Former Stacom team member talks shop

Eric Negrin describes gap between owners and brokers in investment sales 

Not many investment sales brokers have worked both sides of the owner/broker divide, and fewer still make a switch and return back again. Eric Negrin, who last month was hired by commercial advisory firm Studley as a corporate managing director, has. Negrin, 46, spoke to The Real Deal about how the two sides view one another, why he made the switch, and why the grass often looks greener on the other side. After working with top sales broker Darcy Stacom for a total of 11 years first at Cushman & Wakefield and then at CB Richard Ellis, Negrin left the broker side of the industry in January 2010. In May that year he began working at Midtown-based office landlord Paramount Group, as the co-head of its acquisitions team for the firm that owns about 12 million square feet of Class A buildings in Manhattan, Washington, D.C. and San Francisco. Then in March 2011, he moved back to the brokerage side, taking the job with Studley.

What are the perceptions the two sides have of each other?

I don’t think that either side has a full appreciation of the challenges that the other faces. I think that principals think brokerage — in better markets especially — is just kind of a matter of processing. Just kind of taking a bid, producing a book and sending it to market. [And] brokers think that all the acquisitions folks do is look at deals and allocate resources.

What are some challenges brokers don’t think about?

On the principals’ side, it is tough to find deals. And it is tough to find deals that will meet your parameters.

What are some problems principals have that can slow or kill a deal?

There could be tax issues. Perhaps [using a popular tax-deferral arrangement] someone 1031-ed into a deal after a chain of 1031s, that makes them have a very, very low tax basis so the sale would be untenable. If [there is] a partnership… there could be [issues such as] a right of first refusal, [buyout agreements known as] buy-sells, or promote structures that make selling at a particular time or price either unattractive or impossible.

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How is underwriting a deal different on each side?

When you are on the principals’ side, you know the parameters you are underwriting to. When you are on the brokers’ side, you are dealing with a much broader audience. You know that folks are going to be looking at that same transaction in a bunch of different ways.

Why did you take the job on the owners’ side, did the ‘grass look greener’?

I think every broker is intrigued by what is going on, on the principals’ side. You know, ‘acquisitions’ always sounds a bit sexy. And like everybody else, I had an interest in it.

Why did you return to brokerage?

I did miss the opportunity to work on the variety of different deals and I do think from the brokerage side there is going to be a lot of opportunity.

What is the main lesson from the opposing work experiences?

The one thing that you do learn on both sides, is — it’s never as easy as it looks.