Raising Capital and Co-GP Investing with Abraham Cooper

When Abraham Cooper left JLL in January 2020 to launch Polly Park Capital, the world shut down within weeks. He saw it as an opening. By summer, he had financed Hudson Heritage, a $65 million construction loan for a ShopRite-anchored mixed-use community in upstate New York and one of the few retail construction loans to close anywhere in the country during the pandemic.

Polly Park was built as a merchant bank with two business lines. On the advisory side, Abraham has placed capital for transactions ranging from a $360 million construction financing for a senior living community in Tysons Corner to a $75 million programmatic joint venture for a Wilmington-based operator scaling to 10,000 units. On the principal side, he co-invests alongside local operators on ground-up development, anchored by a high-net-worth partner and focused on the New York tri-state and South Florida.

In this episode of The Dealmakers' Edge, Aaron Strauss and Abraham Cooper discuss how Polly Park's merchant banking and co-GP businesses work together, why he targets East Coast coastal cities where capital and tenancy understand the product, how he vets operating partners on co-GP deals, and the grounding that keeps him steady through the stress of dealmaking.

1:16 - Polly Park Capital and the merchant bank model

1:50 - Starting at CBRE and moving to JLL capital markets

2:16 - Launching Polly Park in 2020 and seeing the pandemic as an opportunity

2:50 - Financing Hudson Heritage during the pandemic

3:28 - How brokerage experience at CBRE and JLL shaped the principal mindset

6:47 - Having $200 million of advisory runway going into the pandemic

7:55 - Splitting time between merchant banking and co-GP investing

8:42 - Range of advisory transactions from Tysons Corner to Nashville to Wilmington

9:59 - Vetting local operators and structuring co-GP deals

11:34 - Targeting East Coast coastal cities where capital and tenancy understand the product

12:28 - Equanimity and grounding through the stress of dealmaking

15:00 - Reading the market and why better days are ahead

16:52 - Scaling from high-net-worth to institutional capital

18:39 - Using AI to augment, not replace, human underwriting

20:22 - Sticking to core markets and what's exciting ahead

Mentioned In Building a Raising Capital and Co-GP Investing with Abraham Cooper

Polly Park Capital | LinkedIn

Abraham Cooper on LinkedIn

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Transcript

Aaron Strauss: You're listening to The Dealmakers' Edge with A.Y Strauss, diving deep into stories behind commercial real estate leaders. 

Hello everybody, welcome to The Dealmakers' Edge. Today we have a very exciting guest who is Abraham Cooper, who's the founder and managing member of Polly Park Capital and its affiliates. And Abraham's got over a decade of experience in commercial real estate, transactions, spanning capital markets, investment banking, development and institutional brokerage. He formerly worked at CBRE and JLL prior to launching Polly Park Capital in 2020. And we are going to hear how he balances raising capital, overseeing deal management and also his general approach to the market. It's a great conversation. I hope you enjoy. 

Aaron Strauss: Hello, everyone. Welcome to The Dealmakers' Edge. Today, we are delighted to be joined by my friend, Abraham Cooper, who's got an amazing story. Young up-and-coming developer, investor. He's got a great background, which informs his career decision-making today. Abraham, we'd love to just kind of hear how you got started, or share for the audience your background and kind of how you got to where you are today and what you're up to. 

Abraham Cooper: Certainly, I appreciate the kind words, Aaron and thank you for having me. So, I'm the managing member of Polly Park Capital. Polly Park is a merchant bank, so two businesses on one end of the barbell is the advisory business, placing capital on a third-party fee basis for large-scale operators, owners and developers. That's throughout the capital stack, from co-GP equity all the way to senior financing and the like. And the other end of the business, which has been the predominant focus over the last two years has been the co-GP and co-investment business, which is anchored by a high net worth partner, here, in New York City. So, you know, I started my career at CBRE in the executive office and then spent the better part of a decade at Jones Lang LaSalle in the capital markets group, where I was raising capital. And so Polly Park I founded with the intent of taking my client capital relationships and operating in a boutique merchant banking format ,where one can enter transactions in a line of ways and co-invest alongside clients. 

Aaron Strauss: Absolutely. I know you started Polly Park in 2020, so that was obviously an insane time in the market and also very exciting in retrospect. Tons of free-flowing capital, tons of opportunity, but also the world shutting down on you as well. That must have been really thrilling to leave big time corporate America, go off on your own and then have everything just shut down on you right at day one, right? 

Abraham Cooper: In fact, I saw that as a major opportunity, because capital wasn't as available, because information was so static. I thought that was actually an amazing opportunity to start the platform. In fact, in summer of 2020, I financed a project in upstate New York, called Hudson Heritage, which was a $65 million construction loan, amongst which was one of the few retail construction loans in the country, it was a ShopRite-anchored center. It's part of a broader mixed-use community in upstate New York. So, by way of that example, while it was a very unique and challenging time for the broader market set, it brought about a lot of opportunities. 

Aaron Strauss: Right. The term necessity retail was like a buzzword for 2020 to 2021. 

Abraham Cooper: Yes, absolutely. 

Aaron Strauss: It's all necessary, right? But maybe we'll go back a little bit further. I mean, you got to do  finance and GW. You started at CBRE, you went to JLL. And I think some of the most successful people I know in real estate all kind of cut their teeth in the brokerage world, whether they're debt brokers, acquisition brokers, advising on strategy, tenant rep, et cetera. So maybe you can speak to that, how that experience at two mega firms in commercial real estate kind of shaped the transition to a principle that you are today. I think that a lot of people listening to this are brokers. They all have a passion for the business and perhaps transitioning over to the principal side. 

Abraham Cooper: You know, CBRE was a very, very interesting experience, working in the executive office. I wasn't transactionally focused. I was supporting the then global president of capital markets, the then global chief client officer and the broader heads of all the business verticals from multifamily to office and the like. That experience gave me a very strong understanding of the services business, how to cover clients, that was largely focused on corporate operations, rolling out new lines of business. At the time, in 2013, the investment banking business was extremely important to CBRE. And I took a hand in actually rolling out the then-broker-dealer business called CBRE Capital Advisors. And so, you know, it was a phenomenal experience and sort of entry point into large corporate America. But after almost two years, I knew I needed transactional-based experience. And of course, you meet with teams internally, you meet at various competitors and you end up at a firm like JLL, where obviously the platform, the capital markets business was expanding rapidly. And, you know, that was a transactional based experience going into 2020. You know, there was a, you know, the primary focus was new construction and transitional based financings. You know, I was an origination banker and focused predominantly on client coverage. So coming out of a corporate role per se and into a client coverage role was a very unique but seamless transition, in my opinion and gave me sort of the full scope of skills necessary to ultimately pivot and go out on my own. And so that was sort of the, if you will, the embryo of Polly Park Capital. It's taking that skill set, it's taking those client relationships and those Capital relationships and starting this platform. 

Aaron Strauss: Absolutely. And also the relationships you build and to see what first class looks like. You know, if you're talking to the global heads at those global organizations, you're going to see the best of the best rise and how to treat people professionally and be successful and corporate governance too. So it's an intense jump to entrepreneurship. I left big firms one day and then the next day I was sitting at a computer and figuring out what am I going to do here. So I think we definitely want to talk about the business itself, but maybe you could talk about those initial months and what set your mind to do it. You're obviously young, you're passionate about what you're doing, but how do you kind of get through those first, you know, three months, six months, one year, when you leave a big company, which is obviously very terrifying. 

Abraham Cooper: You know, I will say, fortunately enough for me, it wasn't terrifying. And in fact, it was with intent that I went out on my own and formed Polly Park Capital. You know, for me, I had the good fortune of having some runway going into the pandemic, where I was doing, I probably did about $200 million of volume. Again, starting the business out as a merchant bank with an advisory portion, I'm really fortunate enough to have that level of runway. Capitalizing the business I mentioned on the co-GP side with a high net worth partner, we were able to start looking at sites in Westchester County more broadly, in the state of Florida and being very prudent on when and what we would buy. But fortunately for me, it wasn't as daunting as I think most would find it to be. And also, by the way, for what it's worth, at JLL, the business is and was very entrepreneurial. So while being in a broader corporate structure, it felt fairly natural to me to go out on my own. Now, obviously, you have your trials and tribulations and you learn along the way. And you have wins. And at the same time, you have some losses. But it's all a learning experience. And I felt fortunate enough to have those experiences and I mentioned that runway early on. 

Aaron Strauss: That's terrific. And I know to this day, I mean, I know that the ratio shifts, how much is doing advisory, kind of merchant banking, advising clients on some of their own deals versus strictly on the principal co-GP side. I know you're doing more co-GP side than you ever did, but it's always good to kind of buffer things that could take three, five, seven years to hit a return and then, you know, shorter term returns on your time investment. Maybe you could talk about obviously one forms the other, but how you kind of split the brain in that way. It's hard to keep that wiring going in two directions at times. 

Abraham Cooper: Absolutely. As I had mentioned, founding the business in 2020, the first two and a half, three years right before the rate started skyrocketing, we're focused predominantly on merchant banking and advisory level work. So those transactions range from a $360 million construction financing for a senior living community in Tyson's Corner called the Mather, to Hudson Heritage, up in New York State, which is one of the few larger scale we took construction loans of the pandemic, to financing land assemblages and redevelopment activities in Nashville, to raising programmatic joint venture equity for a Wilmington based operator scaling to 10,000 units, that was about a $75 million programmatic joint venture. So as rates started to skyrocket, you obviously have to transition the business. And I'm a long-term thinker and long-term investor. And so when I got together with my partner, Mitch. Mitch is a former founder of a $7.9 billion hedge fund. We thought to ourselves, with all the sort of chaos in the market or the stillness, how can we think about the next four, five, six years? Where's the world going? Where is the most aggressive level of growth in population and employment? Where do customers, where do tenants and owners want to be? And so we set our sights out into South Florida, you know, the brunt of which our investment activities are taking place today, both on the West Coast and in Central Florida and now in Miami. 

Aaron Strauss: That's awesome. And maybe we could talk about how you structure some of these deals. I know you're doing them, Co-GP, you're partnering with a lot of developers and you're bringing a lot of strategic expertise, financial expertise, fundraising expertise and just sort of global project management expertise. Maybe you could describe how you're vetting partners. You don't have to get in great detail, but generically how you think of structuring transactions on a win-win basis and what's been rewarding, frankly, about being in the co-GP position. 

Abraham Cooper: Absolutely. For us, it's about finding great local operators who have municipal relationships and are able to tie great sites up on a strong basis. And what we do is we come in, we co-invest in 50% up to 99% of the general partner commitment and then ultimately anchor a development with an institutional family office and/or high net worth. For instance, we have a project just outside of St. Petersburg, in Lakeland. That's a situation where our partner is a mainstay in that market, excellent track record, 252 units, mixed-use multifamily market rate, but simply needed enhancement on the GP and moving out of their own friends and family capital, into a family office source that we have here in the city. So these are traditional joint ventures coming in, co-investing in the project alongside our partners and then typically financing the transaction with a debt fund and/or a regional bank. 

Aaron Strauss: Makes sense. And you obviously targeted some fantastic markets. Obviously Miami's exploded and I know you're New York centric and you've tapped other markets. Any market that you're eyeing now that's outside of your core, or any market you want to do more in than you already invested in? 

Abraham Cooper: Sure. So, the East Coast of the U.S. is obviously very strategic for us, not only in capital and our base understanding the markets itself and having a no more than two and a half hour flight, but I've probably spent about three months over the last two years in Miami. So, whether it's Edgewater, whether it's the design district, whether it's downtown, we just launched on the merchant banking side, several branded condo and/or hotel products into the market that's, I think, very, very interesting. And so, it's strictly East Coast, coastal cities where the tenancy and the capital understand the product. 

Aaron Strauss: Let me ask you, switching gears, I know when we hung out last, we were talking about beyond just real estate, just the work we do is stressful, right? Whether in the service business, you're closing a loan, you're originating a project, you're managing a project, but this podcast is called The Dealmakers' Edge for a reason. It really tries to get into the psyche of dealmaking and you've done hundreds of millions of dollars of transaction volume, probably billions at this point. It's stressful, we've talked about this, it's very stressful. You maintain an incredibly sense of calm, equanimity, you have a wonderful presence about you, Abraham…

Abraham Cooper: Thank you.

Aaron Strauss: … everything you bring. I think we talked about the sense of gratitude. Our problems are first world problems, if you will. 

Abraham Cooper: Sure. 

Aaron Strauss: But, you know, on your most stressful days, the audience here, I think, would love to hear, you know, kind of how you talk to yourself. You know, how do you manage to keep calm despite, if you're developing, all you're dealing with is problems. That's how you're getting paid. You're getting paid to deal with problems, whether you're a co-GP or you're a builder or whatnot. How do you kind of navigate that mental health component that's so important to kind of keep your cool, while you're riding the waves of these deals and markets and interest rates and investors and everybody's demands on you and your time? 

Abraham Cooper: I appreciate the kind words. Equanimity and having grounding is extremely important in business for all the reasons that you just mentioned. While business and making money is important, there's more to life than that. And so everyone deals with those stressors in their own way. I think having grounding, whether that's through physical fitness, health and wellness, spirituality, being around friends, being around family, being active, being on the golf course, swimming. Of course, in Miami Beach, I think that you have to put your life, you have to put yourself in perspective on what is truly most important. And I think, you know, at least certainly from my experience in taking care of all those parts of my life, it makes coming into the office every day feel that much easier. So I would recommend to anyone in our business, or even in other industry verticals, whether you're an investment banker, or you're a private equity investor, or a hedge fund manager, have grounding, have perspective and understand what it's all about, for you.  

Aaron Strauss: Well said and I fully agree. I absolutely agree. I want to ask you another question too. Let's talk about the markets a little bit. 

Abraham Cooper: Sure.

Aaron Strauss: You know, when you're developing, you're really in real time, you're understanding value costs, you know, the way something like a tariff would affect, or interest rates up and down. Hard to really kind of tell where we are exactly. I mean, you have the broader economy, you have real estate markets, you have local markets. But what's kind of like the real-time temperature feel on these developments you're doing, in various markets? Do you feel like the wind is behind your back? Is it tighter? How are these investors' sentiments? Is it harder to raise capital today versus a year ago, easier? 

Abraham Cooper: Well, obviously, as investors, developers and merchant bankers, we're always bullish, right? We always believe that the future is going to look better. I would say that I think the worst is behind us. I think we've entered into a new cycle. Development capital, certainly on the equity side, remains still challenging. And obviously, those baseline return metrics as investors, whether they're an institutional investor, whether they're a family office, are evaluating equity development like returns versus investing in a different part of the capital structure, or even a different asset format, whether it's the equities or fixed income market more broadly. But I would say certainly from our projects in Florida, the sentiment is much stronger. And I believe certainly the products that we have in some of those secondary markets, the return metrics and the multiple compensates the investor base relative to what they would be seeing in other markets. So to answer and conclude, I think better days are ahead and I'm very bullish. 

Aaron Strauss: Absolutely. And you have a lot in the ground. So if it's going to get built, got to be bullish. Otherwise, nothing would get built. 

Abraham Cooper: Always. It's always about the story and positioning it to the market and to investors. 

Aaron Strauss: Absolutely. And speaking of investors, I know when you started, start with a partner, which is fantastic, but probably the classification type of investor may have been different. Maybe it's high net worth to start and perhaps now it's geared more institutional, maybe a little mix and match. I think that's very common for people starting out. They start with a certain caliber investor, it's maybe more control in the deal. Then once you get more institutional, it's a little programmatic and maybe a little bit less control. But how have you kind of managed to morph the opportunities to the investment capital? And I know that's a constant struggle everybody has, it's developing and raising equity for transactions, no matter how good the projected return is, it's a constant struggle to find the right partners. And just kind of how you manage through that. Words of encouragement to people struggling to bring equity to their projects. 

Abraham Cooper: Obviously, yes. I mean raising capital from an ultra-high net worth individual or a smaller family office, requires a little bit more of an educational process and hand-holding. I think the projects that we've capitalized in the New York tri-state and in South Florida are becoming larger and therefore require a higher octane capital base. And so I would say to anyone who is scaling a business or a platform, it's about treating every opportunity, whether it's a smaller investor or a larger investor, the same and giving that level of care and sort of reporting control to that investor. 

Aaron Strauss: Well said. And I think that works at scale, whether it's JP Morgan or John you met at the country club. I mean, it's the same thing. It's quality, transparency, reporting, great steward of capital, basically. Let me ask you another question too. I mean, everyone's talking about how technology, AI, everything's disrupting everything. I mean, clearly development is its own branch, but if you're not looking at how technology can morph things as well, do you find applying technology to what you're doing today, versus a year or two, has been a game changer? Or is it kind of still slow to adapt and adopt to prepare models and understand land development, et cetera? 

Abraham Cooper: Sure. I would say from our experience, the outsourcing of the analytical capabilities is a mistake. You need to have human touch in understanding the underwriting, understanding the assumptions. And I think AI, at least in our world, is used to augment but not to replace thought. So yes, being able to turn around certain documents, being able to turn around certain financial models and putting together an offering memorandum becomes that much easier, when you can streamline it with AI. But in our experience, that doesn't replace the human touch. And at the end of the day, investors, clients and customers work with humans, not AI. And so I'm a huge proponent of the humanity of the business and to not outsource that entirely to automation or to computers. 

Aaron Strauss: Yeah, I couldn't agree more. I mean, you obviously need to be cognitive and use all these tools, but we're definitely still at the stage where the final set of eyes needs to be human. And honestly, there's a ton of mistakes that get built into these systems. So I really liked that answer. 

Abraham Cooper: Absolutely. Augment, but not replace. I think that's sort of how I think about it.  

Aaron Strauss: Totally, that makes perfect sense. Anything I could have asked you but didn't, you know, something you're really excited about for the next year or two or three, whether it's a future market, a specific project, the fact that you've got so many opportunities coming your way. Is there anything jumping out at you that maybe we could have touched on that would have been good to cover in this call we're having, this meeting? 

Abraham Cooper: No, I mean, this was certainly enjoyable and engaging. I think right now, you know, the state of Florida is very exciting for us, you know, as far as new markets. We stick to what we know, which is the New York Tri-State, Westchester and South Florida more broadly. So for me, it's about sticking to core competency. Now, on the merchant banking side, if there are larger scale transactions that require capital, yes, other markets could be very interesting. But as far as share play principle investment, it's staying in the core markets. 

Aaron Strauss: Awesome. Well, Abraham, you're definitely doing a lot of great projects now. You're young, you're a positive person with a great presence. 

Abraham Cooper: Thank you. 

Aaron Strauss: Great ethics and integrity. And I think success will continue to find you and all the projects that you touch. So I really want to thank you for making the time. Hopefully people will learn a lot from the conversation. I certainly did. I know, for one, I'm really excited to continue to watch all your success as these projects continue to develop and your career continues to skyrocket as well. So I really want to thank you for being on with me today. 

Abraham Cooper: Likewise, Aaron. I appreciate the time. It was a pleasure. 

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