CPE<\/em>. \u201cThere aren\u2019t many people who can look at debt from a 360-degree perspective like she can, and you always learn a lot in doing a deal with her.\u201d<\/p>\nBalkan began her career after graduating Wesleyan University and undergoing a credit training program at Chemical Bank. After spending some time in the corporate banking world, she seized an opportunity to move into the real estate finance side of the bank.<\/p>\n
\u201cGoing into the real estate finance side, you were so much more hands-on,\u201d said Balkan. \u201cYou were basically handed real estate projects and you underwrote the project to make a decision as to whether you wanted to lend on that project.\u201d<\/p>\n
During her time with Chemical Bank\u2019s loan origination division, Balkan experienced the major credit disruptions of the late \u201980s and early \u201990s when many banks closed or were forced to receive federal financial assistance.<\/p>\n
\u201cI handled a lot of troubled situations at a pretty young age, which really was a great experience,\u201d Balkan said. \u201cWhile you\u2019re going through it, it\u2019s like trial by fire, but in hindsight, starting out as a workout person really helps inform your decisions throughout the rest of your career.\u201d<\/p>\n
Breaking into the principal side<\/h2>\n
After 12 years at Chemical Bank, she moved into Merrill Lynch\u2019s investment banking and capital markets department. After four years at Merrill Lynch, she had a desire to step into the principal side of real estate finance.<\/p>\n
\u201cI didn\u2019t love the originate-and-sell model,\u201d Balkan said<\/p>\n
Upon joining Brookfield in 2002, Brookfield kickstarted the company\u2019s mezzanine platform with a plan to marry the company\u2019s real estate lending expertise with its equity ownership expertise. Brookfield started its first mezzanine fund in 2004 and has ingrained itself into what has become a major part of the real estate finance world.<\/p>\n
\u201cIf we originate a loan that we\u2019re putting into one of our mezzanine funds, we live with that loan until it gets repaid,\u201d Balkan explained of Brookfield\u2019s model. \u201cAnd if there\u2019s a problem with the loan and we have to take ownership, we live with it until we stabilize the property and sell the property.\u201d<\/p>\n
Careful, steady growth<\/h2>\n
In her role overseeing Brookfield\u2019s real estate funds, Balkan\u2019s day-to-day responsibilities vary greatly. Some days involve meeting investors for fundraising and other days call for reporting to investors about the fund\u2019s performance. On top of communicating with the investors, Balkan is also responsible for visiting properties that Brookfield may want to make a loan on and holding meetings with her team to discuss what new deals they\u2019re recommending.<\/p>\n
\u201cWhat you focus on every day is different, which is great for me,\u201d Balkan said. \u201cIf it was the same thing every day it would be boring.\u201d<\/p>\n
Balkan hasn\u2019t been able to travel and meet investors as much due to COVID-19. But she teleconferences with investors as she continues to grow Brookfield\u2019s mezzanine debt and monitor the COVID-19 situation with strong caution.<\/p>\n
\u201cWe\u2019ve always had a healthy respect for cycles,\u201d Balkan said. \u201cWe don\u2019t get excited when things are really great, and we don\u2019t panic when things look bad.\u201d<\/p>\n
Instead, Balkan said, she and Brookfield aim for an equilibrium that allows the company to be opportunistic during a downturn. She explained that while the pandemic has caused serious consequences for people and their health, financial institutions are faring a lot better than they were in the 2008 Financial Crisis.<\/p>\n
\u201cThere\u2019s a lot of liquidity in the market right now and that helps minimize the negative impact on our lending business,\u201d Balkan said. \u201cI don\u2019t want to minimize it because this crisis is much worse for people, but it\u2019s probably not as bad for financial institutions.\u201d<\/p>\n
Since Brookfield doesn\u2019t use repo finance in its business, it also did not face margin calls from their lenders in the early days of the pandemic, and the portfolio has held up fairly well.<\/p>\n
\u201cAndrea\u2019s proven ability to successfully manage the business through multiple credit cycles speaks for itself,\u201d Nailah Flake Brown, a managing director with Brookfield\u2019s Real Estate Group, told CPE<\/em>. \u201cHer depth and breadth of knowledge is evident by her instincts to identify good investments and creativity to maximize returns and preserve investors’ capital.\u201d<\/p>\nFuture funds<\/h2>\n
The company\u2019s first four funds were focused on the United States while the latest Fund BREF V, which closed at $3 billion in 2017, has expanded to the U.K. and Europe. Balkan explained that Brookfield foresees strong opportunities in the U.K. and has even expanded its presence in the region. Additionally, Brookfield is looking at making more loans at a lower leverage point so investors can come to the company for loans at any leverage point, Balkan said.<\/p>\n
\u201cWe like the mezzanine lending business,\u201d Balkan said of Brookfield\u2019s future funds. \u201cWe think it provides really great risk adjusted returns for both Brookfield\u2019s capital and for our investors and we intend to continue to build out our suite of real estate debt products.\u201d<\/p>\n
Read the December 2020 issue of CPE.<\/em><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"The pandemic has slowed but not stopped Balkan from growing Brookfield\u2019s mezzanine lending platforms.<\/p>\n","protected":false},"author":883,"featured_media":1004495980,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1521,44033,21744],"tags":[50701,33496],"class_list":["post-1004495962","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-digital","category-executive-profiles","category-people","tag-andrea-balkan","tag-brookfield-asset-management"],"acf":[],"yoast_head":"\n
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![\"Andrea](\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2020\/11\/A-Balkan_Headshot.jpg\")
<\/a>