They Know Money

Falling interest rates, an influx of capital and a strong business outlook for Arizona make for a competitive landscape in the mortgage banking world. We hear from Tim Storey, Gantry, Ann McCartney, CBRE, and Nick Barbaria, Arriba Capital, on their predictions, challenges and creative solutions in the commercial mortgage industry.

Tim Storey

Principal, Gantry

Tim Storey

Founded in 1991, Gantry (formerly Newmark Realty Capital) is the nation’s largest independent mortgage banking enterprise. In 2019, across seven offices, the firm facilitated over $3.1 billion in mortgage transactions in market segments: office, multifamily, industrial, mixed-use and retail. In conducting the rebranding effort, “the name change turned out to be an opportunity for us to refocus on our core values and positioning in the commercial mortgage banking industry,” says Tim Storey, principal in Gantry’s Phoenix location. “After almost 30 years in operation, we were able to explore not only where we have been, but more importantly, where we are going in this quickly changing environment.” mortgage activity. “The rate environment has contributed to the cap rate compression we have seen in recent years, helping to create value for property owners,” he says. “Owners in turn have the ability to refinance and take some equity off the table and/or sell their properties. In either case, the mortgage banking community has benefited greatly from these opportunities.” From the vantage point of competition, “we have to work very hard day in and day out to distinguish ourselves and our abilities, creating value in every transaction that we are fortunate enough to participate,” he says.

Storey opened the Phoenix office in 2004, and over the last 15 years has personally amassed over $2 billion in originations. “My specialty is working with a variety of insurance companies, banks, CMBS and other financial institutions in order to obtain optimal financing solutions for clients,” he says. “I am blessed to have two incredible business partners in Arizona (Patrick Barkley and Adam Parker) as well as the support and ability to collaborate within our office ecosystem.”

A Greater Phoenix native, Storey graduated from the University of Arizona and entered the commercial real estate space in 1991 at CBRE in the mortgage banking division. “The industry was always interesting to me,” he says. “I had a number of part-time jobs in the industry throughout my high school and college years.”

As for the Arizona outlook, Storey assesses a robust growth cycle in the coming years. “Individuals and businesses continue to move to Arizona in record numbers for a variety of reasons – climate, affordability and a pro-business environment,” he says. “The state is a great place to live and work, and it has proven to be a great place to invest in commercial real estate time and again.”

Storey’s business success is matched by a prosperous home life. “Spending time with family is very important to me,” he says. “I have been blessed in marriage and have two amazing daughters. At this point in my life, I guess I am most passionate about those things that revolve around family.”

13 As Gantry’s business continues to expand, Storey and the Phoenix office will be leading the charge. “In order to adapt, our firm is constantly evaluating the way we conduct business. We are challenged to consider changing the way we have done business in the past,” he says.

Ann McCartney

Vice President, Debt & Structured Finance, CBRE

Ann McCartney

For an airplane to successfully take off, the pilot must reach VR, the rotation speed at which the captain pulls back on the yoke to enable the plane to become airborne. A pilot of 20 years, Ann McCartney, vice president, Capital Markets at CBRE, achieved liftoff in the commercial real estate space nearly three decades ago, and her distinguished record of accomplishments has her soaring above the competition. “There is nothing quite like the feeling of lifting off the ground and being responsible to find a small runway several hundred miles or several states away and landing as you had planned,” she says.

An industry veteran of the debt and structured finance sector, McCartney has finalized over $2 billion in transactions during her career. “I am fortunate to be on a team of six people, led by Rocco Mandala,” she says. “Everyone on the team works super hard, so the results are what set our team apart from competitors.”

14 Earning two degrees − a Bachelor of Science, Real Estate from Arizona State University and an MBA from Thunderbird School of Global Management − McCartney entered the industry through a research position at Grubb & Ellis. Subsequently, she held executive level positions at several prominent financial firms and brokerages before joining CBRE in 2018. “The company offers its debt and structured finance personnel a platform that is unsurpassed in the industry,” she says. Working across all market segments, McCartney and team source lenders for clientele, and screen potential borrowers for mortgage banking entities. “An ongoing challenge in our business is to convince the client that we can add value to a transaction, especially when they have only borrowed from the same lender for years and are used to dealing with them on a direct basis,” she says.

McCartney sees solid metro Phoenix fundamentals as a positive driver of growth in the CRE space. “I am optimistic about the decade ahead given where we’re at right now: low interest rates for the foreseeable future, healthy national economy, low unemployment rate and positive job and population growth in Arizona.”

As for compelling segments, she believes multifamily will continue to outperform. “Multifamily growth in institutional real estate has been the most significant change I have seen,” she says. “This is tracked through the NCREIF Property Index, which totals the market value of all U.S. commercial real estate - $630 billion as of Quarter 1, 2019. For comparison, in 1983, the multifamily sector was just 2.1% of this total compared to 25.7% in 2019.”

In pilot terms, McCartney is nowhere near the maximum speed designated as VNE. “I feel like I have a great deal of runway left in my career and am looking forward to ongoing success,” she says.

Nick Barbaria

President, Arriba Capital

Nick Barbaria

In 2012, Nick Barbaria flexed his entrepreneurial muscles and started the commercial real estate finance company Arriba Capital. Eight years strong, the company is certainly living up to its name: upward, higher. “After learning the ropes, I decided to step out on my own,” says Barbaria, the company’s president. “We have a talented team of professionals who are skilled at solving client financing challenges through a combination of creative solutions, broad access to capital and unrivaled execution.”

Arriba Capital is a fully integrated, commercial real estate finance and investment company, which provides asset management, investment banking, capital markets services and advisory solutions. While headquartered in Scottsdale, Arriba operates across the country. “I like to think we are more well-rounded than most local shops because we work nationwide - only about 10% of our overall volume every year comes from Arizona,” he says. “Working nationwide opens our eyes to different techniques and structures that developers are using in markets outside of Arizona.”

A Valley native, Barbaria earned a business finance degree from Arizona State University, and later a Master of Business Administration degree from Thunderbird School of Global Management. “In my senior year of undergrad, I interned at a commercial mortgage brokerage and then eventually got a job there out of college,” he says. “In three years, I worked my way up to be an account executive.”

Armed with confidence, he launched Arriba with a strategy of providing customers a tailored, client-centric, value-add financing expertise that larger brokerages could not offer in the marketplace. “An important element of our success is technology. We have invested heavily to try and stay ahead of the curve.”

Assessing the current commercial real estate sphere, Barbaria anticipates an ongoing cycle uptrend across segments. “Borrowers are taking advantage of the low rate environment, so there has been increased activity,” he says.

In this context, Barbaria is positioning Arriba to outperform the competition by targeting key strength asset classes. “We have been very successful in building out our debt platform for hotel investors, with a specific focus on limited-service, mid-market transactions,” he says. “We have closed over $500 million in hotel finance in the past four years and have a larger pipeline in 2020 than we have seen historically. Based on current supply and demand in the market, we are expecting expansion in the space over the next two to five years.”

With solid economic fundamentals in place, Barbaria and team are looking to gain market share in the next several years. “The Arriba team is excited for our growth prospects, we look forward to providing our robust suite of offerings to clients nationwide,” he says.