G2 Investment Group bought advisory firm Vesey Street Partners, adding former Lehman Brothers Holdings Inc. executives to expand its real estate division after property values tumbled during the financial crisis.
Vesey will be folded into New York-based G2 Real Estate Partners, Vesey co-founder Larry Kravetz said in an interview. Co-owners Kenneth Cohen and Charles Manna also joined G2’s property group as managing partners. Terms of the agreement weren’t disclosed.
G2 is among the Wall Street firms taking advantage of turmoil in financial services to hire bankers and expand into businesses such as real estate with the expectation of a rebound. U.S. commercial property values were down 42 percent in March from the October 2007 peak, according to the Moody’s/REAL Commercial Property Price Index.
“This market offers a historic entry point for real estate investors, and G2 Real Estate will be a critical part of G2’s overall platform,” J. Todd Morley, chairman and chief executive officer of G2, said by e-mail. “I have known Kenny for over 20 years and he and his team are the best in the business.”
G2 has offices New York, Hong Kong and Qatar. Kravetz established the large loan group at Lehman Brothers, where Manna was a senior executive, according to G2. Cohen specialized in real estate debt at Lehman Brothers, which filed for bankruptcy protection on Sept. 15, 2008.
Lehman Brothers Alumni
The real estate group includes former Lehman Brothers executives Spencer Kagan, who headed credit and underwriting for the large loan group; Alan Kanders, managing director in the bank’s commercial real estate group; and former real estate analyst Jeffrey Mudrick.
The real estate hires follow the addition of former Lehman Brothers credit traders Scott Best and James Gregorek and Larry Taylor, a former credit analyst at investment bank Donaldson, Lufkin & Jenrette Inc.
Morley, who worked at Lehman Brothers in the 1980s, also signed a deal last month with descendants of the late Malcolm S. Forbes to manage money for wealthy families and institutional investors through a new business called Forbes Private Capital Group. Forbes, who died in 1990, was publisher of Forbes magazine.
The real estate group, in addition to providing advice, is creating a commercial-mortgage lending arm. It plans to start a credit fund and another for hospitality investments.
“The time is right to be getting back into the market,” Manna said.