By Keat Foong, Executive Editor
New York—Since its capital restructuring came to an end in March 2010, Centerline Capital Group has been laying the groundwork for future expansion. Accordingly, 2012 will be a year of growth for the debt and equity financier.
“In 2012, we will take that platform that we have put in place, support it with investments in people and technology, and allow the business to grow over the next year,” remarks Robert Levy, president, Centerline COO and CFO.
Centerline is projecting a dramatic doubling of business volume in 2012 in some of its four lines of businesses—conventional multifamily lending, affordable lending, affordable equity (Low Income Housing Tax Credit (LIHTC) syndication) and asset management. (Centerline’s asset management portfolio, which places it consistently among the top five owners in the NHMC Top 50 rankings, consists of about 147,000 units of affordable housing financed by Centerline-raised funds.)
Centerline’s affordable equity syndication business is expected to double to $300 million next year in transactional volume, says Levy. And the affordable debt business is projected to also increase by two times in volume, from its $175 million level in 2011.
Meanwhile, Centerline’s conventional debt business line, which composes Fannie Mae, Freddie Mac and FHA financing, as well as some CMBS, bridge and mezzanine lending, had already tripled in transactional volume to $1.3 billion in 2011. Centerline expects this division to increase its business by about 20 percent to about $1.6 billion in 2012.
Much of Centerline’s growth is made possible by high-level hires in 2011. The diverse finance company hired a team from Grandbridge Real Estate Capital LLC to power its affordable debt financing department. This year, it has also brought on an executive from RBC Capital Markets to head and further expand its affordable equity business. And new leadership was also appointed to lead the asset management business. Levy says these new appointments bring in new energy, but must also complement the longstanding leadership in the company, in conventional debt financing and other areas.
“When we bring in new leadership, we are very focused on developing a certain culture at the company and hiring people who embrace that culture,” says Levy. This culture at Centerline can be boiled down to: transparency, communication and integration (cross selling of products), he says.
Certainly, based on its history alone, Centerline may appear to benefit from a large web of old, established, relationships. Its predecessor companies include Related Capital, in the affordable equity side. And in the early- to mid-2000s, Centerline had added agency—Fannie, Freddie, FHA—capabilities with its acquisition of PW Funding, and subsequently, Capri Capital.
Today, the New York-headquartered company has 240 employees and 10 offices throughout the country. Sixteen percent of the company’s stock is publicly held, and 39 percent closely held by a company controlled by investor Andrew Farkas. The company had an initial public offering in the late-90s that consisted of the roll ups of existing public partnerships.
Describing Centerline as a diverse finance company, Levy notes that the various business lines create synergies. For example, owners on the affordable side who also participate in conventional multifamily housing could be cross sold products from the company’s other business departments. Ultimately, the debt and equity financing company will compete on great products, great service and an entrepreneurial and creative approach, says Levy.