Joseph Landsberg is the Director of Capital Advisory at Franklin Street, a commercial real estate, insurance, leasing and management firm in Fort Lauderdale, Fl. Originally from London, he has been working in CRE since 2015. He worked for Europe’s largest residential real estate firm, Foxtons, working on the broker side. He joined CBRE, serving as Vice President for the Boca Raton Debt & Structured Finance Team, and previously held roles at Marcus & Millichap Capital Corporation as an Associate Director and at Meridian Capital as a Vice President of Origination.
Landsberg joined Franklin Street shortly after the pandemic.
“It was an organic and pleasant transition,” he told Leverage.com. “I’m disappointed I didn’t find Franklin Street sooner. Everyone here is young, engaged and collaborative, a breath of fresh air.”
Landsberg is responsible for loan origination and capital placement at Franklin Street. He also works closely with underwriters and the investment sales team at the firm, helping them execute the best loans for various asset classes.
Today Landsberg focuses on the tri-state county area but specializes in south Florida, when it comes to lending, debt financing and insurance. Condo insurance companies have fled Florida since last summer, when Champlain Towers South collapsed, killing 98 people (that, or they’ve jacked up their prices anywhere between 30% to 50% according to the Miami Herald). Landsberg gives us a snapshot of what’s going on in the south Florida market, what he’s hopeful of and what makes Franklin Street stand out from the competition.
On Lending With Condominiums, Post-Champlain Towers South Collapse
“The Champlain Towers South condo collapse, it’s almost a year since it happened in Surfside, Miami [it happened on June 24, 2021]. There have been changes in underwriting from lenders. For Freddie Mac, the largest government-sponsored entity that issues debt, their lending guidelines did change. It got stricter specifically with condos. They’ll be looking for inadequate reserve funding, budget deficits and special assessments. Any association records that document unsafe conditions. They’re being strict about making borrowers put aside money if they deem it unsafe.
Part of the issue with the Champlain Towers is that there was an HOA [Homeowners Association], but they couldn’t agree on stuff, the politics prohibited moving fast enough to make changes and improve the towers. Lenders are looking at that structure and how much they’re lending, to make sure the collateral they’re lending is safe for tenants. It’s true for local and regional lenders.”
What Makes Franklin Street Stand Out in Florida?
“What’s unique is that a lot of firms have debt brokerage and investment sales, but none of them have a commercial insurance division. We’re the only one as a full-service commercial real estate company.
Our insurance division is our largest division. It’s our most prolific division. In this market, when you’re talking to real estate owners, to be able to source insurance from people who get it, is hard. Franklin Street has some exclusive master binders across the country, for different asset types, to have a client on the investment sales side, we can finance the debt and we can also lay out the insurance for them in a timely manner. It’s a slam dunk for the client and Franklin Street.”
How Streamlined Transactions Work
“We just closed on a West Palm Beach portfolio, two 30-unit apartment buildings in south Florida. Our investment sales team represented the seller, I did the debt, and our insurance team did the insurance.
The client couldn’t have been happier. In times like these when there’s a lot of uncertainty, it’s actually really nice. It’s a culture-rich company. They are big enough to have the corporate structure and resources like any big office would have, but small enough to have that family office feel. It’s about being reactive to the market. I’ve been here for around two years.”
On ‘Getting’ Insurance
“In Florida, all the carriers have either left the state or gone bankrupt. Only very few, or maybe one or two wiling to insure Florida-based properties. The availability of insurance is very difficult.
It means not every insurance provider has full access to the insurance market. Not every insurance broker understands the commercial requirements for underwriting properties and providing effective coverage. Instead of giving a client any old quote for deductive windstorm, it would be giving them the lesser-of $20,000 or 5% of coverage.
When a hurricane comes in Florida, the building is not blown away. It’s made of concrete. Cinder block. The roof and windows are going to be damaged. As the rising cost of insurance incurs, property owners need to be strategic about how much they’re negotiating in their deductibles for windstorm and that’s affecting the net operating income of properties being looked at for purchase, because those properties have gone up exponentially. We were underwriting pretty much double. It’s insane.”
Keeping Buyers Informed and Prepared for the Unexpected
“Let’s say I’m a seller and I’m selling a 20-unit building. I have insurance on my building and over the past year, I have paid X amount of premium. When a buyer wants to come and buy that property, they can’t just assume that insurance because they’re a new entity.
The risk is partly based on the borrower itself, that relationship. When they come in, they might be paying $900 a door but with a new policy it could be $1,500 a door. They might say “I wasn’t expecting that.” Unless borrowers are really tuned in with what’s going on, on the insurance side, they’re going to be at a massive disadvantage.
What we do differently at Franklin Street is whenever we have an offering, we have the investment sales memorandum. In addition to putting a pre-underwritten debt finance package so they can see exactly what the rate is. The clients are more informed. That means they’re better prepared. Buyers aren’t dropping out as much. It’s not “go figure out insurance on your own,” it’s “hey, let me introduce you to Evan Seacat, he’s three doors down from me at my office and specializes in commercial insurance.”