08/07/2009

Green, Other Wachovia Alumni Open Shop

A handful of former senior executives in Wachovia's real estate finance group have joined forces to launch an advisory firm in Charlotte.

The principals are Bill Green, Brett Smith, Chuck Wolter, Bill Cohane and Sam Solie. They are actively looking to add staff in New York, Florida and California.

Their shop, Tannery Brook Partners, will initially focus on advising borrowers and lenders on how to address overleveraged loans.

The startup has already lined up a major advisory client: fund operator Starwood Capital. Green ran Starwood's debt-investment business for two years before stepping down in June.

The five partners - co-equals in the venture - worked together at Wachovia for many years, establishing relationships with top real estate investors in the process. Wachovia was the most-active lender among U.S. securitization programs during the go-go years of 2005-2007. In 2007, for example, the bank contributed $24.2 billion of loans to domestic commercial MBS deals, for a 10.8% market share. The next-nearest competitor contributed $15.6 billion.

Green, who was head of the CMBS group for six years and then oversaw the European real estate unit, left the bank in late 2007 to join Starwood. Cohane left Wachovia last year. Smith, Wolter and Solie left early this year, after the bank's acquisition by Wells Fargo.

Tannery Brook expects to primarily advise borrowers on how to navigate the credit crunch and property-market downturn. For example, it will provide advice on raising equity, negotiating loan extensions and converting debt to equity.

The firm is also open to helping lenders evaluate loans, although there may be fewer of those assignments available. "Many of the institutional lenders are internalizing that effort and doing it themselves," Green said. "But we are happy to do that, and you never know how a new business is going to progress."

Down the road, Tannery Brook may cobble together ancillary business lines. Green also said the company may eventually evolve into a direct lender, especially if a reconstituted CMBS market requires issuers to retain principal risk in securitizations. "In that kind of scenario, the traditional investment banks would perform the distribution role, while outside entrepreneurs would take the risk," Green said.

Smith held a handful of senior positions at Wachovia, including head of origination, overseeing nine regional lending teams in the CMBS group. Wolter ran structured finance in Wachovia's real estate group from 2005 to 2009. He previously was in charge of loan production.

Cohane was named co-head of Wachovia's European CMBS program in 2006, after a stint in the U.S. CMBS group, where he helped to manage the securitization business, contract finance and the commercial repo book. Solie was named chief operating officer of Wachovia's real estate capital markets group in 2005, after working as a regional manager, in Charlotte, for Royal Bank of Canada's U.S. operation.

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