Guardian Takes Majority Stake in Executive Asset Management

Guardian will merge the firm with its AssetAdvisor division and build on EAM's experience in disposition strategies, property management and rental solutions for FDIC Loss Share assets.

Investment banking services company Guardian and Atlanta-based Executive Asset Management are on the same team now that Guardian has acquired a controlling interest in the residential and commercial real estate management firm. Guardian will merge the firm with its AssetAdvisor division and build on EAM’s status as an expert in disposition strategies, property management and rental solutions for FDIC Loss Share assets.

The marriage is a timely one. “The industry, particularly those sectors involving loss share assets, is very fragmented with many smaller players; we definitely see consolidation on the horizon,” Paul Brenneke, founder and CEO of Guardian Investment Banking & Real Estate, told Commercial Property Executive. “Additionally, asset management requires scale and volume; therefore, joining forces makes sense for both parties.”

Guardian is a big gun—its team has closed more than $10 billion in capital market transactions—but EAM is no small force, having orchestrated the disposition of more than $2 billion on behalf of clients across the country. The newly merged entity will operate as EAM and overlap will be minimal, as Guardian’s expertise has centered primarily on commercial assets, while EAM has focused mostly on residential properties. “Bad bank portfolios are full of all asset types and therefore, having broad based competencies is essential to provide turn-key service in the loss share industry,” said Brenneke.

The companies’ combined expertise and shared operational synergies will likely provide a firm foundation for the new entity’s growth in the rebounding real estate industry, and growth is indeed on the agenda. “We intend on expanding our customer base from banks to funds and other investors that have acquired pools of assets, but don’t want to develop the systems and processes to solve a short-term market problem,” he explained. “We can step in and provide immediate scale and efficiency.”

EAM will probably have its hands full; while the real estate market is quite clearly in recovery mode, it has yet to make a full comeback. “There are still hundreds of billions of troubled assets stuck in the system,” Brenneke noted. “The US is still paying the price for too much leverage and other parts of the world are suffering from similar challenges.  Even though there appears to be some light at the end of the tunnel, especially in coastal urban markets, there will continue to be a push to flush through the challenges before the real estate markets are completely healed.”