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Ted Martell

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68
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2023-11-09
most recent
2023-11-09
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1
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  1. “We raised our first fund from friends and family, and we're extremely successful with that first fund. That investor group introduced us to other investors, and we kept going down this road over the years where presently investing out of our sixth private equity style fund, which has about $317 million in commitments, and 80% of that capital is institutional limited partners, foundations, endowments, and pensions. In the meantime, we've really doubled down on data and building out systems in order to achieve our goals.”

    2023-11-09 · Capital Allocators · Ted Martell – Empty Rooms: Commercial Real Estate Non-Performing Loans in NYC at Maverick Real Estate (EP.349) · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “Dave and I got to work making phone calls. We called the lenders on which these mechanics liens were recorded, and we said, hey, we noticed that there's a mechanics lien recorded on your property in which you've lent money. We're interested in buying the loan. Many times they did not know about it. Sometimes they said, don't worry about it. We know all about it. It's not a problem. But hey, take a look at this other opportunity I have. And we learned how to systematically call people to do outreach to find these opportunities. We recorded our progress. We followed up, and we were able to generate a real stream of deal flow using this data. Around the same time, we started raising discretionary capital. We lost a lot of transactions along the way because we didn't have money. Buying nonperforming loans requires you to have capital and the ability to move quickly. These transactions can close in as quickly as five days. But lenders want certainty of closure, and they want to know that you're going to do what you say you're going to do. We needed cap.”

    2023-11-09 · Capital Allocators · Ted Martell – Empty Rooms: Commercial Real Estate Non-Performing Loans in NYC at Maverick Real Estate (EP.349) · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “Over $100,000. And then we collated them, scanned them, we sent them to an outsourcing firm in India who put them all into a spreadsheet for us, and we had our first data-driven sourcing spreadsheet.”

    2023-11-09 · Capital Allocators · Ted Martell – Empty Rooms: Commercial Real Estate Non-Performing Loans in NYC at Maverick Real Estate (EP.349) · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “We closed it, that first transaction paid off in the first three months. We made about a $1.3 multiple, so we were into the carried interest. Dave and I made some money. We took a deep breath and we said, now what? On the second transaction that we did, we bought a loan secured by a hotel under construction on the lower east side of Manhattan. There was a mechanics lien sandwiched in the middle of the capital stack. We ended up negotiating with the construction company that had the mechanics lien and bought it for fifty cents on a dollar. And the light bulbs went on right there. And we said, how do we find a record of every mechanics lien on every property in New York City? And we quickly found out where they were recorded. You had to go to the county clerk's office. 60 Center Street in downtown underneath the courts is the clerk's office. And down there was a green screen computer, and you could print out mechanics liens one by one. And we printed out every mechanics liens.”

    2023-11-09 · Capital Allocators · Ted Martell – Empty Rooms: Commercial Real Estate Non-Performing Loans in NYC at Maverick Real Estate (EP.349) · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “Our first break was a call to a banker who invited us into his office, and he saw us an industrious entrepreneurial guise, and as we were leaving the meeting, we had a nice discussion with him for about an hour, he threw an appraisal at us literally threw it to me and I caught it, and said, Tell me what you think about this, and we went back to our office, fast and furiously trying to figure out what the situation was, and it was a loan secured by almost a full city block of land in a good area of Williamsburg, Brooklyn. The default rate of interest on the loan was twenty four percent. It had been in default for two years, and we perceived the loan to value on the property to be about forty percent. So very well secured loan with lots of accrued default interest. And we immediately called some of the private equity managers that we had been talking to and said, hey, we've got this situation. We want to take a look at it. What do you guys think? And we got to work at underwriting and putting an investment memo together for it.”

    2023-11-09 · Capital Allocators · Ted Martell – Empty Rooms: Commercial Real Estate Non-Performing Loans in NYC at Maverick Real Estate (EP.349) · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “We found some office space, it was one room, and we started going there every day of the week. We felt that it was important to be together. There was a lot of broad confusion still, two years into the global financial crisis as to what real estate was worth, where the opportunity was. After a few months, we settled on nonperforming loans. We knew that there were a bunch of broken projects all over New York City, and we started trying to call lenders to see if we could buy the debt. And we were a fundless sponsor. And we really started focusing on data. Dave's experience before working at East Ill secured was at Bloomberg, and he understood the power of data, and we both understood how technologically behind real estate was. And there was a tremendous amount of information becoming more available.”

    2023-11-09 · Capital Allocators · Ted Martell – Empty Rooms: Commercial Real Estate Non-Performing Loans in NYC at Maverick Real Estate (EP.349) · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “A little bit scary. You're giving up good jobs. You're giving up certainty of income. It's also extremely exciting. I was working for a real estate developer. There was no capital available in the market to build anything. And so I wasn't really working on anything meaningful at the time. And that bothered me more than anything. My wife and I were expecting our first child, and I asked her, what do you think? And she said, well, if you don't do this now, it's going to be a lot harder down the road once we have our first son. And so I told Dave I was expecting a child with my wife. He said, let's do it. I said, I don't know where this road's going to lead, but we've got to make some money and we've got to do it quickly.”

    2023-11-09 · Capital Allocators · Ted Martell – Empty Rooms: Commercial Real Estate Non-Performing Loans in NYC at Maverick Real Estate (EP.349) · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “And we continued down those paths, watch each other got married, went each other's weddings, enjoyed New York City, and the global financial crisis hit in 2008. We knew that there had to be a tremendous amount of opportunity in the marketplace. And those entrepreneurial ideas or those seeds that we planted back in business school, they started reappearing in our minds. And we decided to quit our jobs and start Maverick full-time.”

    2023-11-09 · Capital Allocators · Ted Martell – Empty Rooms: Commercial Real Estate Non-Performing Loans in NYC at Maverick Real Estate (EP.349) · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “So, most people go to business school, in my mind, for one of three reasons. It's to learn something, to meet people, or to climb the corporate ladder. For me, I really wanted to go learn something. I've always been very driven by this curiosity and this desire to learn. I wanted to understand capital flows and real estate and buildings and how it all worked. Turned out that was also a great place to meet people. That's where I met David Aviram, who's my 50-50 partner in Maverick. We've been business partners since 2000.”

    2023-11-09 · Capital Allocators · Ted Martell – Empty Rooms: Commercial Real Estate Non-Performing Loans in NYC at Maverick Real Estate (EP.349) · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “Very good question, and it's something I struggled with along the way. My first job out of college was working in construction as a site super, a project manager, and a project executive, pretty non-traditional path for a Princeton grad, and very mechanical in nature, you're managing projects, you're doing a lot of analysis. The creativity there comes in finding better ways or cheaper ways of building. But it felt like there was a gap. And so after a couple years of working in the construction industry, I really wanted to understand the capital behind the projects. So I went back to business school. My plan was to become a real estate developer so that I could apply that creative side of my brain to the business. And that's what I did post business school. I worked for a few different real estate developers managing the construction design and financing of projects.”

    2023-11-09 · Capital Allocators · Ted Martell – Empty Rooms: Commercial Real Estate Non-Performing Loans in NYC at Maverick Real Estate (EP.349) · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “Weekend working on my project because I had games and practice was very difficult and challenging to organize. But both were extremely important to me. I had to figure out how to reconcile those things, particularly because the lacrosse team at Princeton was extremely successful. While I was there we won three national championships in my freshman sophomore and junior year. I was an active player on the team. And I think some of that experience has been really influential on some of the things we've done at Maverick today and on my business career as a whole.”

    2023-11-09 · Capital Allocators · Ted Martell – Empty Rooms: Commercial Real Estate Non-Performing Loans in NYC at Maverick Real Estate (EP.349) · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “In sports as in music, being part of a team and collaborating with people just as important in sports and music, making sure that you're aligned with each other, sports and music the same. And so after high school, I went to Princeton University where I studied architecture. And architecture for me really touched on a lot of the things that I had grown to love as a student using my analytical and creative skills together to design solutions to problems and then create visual representations of them generally around the built environment. I was fortunate to also be a lacrosse player in college. And here again I was juggling two extremes, explaining to my teammates and my coach why I was late to practice because I was an architecture studio or explaining why I was missing an architecture studio event or why I wasn't there.”

    2023-11-09 · Capital Allocators · Ted Martell – Empty Rooms: Commercial Real Estate Non-Performing Loans in NYC at Maverick Real Estate (EP.349) · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “It was challenging. My parents were my music teachers. There was an expectation around practicing. They instilled in me the quality that you should practice daily, that you should perform repetitions. As I grew older, I was more interested in athletics than I was music. And I think that was difficult for them to understand how could they possibly have an athlete as a child. I continued with music through high school and sports. I played soccer and lacrosse. I was the kid that went late to practice because I had orchestra rehearsal and I was the kid that went late to jazz band because I had a game. And so I was constantly juggling these two disciplines. And while my parents saw them as extremely different, I saw them as extremely related, certainly in retrospect, practicing or repetitions just as important.”

    2023-11-09 · Capital Allocators · Ted Martell – Empty Rooms: Commercial Real Estate Non-Performing Loans in NYC at Maverick Real Estate (EP.349) · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “I grew up on the South Shore of Long Island with a family of musicians. My parents were from northern Minnesota, moved to New York after they graduated college and got married because my dad had to fulfill his rotzi requirement and joined the Army band and he was stationed in Fort Hamilton in Brooklyn. And so they both became teachers ultimately. My dad was a high school orchestra director, and my mom was a elementary music school teacher. And so music and education in my family were extremely important. What was that last?”

    2023-11-09 · Capital Allocators · Ted Martell – Empty Rooms: Commercial Real Estate Non-Performing Loans in NYC at Maverick Real Estate (EP.349) · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “Last week, just when you thought it couldn't get worse, the world famous New Zealand All Blacks had a heartbreaking loss in the finals of the Rugby World Cup. So when all your expected sports results fall by the wayside, I suggest you cleared your mind with a riveting edition of You guessed it, the capital allocators podcast. Thanks so much for spreading the word. Please enjoy my conversation with Ted Martell”

    2023-11-09 · Capital Allocators · Ted Martell – Empty Rooms: Commercial Real Estate Non-Performing Loans in NYC at Maverick Real Estate (EP.349) · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “Before we get going, there's a lot of serious heavy stuff happening in the world. Without making light of any of it, these spread the words are intentionally just the opposite. They're my attempt to provide a little comic relief in what can be a very difficult world. So this week, I thought I'd talk about another travesty of sorts. The World Series finished up last week with the Texas Rangers defeating the Arizona Diamondbacks. In case you missed the whole thing, yeah, that's called parody in Major League Baseball. These underdogs not only weren't the New York Yankees, they weren't even portfolio companies of my favorite, most passionate investment in Arcto's sports partners. Adding insult to injury, both teams actually beat an Arctos portfolio company in game seven of their league championship series. And there would have been just a little more money in it, well, for me.”

    2023-11-09 · Capital Allocators · Ted Martell – Empty Rooms: Commercial Real Estate Non-Performing Loans in NYC at Maverick Real Estate (EP.349) · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “On today's sponsored insight, we'll discuss another empty room, an opportunity ignored by most investors because they either don't want to or can't participate. It's real estate NPLs in New York City, a niche opportunity requiring a high degree of specialized expertise. My guests on today's show is Ted Martell, the co-founder of Maverick Real Estate Partners, the leading investor in commercial real estate NPLs and distressed loans in the New York City market. Maverick manages $500 million focusing on the specialty since its launch in 2010. Our conversation covers TED and David Avaram's path to bootstrapping the business, the nature of the opportunity, and the blend of data science and analysis that makes it work. We also discuss the wide open landscape of opportunities on the horizon in the New York City commercial market.”

    2023-11-09 · Capital Allocators · Ted Martell – Empty Rooms: Commercial Real Estate Non-Performing Loans in NYC at Maverick Real Estate (EP.349) · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “Hello, I'm Ted Sides, and this is Capital Allocators. This show is an open exploration of the people and process behind capital allocation through conversations with leaders in the money game, we learn how these holders of the keys to the kingdom allocate their time and their capital. You can join our mailing list and access premium content at capital allocators.com.”

    2023-11-09 · Capital Allocators · Ted Martell – Empty Rooms: Commercial Real Estate Non-Performing Loans in NYC at Maverick Real Estate (EP.349) · IDENTIFIED FROM THE TRANSCRIPT · source