Award-winning commercial broker Isabella Constatinou isn’t fazed by competition in the industry. In fact, she’d like to see more brokers adding commercial lending to their repertoire.
“We have such a significantly lower market share of clients in commercial than in the residential space,” she said. “It screams opportunity for (residential) brokers to be working with their clients on commercial transactions.”
Diversification is influential in growth. But she emphasises the fact it needs to be managed carefully. Swimming in a different lane without support and a strategy can sink the broker-client relationship.
While Isabella’s has been on a fast track to success - she’s been named in MPA’s Rising Star list multiple times and has been an Excellence Awardee two years running at the Australian Mortgage Awards - servicing property developers, the Sales Director at Simplicity Loan and Advisory stays in her lane when it comes to their personal mortgage needs.
“I’m always getting developer clients saying, ‘Izzy, I need you to refinance my house’,” she said.
“It might be a $6 million house in a really nice area in Sydney, and that's a decent loan amount for me. (But) I say no, and refer them to my residential broker because I'm not set-up to write a residential loan well enough, and I’d be delivering a terrible experience for the client, fumbling my way through compliance and BID (Best Interests Duty). My residential broker, who is my referral partner, nails it every time, and it makes me look better than trying to do it myself.”
She encourages residential brokers to seek out a commercial broker initially to help their client, rather than knocking back the business opportunity.
“If residential brokers get into commercial in the right ways - not trying to do everything at once, (but) by referring it and learning about it along the way - it's going to strengthen the industry as a whole.
“I don't think it should be a competitive industry. I've got commercial brokers writing the same sort of transactions as me, but I can pick up the phone and call them and say, ‘Hey, I need your advice on where to take this’, and they don’t see it as a threat.”
Isabella found the aspect of commercial that she loves - property development - and has quickly won respect from the industry. Currently, she has 60 projects in the pipeline which have different timelines.
Unlike many commercial brokers in the industry, Isabella didn’t have a background in business banking.
She took up an initial graduate role with the brokerage in 2017 having filled an administration role at another company. Showing exceptional organisational skills and a willingness to learn, she progressed into an Associate Role.
As an Associate, she supported another top industry performer in commercial, Jean-Pierre Gortan, responsible for back-office duties such as preparing application forms and credit submissions.
At school and university, empirical skills such as mathematics were her strong point and she gravitated toward the construction specialisation in commercial broking under Jean-Pierre’s guidance.
“For some residential brokers, the construction space seems really daunting, but it's actually very formulaic. If you can get your head around the formulas that are behind the feasibility calculations and everything, it all makes sense.”
The construction industry has been through a torrid time since Covid - increased construction costs, shifting lender policy and an upward rates cycle - which has further underlined the importance of the broker-client relationship, said Isabella.
“The key thing is empathy. In these tough times, I have many deals on my books where the development has run over time, the budget's gone up significantly, the builder has walked off site or fallen over … it's a really stressful time for the client.
“We're not in the business of settling a transaction and not speaking to the client through the life of the construction term. We're heavily involved in the PCG (Project Control Group) meetings and progress claims, the drawdowns with the lender and everything else. We have ongoing communication with the client and the developer throughout the whole term of the loan, which is really crucial if you're going to get into development or construction funding.
“You have to stay actively involved to understand what's going on because there are so many variables involved over the course of the loan and things change so quickly.
“In the last six months, I’ve written maybe 15 renewals of construction loans because they've run over time and the clients need to renew them with the existing lenders or refinance if it no longer works with the lender. If your client contacts you at that point, and you haven’t spoken to them for nine months, the conversation will be very different to the one you would have if you’d been actively involved.”
Thinking about diversifying into commercial finance? Reach out to the LMG Commercial Finance team today who can assist you in diversifying.
“If you're a young broker that's doing residential and you have an interest in commercial, figure out what aspect of commercial you have an interest in, find the right people to talk to and have a go,” Isabella said.