the staff to 35. In that period the office originated $4.5 billion in loans, Massey said.
Saft did not see Thelander as culpable for Anglo Irish’s bad loans, noting many loans, including larger ones have failed spectacularly, such as Stuyvesant Town.
“Somebody at some point or some group at some point made the wrong decisions. But you can’t really pin that on an individual,” Saft said.