Scott Taccati enjoys the art of the deal in real estate finance.
Here is a recent article regarding Scott Taccati and Trillium Capital Resources published in the Columbus Ledger.
Scott Taccati knows his numbers, having spent more than 25 years in the very structured world of banking, his final stop at Regions Bank in Columbus.
But it was in 2010 that the Columbus native, who had lived and worked in Jacksonville, Fla., for nearly two decades, decided to put down roots in his hometown and launch a company called Trillium Capital Resources. He finds it more creative in a sense, not surprising since Taccati plays and sings in a band, with his love of music drawing him to The Grammy Awards and volunteering to help with a Super Bowl halftime show featuring legend Paul McCartney.
Over time, Taccati has found a sweet spot in the much more entrepreneurial world of commercial real-estate financing, specifically in helping apartment developers land competitive loan terms for their projects. To date, his company has closed on about $300 million in loans and is looking for more, with interest rates still very low and the apartment market near its peak.
It’s an environment that the president of Trillium relishes, with his company expanding into Jacksonville, Fla., a couple of years ago, opening an office there, and then into McDonough, Ga., after his wife, Kim Taccati, owner of Staffing Connections, set up an office there. Both of their headquarters are in the same building on Princeton Avenue in north Columbus.
The Ledger-Enquirer sat down recently with Taccati, 54, to discuss his job, his line of business and why he advocates becoming an entrepreneur if you can handle the stress. This interview is edited a bit for length and clarity.
Q. For starters, was it at all scary to go out on your own after so long with the banks?
A. No. I went ahead and got a real-estate license just as a backup for commercial real estate. But Columbus has fairly limited commercial real-estate activity. It’s not like Atlanta or a larger market. There’s some very good apartment activity here. I started Trillium Capital Resources because I had been involved with capital markets financing in the late ’80s, and basically what that is is non-bank financing. Funding is provided through insurance companies or through Freddie Mac or Fannie Mae. You’ve probably heard of CMBS (commercial mortgage-backed securities). It’s like Wall Street where they pool loans together. I still had some contacts in that arena and was involved in loans for 25 years. So, I didn’t do anything different other than go out on my own and not have to wear a suit and tie. That was in 2010, and I’m still cranking here.
Q. You line up financing for projects in the Southeast?
A. The Southeast is our target market. We’re now working on a $35 million (construction) loan outside of Atlanta with HUD construction. We actually found the land and helped get it rezoned.
Q. Apartments are your bread and butter?
A. Yes, probably 90 percent of everything we work on is apartments.
Q. I understand senior housing is a growth area with the aging population?
A. Yes. We’re working on two deals up in North Carolina — senior housing, skilled nursing, nursing homes. They’re $24 million between the two of them. We are an authorized correspondent for different lenders, including Aegon Real Estate USA. They do billions of dollars a year in loan production. And we’re an approved correspondent for Red Mortgage Capital, which is our primary lending source for apartments and senior housing.
Q. Is it about setting up relationships, and can that be difficult?
A. It can be. That’s why we network and go to different conventions, and we spend a lot of money on information so we can be of more value to clients.
Q. Are you on the road a lot?
A. Not too bad. Maybe a couple of days a month, and I go to Atlanta quite a bit. We focus on our geographic area. We could provide financing on a property in California, but it has to be feasible to work on something like that. The key is to work on relationships, because it is a very competitive business.
Q. Are there hundreds or thousands of companies like yours out there?
A. There are hundreds, I would say. But these major lenders, they really only want to deal with certain companies. So not just anybody can call these lenders. We’ve been able to establish three large relationships that pretty much cover the gamut of the CMBS market — Fannie Mae, Freddie Mac, HUD — and insurance. Those are the major sources of commercial real-estate money.
Q. What’s your daily life like in the office? On the phone a lot?
A. On the phone a lot (laughs). It consists of evaluating different markets that are in the headlines or deals that we may be working on, different product types, reviewing market information, trends. We spend roughly $30,000 a year on information from four different sources. It’s databases that provide information, such as CoStar, which is a real-estate company for listings of commercial real estate. There’s always something to review. I get emails all the time on something happening.
Q. Are you ever off the job?
A. Not really. I was on vacation last week, but I still worked. I was in the Virgin Islands, but I had my computer and my phone and I’m sending out emails and responding to clients and what have you. But a good bit of the day is looking at potential opportunities and trying to get in touch with new prospects. In the end, it’s all about bringing the deal in to the company. We can do as good a job as anybody in this business — Wells Fargo or Grandbridge, CBRE — but they’re big names. The challenge that we have is we’re more of a boutique. The larger developers, they may say, ah, I don’t need your kind of thing.
Q. They wonder who is Trillium?
A. Exactly. But here’s the thing. I may have something that whoever they’re dealing with doesn’t, because dynamics change, particularly for (multiple property) portfolio loans, which would be an insurance company. They make the loan and they keep it. And they have different appetites and different rates. Sometimes they’re very motivated to get a deal done.
Q. Is it about the art of closing the deal?
A. Definitely. It is an art, and you have to evaluate everyone’s personalities and what’s motivating them or what’s not motivating them … It’s trying to understand what drives the buyer.
Q. How many clients do you have?
A. We have a base probably of a dozen clients, and then the prospecting of it is limitless. But we’ve actually closed about $300 million in loans since we started. It was in 2011 when I was really starting to get going good, because I was just starting up in 2010 and getting marketing material ready. But over four or five years, $300 million is not chump change for a little shop in Columbus, Georgia.
Q. Are you satisfied with the growth?
A. No, I would like more for sure, just because you can’t rest on your laurels. We actually hired a sales consultant out of Jacksonville to help process the sales approach to different personalities and things like that. It’s all about adding value somehow, some way, and the best way to do it is through service and information. And you have to establish a trust. That takes time.
Q. What drives you?
A. I like doing deals. It is a challenge. But the thing is there’s always something out there that you can work on, whether it’s selling real estate or buying real estate or leasing. There are just unlimited things to make something happen. I guess what it boils down to is I can’t sit and wait for the phone to ring, for sure.
Q. What’s the most challenging aspect of your work?
A. It’s getting in front of prospects that you desire without some type of referral. In a way, it’s like a cold call. I have people cold calling me for things, and I don’t really want to talk to them. So, we try to do unique things to make an impression. Like we’ve started doing little videos on (prospects’) deals. Whatever the loan is, we put together a little two-minute presentation — Here’s your loan. Here’s your balance. The rate is 4.8. Here’s what we can do. Here’s what it would cost. Here’s your savings. We just started that a couple of weeks ago, and we’re about to land a fish on that.
This business also is challenging through the competition that’s there and established relationships that real-estate owners have. There’s a difference between an investor that has 30 properties versus one that has two. While we would like that 30-property investor, they’re probably talking to someone out of New York City or something. Though it really doesn’t matter. We have whatever the best shops have.
Q. What’s your sense on the economy at the moment?
A. For our business, it’s real good because interest rates are historically low. They’ve been lower only one other time, in the last half of 2012. I think interest rates will stay low for a long time. Internationally, you have negative interest rates. The economy generally is not growing like gangbusters. GDP is low. The unemployment rate appears low, but there’s a lack of (workforce) participation. So even though the Fed says they will raise the short-term rates, that doesn’t mean mortgage rates are going up. Generally, they do, but not always.
Q. Anything in particular that concerns you?
A. We’re at the top of the cycle in apartments. That’s the first area that the brunt of the recession will come from, probably in the next couple of years. But there’s always financing out there. They’re always a need for financing. And the market’s pretty resilient. Fixed-rate money is pretty expensive right now, but when it’s not you can float through an adjustable-rate mortgage or something that can convert to a fixed-rate loan.
Q. Finally, you have no thoughts of going back into the banking world I take it?
A. Well, I don’t think so. I like this. (laughs) The banking world is very structured. The banking profile is very structured. I’m more of an outgoing, extroverted-type person. That’s why I play the piano and sing. If somebody can work for themselves, that’s the best situation. But it is a risk and it is stressful … But, no, I don’t miss the corporate political situation that’s in any large company.
Q. You enjoy the autonomy?
A. Yes. It’s making something happen on your own. You control your own destiny, and, with a little luck and the grace of God, you should do well. You have to stay focused and go into a direction and be good at it.
Current residence: Hamilton, Ga., on Lake Harding
Education: 1980 graduate of Baker High School; earned bachelor’s degree in finance from Columbus State University in 1983
Previous jobs: Banker from 1983 to 2010, most recently with Regions Bank, specializing in commercial real-estate finance
Family: Wife, Kim Taccati, owner of Staffing Connections, and two children — daughter Meaghan, 23, a student at the University of Alabama, and son Ryan, 20, who plans to study at Kennesaw State University
Leisure time: Enjoys singing and playing music on the piano and guitar; has a band and plays gigs occasionally at Ben’s Chophouse and other venues; enjoys boating, traveling and playing golf on occasion
Of note: Has attended the Grammy Awards in Los Angeles and participated in the Super Bowl halftime show during which Paul McCartney performed in Jacksonville, Fla., in 2005