EXCLUSIVE: Colliers Debt Pro Switches Firms In Anticipation Of 'Challenging Recession'
Former Colliers Senior Vice President Erik Binkowski joined the capital markets group of Lee & Associates as principal of debt and structured finance, Bisnow has learned.
The debt broker, who said roughly a third of his deals are in the D.C. area, is moving to a firm that has dozens of offices throughout the U.S. and Canada and is actively expanding its debt team, according to a release.
Binkowski said the move will allow him to continue to grow his client base nationally.
"To have only two or three people around the country that do debt may be an opportunity if they have sales transactions that need mortgages," Binkowski told Bisnow. "That's also an easier way to grow business in what could be a challenging recession."
The local office is in growth mode, with plans to add a multifamily group and triple net team in addition to other ongoing projects that will "complement Erik's objectives and strengths," Simon said in a statement.
"Attracting [Binkowski] to Lee & Associates is a tremendous win for us, particularly at this critical juncture where capitalization has become increasingly challenging," Simon said. "He will hit the ground running and, within a short period of time, will deliver significant opportunities with investors regionally and nationally."
Binkowski predicts transaction volume will pick up this year after a relatively quiet end to 2022, fueled in part by brokers who are paid on commission.
Those brokers will have six to nine months of deals in a high-interest rate environment to look back on by the second and third quarter of this year, Binkowski said. He anticipates this will be enough data to get the pace of dealmaking closer to normal.
Binkowski also said that debt workouts with lenders typically begin after two quarters of defaults. For those owners that began defaulting in October, when interest rates had already topped 3%, the start of Q2 2023 will also trigger the start of workouts.
"With a year of understanding where the new cost of capital is, I don't believe all these transactionally oriented compensation employees are just going to go 18 months without any compensation, they've got to get paid," Binkowski said. "It forces movement in the marketplace."
Binkowski began working at Colliers in January 2020. Prior to that, he worked at Marcus & Millichap from 2017 to 2020, CBRE from 2014 to 2017, Studley from 2011 to 2014 and HFF from 2008 to 2011, according to his LinkedIn page.
The debt broker has managed deals for a variety of property types, including office, retail, industrial and self-storage, mostly in the $1M to $40M range. He said office deals today don’t represent a ton of his work, but he has seen some movement from suburban office owners in high-performing submarkets taking out loans on their properties, as well as deals for mezzanine debt or preferred equity on struggling suburban office properties.
He has also seen plenty of activity from noninstitutional investor clients in the grocery-anchored shopping center space, where he has worked out deals with borrowers to secure a one- to two-year floating-rate loan before securing a lease extension with their grocer and locking in a 10-year permanent rate.
Those clients, which Binkowski has worked with through much of his 22-year career, are poised to “take advantage of pent-up demand,” he said.
“They're getting in and out of [the] space because they're not having to compete with the larger funds or institutions who are not going to spend a ton of time buying a $20M deal,” Binkowski said. “Those groups still have to transact.”