Vista Capital Company founder and CEO Zak Selbert has engineered, negotiated and closed approximately $3 billion of real estate transactions on behalf of clients over the years. As the top exec at the Los Angeles-based real estate investment banking firm, he’s responsible and accountable for its overall strategic initiatives. This undertaking requires him to be able to foresee the inevitable and, for him, it’s Airbnb’s threat to the financial markets.
Hotel Business chatted with Selbert about his secrets to closing financial transactions, leadership team expansion efforts and Vista’s future.
There’s “The Vista Process” and “The Vista Platform.” What are the differences and similarities between the two? The Vista Platform is a bird’s eye view of how we define our role as a hospitality investment bank. For us, to successfully raise capital for clients and outperform our competitors, we need to understand that our role is diverse rather than narrow, and includes required expertise in data analytics, capital markets, the hotel operating business, client service, creating and maintaining financing relationships, the legal environment and anticipating market cycles. We keep this philosophy with us in order to close each transaction, and that’s where the micro Vista Process comes into play. Each deal goes through a cycle and we define success by how well we manage the process.
Without giving away Vista’s secret sauce, what’s the key to closing transactions? What must every deal have in order for it to close? We have to be meticulous and involved at every stage of a deal in order to succeed on behalf of a client. Starting from initial due diligence to lender selection and reviewing loan documents, through effectuating a funding, we are extremely thorough, experienced and participative. Obtaining and closing financing for strong hotels and clients is a foundational step. Matching a deal to the perfect source of financing is as important, and it’s an area where we excel because our relationships are vast and strong. Awareness of current underwriting trends and lender allocation needs is imperative. Even the best deals will run into issues during the closing process. Anticipating those issues and finding solutions are essential to successful closings.
Vista’s average deal size is about $30 million. With regard to deal size, what’s Vista’s sweet spot? Is there a deal size too small for Vista? Our typical deal size ranges from $10 million to $50 million, but we’ll finance anything above $5 million so long as there is a ready, willing and able capital source.
Including yourself, Vista has three members in its leadership team. What’s Vista’s growth plans at this level? Are there plans to grow this team? Not at the moment. Rather than striving to be a high-volume shop that provides mid-level service, maintaining our boutique structure allows us to deliver exceptional results to clients based on personalized attention.
What common missteps are properties making when they first sit down with Vista? What should they have in order before requesting financing? A common client misstep is not thinking that something might be an issue. We do extensive upfront due diligence in order to uncover problems because if we can work with full information about what might go wrong or come up, we can find solutions early that prevent issues and maligned expectations later. I ask clients upfront to tell me everything that might impact the deal in a negative way, whether it is an underwriting issue, a zoning issue, a property-level issue, a market issue, a borrower issue, or another kind of issue altogether.
What was it like closing your first deal? My first closing was for a shopping center in Northern California. New to the industry at the time and pessimistic by nature, I was skeptical the deal would close, even though I had no reason to have doubt. Despite the fact the deal closed without any issues, I promised myself I would always go through future financing processes with the same level of skepticism in order to anticipate problems and find solutions. This skepticism has proven itself to be a successful trait over the years.
What makes Vista Capital Company different than other real estate investment banking firms? If I were to ask some clients about their experience with Vista, what do you hope they’d say to me in response? We frequently hear from our clients that we are far more involved than our competitors are throughout the financing process. Clients are often surprised by how deep into the details we get. We don’t sit back and just hope that all will go well. Rather, we orchestrate massive teams in order to make sure that everything goes smoothly. Clients hire us for a reason—and this methodical engagement is the best way to deliver.
What’s the most meaningful leadership advice you’ve received over the years? Why has it had such an impact on you as an exec? Warren Buffett has always had a big impact on my thinking. It impresses me how he simplifies everything into very basic concepts. Although transactions can be complex, everything can be simplified. I carry this philosophy with me as I try to make sense of complexity in an ever-changing world.
If I were to interview you again five years from now, what would you report back to me about Vista? Despite the strength and favorability of the current hotel financial markets, I think a lot about where we are in the capital market cycle and how the Airbnb threat will impact our industry. Five years from now, I think we’ll likely have gone through another down cycle and I hope to report back to you that by anticipating it—and the Airbnb threat—we thrived by guiding clients toward financing sources and deal structures that were designed precisely for volatile cyclical expectations. HB