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NEW YORK CITY—FTI Consulting and the Schonbraun McCann Group have joined Compass Advisers, LLP to create EdgeRock Realty Advisors, an independent boutique real estate investment bank. According to a release, EdgeRock will advise real estate, owners and institutional investors on M&A and divestiture transactions, private capital raising and IPO and other capital market strategies and transactions. The new firm will be headquartered here.

FTI’s current head of global real estate, Bruce Schonbraun, and Compass Advisers founder Stephen Waters will take on the role of co-CEOs at EdgeRock. The company is also bringing former LehmanBrothers/Barclays Capital global real estate managing director David Lazarus as senior managing director.

Lazarus tells GlobeSt.com that the group had been discussing this venture well before the events of 2008 that culminated with Lehman’s extinction. In fact, he says, “early on, the mission was to provide a differentiated level of service to real estate owners.” However, he acknowledges that pressures on big banks have led to an evolution of the big bank business model, which in turn has created fundamental challenges in capitalizing and financing for real estate owners and operators.

Harvard Business School Professor William A. Sahlman tells GlobeSt.com that Lazarus’ new venture will probably do well in this new challenged environment. “Firms like this one will enjoy great success as the entire industry is restructured over the next five years,” says Sahlman, who with Harvard Business School associate Paul Gompers published the 2002 casebook, Entrepreneurial Finance.

On the ground, Lazarus says that in the years leading to the current downturn, “people could make money buying and selling real estate using significant amounts of leverage.” Moreover, “there really wasn’t much standing in the way from owning something for a period of time, and then making money selling it.”

But, he says that from here on out, that will be increasingly difficult, and a big dose of nuance will be a required for owning and operating real estate.

In those five years leading to 2008, Lazaraus says a lot of real estate changed hands and it got capitalized in an environment that was unsustainable. Now, he says that market needs to see capital structures, restructured to what today’s metrics are and based on what investors think makes sense.

“That’s going to be very different than it was before, and, it’s obviously going to create a tremendous amount of stress, a tremendous amount of loss of wealth, some which has already occurred,” says Lazarus. “Much of that debt is on paper, however, and will be increasingly realized over the ensuing years.”

During his time at Lehman/Barclays, Lazarus was involved in over $50 billion of real estate transactions across a wide range of sectors and products. At EdgeRock, in addition to managing director duties, he’ll head up the firm’s strategy and operations. He says this firm can make a difference with clients.

Sahlman tells GlobeSt.com that these days, “clients want to work with the best people,” and “some of those best people are fleeing the spotlight at big investment banks.” To that, Lazarus says although he was successful at Lehman/Barclays, “I didn’t leave the bank as much as I went to pursue this opportunity.”

Still, Lazarus says “if the world had not changed as it did, the opportunity may not have been as significant as I think it will be now.” However, “the world did change, and I think the opportunity is significant, and I think for people like myself, what we’re finding, is that owners and operators value the insight, advice and counsel much more-so than they did a year ago.”

The value proposition Lazarus offers is, “you get me, and my partners, and when you want to access me, you can talk to me anytime you want; I’m there for you.” He adds in this new venture, “I won’t have to support the same kind of infrastructure I did before.”

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