- Goldman Sachs has advised some of real estate’s biggest names on major transactions, such as Blackstone’s $18.7 billion purchase of GLP’s logistics assets in 2019.
- We spoke with seven bankers who help run the firm’s real-estate coverage group and learned about their roles, how the practice’s business has grown, and the ways the pandemic has affected what they do.
- The bankers have a combined 146 years with Goldman.
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While real-estate investment trusts were created by Congress in 1960, the category ballooned in the ’90s, growing from $5.6 billion in market valuation in 1990 to $135 billion in 1997. The massive influx of capital also led to an increase in real estate’s need for advice from investment bankers, as the prospect of mergers and other liquidity events required a significant increase in outside help.
Goldman Sach’s real-estate investment-banking team is one of the beneficiaries of a jump in demand from REITs — as well as other players — for advisory work in the sector. The team has vastly grown its head count, doubling its number of employees over the past decade, and has worked on increasingly bigger and more complex deals, like Blackstone’s $18.7 billion purchase of GLP’s logistics portfolio, the largest single private real-estate transaction ever. Goldman declined to disclose the number of employees on its real-estate investment-banking team.
In the past 12 months, the team advised Liberty Property Trust in its sale of 107 million square feet of logistics space to one of the largest owners of industrial properties, Prologis. It also advised Taubman Centers in its $7.5 billion sale to the US’s largest mall owner, Simon Property Group, though Simon is now trying to get out of the deal, saying Taubman has been “disproportionately affected” by the pandemic.
Many of the people who are leading Goldman’s real-estate practice today got their start at the firm in the middle of this boom and have stayed with the firm since. The practice, which includes everything from loan origination to advising the casino and gaming world, has become one of the leading banking franchises in commercial real estate.
The real-estate team has more than doubled its mergers and acquisitions volume market share since 2012, from 7 to 16% in 2019, and more than doubled its M&A fee share since 2010, from 6 to 15% in 2019, the firm said. According to Real Estate Alert, the team led the real estate M&A world in deal-size 2018, working on $73.96 billion in deals, and was 6th in 2019, with $21.84 billion in deals, less than $6 billion behind leader Morgan Stanley.
The team is now helping its clients navigate the commercial real-estate landscape during the pandemic, which threatens shake-ups in hard-hit sectors like hotels and retail but is also providing major boosts for industrial real-estate assets.
Read more: Markets for retail and office space are under enormous pressure. A foreclosure in the works for a building on NYC’s glitzy Fifth Avenue shopping corridor shows just how bad it’s getting.
We spoke with seven of the leaders of the practice to learn about their roles, the influence of the pandemic on their business, and the ways that the practice has grown over their time at the firm. The seven power players have a combined tenure of 146 years at the firm and have grown Goldman’s practice to its present-day scale.
Meet the seven power players running Goldman’s real-estate investment-banking business below.