Michael (Dovi) Weiser is the only person I’ve ever interviewed who, in the same conversation, delivered stone-cold business advice and teared up when speaking about his married children. But that combination of vision and heart are exactly what have made him a success in business.
On the stage of real estate, Michael Weiser has played virtually every role in his almost 30-year career. He began as a commercial mortgage banker for GFI Capital before stepping in to manage the company’s national acquisitions and dispositions–handling the purchase and disposition of over 35,000 multi-family units across the country. In the years since then, he has managed billions of dollars in real estate transactions, and now acts as President of GFI Realty Services, a standalone Commercial Real Estate firm based in Manhattan which focuses on investment sales, debt and equity. Over the years the firm has been honored with numerous CoStar Power Broker awards. Basically–if you want to invest or sell in the five boroughs and in real estate hotspots across the country, Weiser is the man to ask about it.
Dovi took some time out of his jam-packed schedule to tell me about his full-bodied career trajectory and give over some plum business—and life–lessons. Enjoy!
I was born and raised in Flatbush and still live two blocks from where I grew up. My mother was an early childhood teacher turned residential real estate broker, and my father is in Chinuch and Kiruv. I’ve always had a natural business streak in me, I went to Brooklyn College and got my degree in accounting. At the time, accounting seemed like the right foundation for understanding business. Economics is to macro; accounting is more micro.
“I got my degree in accounting and got married around the same time in 1996. I interviewed at banks and a few other companies, but everything felt like I’d be put in a box. My father-in-law, Isaac Gross (known in the industry as Allen Gross), was an attorney who founded GFI in the early ‘80s (though back then, it was called Gelt Funding). At the time, he was starting a new venture and he offered me to get involved. That’s how I ended up working in equipment financing, making loans to limited-service hotels. These were small, older hotels, like a Holiday Inn or a Best Western, that stood for reliability. To keep their “flag” , owners had to update their properties to meet brand standards. Many of these owners were doing well, but when they were required to make big upgrades, like changing to electronic card locks, they didn’t have the cash to do it in one shot. We provided financing for these property improvement plans (PIPs), and that’s how I got involved in the business.
“As I spoke with these property owners across the country, I realized that they were getting their mortgages from local banks at high rates, with full personal guarantees. At the same time, the CMBS (Commercial Mortgage-Backed Securities) world was really starting to take off, and GFI had relationships with a few investment banks. We would originate and underwrite the loans, but the investment banks would fund the loans under our name, although they owned them. I’d be talking to these property owners in the Midwest and secondary markets and say, ‘Look, I can do better for you. You don’t have to sign a personal guarantee, and we can give you more money.’ And they would be interested. So, I started doing that, and eventually, I was working with GFI’s Commercial Real Estate team, full time. I left the equipment financing behind because this was a bigger opportunity.
“In 2001, GFI owned a lot of real estate in New York, New Jersey, and Pennsylvania, but my father-in-law wanted to expand further. I was brought into that process, along with a few others, and we started working on these deals. We bought about 2,500 units in Houston, Texas, in one transaction, and after that, I was sort of running acquisitions for GFI on the multifamily side. Between 2001 and 2008, we purchased about 30,000 apartments across seven or eight states. Along the way, we assembled a full team of people.
“I visited most of the properties before we bought them. I arranged the loans on practically all of them, handled capitalization with private equity firms for a good portion of the portfolio, and dealt with some of the private investors. I also worked with the banks and lawyers, negotiating the joint venture agreements, loan docs and overseeing various aspects of the deals. It was all interconnected—I wore multiple hats.
“Then, in 2008, the world changed. Like everyone else, we had to deal with the financial crisis. You put out fires, kick cans down the road, and do whatever you can to survive and fight another day. The key in this business is to do more good deals than bad ones. When people tell me they’ve never done a bad deal, they’re either new to the business or they’re lying. Nobody’s that lucky. You can do all the due diligence in the world, but you can’t control the market.
Up until 2008/2009, the 30,000 units, we owned were all Class B and C. After the financial crisis, we started dipping our toes back into the market by buying non-performing loans and unfinished condo projects in New York. We foreclosed on those properties, finished the construction, and then sold them. Our experience during the downturn showed that with B and C properties, if rents are around $500-$800 and tenants lose their jobs, they’re gone. If you drop rents from $800 to $600 to try and retain tenants, that’s a 25% decrease. You can’t make the numbers work. In these kinds of properties, your profit is in the last few percentage points of occupancy.
“So, we made a decision: we didn’t want to buy B and C properties anymore. We wanted to buy better-quality, Class A or newer properties. The thinking was that these properties wouldn’t have the same functional or architectural obsolescence, and the tenant profile would be more stable. If things went bad again, we could drop rents and stay full, even if we were just breaking even. We wouldn’t make money, but we’d hold onto the property and ride it out. So, we started buying again—thousands of units in Atlanta and Kansas City. Over the next few years, we did quite a few deals in Kansas City, even developing a few properties from the ground up.
“Throughout this time, I was still working as a commissioned salesperson at GFI, doing deals for my own clients while also handling in-house deals and wearing multiple hats. Around that time, the person running the commercial real estate group left. As I had been working with and a part of the team for over 15 years and knew most of the people—I stepped in to run the group.
“As the company grew, it expanded into development, and the hospitality business. Although there were dedicated individuals running those deals, I learned a tremendous amount about those businesses by being part of the financing and capitalization side of things. Hotels offered much higher returns than multifamily properties, although they came with higher risk. As a result, the company was allocateing more capital towards hotels then to multifamily. In an effort to source cheaper capital, in 2014, I spearheaded GFI ‘s first bond offering on the Israeli stock exchange. We weren’t the first to do this, but we were one of the early ones, and though I’m no longer involved, the subsequent offerings continue to fuel GFI Capital’s growth.
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