Defying pricing standards operative throughout the commercial real estate finance sector for decades, two of the top brokers at Eastern Union — one of the country’s largest commercial real estate finance firms — will lead a new, multi-family financing unit that charges a quarter-point fee for refinancing multifamily properties backed by Fannie Mae or Freddie Mac, transactions known as “agency refinancings.”
The newly launched “Multi-Family Group” — the sole unit within the firm that is offering the new pricing — arises from the merger of two company teams managed by Marc Tropp, the company’s number-one broker in the Mid-Atlantic regional market for the last 15 years, and by Michael Muller, the firm’s leading broker in the New York City market over the past 19 years.
In addition to reduced pricing for agency refinancings, the Multi-Family Group has set a half-point fee for agency acquisitions. The two discounts also apply to CMBS multi-family transactions. By contrast, as a general industry practice, commercial brokerages nationwide charge a one-point fee for mortgages that are placed with Fannie Mae and Freddie Mac.
According to the Mortgage Bankers Association’s 2019 origination rankings, Eastern Union ranks second in the country as an intermediary for loans backed by either Fannie Mae or Freddie Mac.
Mr. Tropp and Mr. Muller are recognized as prolific deal-closers. They together arrange several hundred deals yearly across almost every property type and virtually every deal structure in markets nationwide.
“The value of a broker is stronger than ever as we strive to overcome the challenges posed by this pandemic,” said Brooklyn-based Michael Muller. “We can structure, package, create the competition, and work through every step of the process.
“With conventional loans, brokers consistently need to find new lenders, create a market, and deal with the fact that all lenders have their own unique process,” he said. “This merger is significantly propelled by the fact that agency loans — and specifically agency refinancings — entail fewer issues and more automation. They can be streamlined.”
“Our goal is to redefine the real estate industry one deal at a time,” said Marc Tropp, who is based in the Washington, DC region. “By combining our two teams’ strengths and knowledge of the markets, and by pooling our assets, we aim to capture market share and increase our annual production volume.
“Lenders and investors will benefit by having their agency transactions executed by some of the most-talented brokers in the industry,” he said. “And as a major, added plus, the deals will be delivered at fees priced well below standard market levels.”
“Marc Tropp and Michael Muller are unsurpassed in delivering the high-end structure and value-add that clients expect from a first-class broker,” said Ira Zlotowitz, Eastern Union founder and president. “They’re highly proficient at complex, highly structured deals. By conjoining their two high-performing teams, Marc and Michael have forged a strategic partnership that is resetting established market pricing and disrupting the status quo.”
Only Eastern Union brokers who are part of Mr. Muller and Mr. Tropp’s Multi-Family Group will be offering the reduced fee. To be eligible for the lower rate, transactions must meet or exceed a $15,000-fee threshold.