Meridian's Crown Prince Abdicates & Top Broker Ranking

Meridian’s Crown Prince Abdicates

In most companies of a certain size, there is the founder, and then there is the guy: the dynamic, wicked smaaht hotshot who everyone knows will be running things someday. The founder, the one with the capital and the heavy-hitting relationships, sees something in the guy that will propel the firm to new heights, and over the years endows him with more and more power, shows him how the world really works. The guy, in turn, rewards the founder by throwing his entire being into the job: his identity is subsumed into the firm’s.

At Meridian Capital Group, Yoni Goodman was the guy. Since joining from Goldman Sachs in ‘14, he was anointed, appearing side-by-side w/ Ralph Herzka in the press releases and the power rankings. Whenever Herzka decided to step down, went the thinking, it would be Goodman who would take the top job.

Then came the mortgage fraud scandal, and the world changed.

Meridian (cont.)

In November, Meridian was placed under investigation by Freddie over an allegedly shady deal. Effectively blacklisted by the agency that accounted for billions of dollars of its deals, Meridian began losing talent. Fannie soon followed suit, declaring the debt powerhouse brokera non grata. More stars left, including rainmaker Shaya Ackerman. To appease regulators and show that it was serious about cleaning house, Herzka brought on Brian Brooks, a former acting comptroller of the currency 💵 , as chairman & CEO, while Herzka took on a new perch: senior chairman 🤷 
 
Brooks got to work. He promised to clean up the cowboy culture at the firm, hired a chief risk officer, and went about setting new standards for compliance and dealmaking. “We want our brokers to be scrappy and hungry, but we will be checking,” he said at the time. With a new sheriff in town, speculation started flying about Goodman’s future in this new power dynamic. As I wrote in The Promote June 10, “princes expect to someday be king 👑”

Goodman has now put an end to the chatter. He’s officially out of Meridian later this week, telling TRD in a fairly brusque interview that “people don’t stay at companies forever.” He added he’s leaving for “other opportunities,” but declined to say what they were.

Where might he end up? As long as he can step out from under the cloud of his soon-to-be former firm, a guy like him – a hybrid of rainmaker/company builder – has options, particularly now: lenders are putting more & more resources into building out mortgage brokerage capabilities in-house, and attracting talent that used to ply their trade at brokerages: Ackerman, for example, went to Greystone in May; Meridian alums Ralph Gelley and Israel Leiner went to bridge lender Sheridan Capital and Walker & Dunlop respectively; and David Singer just left his own brokerage shop to join Northmarq. The talent wars that used to play out at brokerages are still happening, but the battlefield has shifted to the lenders.

As for Meridian: Brooks’ efforts to make the brokerage kosher again might be part of a longer game to roll Meridian into NewPoint, the Meridian/Barings multifamily lending JV that was launched in ‘21 but that distanced itself from Meridian in the wake of the Freddie probe. NewPoint’s CEO, David Brickman, formerly held the title of “exec chairman” at Meridian 👀   

Office Rankings: Newmark Tops, CBRE Sputters

Selling office buildings, once the highest calling of a CRE broker, continues to lose its luster: deals for properties that sold for at least $25M were down in the first half of ‘24 to $12.6B, from $16B during the same period last year, according to a new REA tally of Green Street (which owns the publication) data. Total deal volume is in the same sorry state as it was just after the GFC.

Most brokerages took a commensurate walloping, but Newmark made serious hay: the firm’s deal volume jumped by 27% YoY to $2.7B, per Green Street, sealing the top spot. The much larger JLL, w/ $1.94B in deals and just a slight decline in YoY activity, came second, and Eastdil took 3rd place w/ $1.45B. CBRE and Cushman both failed to crack the $1B threshold and both saw their deal volumes fall by more than half – expect some soul-searching within the halls.

A fascinating nugget from the Green Street crunch: nearly 1/3 of the deal volume – just over $4B – was done direct - i.e. had no broker at all. 👀 

Secular Tailwinds Ain’t Cheap

Blackstone is all-in on data centers, as it'll tell you at any available opportunity. The firm’s QTS’ division wants to be the most dominant player in the space, and the numbers and projections keep getting more immense: during Blackstone’s earnings call last week, Schwarzman threw out a $55B figure for current and in-pipeline holdings in the asset class. The appetite is such that there’s gobs of money to be made for scrappier players who can pull off roll-ups for Blackstone.

Just east of Richmond, VA’s international airport, Mark Hourigan has pulled off one such coup: His eponymous firm bought 400 acres in Varina, spearheaded a crucial rezoning that would allow for data center usage, and then closed on the parcel for $58M on July 1. The very same day, however, it closed on the sale of the parcel to QTS, which owns 220 adjacent acres, per Richmond BizSense. QTS paid $119M for the privilege, a 105% return for Hourigan.

In his statement explaining the transaction, Hourigan channeled Blackstonespeak perfectly: “Development plans change over time as activity and events happen,” he said. 👏👏👏 

Quickies

• 🎥 How SASBs have lost their rizz 😵 

• Jared Kushner’s $150M stake in Brad Jacobs’ shellco now worth $2.2B - in 2 days 🐚 

• CoStar cuts its revenue forecast

• Heavy, California: Plans for Silicon Valley megacity shelved

• Trump on considering Jamie for Treasury Sec: I never said that 🤷 

• Capital punishment: DC office market in the dumps

• Ken Griffin’s Citadel files first plans for Miami HQ project

• “Wolf of Airbnb” gets 4Y in prison for sublet scheme 🐺 🐑

• Related’s Hudson Yards casino gets cold shoulder from pols 🃏 

• Curious who else is bingeing The Promote? 😍 

So Bullish it Hurts: Reinsdorf’s $7B Chicago bet

Small moves are for jagoffs: the Reinsdorf and Wirtz families, among the most storied names in Chicago business, are looking to kick off a $7B megaproject around their jointly owned United Center. Dubbed the 1901 Project, the development would aim to build up to 5K units (20% affordable) and a 6,000-seat music hall 🎼 to an area that’s currently an ode to parking lots, per the Chicago Tribune.

Chicago is the stage for several megaprojects (Sterling Bay, Related Midwest, Farpoint among the developers) in various states of undress, but United Center CEO Terry Savarise told the paper that his team is good to go. The project will primarily be privately funded, he said, but may explore using tax-increment financing.

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