David Sonnenblick’s Boutique Firm Stands with Giants

The financier’s tenacity and collaborative drive have earned him a fruitful career over the past 30 years, including 18 years at the helm of the high-touch investment banking concern he leads with longtime partner Elliot Eichner.
Hawaiian Airlines Lobby

It’s no surprise that David Sonnenblick grew up playing competitive sports. The real estate financier’s tenacity and collaborative drive have earned him a fruitful career over the past 30 years, the past 18 of them at the helm of Sonnenblick-Eichner Co., the boutique real estate investment banking firm founded by Sonnenblick and Elliot Eichner. While helping to guide the Beverly Hills-based company through multiple economic cycles and landmark deals, Sonnenblick has propelled his firm to the top of the industry, with the track record and relationships to prove it: Sonnenblick-Eichner’s book of repeat business has enabled the company to execute an average $1 billion annually in capital market transactions across all commercial property types and maintain a pipeline currently valued in excess of $800 million. Despite its boutique-size team, the firm ranked among the top three hotel mortgage brokers in 2017—trailing only giant competitors Eastdil Secured and HFF—with nearly $250 million in transactions, according to Real Capital Analytics.


Sonnenblick is a third-generation leader in real estate finance, a business that’s been in the family for a century. Nathan Sonnenblick, David’s grandfather, launched the legacy in 1910, when he went to work for Jacob & Emil Leitner Inc., an apartment mortgage company in the Bronx, N.Y. After rising through the ranks for the next three decades, in 1947 Nathan teamed up with Nathan Goldman to form the Leitner firm’s successor, Sonnenblick-Goldman Co. The partners built the company into one of the industry’s leading investment banking concerns, and by the 1970s, Nathan Sonnenblick’s sons, Jack and Arthur (David’s father), were running the shop. Cushman & Wakefield acquired the firm in 2007.

When I started my career in the ‘70s, Sonnenblick-Goldman was a big name in the mortgage brokerage business,” recounted Continental Development Corp. CFO Mike Curran, whose relationship with David Sonnenblick began in 2004, via a cold call. “I called him back because I recognized (his last name).” Since then, the pair have worked together on several deals, the most complex of which was refinancing the InterContinental San Francisco hotel.

The transaction—a 10-year, non-recourse, fixed-rate loan—was initiated in August 2016 but took until December 2017 to close, delayed by litigation and an expiring management agreement. “Hotel loans are notoriously difficult because they’re very cyclical in terms of risk, so lenders are wary,” Curran explained. But thanks to Sonnenblick’s responsiveness and attention to detail, Sonnenblick-Eichner secured $110 million in first mortgage financing for the 32-story, 550-key hotel. “He can get things done that we as a newer borrower could not,” Curran stated.

Competitive Spirit

David Sonnenblick, Principal, Sonnenblick-Eichner Co.

Sonnenblick’s introduction to real estate came early. “I had an opportunity to start when I was young, so I decided to take advantage of it and see if it interested me,” he said. In 1982, a year after graduating from the University of Colorado with a degree in economics and environmental conservation, he started as an associate at Sonnenblick-Goldman. He routinely worked into the early morning hours, reviewing leases and underwriting investment opportunities. “I was kind of thrown into the pool,” Sonnenblick recalled, ticking off the academic pedigrees of his fellow associates. “They were all very bright, with degrees from places like Harvard, UPenn and NYU, and I didn’t actually have that background, so I felt like I had to prove myself.

Sonnenblick’s first chance to show his mettle was his introductory assignment: selling Riverside Square—a 620,000-square-foot regional mall in Hackensack, N.J.—to JMB Realty Corp., on behalf of Federated Department Stores Inc. The deal was part of a four-property, $128.3 million portfolio transaction that included three retail assets in Texas. 

Back then, we didn’t have the financial underwriting software they have today, so I had to create a three-foot-wide spreadsheet and pull out all of the pertinent economic data from the leases of more than 100 tenants,” he recollected. There was a lot of capital in the market at the time, fueling the firm’s robust investment activity and providing Sonnenblick with practical experience. “Being able to work directly with the partners, who were interacting with some of New York’s and the country’s largest developers, gave me exposure to working through a transaction from start to finish,” he remembered. “It was exciting.

Growing up in Scarsdale, N.Y., just north of New York City, young David was active in soccer, football, basketball, baseball and lacrosse and went on to play lacrosse and rugby in college. But he discovered his favorite sport, skiing, during a series of trips to Jackson Hole, Wyo., while he was in high school. After college, Sonnenblick returned to Jackson Hole for a year, paying for his ski pass by working as a carpenter and cook. Though brief, his post-college sojourn in Jackson Hole was long enough to encompass a life-changing meeting with Kim Walliser. The couple married in 1987 and are the parents of three children.

Building Trust

During his apprenticeship at Sonnenblick-Goldman, David honed his deal-making savvy, placing capital for institutional clients such as Prudential, Barclays and Citicorp. In March 1986, he traded New York City’s cold and snow for the sunshine and blue skies of Los Angeles. Though a prime draw, the weather wasn’t Sonnenblick’s topmost motivation for the big change: “For the business that we did, there was not a lot of competition at the time in California, and since we already had offices in Los Angeles, I decided to move there and start my own book of business.

In October 2017, Sonnenblick-Eichner arranged the $165 million, 15-year, fixed-rate, interest-only loan at 65 percent loan-to-value through an undisclosed life insurance company. Located in Honolulu next to the Honolulu International Airport, Airport Industrial Park, the largest office and warehouse complex in Hawaii, at 1.3 million square feet. The mixed-use asset comprises two buildings, as well as a variety of lease structures.

Upon relocating to the West Coast, Sonnenblick hit the ground running. He expanded his professional network organically and through his involvement in the Urban Land Institute and the International Council of Shopping Centers. Shortly thereafter, a Sonnenblick-Goldman introduced him to a fellow associate named Elliott Eichner. The duo would later to join forces with Patrick Brown to form Sonnenblick-Eichner.

In 1987, Sonnenblick scored his first California deal through a chance meeting at a party where he crossed paths with Edward Czuker, a developer who was looking to sell a portfolio of apartment properties. Their casual conversation led Sonnenblick to introduce Czuker to another acquaintance, Neal Gumbin, who led West Coast operations for JMB and was seeking to deploy a multifamily fund. “Edward didn’t know me from a hole in the wall,” Sonnenblick said. “But I spent some time with him, and told him I could close the deal.” True to his word, Sonnenblick arranged the sale of four Hollywood properties to JMB for $100,000 per unit, then a record for a multifamily transaction in California.

The relationships Sonnenblick forged in California continued to pay off. Between 1986 and 2014, a connection with the Chicago-based owners of San Francisco’s PIER 39 led to four refinancings and a preferred equity placement for the 242,266-square-foot specialty retail center.

Sonnenblick closed the most recent PIER 39 transaction, a $148 million first-mortgage leasehold financing, with AIG in 2014. “It was a very creative deal,” he noted. “Since we had fewer than 30 years left on the ground lease with the Port of San Francisco, we had to figure out a way to refinance the debt and take advantage of a very low interest rate environment, while also putting some term on the loan for our clients,” Sonnenblick related. The fully amortizing, 19-year mortgage cleaned up all the debt on the asset, he added.

Dan Blatteis, co-chairman of high-street retail brokerage Blatteis & Schnur, has been partnering on deals with Sonnenblick since meeting him in 2006. At that time, Blatteis was brought on to a Southern California specialty retail development project, Malibu Lumber Yards, as a minority partner, and Sonnenblick was hired to secure acquisition financing. “I appreciated his loyalty to his client and his commitment to provide the strongest possible financing terms in the marketplace,” Blatteis recalled. “David was expertly able to line up acquisition financing, and even though we didn’t end up buying the project, I knew I wanted to work with him again.

Boutique Brand

While Sonnenblick was cultivating a clientele, the firm founded by his grandfather was undergoing a generational shift. By 1989, Japanese investors were bullish on the New York City market, providing an attractive opportunity for the company to sell itself. Two years later, Sonnenblick-Goldman’s senior partners repurchased the company. As part of a succession plan, the company’s leadership named Sonnenblick and Eichner managing partners and major shareholders in 1996. Once it became clear that the two shared a goal—to deliver white-glove real estate investment banking services through a boutique, entrepreneurial shop—they decided to split amicably with Sonnenblick-Goldman and formed their own venture in 2000.

Sonnenblick-Eichner closed $110 million in first mortgage financing for the 32-story, 550-key hotel. The non-recourse, fixed-rate loan included a 10-year term and replaced an existing floating-rate LIBOR-based loan.

(Elliott and I) felt that there was a really good opportunity to create a business platform that would set up our clients with a principal whose name was on the door, personally handling their transactions from origination to closing,” Sonnenblick said. At the time, however, he was uncertain that his clients would follow. Furthermore, starting a new company entailed a major financial commitment, and marked the first time he and Eichner had faced such an extensive lineup of administrative tasks such as hiring and training staff, purchasing equipment, finding office space and investing in marketing and advertising. “It was a bit nerve-wracking, but I realized we had a reputation in the market not only from our clients but from the institutional marketplace, as well,” Sonnenblick commented. “(The institutions) knew we were straightforward (and) honest, and that our numbers are done with good due diligence.

Besides name recognition, Sonnenblick attributes the company’s success to its hands-on approach and emphasis on transparency. “Real estate is a 24/7 business—not 9 to 5—and you have to be totally immersed in it,” he said. “There is not a day that goes by when we’re not working. It’s also a relationship business, where your clients become your friends.” And unlike most shops, he added, Sonnenblick-Eichner is not vertically integrated; all three principals work collaboratively on every deal.

Another client, Robert Hadley, attributes his 30-year relationship with Sonnenblick to the latter’s proactive nature, which proved instrumental in refinancing what Hadley called one of the most intensive developments of its kind in the U.S. Located in Honolulu adjacent to Daniel K. Inouye International Airport, the 1.3 million-square-foot Airport Industrial Park is Hawaii’s largest office and warehouse complex and serves as Hawaiian Airlines’ corporate headquarters. The asset comprises two buildings, encompasses diverse occupants (industrial, telecom and office) and features a variety of lease structures—gross, triple-net and hybrid.

In the course of mastering these complexities, Sonnenblick developed an astute understanding of the asset, as well as the objectives of both client and lender. “When you get that from a principal, it’s a remarkable combination that makes deals happen,” Hadley stated. In October 2017, Sonnenblick-Eichner arranged the firm’s third financing of the asset—a $165 million, 15-year, fixed-rate loan provided by a life company.

Sonnenblick-Eichner secured a non-recourse, 10-year term loan totaling $28.1 million to refinance ShopKo stores located in Bend, Eugene and Salem, Ore.

Continued expansion

Hearkening back to his favorite sport, Sonnenblick’s firm arranged a $60 million in loan for St. Regis Deer Valley in Park City, Utah, a AAA Five Diamond year-round resort. The 177-key, ski-in, ski-out destination includes 67 hotel condominium suites and 25 private residences. A domestic life insurance company provided the non-recourse financing, which closed in January 2018.

Sonnenblick remains highly selective about the transactions his firm takes on, despite the abundance of capital in the market, pent-up demand from investors and historically low interest rates. “We don’t take on business just to put another dot on the map,” he explained. “We have to be sure we can close, since all we have is our time and our clients’ expectations.

You’ll find more on this topic in the June 2018 issue of CPE.