The Charlotte Business Journal featured QuietStream Financial in it’s January 15 edition. Reporter Will Boye described the launch of the company and its subsidiaries, including EntityKeeper, Great River Mortgage Capital, Radian Generation and Fairview Real Estate Solutions.
Here’s an excerpt of the article:
In a south Charlotte office building, Rob Finlay and his colleagues at QuietStream Financial are launching companies designed to make a commercial real estate owner’s life easier. A lot of companies.
QuietStream was created in late 2013, and since then it has acquired or launched eight companies while its employee head count has jumped from roughly 20 to more than 100. QuietStream recently expanded at its headquarters off Carmel Road and launched five new businesses in 2014 alone, including three in the crowdfunding space.
“For an entrepreneur, this is heaven,” Finlay says.
QuietStream has its roots in one core business, a company called Commercial Defeasance, which Finlay started after working in commercial mortgage-backed securities at investment banks including Credit Suisse First Boston and Deutsche Bank. In 2000, a real estate owner who Finlay had put into a CMBS loan tracked him down in Charlotte, asking how he could sell his New York property and pay off the debt. The loan contained a defeasance provision, meaning it wasn’t meant to be paid off early, and if the borrower wanted to sell the property, he needed to arrange substitute collateral — a portfolio of government securities — that would make the remaining payments.
At the time, the borrower didn’t know how to navigate that process, and he was just upset that his potential sale was in jeopardy.
“He basically gave me an ultimatum,” Finlay recalls. “He said, ‘You either figure this out, or be ready to be deposed because I’m going to sue you and your former employer for putting me into this loan.’ At that point, a little light went off in my head and I said, ‘I wonder if people know how to do this.’ ”
Finlay put together a business plan, and Commercial Defeasance was born. The Charlotte firm developed a reputation for customer service, sending out complimentary T-shirts and cookies to clients after each deal. The company grew to nearly 50 employees, helping commercial real estate owners defease 120 loans per month during the boom years and collecting a fee for each deal.
“It was really to the point where we didn’t have to do a lot of marketing — the deals were coming in so fast,” says John Hosmer, who took over the day-to-day operations at Commercial Defeasance in the mid-2000s. Hosmer says the fee charged for a defeasance is typically between $15,000 and $20,000 for each deal.
In early 2006, Finlay sold a majority interest in the company to private-equity firm Summit Partners. After the sale, Finlay became chairman of Commercial Defeasance, and he and his family moved back to his home state of New Hampshire, where he started a real estate investment, construction and building materials firm while also pursuing philanthropic interests.
Two years after the sale, when the real estate market crashed, Commercial Defeasance’s volume dropped from 120 deals per month to five, and the company reduced its head count from 46 employees to about a dozen.
“That was very difficult,” says Hosmer, now chief operating officer at QuietStream. “I knew all of them well. I watched a lot of them date and went to their weddings and watched them have kids. And then for the longevity of the business, you’ve got to make some hard decisions and let some people go.”
During the downturn, Finlay stayed in touch with Hosmer and CFO Jason Kelley, and the three began talking about different products and services they might offer to their customers, particularly those that would be less cyclical than the defeasance business. QuietStream, co-owned by Finlay and Summit, launched in late 2013 with Commercial Defeasance as its first portfolio company.
“We needed to reinvent ourselves,” says Finlay, who moved back to Charlotte in 2013 as CEO of QuietStream. “As much as I love real estate, running businesses and building up businesses that support commercial real estate owners is much more my core competency and something I really enjoy.”
QuietStream’s businesses are varied and include Tax Credit Asset Management and Radian Generation, affordable housing and renewable-energy asset management firms, respectively; Great River Mortgage Capital, a commercial real estate mortgage firm; and Fairvew Real Estate Solutions, which specializes in commercial real estate loan underwriting, valuation and due diligence services.
Last year, QuietStream also launched EntityKeeper, an online product that helps real estate owners manage their various limited liability companies and tracks due dates for annual reports. At the end of 2014, QuietStream also launched three products aimed at crowdfunding: CrowdRabbit, Crowd With Ease and FullCapitalStack.
To read the full article visit the Charlotte Business Journal website.