More than Mortgages

More than Mortgages

Developer. Mortgage broker. Real estate broker. There's no pigeon holing Sarasota's Horizon Mortgage Corp.

By Sean Roth

Real Estate Editor

Sarasota-based Horizon Mortgage Corp. is not a cookie-cutter company. From the way N.J. Olivieri's company closes real estate deals to its price structure, it is unlike others in the Tampa Bay market.

But N.J. Olivieri, a 61-year-old former finance professor who has a master's degree and almost 30 years in real estate business, says other companies are missing out.

Horizon Mortgage is a commercial mortgage banker, a real estate brokerage and it does its own development.

"Commercial mortgages are our bread and butter," Olivieri says. "The other stuff is just the icing on the cake."

That icing is thick and sweet. On average the company sells about $125 million to $175 million of commercial real estate every year. That makes the company the largest commercial real estate broker in the Sarasota-Manatee area; one of the top 10 brokers in the Tampa Bay Region and one of the top 15 in Florida.

Meanwhile, the company closes $250 million to $275 million in commercial mortgages annually, as well. Commercial Property News named the company the 42nd largest commercial banker in the U.S.

Ask Olivieri about who those mortgages were for and you'll hear names like the Ritz-Carlton, Sarasota; Kevin Daves' Concession Golf Course, Bradenton; and the Benderson Development/Neal Communities' Panacea in North Port. You are also likely hear national locales such as Nashville; Phoenix, Ariz.; Houston, Denver and Seattle.

"We are not like Michael Saunders (& Co.) and Cushman & Wakefield," says Olivieri. "We don't solicit listings. We go to where the money is. I like dealing with investors. It is much better when you are dealing with a prospective seller, when you already have a buyer with money in the bank. I (also) know they are going to pay our fee."

The Horizon Mortgage staff gets to know the biggest players in real estate through its mortgage writing. Olivieri says the company charges lower fees than the average mortgage company (an average of 0.5%). It also charges lower than normal fees for real estate brokering - averaging about 1%.

Volume is the answer, he says, citing his "Little Pig Theory."

"We charge fees that are livable," says Olivieri, "but we do it in volume. That way our clients always come back to us." Those mortgage clients end up being helpful for both potential buyers and potential real estate sellers.

"They are very competitive," says Kevin Daves of Core Development in Wichita, Kan., and Sarasota. "We've always felt that whatever we were paying was well worth it. N.J. is one of the more creative mortgage brokers in the country. I think the Ritz-Carlton was one of the most difficult, if not the most difficult, development to find financing for.

"At the time, my concept of a hotel with condos on the top was considered new. It didn't have a proven track record. Banks from the Northeast would say 'Hey we understand the Ritz-Carlton hotel but we don't know condos in Florida.' and Florida banks would say, 'We understand and like the condo market, but we don't understand the hotel market.' I went around the world looking for financing. It took a broker like N.J. to understand the value and explain it to the lender."

For instance, Horizon Mortgage needed to find apartments in Florida as an investment for a Boston teacher's pension plan. Months earlier, Horizon Mortgage had completed a $14.9 million mortgage refinance with Drucker & Falk LLC for Summer Cove Apartments, Sarasota. Horizon Mortgage staff called Drucker & Falk to see if it was interested in selling the development. That led to a $17.3 million deal with the pension plan paying $2.4 million and taking over the mortgage.

In another case, Horizon Mortgage played matchmaker for a client who needed to shed funds to avoid additional taxes. Once again, Horizon Mortgage called an existing mortgage client and sold a Staples-anchored shopping center in Bradenton to the tax-averse investor within 30 days.

With the exception of one agent, who handles small apartment complexes, Olivieri says 99% of the property that Horizon Mortgage sells is not openly listed on the market. Shopping center owners, he says, are especially reluctant to list centers for sale for fear of scaring existing tenants. But Olivieri says those owners may be willing to sell; you need a buyer and the guts to ask.

"We know everything there is to know about them," Olivieri says of his mortgage clients, "because we did the financing for them. We know their operating expenses. We know about any construction problems. We are in the best position to structure the deal. We can also present the entire (financial and construction) picture to both parties."

The nearest company, Olivieri says, that follows a similar business model is the Aztec Group Inc., Miami.

For Olivieri, being a real estate and mortgage broker is putting into action the business principals he once tried to impart to his students. Olivieri, who grew up in Madison, N.J., taught finance management and real estate at Brandywine College in Wilmington, Del., for several years in the early '70s.

In 1972, he went to work as a mortgage broker in Philadelphia. "I was still wet behind the ears," says Olivieri, "but everyone there worked together well. Working in real estate is what I love. I come from an old Italian family. ¦ I had uncles, who are plumbers and masons, and I worked for each one. (And) I was really good at reading finance statements from my time as a teacher."

In 1973, Olivieri noticed an advertisement in the Wall Street Journal that would bring him south to Florida. Coastal Mortgage was setting up a commercial loan division in Sarasota. He was hired and spent the next two years working downtown.

During that time, Olivieri received his broker's license and then his first sale - the Lido Ambassador Apartments on Lido Beach. He created Horizon Real Estate & Investment as a commercial real estate brokerage side business.

He later joined Mortgage Investment Securities, Sarasota, as a head of the commercial mortgage division. Then in 1977, he became president of First Security Mortgage Co., at the time one of the largest mortgage firms on Florida's West Coast.

Two years later, Olivieri founded Horizon Mortgage Corp. The company quickly expanded to four offices in Sarasota, Atlanta, Orlando and Clearwater. Three years later, the company contracted to two offices, closing the Atlanta and Orlando offices.

Olivieri attributes much of the company's growth to word-of-mouth. "One of our client's former CFOs took a job in Seattle," says Olivieri. "He wanted to build apartment complexes in Seattle and Sacramento, and he asked us to finance the project. We did. Days later we got a call from a friend of his - a gentleman by the name of Mike Mastro. We wound up doing the deal for him (a $31 million industrial park). We also sold two apartment complexes for him. Then a friend of Mike's, in Phoenix, called us up. We wound up financing and later selling eight apartments in Phoenix. Now, I have people calling me up from Nashville."

The majority of Horizon Mortgage's clients, about 90%, live outside of Sarasota. Olivieri says that in the early '80s he traveled a lot for the national projects, but now he's able to do much of the work by telephone and e-mail.

Olivieri cites a high demand for mortgage brokers. "You could walk into my office now and see a huge pile of applications," he says. "Don't ask me why. Our clients have faith in us that we can supply the appropriate financing for them, be it equity or debt."

Horizon Mortgage employees do make cold calls to prospective sellers. And to keep up with the market, the company subscribes to about 30 local, regional and national commercial real estate magazines.

Even with its current high production, Olivieri keeps the expenses low. Horizon Mortgage has 11 employees and operates from a 4,200-square-foot suite in Olivieri's Towles Court office complex on U.S. 301 in downtown Sarasota.

The company also has participated in developing a number of real estate projects. He converted a rundown apartment complex in Sarasota into a group of buildings for artists and a 15,000-square-foot office center called Towles Court. Horizon Mortgage also developed the 49-unit Kingston Arms development on St. Armand's Circle.

Recent Financings

TotalNameLocation

Hotels

Ritz Carlton Resort Project$95 millionSarasota

On-The-Avenue Hotel$45 million New York City

Holiday Inn & Convention Center$5 millionCharlottesville, Va.

Holiday Inn Express Hotel$4.2 millionShreveport, La.

Retirement Centers

Woodmere Retirement Condominium Project$11 millionVenice

Health Clubs

18 health clubs$49 millionThroughout the U.S.

Health Club$12.5 million Baltimore

Apartments

Woods at Frenchmen's Creek Apartments$6.1 millionSt. Petersburg

Anchored Retail

Oaks Plaza (Albertson's, Toys 'R' Us)$9 millionSarasota

Sarasota Town Center (Winn Dixie)$8.7 millionSarasota

Unanchored Retail

Hollywood 20/ Sarasota Main Plaza$18 millionSarasota

Randolph Shopping Center$2.8 millionDayton, Ohio

Recent Real Estate Closings

TotalNameLocation

Mobile Home Parks

Harbour Point Estates Mobile Home Park$12.5 millionChicago

Moorings of Manatee Mobile Home Park$10.9 millionRuskin

Retirement Centers

St. Catherines & DeSmet Retirement Centers$10.9 millionSt. Louis

Health Clubs

18 Health Clubs$69 millionThroughout the U.S.

R.V. Parks

Tropic Isles RV Park (142 Spaces)$1.765,000Pine Island

Land Sites

Condominium Site for Ritz Carlton Project$26 millionSarasota

Apartments

Summer Cove Apartments$18 millionSarasota

Polos Apartments$12 millionBrandon

Industrial

Preferred Freezer Industrial Warehouse$10 millionMiami

Office

Murdock Professional Center$3.85 millionPort Charlotte

Anchored Retail

Sarasota Town Center (Winn Dixie)$11.98 millionSarasota

Nokomis Village Shopping Center (Publix)$5.1 millionSarasota

Golf Course Facilities

Legacy Golf Course$8.2 millionSarasota