CBRE focuses in on loan sales in slow leasing market

CBRE Group is projected to broker up to $5 billion in loan sales — one of the fastest-growing subfields of commercial real estate — by the end of the financial year, the Wall Street Journal reported.

A sure sign of the company’s renewed emphasis on the loan sales line of business is a recent choice for promotion: Patrick Arangio, a 34-year-old executive in the loan sales division who recently became a vice chairman. While the office leasing market has been somewhat stagnant, loan sales have skyrocketed since the recession, the Journal said. The division’s staff in New York has grown from five to 11 in the past decade, the Journal said. CBRE has brokered about $2 billion in loan sales so far this year, the Journal said.

The newly minted vice chairman told the Journal loan sales have totaled $25 to $30 billion in recent years, whereas $15 million used to be a “huge year.” Rival brokers Jones Lang LaSalle have also grown their loan sales staff from five to 20 professionals recently, the Journal said.

Arangio jumped from Cushman & Wakefield in 2003, when he took the job of co-head of the CBRE loan sale group with David Dorros.

“There is still distress for certain pieces of real estate,” Arangio told the Journal. “We’re also seeing extremely aggressive capital chasing transactions.”

With a number of 10-year loans for high-priced commercial real estate coming to maturity in the next couple of years, the loan sales market is expected to continue to grow, experts told the Journal.

Arangio would not comment to the Journal on the commissions CBRE brokers are paid on loan sales. [WSJ] – Mark Maurer