At Sonnenblick-Goldman the proof is in the pudding

While other companies spend time talking about their accomplishments, Sonnenblick-Goldman Co. lets its record of success speak for itself.

Like peanut butter and jelly, Sonnenblick-Goldman and New York have gone hand in hand for more than a century. But while it's true that the company made its mark in the Big Apple, it certainly didn't stop there.

"As of 10 years ago, we had financed about 60% of the skyline of Manhattan," says John I. Bralower, president of Sonnenblick-Goldman. "And that market is growing again for development, and we've already been involved in certain deals."

However, Bralower says, "it's important to note that for the last six to seven years, maybe about the last 10 years, only about 25% of our business is in New York."

In fact, Sonnenblick-Goldman has been a national company for decades. For the last 20 years, it has had offices in Los Angeles, Miami and Denver. The company has had a Washington, D.C., office in conjunction with Cassidy & Pickard for the last five years. And a few weeks ago, Sonnenblick-Goldman opened a San Francisco office.

The reason that not everyone may realize that is because, while other companies spend a lot of time and money announcing their accomplishments, Sonnenblick-Goldman lets actions speak louder than words.

"As far as being a quiet company, I think we spend a lot more time getting transactions done than particularly promoting ourselves," Bralower says.

"Another thing that happens with us is a lot of our clients don't particularly want us to trumpet some of the deals that we get done," says C. Scott Robertson, the company's chief operating officer. "So there's a certain amount of discretion on our part that's just part of the nature of our client base."

Helmsley Palace in New York "In New York we just completed a $70 million financing of a very interesting entertainment-related project, but we're not allowed to disclose what it was, (which is) very frustrating for us, but those are the rules, and we're going to play by them with our customers," Bralower says.

Founded in 1893, New-York-based Sonnenblick-Goldman Co. is the country's oldest and largest private real estate investment bank. The company was originally an independent real estate broker with adjunct advisory services. In 1979 when it was purchased by Lehman Brothers Kuhn Loeb, the company began to gain corporate financing and investment banking experience. Then in June 1983, the principals of Sonnenblick-Goldman repurchased the company. It is currently owned by its senior management and some nonmanagement shareholders, including the Robert M. Bass Group, Interstate Properties and G. Soros Realty.

For the past 10 years, Sonnenblick-Goldman's annual volume has averaged 100 transactions and $2.5 billion in debt and equity transactions. The company is expecting more than $4 billion this year, according to Bralower, with 60% of that being sales and 40% being debt.

The company is currently arranging the equity partnership and acting as an adviser on the debt side for a hotel expansion project at Universal Studios in Florida involving several hotels and thousands of rooms. Other recent projects include acting as the financial adviser in the financing of the $230 million mixed-use development Brooklyn Renaissance Plaza in Brooklyn, N.Y., and, in conjunction with its Washington office, Cassidy & Pinkard/Sonnenblick-Goldman, acting as exclusive adviser in the sale of Potomac Tower in Roslyn, Va., for $62.2 million.

Hyatt Regency in Cambridge, Mass. Sonnenblick-Goldman is very active internationally as well. "Since we were part of Lehman Brothers in the early-'80s, we've had a very strong international presence from the viewpoint of bringing equity from overseas into the United States," Bralower says. Currently, the company is selling a large hotel transaction in New York to a group from Singapore that it has been working with for 15 years.

"Right now, we're working on a very prominent five-star resort project in Italy that should be closing in about a month, and that's a case where we're bringing American capital into partnership with an existing Italian company," Bralower says.

One thing that makes Sonnenblick-Goldman unique is the way it balances its business.

"Most companies focus on sales; a lot of companies focus on financing. We think there's a lot of synergy in doing both," says Paul M. Stern, managing director.

Potomac Tower in Roslyn, Va. "We're the only one that's really relatively equally divided between the financing side of the industry and the equity/sales side of the industry," Bralower says. For about the last 15 years, Sonnenblick-Goldman's business has been pretty equally divided between sales and financing, he says.

However, while it does focus on several sides of the business, Sonnenblick-Goldman doesn't stray too far off course, which means keeping a singular focus. It doesn't lend its own money, and it stays out of the deals as much as it can.

"We go by Benjamin Franklin's old adage, 'Never a borrower, a lender be,'" Bralower says.

"We believe that our role is as intermediary -- independent working for our client," Stern says. "We have really an unwavering orientation toward representing our clients and haven't gone into different businesses as market opportunities arose. Our philosophy is just to stick as an independent investment banking firm."

Brooklyn Renaissance Plazain Brooklyn, N.Y. "It's been tempting sometimes, because we've seen some great transactions," Bralower says. "There have been occasions where we have invested where a client asked us to come in, but we're very careful."

As the real estate business has changed, Sonnenblick-Goldman has adapted to meet the new demands. "We have seen a major shift toward RFPs," Bralower says. "Five or six years ago, (it was) probably 10% of what we did; now it's probably 60% of what we do."

One thing that does seem to remain constant at Sonnenblick-Goldman is its people. Having the same people in place year after year has allowed the company to build a strong reputation with clients. "Some of our older partners have been through several cycles, and it adds a certain degree of knowledge and wisdom that helps us in our perspective in looking at individual transactions and looking at the market," Bralower says.

"Some of the large Wall Street investment banks that are involved in our business really come into it and go out of it," he continues. "We basically have a cohesive group. In fact, I'd say of the top executives, most of them have been here over 10 years."

"We recently were out on a proposal, and we were talking about transactions, and several transactions that we did in the middle- to late-'80s came up," Robertson says. "But it was very funny, because the client said that one of the other contestants in that particular beauty contest had come in and said, 'Yeah, well you know, our company did that, and we did this.' And they asked them, 'Well, how many of the guys that did that are still with you?' and the answer was none. They're gone. And that was only a matter of a few years."

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