Murphy Leaves Deutsche Bank, Joins Coventry
- Mar 19, 2008
Devin Murphy, previously global head of real estate investment banking for Deutsche Bank, has joined New York-based Coventry Real Estate Advisors as a managing partner. In his new role, Murphy will attend to strategic decision-making on behalf of the company in that position, along with managing partners Peter Henkel and David Hirschberg. Coventry is a retail and mixed-use real estate specialist, having acquired and developed over $2.5 billion of properties since its inception in 1998. The firm primarily acquires existing assets for re-development, develops properties with joint venture partners and acquires portfolios of stores from retailers. Recent transactions completed by the firm include: Valley Fair Mall in Salt Lake City, a $120 million mall re-development; High Street, a $105 million mixed-use development in Houston; and REX stores, an $80 million acquisition of a portfolio of stand-alone retail stores from REX, a consumer electronics and appliances retailer. At Deutsche Bank, Murphy managed a staff of over 100 in eight offices in the United States, Europe,and Asia. During his tenure, the team executed over 500 separate transactions on behalf of clients representing more than $400 billion in total deal volume.This afternoon, CPN spoke with both Murphy and Henkel about Coventry’s strategy and the state of commercial real estate finance. CPN: What brings you to Coventry? Murphy: I’ve been in banking for 22 years, and running real estate investment banking for Deutsche Bank was about as far as I could go in that business. But more than that, now is a good time to go to the buy side, because there are going to be very attractive investment opportunities over the next five years. As for Coventry specifically, I’ve known Peter 22 years–we started at Morgan Stanley together–and Coventry has a great track record. The returns in Fund I, which is fully realized, and the expected returns in Fund II, are very strong, with target growth of 18 percent.” CPN: What do you see going forward for the retail sector that Coventry specializes in? Henkel: We specialize in retail, which has dynamics that make it different from other asset classes, in terms of success or failure. It isn’t driven by supply and demand characteristics in any given submarket–there tend to be both really good retail assets in a submarket, and no-so-good ones in the same market at the same time. We can find opportunities across all market cycles, both economic and real estate cycles. Murphy: There are going to be dislocations in the market, both among retailers who are our tenants, and at the asset level itself. These times of uncertainty and dislocation create opportunities for us, if we can identify high-quality locations. We can always drive tenant demand to those kinds of locations. CPN: What’s the impact of the new credit environment going to be on what you do? Murphy: We look for opportunities to drive NOI, and historically as borrowers, we haven’t relied on Wall Street to provide the leverage–instead we’ve dealt with portfolio lenders, which is now to our benefit. As buyers, with the high-leveraged players gone, it’s now a less competitive environment, and that’s to our benefit as well. Henkel: Our strategy is value-creation in underutilized or development properties, in rebuilding or re-tenanting, playing in the 65 to 75 percent leverage part of the capital structure. Our lenders tend to be life or other insurance companies that hold these loans. There continues to be a healthy market on the lending side from that group of lenders.