Sam Suzuki Talks Launch of Sperry RE Capital
By Andrew Coen: Sperry Commercial Global Affiliates (SperryCGA) launched a new capital markets business in December 2020 called Sperry RE Capital. It was originally conceived as a major East Coast presence, particularly for New York City, but has recently expanded its focus nationally.
Sam Suzuki joined Sperry RE Capital in January after nearly 28 years of running Suzuki Capital in Manhattan. He had approached SperryCGA founder Rand Sperry with the idea of joining forces to target transactions ranging from $5 million to $500 million. It turned out that Suzuki picked a great moment to pitch the idea.
“We were looking for a strong presence on the East Coast and up in the Northeast, and as we grow our domestic transaction affiliate network, we’re adding service lines that are complementary to support the growth of our company and the business our affiliates do,” said Mark Hinkins, president of Irvine, Calif.-based SperryCGA, on the impetus behind adding a capital markets group in New York. “This is a very strategic plan that we put together to work to create Sperry RE Capital and also part of our global expansion.”
Suzuki spoke with Commercial Observer about the importance of Sperry RE Capital’s Manhattan headquarters, markets that it’s currently targeting for deals, and his outlook for various commercial real estate sectors for the next six months.
Commercial Observer: Talk us through what sparked the idea for this business.
Sam Suzuki: We’ve been in the works in this for about a year and a half. Originally, my company was Suzuki Capital. We’ve been around for a long time, but we were local. My partner and I decided that we would like to be a national company. So, we reached out to Rand Sperry, and we’re putting together a pitch book and saying that we would like to take Suzuki Capital to a national level, and that’s where the idea came from to join Sperry and be a national capital markets group.
With Sperry Commercial Global Affiliates being based in California, why was the decision made to base this new capital markets business in Manhattan?
The major markets are New York and London, so [Rand Sperry] said we’re not a capital markets group unless we have a New York City office. That was one of Rand’s concerns, that Sperry would be taken seriously. The franchise part of the business of New York City was four years in the making. Sperry believes in quality and they just don’t jump in automatically.
How do you plan to differentiate yourself from other commercial real estate lenders?
Even though we’re kind of a startup, we’re also not. We’re already well-known in the capital markets business, and we are no strangers to a lot of lenders and private equity firms. They already know who we are, but we’re only known as the local New York City firm. We’re now going to try to rebrand ourselves as a national company, not just a New York City capital markets group.
What does a typical deal look like, and which areas of the U.S. are you targeting?
I thought I was going to be looking at really small deals, but it turned out — because of the quality of the agents of Sperry, nationwide — there’s been an average deal size of around $25 million to $30 million. And we’ve got some New York City deals, which — if we close on them — are going to be big press, because they’re all over $200 million.
Most of the deals are in the $25 million range and in Colorado, Atlanta, Texas, all over the United States. We have about 60 offices, so my emails blow up with all the inquiries. I don’t even have to go outside of Sperry; I just have to stay within the Sperry family to get deals, but, of course, we don’t want just Sperry deals — we would like all of the deals. So, that’s what we’re trying to target.
Where do you see the most opportunity as we approach, hopefully, the latter stages of the pandemic?
I always get in trouble with that question [laughs]. I said the hospitality market was going to go down and I got all these complaints from hotel guys. I said, “I’m telling you the truth,” and what happened? The hotel sector went down. I said the retail market was going to go down. I got all these real estate brokers yelling at me, and what happened? The retail market went down.
For my projections in the next six months, I believe the [commercial mortgage-backed securities] business is going to reopen for hospitality. I think the hot sector is going to be hospitality. Multifamily is a conservative, reliable business, and we’re probably going to see more ground-up construction.
Logistics is a hot, hot market, because of eBay, FedEx, Amazon. It’s a hot market, but you’re going to see some consolidation going on, and you’re going to see that the consolidations are going to be with the cold market storage sector — so for Blue Aprons, the Whole Foods, the Fresh Direct. And, you’re going to see that come closer and closer into urban areas within a 30- to 45-minute drive.
If they [legalize cannabis at the federal level], you’re going to see a big jump in the cannabis side of capital markets. Right now, there’s only a few players in the cannabis market, because a lot of guys don’t want to touch it because they can’t. We’re all waiting and we know that’s going to be a big business.