Meridian Capital’s Ralph Herzka came to suburban Jersey with a mission.
“I’m asking everyone if you are a client to stick with us, we will get your deals done,” said Herzka on Tuesday. “If you are not a client, it is your time to become a client. We will do everything in our power to make you happy.”
Herzka spoke in a friendly conversation with RXR’s Charlie Harary at the ReDeal’s conference at an opulent wedding venue in Garfield, New Jersey, where attendees schmoozed over kosher sushi, hookahs and cigars. (ReDeal has no affiliation with this publication.) At times, Herzka was greeted with a standing ovation.
Herzka was not asked about Fannie Mae and Freddie Mac’s ongoing investigation into Meridian. As a result of the probe, the agencies have halted business with the brokerage. Freddie has reached out to developers who have worked with Meridian.
Meridian recently hired Brian Brooks, the former general counsel of Fannie Mae as CEO, and Herzka moved into a chairman role. Brooks said he will build compliance and risk infrastructure at the firm, which could take over a year.
Herzka admitted it was a challenging time, but business was on solid footing. He said Meridian closed $4 billion of new business with 99 lenders in 28 states in the first quarter of this year.
“In spite of all the issues we are having, people are working really hard,” said Herzka. “We are having a tremendous amount of success in managing this business.”
Herzka also stressed he was an intensely loyal person and has learned from experience that others are not.
“I learned who your friends are and who they aren’t,” said Herzka. “You can do something for someone for 20 years, and it doesn’t mean anything. And you can do something for no one, and all the sudden they are there.”
Fannie and Freddie’s decision to halt dealmaking sent shockwaves throughout the commercial real estate industry. Meridian was among the largest commercial mortgage brokerages. Freddie and Fannie were a sizable portion of their business. Herzka pushed the firm’s hard-driving work ethic, and was known for the motto, “Eat. Sleep. Close. Repeat.” Some brokers have already jumped to other firms.
“You are not defined by one event,” said Herzka, speaking generally.
Herzka is well-known in the Orthodox Jewish community for his philanthropic work. He told attendees he just got off the phone trying to solicit support for the Mir Yeshiva. Herzka then told stories about lessons he learned from Charlie Munger over catered kosher dinners. He said the famed investor was a client of Meridian’s for years, and that Munger once advised Herzka to “take the high road, it’s less crowded there.”
“We’re going to learn lessons, we are going to be better and stronger,” Herzka said.
He said he was impressed how many people, including banks and clients, have reached out to him during this time.
“The most important thing is you have to wake up everyday and go out and fight the fight and do what’s right,” said Herka. “Truth prevails and the good people always come out on top.”