I cut to the chase. Do you sleep well at night owning a commercial real estate portfolio leveraged at over 90 percent? “I don’t associate leverage with insomnia,” Frank Cowperwood* replies. “And I never slept well anyhow.” Frank is an intimidating if not fearsome real estate investor. He is responsible for one of the West Coast’s largest commercial real estate private equity shops. And his ever-expanding empire is headed by a group of six Ivy League MBAs.
“Hiring ivy leagues was one of the smartest moves I ever did,” he states. “City officials and bankers immediately recognize the team as smart and hard-working. The effect is mystical. A few weeks ago, I was cc’d on an email a city official had sent out to colleagues. He mentioned my team’s sophistication and strong work ethic as a paramount reason why he felt we should win the bid. It was a foreclosed shopping mall. Point is, except for reading our bios, he never even met us.”
He wears a woven three-piece suit, red tie, gold cufflinks, accompanied with what looks to be a meticulously combed hair. Alongside his conservative appearance, is a dry corporate humor (“it takes two to Tango. But I don’t dance”). But his balance sheet tells a different tale. I bring to his attention that a 15 percent discount on his real estate portfolio would result in insolvency of $150 million. “That’s true,” he says. “But I also earned over $15 million in each of the past five years. And the chance that I will ever sell the portfolio at that discount is slim to none. ”