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The Great Golf Debate
Auction (May28-3) L-CHI
May 8, 2013

The Great Golf Debate

CRE deals of days past were often closed with friendly handshakes on the fairway. (Assuming nobody had 4-putted the last hole.) In today's time-crunched workplace and tight economy, we wondered if putters are being sheathed in favor of virtual deals.

Don't fire your caddies just yet. An official Bisnow poll says almost two-thirds believe the game's still relevant to dealmaking. Golf has always been a high-barrier-to-entry game, with expensive gear, rounds, and significant practice time required. (And more gear after you break your others.) But develop your game and others in CRE will take notice. Here are some notable comments from readers still seeing ROI on the green.
CohnReznick (Think) MCHI

  • "Lower handicap yields more golf invitations with successful people."
  • "It only helps the relationships and helps break down your clients and understand what drives them. People relax and are more open in a non-business environment."
  • "It is getting to be the only available real estate to develop—that and the soon-to-be former Wrigley Field location."

Others are not finding enough hours in the day to sneak off to the driving range. (Why do you think speed networking events have gotten so popular?) The dissenters:

  • "The outings have become a day of 'play' and ineffective in conducting business. We try to schedule one-on-one time with strategic foursomes, but everybody seems to be working too hard to have time for either."
  • "It's a huge time drain for every party involved."
  • "Golf takes too much time, and time is more valuable than ever today."

Links Capital Advisors principal Chris Charnas's love affair with golf began as a 12-year-old caddie. His CRE career began in industrial sales, moving on to the Crown Family and later starting Cushman & Wakefield's golf group. He then started his own golf course brokerage firm in 2008. While Chris thinks golf is a great, informal way to get to know clients and business partners, he's seen rounds and membership fall in the current lukewarm economy (and lukewarm weather, an important factor). Many courses are distressed and little debt is available for golf acquisitions or refis, he says.

Courses have tried to adapt to attract more business and newbie clientele (our favorite type is above), but cutting fees doesn't necessarily increase revenue given golf's heavy fixed costs. Will there be more golf course redevelopment as CRE rebounds and capital searches for large chunks of land? Don't hold your breath, Chris says. Many courses run through residential developments and would be tough to adapt into additional homes, retail, or multifamily, he says. Plus so many lots are still for sale from the last two residential bubbles that nobody is buying land yet to develop.

New Trier's Name Recognition

Michael Hoffenberg - Trevian Capital - Real Deal
New Trier High School's notoriety extends beyond the North Shore, and a new NYC financial firm is looking to capitalize on the name recognition. Founded by Wilmette native Michael Hoffenberg, Trevian Capital (named after New Trier's mascot) is a direct lender focused on short-term (six month to two year) middle market ($1M to $30M) bridge loans, especially in the Chicago area and broader Midwest. (Unless it has competition from a financial firm calling itself Wildkit Investments.) He saw a hole in the Midwest for unconventional and flexible CRE financing that the banks shy away from: time-sensitive deals, partnership buyouts, bad credit situations, discounted payoffs, etc. Trevian plans to originate $150M in bridge loan opportunities within the next 18 months.

It'll lend on multifamily, office, retail, industrial, student housing, medical office, and condos, Michael says. Since launching in December 2012, he's funded over $20M, including $15.8M on 322 apartment units in the Chicagoland market (Elgin and South Haven, Ind.). As $1.2 trillion in CRE debt matures by 2017, a tremendous amount of loans will need to be refinanced or sold at a discount, creating opportunity. Michael plans to open a satellite River North office in July and says New Trier (pictured) has been a great conversation starter, letting Chicagoans know he's not just "another New York guy." Did we mention company colors are red, black, and white? (Let's get a win tonight, Bulls!)

What's Driving Our Zeal

CREW's Chicago Chapter recently held its monthly luncheon at East Bank Club, featuring UIC's Dr. Rachel Weber talking about why we overbuild and boom cycles. The most recent "Millennial Boom" (1998-2008) was characterized by adaptive reuse and an acquisition surge (87% of Chicago office buildings traded at least once during that period), she says. Our overzealous groundbreaking has two drivers. On the demand side: Building users' increasing and changing their preferences. (They need more outlets!) On the supply side: A surplus of capital is searching for yield when other investments show decreasing returns. Pictured: V3 Cos' Margie Lathrop, Rachel, and The Tammen Group's Jennifer Tammen.

Tom Thibodeau's kindergarten teacher referred to him as "Sir." marissa.oberlander@bisnow.com

Come to Our Annual National Student Housing Conference!

Come join us in Philly in two weeks, May 22-23, for our first national Bisnow Annual Student Housing conference ("BASH"). We're hosting 22 phenomenal speakers, including American Campus Communities' Jamie Wilhelm, Campus Apartments CEO David Adelman, Education Realty Trust CEO Randy Churchey, and Harrison Street Capital's Brian Thompson. And reps from universities across the country. All at the luxury Rittenhouse Hotel, at a beautiful time of the year, just blocks from Independence Hall, the Liberty Bell, and Betsy Ross's house. And once you're there, be sure to meet with our reporter on the ground, Catie Dixon. (Set up a meeting with her in advance—catie@bisnow.com.)

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