ERG launches in-house finance division

Investment sales firm recently merged with mortgage brokerage JG Capital
By Guelda Voien | January 14, 2013 05:30PM

ERG Property Advisors, the Manhattan-based investment sales brokerage launched in 2009, has formed a finance division, company executives told The Real Deal. The new division will broker both traditional and non-traditional loans between $500,000 and $50 million for ERG buyers, new division head Jason Au said. Au comes from mortgage broker JG Capital, which merged with ERG last August. The new five-person team should expand to nine brokers in the next six months, Au said.

As far as the timing of the new division launch late last year, Au pointed to low interest rates and lots of available private money.

“It just made sense, [to launch the division] because ERG has started to build a pretty nice reputation,” Au said. “We want to go out there and make a splash and make smart deals.”

Among ERG’s current listings is a development site at 2211 Third Avenue in Harlem, with 125,000 buildable square feet, a representative for ERG said. The asking price for the parcel is $11.5 million.

And ERG is building on JG Capital’s history of taking advantage of market conditions. JG Capital was formed in 1993, amid tightened lending in a real estate market where very little was trading. The firm began marketing traditional bank loans at that time, but in 2009, in another eriod of economic turmoil, JG Capital formed its first private fund, HVB Two LLC, which originates loans in the $500,000 to $2 million range, Au said.

Au now runs that fund, while ERG Chairman James Guarino runs the company’s new larger fund, called NYRE Loan Fund I LLC. That fund originates loans in the $2 million to $50 million range, he said.

Au could not disclose the interest rates for the private bridge loans, but said that those loans were about 35 percent of ERG’s finance division’s business.

“Banks are aggressively lending … the private money is available,” Au said. “It’s a good time to make a mark.”