Taylor Avakian
Welcome to the podcast. My name is Taylor Avakian, uh a private broker here in Los Angeles, and I have my esteemed guest, Zack Stright, on the podcast.
April 29, 2025 · 1 hr 12 min
How to Build a $1B+ Real Estate Debt Brokerage – Inside Zack Streit's Playbook
With Zack Streit — Founder, Priority Capital
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What does it take to close $460M+ loans and run a high-performing debt advisory firm? In this episode, Zack Streit, founder of Priority Capital, joins Taylor Avakian to break down how he’s built his…
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What does it take to close $460M+ loans and run a high-performing debt advisory firm? In this episode, Zack Streit, founder of Priority Capital, joins Taylor Avakian to break down how he’s built his career—transitioning from the principal side to becoming a full-time debt broker. Learn how Zack: - Went from law school to capital advisory - Closed a $50M hotel conversion deal early in his career - Built Priority Capital during a volatile market - Navigates today’s interest rates, distressed assets, and lender relationships - Structures his business around high-touch client service and long-term vision This is a must-listen for anyone serious about real estate capital markets, brokerage, or building a firm from scratch. Subscribe and Stay Ahead! Stay informed and empowered in the multifamily real estate market. Subscribe to the channel for exclusive insights, rental updates, and expert analyses on the Los Angeles market. 🔔 Don’t miss out on the latest trends and tips to maximize your property's potential: https://www.youtube.com/c/TaylorAvakian 📈 Connect with me: Website: https://www.thegroupcre.com/ Email: taylor@thegroupcre.com X: https://x.com/TAYVAY_ LinkedIn: https://www.linkedin.com/in/tayloravakian/ #RealEstatePodcast #DebtBrokerage #CapitalMarkets #CommercialRealEstate #WealthBuilding #RealEstateDevelopment #FinancialFreedom #MultifamilyFinance #BrokerLife #CREInsights
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Episode transcript
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0:00–10:00
Zack Streit
He is, uh, my second broker I've had and a primary broker. However, he is a debt broker.
Taylor Avakian
Um, Morgan, who was on the podcast previously, is mostly principal side now.
Zack Streit
So, this is the first official like full-time broker on the pod.
Taylor Avakian
Man, I'm excited about this.
Zack Streit
Love it. Thank you. Thank you for having me. So, Zach, if people don't know you, what they should, because they they uh listen and and own multif family, tell me a little bit about yourself, where you're
Taylor Avakian
at today, and then we'll jump into how you got to be one of the leading debt brokers, and I would say for construction and multif family in in SoCal and across the country, one of the premier ones. So, so give me the little backstory.
Zack Streit
Thank you. Wow. Yeah, I appreciate that. Um so I'm currently a founder and president of uh Priority Capital Advisory um which is a boutique uh largely debt brokerage some equity um that I founded nine months ago. Um, so you know, new founder mentality. Let's go. New founder, you know, startupish. Uh, I've been in the business 20 years. So, okay. I would say it's hardly new and on the advisory side for let's say eight years. Yeah. But, uh, it is a new flag and a new banner. And so, it's it's really really exciting. Um, and we've had a great start. We've closed 13 deals in nine months. Um, in in I think against I would say extremely challenging market conditions. I'm I'm so proud to be an entrepreneur. Um proud of what we've done and and really excited uh for the future. Um a little bit about me.
Zack Streit
Um I'm from Southern California. Uh originally lived here till I was 18. Uh then spent the first decade of the 2000s in New York. uh where I did college, law school, um business school uh at night and I actually worked for four years at a big UK life company called Aviva uh in one of their equity investment groups. Okay. Um and uh and it was great. Living in New York is an amazing thing in your 20s. There's a lot of young people. There's an incredible real estate community. There's an energy to it. Dollar slices, man. Like, how can you beat it? You can't beat it. the home of five guys, right? For those who know, know. Um, no, you can't beat it. Um, and it was great. I spent 10 years there and, um, I ended up moving home in 2011.
Zack Streit
Um, I did so cuz I I couldn't find a spouse in New York. New York women wouldn't have me. Yeah. Um, and I I I was looking for to be involved in a different facet of real estate. So I was working at at the time what was called a real estate fund of funds group which basically meant uh that we raised UK um sovereign capital, pension fund capital, co-mingled that with UK insurance company capital because Aviva is a UK light company and we invested it into real estate funds. I wanted to be on the deal side of real estate. I knew that very early on. Problem was it was the GFC and there were very few jobs available. So that combination brought me home to LA. I worked as a lender for the first 5 years of my time in LA um including at Colony Capital in a
Zack Streit
CNBS group of theirs. Um and I also met my wife shortly after moving home and we've been together for you know call it 13 or so years now and we've got two children um six-year-old and four-year-olds are both awesome boys keeping me on my toes. Oh yeah. Um, I then decided around 2016 that you know what? Um, I didn't want to be a lender anymore. Um, I had done a stint on the equity side and just being a developer seemed pretty risky to me. I didn't see the opportunity there the way many of my clients do. So, in 2016, I I kind of, you know, took the leap of faith to the quote dark side. Yeah. And became a capital adviser after, you know, a guy who had 10 years of principal experience and, you know, two graduate degrees.
Zack Streit
And people told me I was nuts and they were like, "Why
Taylor Avakian
would you ever do this?
Zack Streit
Um, you know, you have no control. Um, you've got all this principal side experience like you know, how how and why do you see opportunity there?" And to be honest, I didn't have a great answer. And the answer was just I've got this feeling inside that says, you know, I should go do it. I have 10 years of debt and equity capital markets experience already. I've got a book of clients that you know I know are prospective ones or guys I did deals with and they were a little bit different than my target profile client now but you know it was enough to start and there was something like super entrepreneurial about the brokerage profession and I think that was probably what my inner voice was telling me. Uh I think um you know having done call it almost
Zack Streit
four years at Aviva and a couple years at Colony Capital um I love the people that I met there. Some of the smartest people I know um and I learned a ton being there. I think I part of what I also learned though was that um being an entrepreneur is in my DNA and I just wasn't sort of you know cut out for kind of a larger corporate environment. And so I think while the transition wasn't simple, um it really fit for me. So uh in 2016 I started at George Smith Partners. Um I spent the first six years of my career there. Then um co-founded a smaller shop with a partner for two years uh after that and then decided nine months ago, hey, you know, it's time to found Priority Capital.
Zack Streit
And that that's sort of a little bit about me and how I got to where I am today.
Taylor Avakian
Do you suggest uh people who want to um get in the debt brokerage space, do you suggest they do what you did in terms of working on the corporate side first and then getting into brokerage or being a broker and then just doing brokerage right out of the gate?
Zack Streit
So, that's a really good question. Um and you know, it's funny. I'm going to answer it a little. I remember when I was in business school, um, Simon Ze, who's a big East Coast boutique broker, owns his own brokerage house, super successful guy and and somebody that I that I admire a lot, was kind of on the board of NYU Shack. And I mean, I didn't know much about him, but I just knew that like nobody had anything against him. is great but just like the perspective amongst um graduate students with respect to brokerage was was not a good one. It was like why would you do that? That kind of disdain down bottom of the barrel and I bought into that just because it was group think and I didn't know any better. Um and I wonder sometimes if I didn't would I have started this earlier?
Taylor Avakian
Would I have been even more successful?
Zack Streit
Now it's possible that that I wouldn't and and I wouldn't even be doing it anymore. or maybe I'd be burnt out. But I can't help but wonder that. So I think my answer to your question directly would be um everyone's got to kind of trust their gut and go their own way. Brokerage is many great things and one of them is an incredible place to learn. M um so if you start at a brokerage like out of college or maybe you're transitioning into real estate and and you need a first job, you will learn the landscape of players, who the borrowers and buyers are, the sponsors, who the capital is, both equity and debt, and and both are critical to getting deals done, you know, and then who all the service providers are, other brokers, competitors, I guess, um attorneys, different service providers.
Zack Streit
It's a wonderful jumping off point and sometimes I wish I had had that experience of not being a producer. When I started in 16, I was always and only a producer and so I I didn't never really worked for anybody else. Yeah. And and I I didn't really cut my teeth in the business. Look, it's not one sizefits-all. Um I would say I've had an extraordinarily successful 8year tenure so far and I'm I'm very very grateful uh for that and to all the people that help me. I think there may be no better learning ground for somebody just starting off to go work for another broker or look if your heart is set on hunting and you don't want to process somebody else's deals, great, you know, go hunt and and and that's possible, too. There's a lot of young people like you that I think started as a hunter
Zack Streit
and and have been wildly successful and and they just sort of they knew themselves and they they acted in concert with that and that's amazing.
Taylor Avakian
So, you did not do cold calls when you started?
Zack Streit
So, I did not do cold calls when I did. Um, no, I was I was uh Oh, you were continuing. Yeah, I was thinking through your question. I'm a little slow on the update. Uh, it's Friday of a long week. It's all good. Um, I did some Okay. I I didn't do it like the Kyle Matthews way of cold calling or maybe, you know, the Marcus and Milichap or Meridian way of cold calling. I did some. Um, what I found was I think cold calling works. You meet a lot of people that way. You can build relationships. Um, it takes time and you have to give yourself time. Um, but I quickly found that the type of brokerage that appealed to me wasn't commodity stuff. It's very difficult to cold call for commodity stuff, right? It's it's it's a knife fight, but you can
Zack Streit
prevail um if you are a good person, if you are persistent like all the things that you are, if you have the relationship,
Taylor Avakian
it's a at at that stage it's it's who do they like the most.
Zack Streit
That's right. Exactly right. For kind of middle market brokerage, which I haven't talked about priority and exactly what it does, but for middle market brokerage, call it deals that are have a total capitalization of call it 25 million and up. Mhm. That isn't so much the province of cold calling anymore. That's the province of relationship building, a lot of which
10:00–20:00
Zack Streit
is in person, conferences, flying out, meeting people, leveraging your network, email blasting, social media, and then you begin to build it organically. And I knew I wanted to go in that direction. So, what I quickly started doing was trying to attract, you know, sort of deals and sponsors that, you know, could fit that profile. And it wasn't immediate. I mean, I started doing one, two, $5 million loans. Um, and I always dreamed of a day where it'd be my minimum would be 15 or 20 million, which it is now, and was never sure I'd get there. But worked as hard as I could, you know, to get there. And look, I worked hard and I I had a lucky break. Um, my first year brokerage, I I I sourced um a hundred plus million dollar deal and I closed a 50ish million dollar loan on it.
Zack Streit
It was um uh through how how did you do it? So, this is interesting. This is the relationship piece that you're talking about. Um, a buddy of mine who was an attorney in real estate referred the deal to me and it turns out that I knew one of the three principles. I had met him five years before when I was a lender. Never even a thought of becoming a broker and I met him through kind of a mentor of mine. I think mentors are really really important. You need everyone needs a a northstar. Yeah. in their world and and we kind of lost touch, me and this individual. Um, and then five years later, we reconnected. Wow. And and just that having happened and the deal requiring a lot of hustle and look, I had a decent background. I I wasn't starting from scratch.
Zack Streit
I had kind of 10 years of principal side experience. Um, I ended up, you know, kind of winning the assignment. Um, the funny thing is it was a uh an office to hotel conversion. Um, jeez. I had never financed hotels before. Yeah. I had never financed a conversion anything on this scale. But I think just a combination of persistence background, um, always having been a relationship guy and look, let's call it what it is, like having gotten a little lucky, but really placing myself in the in the context of creating it made it happen. Yeah. because all the all the 10 years prior and all the relationships that you'd built had culminated to
Taylor Avakian
allowing that moment to actually happen. For those who don't know because there are some my mom's going to watch this and she has no idea what a debt broker is. Can you tell people like what is a debt broker?
Zack Streit
It's time for that. Okay. So, it's a it's a great question and it it can be a little esoteric. Um, a debt broker in its simplest form, um, is a broker that helps his client, generally a developer, owner of commercial real estate, source debt financing for their property. Got it. Um, so if you own a property or you want to build a property and you need help obtaining a loan, you would come to somebody like me and what I would do for you is run a process. And then through that process, help you decide from the myriad lenders that are out there, who is the best one suited for this project. And you know, include things like, well, what are you building? Where are you building it?
Taylor Avakian
What kind of leverage do you need? What is your tolerance for interest rate?
Zack Streit
Are you willing to sign a personal guarantee or not? And so on and so forth. Um, and I think that's what it is in its simplest form. Um, clearly the markets are are big and fragmented. Um, and and you know what I said can, you know, easily be nine months worth of work. I think I said it in about 30 seconds. Um, but at heart that's what a debt broker does. Yeah. You're a conduit.
Taylor Avakian
You're same same to us. We're a conduit between a buyer and a seller and we're making a transaction happen and you're making that happen on the debt side of things which is uh very similar and you get paid for making that happen, right? There's there's different kinds of debt brokers as well, different specialties just like there's apartment investment sales brokers, office investment sale brokers. What is um the different pockets of debt brokers that people can go into and why did you we talked a little bit but like what was the you're the institutional side I would say of debt brokers comparative to the smaller 1 million2 million $3 million deals which is just a broader brush. So, what are the different buckets and then why did you do the institutional?
Zack Streit
Yeah. Yeah. No. So, so great question. Um, there was something about middle market commercial real estate that always appealed to me. Um, and I kind of broadly define that as deals that start with a $25 million capitalization and up. So, you know, you're dealing with pretty sophisticated guys and it's not their first rodeo and you're probably maxing out between 250 and 300 million on a deal. I've done one that was like, call it 700 million and I closed a $460 million loan for it. So that's it. It's kind of biggest form, but that's not that's not normal. That's not my day-to-day. My day-to-day is probably call closing loans that are between 20 and $50 million.
Taylor Avakian
Do you get like a bit like how much basis points do you get on like a 460? Cuz most loan broker fees are a point, right?
Zack Streit
Uh they start at a point and go down. You don't have to give me the exact number, but like what's a range of someone does a $400 million loan.
Taylor Avakian
How much what are the typical ranges of points that you could get on something like that?
Zack Streit
Sure. So, it's not an easy answer because it depends depends how much work goes into it. Okay. The one that I closed was a $460 million loan on a million square foot high-rise development deal. And that high-rise was in Portland in 2019 and consisted of uh about a 250 K Ritz Carlton hotel. 130 or so Ritz Carlton residences, 160,000 square ft of office, and 20,000 ft of retail. It was groundbreaking. Nothing like that existed in Portland before. Um, it's now built. U sad timing, co Portland and all the kind of, you know, bad politics and press. That was an extremely difficult deal and, you know, very grateful we got paid very handsomely for it. But I would say typically for a deal that big is probably somewhere between I don't know 20 and 50 basis points. Okay. Uh which which would make sense.
Zack Streit
Um I hear of a lot of big conduit CNBS deals getting done and I'd say it's typically a 25 bip fee. Okay. Um the one point is correct. I would say bro debt brokerage fees are typically one point in down. Um, depending on what you were being asked to do, um, depending on how difficult the deal is, um, how much volatility, is it construction, is it an existing asset, is it land, so on and so forth. Got it. So, I would say average fee in my book is probably somewhere between, I don't know, 60 bips in a point.
Taylor Avakian
Got it. And it's just, yeah, relationships at that point and figuring out what
Zack Streit
that value is. And you have to draw the right line as a broker. You have to understand what is going to incentivize you. And that answer is different for everybody. It depends how you're structured. So for me in priority capital, I've got five employees. Um and they're all salary. They are not commissioned. Um and that is intentional. Um they are all execution folks. So they focus on processing and closing deals. Again, intentionally speaking, those resources, that infrastructure is critical to getting my clients deals done and being able to probably juggle a pipeline of 20 deals at once, which if you're going to be in business, that's what you have to do as a broker because you never know anything's going to close. So, given that, I typically floor my fee at 150,000. Um, just nominal dollars. So, I need to be doing deals that are 15,
Zack Streit
20, 25 million in order to get there. Um, but if I can generate that, then that seems worth it to me. Got it. And and so that's another way that I triangulate into, you know, what what I should charge. Now, that may not be true for others. There are guys that won't touch deals less than $50 million. There are also guys that like don't want to be troubled with what a $25 million loan will require to close and they want to make their lives in the$1 to10 million space. And I will tell you that not all deals are created equal. um different sponsors, different deal sizes have kind of different um responsibilities attending to them. For me, when I do deals, I do them exclusively only. Like that's that that for me is an absolute red line. Alignment is critical.
Zack Streit
Otherwise, you know, if you don't have it, you're not going to spend time on it. I urge sponsors. I'm like, you don't have to hire me. I hope you do, but you should hire somebody exclusively because the second things get tough, another broker who's non-exclusive is just going to cut and run to the next deal. Yeah. Yeah. And so, you know, in in tough capital markets like we're in, you need somebody who's really going to lean in. And so, like having that is important. But I think where we can find it, um, the results have been nothing short of like really stunning and and great. And it's sort of how I've how I've built the track record over time.
Taylor Avakian
I kind of wish. So, we talk about this in the office and it's always the grass is greener situation, but um a lot of people I talked to and myself included, I'm like, if I would have started over again, I think being a debt broker would
Zack Streit
have been what I wanted to do because it's it's not that it's more predictable, but there's just like it's like being a leasing agent, right?
Taylor Avakian
Everyone loves leasing agents because they typically give you value in terms of landlords love leasing agents.
Zack Streit
Bring me a tenant. like you're bringing me immediate value. A debt broker, equity broker, whatever, you're bringing them value by, you know, giving them money.
Taylor Avakian
I'm over here like, "Hey, let me sell your building, you know."
Zack Streit
So, it's it's a it's a little bit different of a thing. But I like to that typically on the loans, there's like a a timeline.
Taylor Avakian
Like these aren't, you know, these aren't 30-year loans most of the time. They're threeyear, 5 years, seven year, 10 years.
Zack Streit
So, you know that something's going to happen down the road where I sell a building to a mom and pop and they're never selling it again.
Taylor Avakian
And it's like, all right, well, that business is not coming back around, you know?
Zack Streit
Right.
Taylor Avakian
So, it's it's I I like the I like the business model of of brokerage u of debt brokerage, excuse me. And I think there's a lot of growth that you can do. And what's unique about debt brokerage, too, um is that
20:00–30:00
Taylor Avakian
there's there's different tanches that you
Zack Streit
can do. And also, you can have equity uh like you can you can raise equity, which is almost same side of the same coin. I do some of it. You do some of the equity stuff, too. There's there so there are a few different varieties of us. Touch on your earlier question. So there are guys that kind of do smaller deals. I would say that isn't me. There are guys that only want to broker uh Fanny and Freddy deals. So agency lenders or dust licensed lenders. Um you need to have access to a dust license, which I think costs at least $50 million. So and there are a finite number of them. But if you have access to that and you're at a big shop like a BCadia, you know, or a CBRE, you might want to only focus on that. Um there are correspondent lenders
Zack Streit
which are really um insurance company lenders that are out there. Uh mortgage bankers as we call them. They're brokers too but like they largely feed all of their business to insurance companies. Um and that's going to be long-term fixed rate business. So you know typically 10 15 or 20 year loans. Um and I thought look all the brokerage spaces are great within the debt world. For me those didn't quite feel I know I'm crazy entrepreneurally enough. uh and and and I thought, hey, let me do larger deals where the fees are a little bit bigger, sophisticated ones where you have to get really creative in your capital stack and where you really have to lean in and like that's going to get me out of bed in the morning. It's again, it's knowing one's tolerance for risk.
Taylor Avakian
What is in one's DNA?
Zack Streit
And and that that sort of space spoke to me. To address your second point though, like I don't know, I also wonder about the grass is always greener. I'm like I don't know investment sales guys like they're just there's there's a lot of buildings out there. Um, your fees can be great. You can get paid pretty well on them, probably better than what we can charge. And, and look, a lot of investment sales shops will sell the brokerage, the debt brokerage business, too, and say, "Hey, you know, if as as a condition of me taking on your listing, you've got to hire the in-house debt broker as well." And then the investment sale guy gets a piece of that. And so, like, you know, it could be lucrative in in different ways. I also think what's cool about your business is like you usually don't have to travel very far.
Zack Streit
I don't think like you're doing most of it in SoCal. I wish there was enough business in SoCal alone to to fuel my business. Then I wouldn't have to travel, but I'm on a plane every week. And I would say more than half my business is outside of SoCal because right now the entrepreneurial sort of um risk I think of doing business in SoCal is comparatively high. It's unfortunate, but it's the case. And you just see more entrepreneurs taking risk and seeing opportunities elsewhere. Um, you know, and a lot of that is in like the Sunb Belt. I've done a lot of business in Texas and Phoenix recently. Got it. I was just in Salt Lake this week speaking at a conference for that reason. Um, and so on and so forth. So, I'm not complaining.
Zack Streit
Um, I like meeting new people and I don't mind getting on a plane, but it certainly would be easier if it were all sort of in the backyard. So, yeah. Yes, the grass is always greener is also greener from my side, too. Very true. Very true.
Taylor Avakian
All right.
Zack Streit
Fair enough. Fair enough.
Taylor Avakian
I know it's everyone everyone complains about that would be so much better. It's just like different product types, too. People are like, "Oh, if I sold industrial, oh, if I sold retail, you know, and everything's a cycles, too." Um, what's the craziest deal or the deal that you remember the most where you're like, "I don't know how we did that, but we figured it
Zack Streit
out." The craziest deal was, well, you know, is probably both deals that I mentioned, but I think when I think back to the one that really sort of um I think cemented that this was the right profession for me or that really planted the seed. It was the uh the kind of LAX um dual branded Hyatt deal. Hi House Place. So um that's a deal that I mentioned before. It's on uh West Century Boulevard, kind of very close to the mouth of LAX. And um sponsors were buying an old dilapidated half empty office building and converting it to a hotel. And I closed a $50 million loan with um Bank Ozk back in the day. Damn. Back in uh 2017. And you know, I I that was like my first full year as a
Zack Streit
broker. And I kind of, you know, was all worried. I didn't really know what I was doing. I was less experienced than um you know guys who have been doing it forever and um you know how was I going to get this done but um but I did and and that taught me that you know hey it's not an easy profession it's not going to be an easy road but this could be a good road this could be a fun road and and and I'm good at this and this wasn't just a complete aberration but this was a continuation of like all of the hustle all of the relationship building and that positioning myself as a debt broker like was right at the intersection of capital and opportunity and that and that that that worked for me. I think if I hadn't closed that deal, even
Zack Streit
though later in my career, three or four years later, I closed a $460 million loan, I'm not sure that that I would have remained in the debt brokerage business. Maybe I would have gone back to the lending side or done something else. So I think that that that really is the most special because I credit it with not giving me my start. I had already started, but I really credit it with like booying me forward. And look, the Portland Ritz Carlton deal did in different ways, too. Yeah. But it wasn't at the beginning. Yeah. Yeah.
Taylor Avakian
That first one always always hits and always is like I can do this. It's it's almost the belief you break the belief that you can do it.
Zack Streit
It's that that one where you're like, okay, I can do this.
Taylor Avakian
And sometimes that's all you need.
Zack Streit
That's that that that's all you need. And if I were to send a message to the younger folk on the podcast, it's just it's believe in yourself. Yeah. I mean, geez, if you would have told me 15 years ago I'd be a broker, I' i'd laugh or maybe I'd be horrified because of, you know, what my thinking was then. And then if you told me I'd be successful, I'd be shocked. And then if you told me that I'd be running my own brokerage firm, even more shocked. But like, uh, really, if I can do it, others can do it, too. And yeah, of course you need a luck, but like that that's one small part of it. The other is just hustle and drive and grind and and relentlessness and sticking with it even through a tough capital markets like now. And good things happen when you do.
Zack Streit
You get rewarded when you do. So hopefully that that helps somebody out there. That is exactly what somebody needed to hear.
Taylor Avakian
Yeah, for sure. What um what percentage of your time is spent trying to find the lenders to plug your your clients into versus finding clients?
Zack Streit
Yeah, so that's a good question. Um and it's changed over time. Yeah, for sure. I would say these days I try and spend most of my time um on the client side. Uh, and that includes both prospecting, I suppose, or business development, trying to bring in new business, and then also um staying really close to my current clients um both while doing deals with them and also not because maybe we just finished one or maybe it's going to be a few months before the next one starts. And that that's become critical. I mean at the end of the day going to incentive and alignment like you have to know who butters your bread and and and it is the client that signs our yours and mine engagement agreement and so staying close to them is paramount. Now with that said you have to be able to service them. Yeah.
Zack Streit
So you better know the lenders or you better be able to find a more esoteric one but I built a track record of that. I've got eight years of doing it and 20 years in the business of doing it. Um so it's not that that wouldn't be time well spent. It would. And I wish I could spend much more of my time doing that. But the demands of the business are such that I would say the vast majority of my time is spent on the client side. Um, and then I've got a team of five people that help me manage the process, help me run the process. Um, and we are constantly databasing and adding new lenders. And you know, capital markets are volatile. This guy's in, this guy's out, this guy started a new program, he moved over there.
Zack Streit
following people and making sure that we run the very best process um which is sometimes the widest process sometimes not um to make sure that we are efficiently matching our clients with capital. So then let's dig dig into where we currently are in the debt cycle. Like there's there's a lot that's changed over the last three years, two two and a half years if you want to call it.
Taylor Avakian
What's going on in the debt markets right now?
Zack Streit
Yeah. Yeah. So, super timely question. Um, and and as always, not a simple one, but um, the debt markets today are the best they've been in three years. So, let's start on a very optimist. February 28th, 2025, just February 28th, 2025. They are the best they've been since probably February of 2022, kind of right around there, March, where the rate hikes started. And I think they're they're best because, well, there's an election behind us. We've had four rate cuts. Um and really interestingly the phenomenon that you saw in 2022 that um hurt the markets is that reverse phenomenon is helping the markets now. And so specifically bank lending. One of the first things to happen in early 2022 as the Fed started hiking rates was
Zack Streit
that banks pulled back um and they became very quickly noticeably absent from the market. And anytime you remove a major player from the market, you suck liquidity from the system, uh the market starts to stall and deals go bad. And that's exactly what happened. There was tremendous amount of fallout in 22 and 23. What's changed in the last 6 months is that banks are back and specifically like regional banks, money center banks, and even local banks. And they're back because they spent a couple years uh working out issues. Uh they're back because depositor bases have increased. um and they're back because loan payoffs have started and they're back because they have either u managed or are working through their office exposure. Um if debt
30:00–40:00
Zack Streit
or the lack of availability of it let us into this mess, it is possible that debt and the availability of it leads us out of this mess. And I think you're starting to see that. And so that that's really great. That's a huge thing and it can't be ignored. um and and is something that I think people are excited about and what could lead to more liquidity and more transaction flow in 25.
Taylor Avakian
So that's interesting because the rates really haven't come down significantly from you know where where they were in 2022 at the end and the peak. I mean, we're feels like we're in the same. So, you're just saying that they basically fix a lot of the bad debt situations that they're having, which allows them to have more liquidity and their books are more balanced and
Zack Streit
they can lend. And so when entrepreneurs want to take risk, first of all, on short-term basis, SOFUR's down about 100 basis points because the Fed funds rate is down 100 bips. So, okay, that's a little bit better. M but now you've got more liquidity out there and you've got interestingly priced liquidity on the debt side because banks are known for maybe lower leverage construction and bridge loans and even perm loans but also um commensurately priced and so very attractive on the pricing. So I'll give you an example. Um I closed my first bank nonreourse bridge loan in three years last month and it was an incredible deal. It was a deal in uh in Texas. It was an industrial outdoor storage deal, which is a popular subset of the industrial asset class these days. We closed a loan um with a bank, nonreourse bridge loan.
Zack Streit
It included $10 million of cash out, which is crazy. Um and IOS is not easy to finance from a any perspective because a lot of people just look at it as covered land, which probably is, but it's the best form of covered land. Yeah. Um and we closed it at an incredible rate. We closed this bridge loan at a rate of 280 over. for sofur. So that's that's insane. That's basically um you know at a rate that's let's just say like I don't know around 7%. Wow. So that's you know I haven't seen that kind of pricing in a long time. Were you getting before eight eight and a half at least the best debt fund quote we had that was non-bank also nonreourse was like so for 330. So that was also a bit under eight and most of the rest of the world was eight and up.
Zack Streit
So seeing that was amazing. And we recently signed two term sheets uh for two retail groundup deals in Phoenix, each about $25 million. And we signed those term sheets at a rate of 270 over. Um there hasn't been much pricing south of 300 in the capital markets for transitional deals in the last few years. And and I can confidently say it's now it's now out there.
Taylor Avakian
Is it going to fit for every single deal?
Zack Streit
No, it's not. But, you know, we're marketing a bunch of other deals and we're seeing the same sort of feedback and the same sort of um responses and so that's been really positive. So, ju just to be clear, bank lending being back doesn't mean that all the problems um in the market are gone. It doesn't mean that the treasury rate is down, although actually it is over the last couple weeks. And so, that's awesome, but you're still kind of at a a low force 10 year. And that is the barometer for real estate. So that's the single most important metric that's out there. And you still have to contend with that because if a if it you know if a treasury is four and a quarter then like what's an exit cap? I don't know but it probably needs to be 75 to 100 basis points.
Taylor Avakian
Why did that treasury?
Zack Streit
Because why would I buy real estate if I could just buy the treasury and and then you you build from there. Um so that hasn't changed. I mean it's changing now in front of our eyes but like that is still high. I've always thought that the 10ear has to be at 4% for like 3 months for equity to start redeploying into like multif family construction deals and even value ad deals. Mhm. Maybe on the precipice of that starting that that threemon clock starting. I hope that we are. Me too. Um but but that is still high and and and so that that is still hard. And look yeah so was 525 basis points. It's now 425 basis points. So you know that's a 20% change. That's awesome. Yeah, it's 100 bits of savings, but it still means that the cost of
Zack Streit
many transitional construction loans are going to be 9 10%. Mhm. You know, 3 4 years ago, that same thing might have been 7%. And 7% might be risk for somebody and 10% might be a risk off. And so that is all in the way to say that there are some positive things going on out there. Election behind us, you know, talk of more foreign direct investment, lower sofur rate, um more business optimism than I've seen in years. And there are also headwinds, right? Stubbornly high treasury rate, steel from a real perspective, you know, very high uh bridge financing kind of mean construction financing rates, even though they're coming down, high construction costs, expenses, insurance, payroll, R&M, just everything seems to be higher now because of inflation. So, look, we've got our um work cut out
Zack Streit
for us, but but it isn't all der and bad in the way that it kind of felt like it was in 23 and maybe even the first half of 24. So, look, hey, take your wins. We're we're picking up. So because so that's interesting to to hear because I
Taylor Avakian
keep hearing that we have more pain ahead of us in terms of a lot of these loans that the banks were kicking the can down the road and you know they wanted to work it out with the sponsors and not take the properties back and and I'm seeing more properties be taken back but I also hear that there's more to come. So with with the rates not coming down, are you saying that you think that's
Zack Streit
not necessarily going to happen or it's going to happen less or what are you saying on that distressed asset side of things? Yeah, so distress has kind of been a big mystery. People started talking about it in like March of 22 or April of 22 when the first rate hike hit. Yeah. And it's been a little bit of the boy who cried wolf to me. Um not completely. There have been pockets of it. There have been deals that have gotten done, but of the trillions of dollars earmarked to make distressed investments, I would say if five or 10% of that is deployed, that's a lot. Um, and I think two things have really stopped it from deploying from what I've seen and that is banks extending and pretending as you noted and existing equity pwning up and paying down
Zack Streit
their loans or increasing uh or reupping let's say a depleted interest reserve. There has been a lot of that. If there is a story about why the lack of distress has materialized, I think that's the story. Um I just worked on a deal um where that occurred. We ran a process to replace an existing lender. Ian simultaneously was working with that lender to see if a pretend and extend or a blend and extend or a pay down and extend was possible. Um it wasn't easy, it wasn't simple, hard deal and ultimately a payown and a modification extension occurred and there's been a lot of that and um you know folks have been quieter about it. If there weren't as much of that I think you would have seen a lot more prep equity and other distress plays um come to fruition and they didn't. In terms of what I
Zack Streit
see going forward um I think it's going to be a combination. I can tell you that in my book, I'm working on eight construction loans now. That's the most that I've worked on in probably three or four years. New construction. New construction deals. Deals that guys syndicated the equity. They already had it. They were waiting for a better day. There isn't going to be a better day. And developers will develop and so they're moving forward. That doesn't mean that there aren't also lenders foreclosing and lenders that are agreeing to short sales. I've got another deal in my book where a lender's agreeing to a short sale. Um, so I know that's happening too. So it's it's it's a weird thing. It's not one or the other, even though maybe it should be. It's both. And so like that's really hard to explain, right?
Zack Streit
It's also hard for me to explain that like equity and debt would have worked together to deal with so much of the this distress and you wouldn't have seen much more distress like you did 15 years ago during the GFC. I don't have a good answer for that. Economists and I guess like market analysts will know better than me. But but but I believe there is broad consensus that there hasn't been nearly as much distress as everyone thought. Yeah. Um will more of it happen? For sure. There's a trend of more short sales and more AROS that are happening now. So, you know, yeah, sure. You go from like, you know, 0 to 10 versus 0 to 100, it's going to feel like more. Yeah. But it's not, you know, I I it's hard for me to see like a
Zack Streit
full-fledged recession occurring here which would really trigger a lot of that. So I think look, there'll be some of it and guys that want to play in that space will be able to play and then I think there'll be, you know, other deals where entrepreneurs will still find pockets of opportunity and and try and deploy accordingly.
Taylor Avakian
Where are you looking for to grow your business in terms of opportunities? Like what vertical or or what is that look like for you? um maybe opportunities that you hadn't looked at before. You think it's going to be a hot market. Like how are you looking about growing your business?
Zack Streit
Yeah, that's a that's a really interesting question. Um so I think it's just more organic growth. That's always the way it's been for me. Um I don't want to turn priority into, you know, a JLL or an E still or anything like that, which is no disrespect to those guys. Yeah. A lot of guys, they're incredible and I don't think I could do what they do, frankly. Um, and I don't want to manage hundreds of people. For me, I see priority always being an outfit that's got, you know, call it five to 10, maybe 12 employees at most. And, you know, goal of trying
40:00–50:00
Zack Streit
to get to somewhere between half a billion and a billion dollars a year in production. Um, and I think we can do that. Uh, I think the bread and butter of the business will always be 20, 30, $40 million loans. And how you really scale up is two ways. you do three or four of those a month or you close a few, you know, deals that are 100, $150, $200 million a year or the combination of the two, which is really the Cadillac way of doing it and sort of what I hope for. So, I think growth will come organically. The market has to recover probably a little bit, but it will come through sourcing more business, which in part is dependent on having the um the resources to service that business and and kind of go that way.
Zack Streit
And if I can do that, I'll consider the business to have been tremendously successful.
Taylor Avakian
Would I open other offices?
Zack Streit
Maybe if I felt like it was really important to attracting the business. Um, and I, you know, open question.
Taylor Avakian
Would I add another producer or not?
Zack Streit
Um, historically, I've seen a lot of infighting in my career amongst producers when you have even just two of them, let alone, you know, 10 or 15. And the questions that come up and the the challenges are who owns the client, who gets the resources. It's just that simple. You can't avoid that. You can create, you know, roles and responsibilities. You can you can create rules around it, but you can't you can't avoid it. And so, like, having seen that and also having, you know, been further along in my career and, you know, having a pretty good book and, you know, a desire and really enjoying going out and hunting and bringing in business, I actually think that, you know, what I need is just, you know, more exposure so that sponsors know about the service I provide. And then as deal flow ramps more people to help process
Zack Streit
that business. And so I I kind of really see it, you know, remaining kind of a sharpshooter outfit, but one that provides really intimate white glove service and just building on doing more of what I've always done.
Taylor Avakian
Give me the playbook of how to get new clients. Um, and yeah, and you know what I mean?
Zack Streit
And the reason uh I say that is because that's a big part Oh, my microphone fell.
Taylor Avakian
Um, a big part of what I do is generating new business, right? And so I love creativity when it comes to um, getting clients and earning business and finding new ways to market. Doing the podcast has been fantastic, right? I sell apartment buildings in Los Angeles and so if anyone wants to sell, right, it's it's that trust. So there's different ways of going and trying to build my book of MS, I guess you'd
Zack Streit
say.
Taylor Avakian
How do you approach that? what are you doing and what do you think is the best fit for you moving forward?
Zack Streit
Well, first of all, shout out to your business cuz you built it from the ground up. Thank you. With like your own drive and your own tenacity and you're prolific and so many of the guys that I work with here in LA uh know you, have a high opinion of you. Um and and so I think that's awesome.
Taylor Avakian
I appreciate that.
Zack Streit
I I would suggest that if anybody listening here wants to talk to somebody for a BOV or or to list their property that like you're the guy. You probably will not find a higher level of drive and responsiveness in this business. And that's something that I pride myself on and you have it. I see how quickly you respond to my text messages. Um and so I can only imagine that if you're, you know, giving me and I'm like not your client per se, that service, all the more so for the other people that are out there. And look, transparency and drive and responsiveness are at the heart of what makes a good broker. And so, when you have that, and you know, folks don't know it, I hope they take my word for it.
Taylor Avakian
That is getting clipped and going on my website.
Zack Streit
There we go. Let's go. Testimonial, baby. I appreciate it, bro. Um, how do you get clients? So, this is this is the biggest challenge of brokerage. Um, and let me let me let me add to that challenge. You've got, in my opinion, at least on the debt side, I can't speak to investment sales, the same number of brokers running around today. It feels like as you had in 21 and 22 and you probably have twothirds less deals. It feels like now there has been some movement. Some people have left, but not nearly the amount that I thought. So like again no distress in the like deal market or there is distress but things aren't transacting and like I would have thought the brokerage herds would have thinned and it's been 3 years of a very anemic environment and it hasn't thinned yet.
Zack Streit
Um and that that is something I wouldn't have called. Um but against that backdrop look there's no oneizefits-all. Um it's it's everything. So, you need to be continually prospecting in this business because you never know what will close in your existing book. Um, you need to be continually prospecting in my business because the more deals you have out there, the more information you call from lenders about what they are doing and are not doing. Um, and that's so important to both your existing book and new deals you may source. Got it. Um, and so, you know, I don't have a one-sizefits-all strategy. I wish there was one thing that just did it, but but the things that do it are everything. Um it's it's committing to a space, which I did over eight years. It's attending a tremendous number of conferences
Zack Streit
because those seem to be great um business development tools for the type of sponsor and deal that I look for. So, I've been to six conferences this year, and we're not even through two months of the year. Jesus. one in Miami, um one in Lagouna Beach, uh one in Vegas, one in downtown LA, uh and one in San Diego, and then one that I spoke at yesterday in Salt Lake. So, that's a big part of it. And those conferences are target-rich environments. Um there are a lot of sponsors that are there, and staying in front of them and having them remember me or meet me is a huge thing. Um I try and uh foster a continual social media presence. That's a big one. And for me that's LinkedIn and Twitter, not really Instagram. And I try and post at least once a week, if not twice a week.
Zack Streit
Some of it's advertisements for what I'm working on or what I've closed, and others just sort of thoughts um reflections uh that are there on the market. Um eblast, I probably have, I don't know, 10,000 people in my um I guess eblast database. And so I try and send an eblast out um you know, every month. And then I am constantly entertaining clients. I'm taking them golfing. I'm taking them to dinner. I'm flying out to see them. I'm flying out to like look at one of their properties. Um I'm playing tennis with them. I'm having breakfast with them. That's just a very constant thing of what you have to do um in order to stay top of mind in a business like this. Yeah. Um but do it and you'll be rewarded. And look, don't do it and you might be fine.
Zack Streit
Maybe maybe I'm approaching this all wrong and so if I am, I'd love to hear about it. Um but those pretty well. Thanks. Those are the things that I always try to do. And and and then it's then it's then it's when you do create the opportunity and a deal comes your way, making sure that you can pitch on it efficiently and well. But here is the most important thing if you're going to do middle market brokerage in my opinion and and really a reason I set up Priority Capital. I wanted a relatively safe place to do deals, which brokerage isn't safe. But I wanted to know that when I did all of that work, all of that business development work, the conferences, the social media, the dinners, the basketball games, the golfing, the client events, whatever they may be,
Zack Streit
and I brought a deal in, I wanted to make sure that I could service that deal, that I could run the best process out there possible. Does not mean the deal will close. Hopefully, it does. Yeah. But it means that I am delivering the best possible client service I can and and and priority was formed in large part to um achieve that mission and carry out that mission. And you know that that makes me happy and thankful every single day that I have that because gosh, what could be more frustrating than going to six conferences in 8 weeks, sourcing 20 deals, and then them languishing, not being able to get back to clients with guidance, not being able to efficiently send them into the market, not being able to answer lender questions to generate term sheets to kind of
Zack Streit
create the buzz about your business, and then ultimately hopefully to to monetize.
Taylor Avakian
Yeah, it's it's super important. If you don't have a good product, which is the brokerage, the the business, then no one's going to tell about your service and really word of mouth and
Zack Streit
referral travels and it travels fast.
Taylor Avakian
It is the most powerful way to grow your business as a service professional in my opinion. And so everything we do is trying to get that referral uh that that experience to be referral worthy um in my opinion which you know clearly you've done a fantastic job at doing that.
Zack Streit
Likewise. I want to get super tactical because I am a person who is obsessed with organization because it does not come natural to me. I'm I'm very much a run and gun like you know athlete go running go run 50 yards this way run into a wall right there.
Taylor Avakian
What is the actual tactical organization that you do to make sure that you are following up with clients that you're doing you're setting the breakfastes that you're like the organization is is just as much of a part of the broker's business as
Zack Streit
making sure people don't slip through the cracks. Yeah. Um well my short answer and somewhat flip answer is going to be not enough. Got it. Not enough. I I wish I was a lot more organized than I am.
Taylor Avakian
Use a CRM.
Zack Streit
I use a CRM. Yes. Okay. So, I'm not as diligently as I could and it's on a to-do list to do more. Um, I would say that like there there are a few parts of the CRM for our businesses since you asked about it. One is on on the execution side of the business, making sure you keep track of all the lenders that are out there. You have a database and then who you talk to on a specific deal and what they said. And we'll do monthly, sorry, we'll do weekly capital markets updates with our clients. and you may be going out to a hundred lenders, but you might do that across 15 deals. You can begin to do the math on what that actually means. Wow. Um and and so you better be and on that side, we are extraordinarily attentive to detail because it's easy to lose them.
Zack Streit
Um I need to get a lot smarter um about the
50:00–1:00:00
Zack Streit
front end and more targeted marketing. But I'll also tell you that not having it and just having a blast database and social media has actually, you know, it's worked pretty well to date, which is crazy. which is crazy. And so like, you know, could I be doing a lot more like if I show up like in Dallas? Like who are my top 10 sponsors in Dallas? And some of that I know, but it would be really nice to see a list. So I'd like to work towards getting that because I'm always kind of in so many different places. But I would say I I at this point have generated a lot of like inbound traffic that like they're just very few days where there's nothing on my calendar, which uh is a bit of a barrier. So this year, something that I like to think about is how better
Zack Streit
to brand and market, but also to get a lot more tactical and organized in who I'm spending time with and who I'm reaching out to and why. I I have spent a lot of time trying to figure out like how my bread is buttered, so to speak. And it's clear that like conferences and world warm referrals are probably the two biggest sources of business for me. So I try and go to a lot of conferences and then I try and nurture like important but tactical relationships like you who know a lot of sponsors and and have a lot of crossover in the client base or will know a lot of sponsors and let there be a lot of crossover and so like you know that that that's it's it's just it's almost natural and I don't know my business has always been um I guess somewhat
Zack Streit
personal too and that like I forge bonds with people whom I like and whom I trust and I want to transact with more and there's a lot of them out there. So that that seems to work to work pretty well. But I I wish that I had like the mother of all CRM with, you know, all of my existing clients and top prospects in different markets and and were a little bit more tactical about staying in front of them. And I I haven't got there yet. So it's somewhere that I that I need to go. Um and I think it would would help them.
Taylor Avakian
it's on the menu when you get it figured out and you will because uh it it just kind of juices things up because it's it's something most of what my business is is is is again similar to to you in that front but not as much referral business because what I do is more mom and pop and so a lot of mom and pops are not in the same space uh they're
Zack Streit
not going to the same events and they're not you know hanging out right or under the radar. Yeah. You have to kind of seek them out.
Taylor Avakian
You have to seek them out. And so I have to make sure that I'm very much like on top of everyone. I got to call this person next week. Okay, talk to them. Let's put them a month, you know, a month in in front. I'm going to put some sales comps reports together for these people. Like all these nurturing strategies because the average hold time for a property in Los Angeles is 40 years.
Zack Streit
Wow. 40 years, right? From a from velocity standpoint. Incredible.
Taylor Avakian
So, like you got to have a long-term out outlook of what these um famil family's portfolio plans are and you got to make friends with the kids and then the kids maybe they want to give it to this person over here and then they got a estate attorney who is actually the one who's going to be making the
Zack Streit
decisions or a financial planner.
Taylor Avakian
So, it's like putting it's this puzzle piece that you have to put together in the right way to make it all tie up in a nice little pretty bow, which it never is nice
Zack Streit
and pretty, but it's just that continue continuation.
Taylor Avakian
And so, I think for you the next step being able to do that and having both sides of it, it's huge. It dude it will be it will be huge.
Zack Streit
People won't slip through the cracks and and they're there definitely similarities. So yeah, that's a big uh growth area for me as opposed to sort of just feeling like I'm I'm kind of winging it and being reactionary. On the other hand, there's a lot of demands of the business from an execution side and you know, your your boutique so your headcount is limited and so there's a there's a cost benefit to try and figure it out. But uh look, I'm I'm always thinking about it and I always feel like I could and should be doing more and you know like hey I've got eight people at dinner but could I really have 10 and okay so I pay another 100red or 200 bucks ahead. Who cares? Yeah, man. So, you you figure it out.
Taylor Avakian
Totally. It's a very interesting business model and I love talking to brokers because I'm so much on the strategy side, the strategic thinking of of what would make the ultimate broker, brokerage, process, system. How do you make it so that when you're servicing clients, it becomes this experience that is unlike anything else? I nerd out about that stuff because there's always improvement.
Zack Streit
There's always room for improvement.
Taylor Avakian
And that's the cool thing about a sales job and and being in sales is there's never really a ceiling. There's never a max capacity. Um it's it's all about bodies and opportunities. And if there's really an unlimited amount and so if you can work harder and harder to take more and more market share through strategic and creative ways that almost and I don't know about you but um I there's like a this lack of creativity that I think in the beginning when I was doing brokerage that I
Zack Streit
was missing.
Taylor Avakian
I wanted some creativity in the day-to-day instead of this just like ground and pound D. And I found when starting my own team and brokerage that I get a little bit more of that creativity. I get to use more of that creativity in the day-to-day.
Zack Streit
Sure. Well, you're the boss, right? And everything sort of is on your shoulder. So, you you better be you better be really really nimble. Like you can't like uh what do they say about the guy that like does the same thing over and over? It's the same as all these insanes. You you've got Yeah. definition of insanity. So, yeah, you've got to be that way. I agree with you, too. like I'm I'm much more sensitive to psychology and optics frankly than I used to be and probably to my detriment, but that's a normal part of the learning curve. There are certain signs and certain things you probably aren't going to hone in on or don't realize are actually important even though they are. And that's the nature of being younger in a profession and um you know I
Zack Streit
think seasoning uh but now yeah I I I think about need versus want a lot on the transaction.
Taylor Avakian
Why did somebody say this?
Zack Streit
It was pretty strategic and you know could they have said that should they have and so on and so forth. So yeah, there's there's definitely a creative side to it too. How do you learn?
Taylor Avakian
How do you uh continuously improve your skills?
Zack Streit
No, I beat myself up. I don't recommend doing that and I wish that I didn't. It's a bad habit. It's one that I am working very hard on managing and maintaining and doing better. But I think you mean like negative selft talk. Yeah, absolutely. Got it. And especially when I when I make a mistake mistake or a perceived mistake. Yeah. But I think you really learn by just being relentless and um that isn't beating a dead horse, but it's just trying to do the best job you can to put yourself in a position to win. And counterintuitively, some of that means like putting yourself out there and and you aren't going to win, but but if you learn from those experiences and you learn from what didn't go right, like that's what it is. It's learning to realize, okay, something didn't go the way I wanted it to go, right?
Zack Streit
I I haven't sourced as many deals as I wanted to this week, or, you know, this deal just fell out. All right. Well, what could you change about your sourcing, right? Was it the week between Christmas and New Year's where everybody is out on vacation, so it kind of doesn't matter because nobody's sourcing deals. Yeah. Or or was it like prime sourcing season and you were just sitting on the beach, right? Um, a deal falls out. All right. Well, what happened?
Taylor Avakian
Why? Is there anything you could have done different in your process that would have stopped that? A lot of times the answer is going to be no because so much about this is out of our hands, right?
Zack Streit
An equity partner falls out on a deal. Seller cancels a contract for some reason. Um, you know, there's a title issue, there's an insurance issue, the proceeds come in way way short for some unforeseen reason, right? There's a there's a Palisades fire or something, whatever it is. So, you know, you got to like let go of those. But if there was something that you you kind of didn't realize and didn't do that was right, then okay, look, it happens. They're occupational hazards. Don't kill yourself. Don't beat yourself up. Just make sure that you never make that mistake again. And that you, you know, you you sort of get really, really smart. One area that I've tightened up like crazy that I didn't used to. I am much more let's say attentive and focused on giving clients the best possible guidance that I can at the outset of the transaction to
Zack Streit
manage those expectations to not sell to them. Mhm. So, if there are brokers listening and look, you each know your profession better than me, but I'll tell you for mine, there's a tremendous urge to sell. Tremendous urge to say, "Oh, well, you think pricing on this deal is 500 over, well, I can get you 300 over. You think, you know, you can only get 65% leverage, I can get you 75." You know, you think this is an eight debt yield deal, well, I'll do something at a six debt yield. and and that to me is folly and crazy and and for me not everyone that is bad business. And so in addition to understanding clients needs versus want and why they might hire me to run a process, um I also want to make sure that the guidance that I give them is very very clear, is documented and is
Zack Streit
in my opinion realistic and not stretching too far because I have found over the years that in selling too much um you can contract a bad reputation and that you will never be able to meet those expectations. So even if you do end up monetizing and even if in your opinion the execution is wonderful like if if a client has to transact at a leverage level significantly lower than what you guided to andor an interest rate that's significantly higher it's not going to leave a good taste in that client's mouth period ever. Full stop. And so you know if you're okay not getting that repeat business you know so great. I'm not. I'd like to get it. I think that's the promote in our business. That's the residual in it. Um I think paying attention to that is a really important thing and
Zack Streit
it's something that we started to focus on and and you know now we screen deals and very closely. We ask a lot of questions. We make phone calls to other industry players to make sure that like we understand what's going on and we can really deliver the best possible feedback. So we say hey you
1:00:00–1:10:00
Zack Streit
know 80% leverage is possible here and we think it's going to cost you 5 to 600 over or we say hey 65% leverage at 270 over is possible here but we really have a good idea now things happen things can change and when they do you bring that up and you say hey you know we had talked about X but now I learned why and I didn't know about why when we talked about X and immediately saying like why changes X we need to have a conversation about that and it's actually hard Yeah, it's really hard to have that conversation with your client, but brokers that can do that and do it well, I believe, get extraordinarily well rewarded and can be around the profession for a really long time. So, I think um you know, being pretty street smart and being
Zack Streit
pretty transparent uh are are underrated and can take you a long way. Do you do any self-study? Um by self-study am like do you read
Taylor Avakian
any sales books or psychology books or professional? Oh, advanced like what what is that for you? What do you do to that?
Zack Streit
I have an executive coach that I meet with um almost every week for a couple hours. UI part of my life. I'll meet with him twice a month in person for two hours and then we'll typically do a half hour call in between that. Um and then their follow-up items towards each session. Um and that's easy. He's both a professional coach and also a personal one. Um what else? I meditate a lot. Um I try and work out a lot. Let me hold on a sec.
Taylor Avakian
I want to let me jump into the coaching cuz I I'm a big believer in coaching. So, what specifically are you guys discussing in the coaching sessions? Like is it okay here's what happened to my business? How can I what can we do to fix this or what do I need to do like an outside perspective? What is it specifically for him?
Zack Streit
He is a believer that business and life mirror one another. Okay. So, I would not say that our coaching sessions are are all business. Okay. um like a therapist slash kind of business coach kind of like a life coach business coach more than a therapist and he helped him work on myself. He's helped me with my marriage. He's helped me with my interaction with my children with my friends. Yeah. Um you know figuring things out I I would say that I actually came up with the name priority capital because of him and this will illustrate some of what he does. So um the name priority is a double entandra. You know part of it is our clients are priority. So obviously priority capital get you the best capital prioritize it. The other part is for me on an everyday basis to remember what my priorities
Zack Streit
are and I sort of classify my priorities or my pyramid as myself, my marriage, my children, my business and in that order. And I would caution brokers, it's really easy to reverse that. For a lot of my career that was reversed where the business was first and that comes um with a cost. I wouldn't say it's right or wrong. It's it's subjective. For me it was wrong. uh for others it may not be. Um and and and so it's a it's a reminder to myself about what my anchors are, what actually matters in my life and why I'm doing the things I do um on a big picture strategic basis and down to an every minute and every second type basis. So yeah, you know, self-help, professional development, personal development, enormous, enormous sides of my life. Um coaching is part of it. mentoring. I have mentors and I I am
Zack Streit
a mentor or have been uh for ULI for various other organizations and I really try to believe in in giving back to that next generation and I was the recipient of a lot of wisdom and I I hope that they will be too. Um, I used to listen to more than I do now, just timing wise, a lot of different audible books. These are books that CEOs wrote about their journeys or like some of the, you know, professional development books that are out there to sort of help you guide and and sort of build your business.
Taylor Avakian
And what's your favorite book that you've read on that, man?
Zack Streit
Um, I think my favorite CEO book has got to be uh there was two that I really loved, but um, I loved Reed Hastings book about Netflix. Okay. Um it was just such a different way of thinking to me. I also like Bob Iger's ride of a lifetime book. I thought like God, you know, having gone to Disneyland as a kid. Yeah. Um was a big one.
Taylor Avakian
So that I'll have to read those. I haven't checked those out yet.
Zack Streit
Both both are amazing. They're not specifically saying do this and your business will prosper. But you learn from two of the brightest minds, two of the biggest CEOs out there that have built major major organizations. And so like a lot of what they talk about is pretty great.
Taylor Avakian
What I think makes someone smart is being able to take information and execute on it in a timely manner as quickly as possible. Right? That's smarts to me. And so I think when you study great people again they may not be talking directly about your business but if you understand the patterns of what they're doing and the recognition that this is similar to this aspect of my business and I can get an idea from that to implement it in mine. I think that's where a lot of the wins come from cuz I'm obsessed with
Zack Streit
that too.
Taylor Avakian
There's a a podcast that I listen to rel religiously which is called founders which this guy studies you know some of the best founders of all time and there's so many throughputs of similarities between all these great incredible entrepreneurs and and the greatest of all time and so when you when you realize that there's these patterns that you can do and take into your own business and the creativity and the smarts comes in figuring out ways to uh articulate that and actually put it into practice in your own because they don't give you a road map. You have to be able to take that out of what they're doing, that example or situation and say, "Okay, what does that mean for me? What how can I, you know, build relationships better? How can my sentence structure when I'm talking to clients lead to what I'm doing?
Taylor Avakian
How can my emails be better?" Right? How did he get a deal done in that situation? What was the psychology behind it or the steps that he took? And how can I use that in my situation?
Zack Streit
So it's it's that continuous learning.
Taylor Avakian
I think from a saleserson's perspective, you have to be obsessed with getting better at this job because if you don't, other people who are obsessed will beat you.
Zack Streit
Very competitive environment. It is a very competitive environment. You are 100% right about that. So either you're constantly growing, evolving, and improving or you're not.
Taylor Avakian
One question before we kind of wrap up.
Zack Streit
Sure.
Taylor Avakian
How are you um because the brokerage business is somewhat of a treadmill. Are you building wealth in other ways that are quote unquote passive income? What what does that look like for you?
Zack Streit
Yeah. So, it's it's a good question. Um, people have all always asked me like, do you think you could sell at some point priority for a number? And I, you know, I don't really know. I don't think about it that way. I think that if I can get to where I'm doing 500 million to a billion in deal flow annually that I'll be making enough current income that it probably doesn't matter. And and I'm okay with that. Yeah. And I think that for as a society, as a business culture a few years ago when the market got flooded with liquidity by the government, everyone was obsessed with this because for a moment in time, things were trading at crazy multiples. Not really the case anymore. So, I'm I'm quite all right with a business that generates, you know, a hefty amount
Zack Streit
of current income and sucks to pay the taxes, but like I will and hopefully I got enough left over to, you know, cover my costs and, you know, save and and invest. In terms of the investments that I do, it's funny. Um, I'm not a great real estate investor. I was never great on the equity side. I was a pretty good lender. Yeah. So, I know how to, you know, write small loans. I did that many, many years ago. Um, but I I have invested in 15 or 20 real estate deals and, uh, most of them haven't been great. Yeah. Um, so these days I'm investing my money, I mean I've got an IRA in the stock market, but beyond that into Priority Capital and then together with my wife. My wife is an architect in GC. And so she uh has a business that basically um I guess builds
Zack Streit
and redevelops custom homes for homeowners. Nice. Uh and occasionally we'll do a spec project. We're doing one now. Oh, nice. And so we'll we'll kind of invest in that. And then we we we own a couple properties. Okay. Just residential properties, not homes. are you uh and rented one of them and and that's it. But otherwise, like I'm not a sponsor. I don't want to compete with my clients. I don't think I can do what they do. Frankly, I know everybody views a broker's job as risky. I'll say it for the record here. I actually think what sponsors and owners of commercial real estate do is much riskier. Maybe it wasn't back in the day, though. I think it always was, and they never could have known values would, you know, go up the way they have. But I look at what most of my clients and I'm like, I
Zack Streit
mean, you're taking an extraordinary amount of risk, much more than I am actually, and you should be rewarded for it more than I am. Like, yeah, if you're a good GP and you make a promote, you should get 4x on your money. So, it's very different. So, I I I used to feel a lot of pressure and I probably made some investments in 21 and 22 that I shouldn't have. Yeah. Small, so they're fine. But I kind of learned from that that like I'm a guy that needs to just stay in my lane. I'm good at one thing, so let me do that and let me do it well. And if I'm going to invest, let it be with my wife because that's her business. That's what she does. She does it well. And and and I'm okay like not trying to, you know, sort
Zack Streit
of like I don't know, chase this huge pot of gold at the end of the rainbow that like is pretty elusive. Yeah. And and because of like, you know, FOMO or peer pressure. That isn't me. Yeah.
Taylor Avakian
Okay. You brought something up.
Zack Streit
One one more question. Sure.
Taylor Avakian
The Palisades. Yeah.
Zack Streit
Yeah.
Taylor Avakian
It's kind of crazy what's happened. Um, a lot of people are affected and there's a lot of land that now needs homes on them.
Zack Streit
Yeah.
Taylor Avakian
Is that something that you would ever you and your wife would ever do? Is that an opportunity you guys are looking at?
Zack Streit
Yeah. So, good good question. So, I'm from the Palisades. I don't know if I mentioned that. I probably didn't. And I grew up in the Cast Lamar area and my dad still has a house there. He rebuilt the one we grew up in and luckily his survived cuz it it's made of stone. Um, but I'm devastated for that community. Yeah. Uh, on the street I grew up on 10 houses burned. Vino way. I just shock. In the Porto Marina area, you can see some of it from just PCH. You the drive from PCH to Malibu and pretty much every every house from Sunset Mesa to Nou is burnt on the ocean side. So, it's really really rough. Uh, but
1:10:00–1:20:00
Zack Streit
look, you know, um there are there there are always opportunities and and maybe out of some of this devastation becomes opportunities. My wife's actually rebuilding eight houses for different clients. Wow. Now that's made her really busy. And look, there's part of it that's a little bit uneasy, but it's her profession. People have a need. She's also helping them rebuild their lives. Totally. And so, you know, I'm I'm fortunate that we can. And you try and be altruistic and help out and modify what you charge in certain cases, but like you also have to make a living and it's not easy. It's going to be a long road for that community. Um, and and building in the Palisades was never easy. And I know they say they're going to make it easier, but uh, you know, TBD, we'll see. Yeah, look, if there's a good investment opportunity, look at it.
Zack Streit
I mean, of course, who wouldn't? Um, do I want to capitalize on somebody else's misery? No. No, I don't. And I would hope that, you know, if there's a seller of a piece of land that he's getting a price that works for him. Yeah. And that is going to be different than works for the next guy. Yeah. Um, and and you know, and hopefully that's okay. So, sure. I mean, I'd look for opportunity anywhere we can, but it's neither of our primary business, right? I am a service provider and frankly so is she and that's what we like to do. We like to help people. At the end of the day you can strip it all away. All the big deals of sophistication. We we like people and we like helping them and so hers manifests in um design and construction and mine manifests in like helping
Zack Streit
guys you know sort of procure sophisticated financing options for their real estate and that's who we are. Zach, I appreciate you man for coming in.
Taylor Avakian
Um where can people find you?
Zack Streit
Priority capital.com. priority cap priority capitaladvisory.com is the website. Um I'm on LinkedIn. Um I'm on Twitter. Um and so I'm pretty easy to find. Plus they can reach out to you to find me into That's true.
Taylor Avakian
You're spitting some meat on those social platforms. So please go follow Zach. He uh his we didn't get into the nitty-gritty weeds of everything, but he is so knowledgeable on all his stuff that like I learn everything. I learn something new every time you post. So like keep it up, dude. I I love it.
Zack Streit
So thanks, brother. All right. Awesome stuff.