Toronto's CMLS Financial has entered a strategic partnership and made an undisclosed investment in New York City-headquartered Skyhawk Capital Advisors.
Skyhawk, led by managing principals Kevin Stahl and Wendell Osborne, is a boutique real estate advisory firm that provides strategic advice, bespoke capital markets execution and mergers and acquisitions services to owners, operators and developers across the United States.
CMLS Financial is one of Canada’s largest independently owned commercial real estate finance companies, with 11 offices across the country. It was founded in 1974 and provides a range of residential mortgages and commercial lending, advisory and institutional services.
CMLS Advisory, the advisory arm of CMLS Financial led by Pierre Bergevin, has been expanding its services to meet the needs of its clients.
CMLS, Skyhawk share "common ground"
Both firms share the same business philosophy and principles.
The partnership will allow them to work together, Bergevin said, in growing their advisory practices by offering global investor reach and market knowledge while expanding their services and North American coverage.
“I think we both come at this from our own requirements, but there's a fair amount of common ground,” Bergevin told RENX. “We think this will be exceptionally successful in relatively short order.”
Bergevin and Osborne were previously partners at Brookfield Financial (now Sera Global) and had kept in touch since Bergevin joined CMLS in November 2020 and Osborne partnered with Stahl in 2021.
Bergevin had been exploring access to the U.S. and partnership talks began in mid-2022.
“Most of us within the advisory group at CMLS have worked internationally and to not be able to use that element of our Rolodex was inefficient,” Bergevin said. “The strategies are all fairly synonymous so it's not a big learning curve.
"And to lob something over to the U.S. with people you barely know and have never worked with is not a recipe for success, and doing it back up like that in Canada isn't a recipe for success.
"But, to go with people you trust and you know, who speak the same language and have all the right licenses, that makes a difference.”
Mutual benefits from partnership
Bergevin believes some strategies and solutions that have been used in competitive American markets can be applied to Canadian operators, and vice versa, so the partnership should broaden what the two companies can accomplish.
"Given our excellent strategic and cultural fit, and common strategic growth objectives, partnering with CMLS is very exciting for us," Osborne said in the announcement.
“We have a unique and growing position in the market — partnering with CMLS and deepening our connectivity with Canadian capital sources adds significant value to our clients in meeting their capital needs.”
Bergevin said the partnership will also give his staff visibility on interesting and complex files, which will benefit recruiting and talent development and open doors for future deals.
“It's less about asset classes or markets than it is about investment strategies and solutions,” Bergevin said of CMLS’ business approach.
“The biggest differentiator between what we do as advisors and what is currently done in the marketplace is that we come up with our own ideas and solutions to relatively complex problems rather than focusing on a sector or geography.”
Uncertainty can bring opportunities
The current real estate cycle is the fourth Bergevin has been part of in North America in his decades-long real estate career. He thinks the current uncertainty in the market can provide opportunities for CMLS at a time when some competitors might be pulling back.
“My philosophy is, if you're entrepreneurial and you're a good operator and a good investor, you should not be shying away from any thesis right now as prices adjust downwards,” Bergevin said.
“We're always busiest at this place in the cycle. When there are no answers, when there's no pricing discovery, when things are complex and when there are liquidity issues, that's when our past experience and our way of approaching problems I think differentiates ourselves.”