(To read more on the debt and equity markets, click here.)
NEW YORK CITY-Sonnenblick Goldman has formed a wholly owned subsidiary, SG Real Estate Securities LLC, to deal with issues related to securities. The firm has been formally accepted by the National Associations of Securities Dealers as a registered broker dealer. Douglas Hercher serves as president of SG Real Estate Securities and a managing director and principal of Sonnenblick Goldman.
"Our client base is thinking about ways to expand their businesses, raise capital more efficiently, and just generally take full advantage of the opportunities they see," Hercher explains. "In order to meet those demands, it was critical that we create a registered broker dealer."
The firm desired to extend its existing real estate advisory business by providing placement agent services for investment funds as well as becoming more involved in equity and debt products structured as securities. In fact, the company started laying the groundwork for this new venture about 18 months ago with the hiring of Dan MacDonnell. The real estate veteran had worked in the real estate investment banking groups at Lehman Brothers, Bank of America Securities and Montgomery Securities. He points out that senior professionals and partners in Sonnenblick Goldman have years of Wall Street experience. "The creation of SG Real Estate Securities will allow us to take advantage of that experience."
Steven Kohn, president of Sonnenblick Goldman, says the new subsidiary will allow the firm to offer a broader range of services. "Our transaction business has grown enormously in the last five years, both in terms of the volume and variety of business we are executing." In 2005 alone, the firm financed transactions in excess of $6 billion, with an expected increase for 2006.
In one recent transaction, Sonnenblick Goldman, serving as exclusive advisor to a joint venture comprised of affiliates of Silverstein Properties and California State Teachers' Retirement System arranged a $285-million fixed-rate loan secured by a leasehold interest in 120 Broadway. Morgan Stanley Mortgage Capital Inc. provided the financing. Arthur Sonnenblick, senior managing director, tells GlobeSt.com that the owners decided to finance the building because the market was right. Interest rates could increase, so the owners wanted to lock into the current rates before an increase. They plan to use the proceeds for capital improvements to the landmark and the installation of tenants.
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