(To read more on the debt and equity markets, click here.)
SAN FRANCISCO-Jeffrey Eliason and John Manning, two of Buchanan Street Partners' primary originators for Northern California have left firm to become partners of Highland Realty Capital, a competing real estate finance firm formed last year by Brad Sevier and Mike Guterman, formerly Buchanan Street's primary originators for Southern California.
Although split between Highland and Buchanan Street, the new foursome is on track to close a combined $1 billion in transactions this year, taking their overall total to about $4.5 billion. Sevier says the addition instantly gives Highland Realty Capital a regional presence "that would have taken many years to build" and "lifts us into the top tier of capital advisors in California."
"We reached a point where we had a good book of business and just really wanted to break off and do our own thing and become true advocates for clients both on the debt and equity sides," says Eliason, who like Guterman and Sevier were senior vice presidents at Buchanan Street. "That's something we can definitely do better on our own rather than inside another company."
Highland Realty Capital structures and closes fixed and floating rate loans, construction loans, bridge financing, mezzanine debt and joint venture equity for all property types. The loans are funded through a variety of capital sources including local and national banks, investment fund managers, life insurance companies, pension funds, Wall Street sources and private investors.
Eliason and Manning have set shop on the 4th floor of 300 Montgomery St. At least half of the financings he and Eliason arrange include not only the sourcing traditional debt for a client but also mezzanine financing and debt or equity capital along side of it. "We've always had an expertise in structured finance," Manning says. "It's probably what we are most known for."
The foursome expects to top the $1 billion mark in 2007. "We've added analytical staff that gives us more capacity," Manning says. "We would expect [the total] to grow modestly next year."
Among Eliason and Manning's current assignments are a $26 million mixed use (office over retail) property refinance in San Francisco; a $36 million for-sale office construction loan requirement in Carlsbad, and; a $21 million office portfolio in San Francisco. Their recent closings include the $60-million construction financing for the Ocean's Edge Hotel in Monterey, the $97-million Westlake portfolio refinance and the $60-million recapitalization of the Montgomery in downtown San Francisco.
One of high-profile clients Eliason and Manning bring to the table is Emerald Fund Inc., a longtime San Francisco-based residential real estate company. Company chairman Oz Erickson says that the duo has not only arranged $100-million in project financing for the firm, but also "they have done the difficult financings for us, the financings that give most mortgage bankers pause, the seconds on speculative hotels and on condominium conversions."
Buchanan Street CEO Robert Brunswick did not return a Thursday phone call seeking comment.
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