What capital providers want commercial brokers to understand about deal preparation
According to one capital provider, one of the biggest differences between brokers who are winning in this market and the ones who might be struggling comes down to thorough preparation.
Seth Fisher (pictured top), principal and head of special situations at Prime Finance, said the most effective brokers he works with have typically done the hard interrogation before a deal ever reaches a capital provider.
“By and large, brokers are doing a great job of looking ahead, analyzing their own transactions, asking the tough questions of sponsors and transactions, learning what capital providers are going to be asking, and sort of anticipating some of those issues and poking holes before it goes out to the capital community,” Fisher told Mortgage Professional America. “I do find that some of the more effective brokers have already asked a lot of those questions.”
What has changed for brokers
The challenge for brokers is that the information they have traditionally relied on is less reliable than it used to be, Fisher said. Comparable transactions are thinner, pricing has shifted, and the solutions that capital structures need are increasingly customized.
“I feel for them in some cases because they traffic in information and data and a lot of times a big part of that is comparable transactions,” he said. “And a lot of that stuff has been turned inside out and upside down over the last few years. So I think it’s harder for brokers in the role that they play sometimes to guide counterparties toward what’s market when there isn’t a market sometimes, or the market is so transitional.”
