Pioneering money broker Ira Zlotowitz has announced he will cap his company’s fee for the second time in a year as Eastern Union Funding barrels towards another record year.
“Borrowers have questioned for years why a $100 million deal warrants a fee five times the size of a $20 million deal, and why a $20 million deal carries a fee four times that of a $5 million dollar transaction,” Zlotowitz said.
“It doesn’t make sense. If anything, it’s easier for large deals. They are more appealing to lenders. We are confronting this issue directly and offering a value-added, fair fee for a service we know is top quality and inspires loyalty. It’s a win-win.”
Eastern Union Funding announced yesterday (Tuesday) that it will be adjusting its fee cap to $135,000 on loans for stabilized properties, effective immediately on new originations.
Zlotowitz said the decision came after last year’s $250,000 fee cap doubled business, with Eastern Union Funding closing 100 deals above $10 million.
“Not only did we pick up deals above $25 million, which directly benefited from the cap because the industry typically pays one percent of $25 million, but we also saw a surge in the $10 million to north of $50 million loans,” said Eastern Union President Ira Zlotowitz.
“We grew to $3 billion a year based on being trusted advisors, coupled with our certainty of execution,” said Michael Muller, Eastern Union Senior Managing Director and the top originator at Eastern Union Funding for the last decade.
“We are now taking that trust to a new level. We truly feel that, in today’s market, advances in technology and data points warrant a new fee structure. We are now able to offer a cap of $135,000, which we feel is in line with the progression of the market.
Muller alluded to further changes in the company’s fee structure adding, “We are continuing to innovate, and are in the process of developing another industry-revolutionizing refinancing product to be rolled out by the end of the third quarter that will truly transform the CRE financing arena.”