NEW YORK CITY-Meridian Capital Group, LLC, a national real estate finance advisor, has hired two commercial real estate veterans in an effort to strategically expand its presence in equity capital markets and structured finance. The firm has hired Terry Baydala to serve as executive vice president and head of structured finance and Peter Steier as managing director and head of equity capital markets to further the company’s ability to originate and syndicate larger and more complex loans, GlobeSt.com has learned.

“There are a lot of banks out there who don’t participate in the syndicated market in commercial real estate lending, but they want to,” Baydala says, who tells GlobeSt.com that he is spearheading the development of the new structured finance platform, targeting local and regional banks, small- to mid-sized life insurance companies and non-US-based lenders seeking exposure to US commercial real estate. “We can effectively serve as an outsourced syndication desk, both on the buy and sell side for those small banks that don’t have a syndication capability and don’t have access to the syndication market. What I’m bringing to the table is for Meridian is to essentially serve as that outside syndication desk for banks that don’t have that capability.”

Baydala, formerly senior vice president of commercial real estate banking at Anglo Irish Bank, after all, is no stranger to the field. He previously structured and syndicated large commercial real estate loans for the bank, and explains that more deals in the marketplace are increasingly requiring multiple lenders and investors throughout the capital stack.

“The larger the deal, the more structure typically is required for these transactions,” he says. “And the larger the deal, the more it may be necessary to bring in multiple lending partners to these transactions to get them done. My specialty really is putting together large structured financings that involve multiple participants.”

Steier, who joins Meridian from the Carlton Group, is also busy building a platform of his own – a full-service equity capital markets service that will run the gamut of services, from recapitalizations, joint venture equity, sponsor equity, passive promotable equity to acquisition capital. “We are creating an equity platform in order to compliment a very deeply rooted debt platform that Meridian built over the past 20 years,” he tells GlobeSt.com. “The purpose is to service our existing clients in order to provide an equity component that they haven’t already received from Meridian in the past, and then to enhance that by bringing in new clients in the future in order to expand the platform, expand the clientele and broaden the service offerings of the company.”

The team is joining Meridian shortly after the firm’s 20^th anniversary in 2011. The hires also come at a time when the company is experiencing growth; last year, it closed $17.3 billion covering 2,800 transactions. And more deals are in the pipeline. “We are about to close our first transaction, a large mezzanine transaction, which will then be followed by three equity joint venture transactions, two joint ventures as well as an equity recapitalization,” Steier says.

And as money managers, private equity firms and hedge funds in Europe are seeking a flight-to-quality and preservation of capital, Steier says North America, major MSAs in America and more in particular, New York, Washington, DC and San Francisco, are viewed as safe havens. But he explains that the core investment community – like the pension funds and insurance companies – who have in the recent past invested in those MSAs are starting to become concerned about the low yields that they are getting on their investments.

"With that being said, I think that’s going to drive these lenders to a higher yield territory," Steier says. "If that’s the case, they must move up in the capital stack. We are seeing this now with the insurance companies through their mezzanine programs, which they previously didn’t have. Additionally, from an equity standpoint, you may find that the equity in search of yield is going to move more toward some of those select secondary markets as well. Gradually, probably slowly, that’s one of the things could happen in this marketplace. These very low interest rates are creating a very low yield environment for the real estate investor out there. In order to find a higher yield, you need to either increase your risk level of the core-market properties you are investing in or you are going to have to move to investing in secondary markets. It’s likely that you’ll see some of this kind of movement if this low interest rate environment continues and as the capital flight out of Europe continues.”

Instant Insights /

With New Hires, Meridian Expands Equity and Structured Finance Platform

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