Eastdil Secured ended a long-held tradition regarding broker retention as the company seeks potential suitors.
The company last week offered retention bonuses to more than 130 directors and managing directors, sources told The Real Deal. The $1 million bonuses required the dealmakers to agree to stay on with the company for five years, sources said. It’s not clear how many people accepted the offer.
It’s a significant break from “the Eastdil way” company culture that prided itself on being more than just a commercial real estate brokerage.
“Their view was always, brokers should want to come work for us and we shouldn’t have to keep them here with contracts,” said one person familiar with the company. “They never did that.”
Eastdil has long considered itself a real estate investment bank and has garnered a reputation for operating above the fray of their brokerage peers. But parts of that company culture have been chipped away in recent years as the firm has lost ground to competitors.
For instance, the company traditionally cultivated its talent internally — hiring junior analysts out of college and training them in the Eastdil company culture to become top dealmakers. In recent years, though, the firm has done significantly more outside hiring.
A representative for Eastdil did not respond to requests for comment.
The move to lock in brokers comes as the company seeks to bring in more capital. Eastdil hired BDT & MSD Partners to advise the company on strategic partnerships and growth initiatives, Bloomberg reported earlier Thursday.
“We are certain that this initiative will further solidify Eastdil Secured as the premier real estate investment banking firm,” read a memo from the company, which noted that Eastdil is not for sale.
Along with added security for any potential investor, the retention packages could also be intended to prevent Eastdil’s competitors from raiding the company. Newmark’s capital markets team, led by former Eastdil rainmakers Doug Harmon and Adam Spies, last year poached Jonathan Firestore to help run its debt brokerage arm. It also recently hired directing manager Clint Freese from Eastdil’s Dallas office.
JLL a little more than a year ago hired Steven Binswanger, a protégé to Eastdil founder Roy March, who runs the company alongside president Michael Van Konynenburg.
March and Van Konynenburg orchestrated a management-led buyout of Eastdil in 2019 from Wells Fargo, financed by Temasek and Guggenheim Investments. The company was valued at $400 million at the time, and a source told Bloomberg it could now be worth four to five times that.
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