History

Incorporated more than 40 years ago as a pure mortgage brokerage company, Chicago-based Dwinn-Shaffer & Company has grown and adapted to changing capital markets over the firm's life span only to face a mid-life crisis a few years ago. Taking stock of the state of the industry and the firm's place in it, the principals wondered if they could do more with what they had, if they were missing out on something.

"Somewhere along the line a light went on", says chairman Bud Wineburgh. After years of structuring transactions for other people, Dwinn-Shaffer took tentative steps out of its mortgage banker role, first as a partner and later as a principal in real estate projects, eventually spinning off some of its internal expertise into separate entities in development, property management and more. "It was kind of a natural progression."

Today, affiliates Dwinn-Shaffer Development Company and BNG Management Company augment the firm's mortgage banking activities, creating a diversified group of companies that simply allows the individual professionals to do what they do best for the benefit of the entire team.

As a further enhancement to its services, in 2006 Dwinn-Shaffer formed a corporate finance division.  The division is headed by George Garrod, who has 20+ years of expertise in the area.  Programs offered range from accounts receivable and inventory financing to factoring to SBA and USDA loans.

Roots

Capital is the life blood of commercial real estate, and in the current market, "money is chasing deals," says president Lance Mayster.

In the company's history, the loan producers at Dwinn-Shaffer have averaged $500 million in financing each year, having surpassed that amount in each of the last several years. This success makes the company one of the leading mortgage bankers in the Midwest. More importantly, the firm has a closure rate in the high 90 percentile.

Dwinn-Shaffer tracks over 60 different lenders, from the traditional insurance companies to Wall Street's forays into real estate through REIT's and conduits, all with different tastes and appetites for real estate.

"When mortgage banking was in its infancy 25 years ago, there weren't the variables that exist today," Wineburgh says. Bringing together a borrower, who has a specific piece of real estate in mind, and a lender, who has stringent investment criteria, is more than matchmaking. A loan package presentation for a FNMA loan, with all the supporting documentation, can be more than 10 inches thick.

"Lenders and borrowers have dramatically changed," Mayster says. "Today, borrowers will shop a transaction for an eighth of a point on rate. Five years ago, a quarter point difference was not an issue."

What hasn't changed is the staff at Dwinn-Shaffer. Wineburgh has been with the company since its inception, and others more than 20 years. That continuity over the passing years has generated borrower confidence in the company's ability to get a project off the ground.

Just doing the job

Dwinn-Shaffer didn't invent the wheel, Wineburgh will tell you. They've just oiled the gears and kept up the internal maintenance so that the machine runs noiselessly.

Of the 10 to 12 deals the company sees every day, they will take perhaps one or two, Wineburgh says, who attributes Dwinn-Shaffer's flawless loan servicing record to one thing - "Good Underwriting." Putting together a loan package requires a professional judgment of a property's market, physical and economic value, Wineburgh says, which can seem like a mystical formation to the uninitiated.

"We'll analyze the contractor's current income, his future income including any appreciation - escalation of rents or escalation of expenses - the borrower's stability and his management team," says executive vice president Andrew Wineburgh. 'We'll look at the comparable rents, comparable sales numbers, package that and present it to a lender."

The end goal of the process of compiling information for an initial loan presentation - which involves many different members of the Dwinn-Shaffer organization but which the team can do in three to five days, Wineburgh says - is making the connection between two parties in a mortgage transaction - the company's core business.

Choosing teams

When Wineburgh looks out of his office window, down in the heart of Chicago's financial district, he feels that his company's standing and reputation within the real estate community are secure, but just as gratifying is the ability of the individual loan officers to work together to coordinate all the information and supporting documentation necessary for a successful loan package.

"Our most valuable asset, outside of our reputation, is our ability to work as a team," states Wineburgh. "Everybody shares in a successful transaction for the company."

Like the many full-service real estate companies that have grown from pure brokerage to offer a broader range of fee-based services to a client, Dwinn-Shaffer and Company is no longer simply an intermediary between borrower and lender, but a player in its own right. Turning the talents and experience of the team members into profit centers, the firm has grown from its roots in mortgage brokerage to encompass a larger piece of the pie.

In an old joke, Woody Allen compares a relationship to a shark which must keep moving or it dies. "What we've got here," he tells Annie Hall, "is a dead shark." What the Wineburghs, Mayster and the rest of the Dwinn-Shaffer team have is a structure perfectly adapted to its unforgiving environment and which, after 40+ years, is still moving forward.