We’re building on the property crash
Adam Coffer's greatest deal, the United Kingdom Supreme Court
Property entrepreneur Adam Coffer is in the mood to spend. While the credit crisis continues to batter the commercial property market, leaving many industry players lying low, he is gearing up to pounce.
Mr Coffer, 30, is the founder and managing director of the Entrepreneurs Property Fund, which offers large incentives for potential property deal-makers; it guarantees agents and private investors 30 per cent of profits the business makes on the deal.
The firm, backed by a selection of industry players, including Mr Coffer's father, "leisure king" David Coffer, is sitting on a £20 million pile of cash, which could be geared up to generate £100 million of purchasing power.
"We are pretty well-placed to hit this market," says Mr Coffer, the former head of acquisitions at Kier Property. "It's never been a better time to have cash. We've got money and we've got new ideas. There is no doubt that the market is in a lull while bank funding is pretty non-existent, but we are busier than ever with interesting opportunities being introduced."
The EPF typically targets properties worth £5 million or less, particularly care home sites and vacant leisure and retail properties. It is currently doing a deal with a major supermarket chain to occupy a vacant pub - and is in talks with a US-based equity house which wants to create a leisure and retail investment vehicle to enable EPF to target weightier leisure deals. Mr Coffer plans to launch this next spring, when he says the market will get worse and should start to turn in their favour.
"Am I genius? No. Did I know how bad things were going to get? No way. None of us knew how bad things were getting but we launched because you did get the feeling in early 2007 that it was a case of waiting for the storm to brew.
"I thought: ‘I want to keep moving, advancing, doing.' You can either sit and wait for the storm to come and p**s on you anyway, or you can get up and do something about it. Thankfully, we have ridden it quite well so far."
But the father of two is not complacent and acknowledges that securing debt is a problem for many investors. "It's one thing having money to spend - you still need to get loans to maximise the return on that equity. I don't care if you're Abramovich, you're not going to maximise the value on your investment by spending 100 per cent cash - well, he might. The Reubens don't.
"But that is not to say that the reasonably recent phenomenon of borrowing 100 per cent loan-to-value, or more even, and just waiting for the value of a property to increase, was sustainable. It was people running riot with banks' money, and that's partly why the market is in this mess.
"It's the banks that have got things so wrong. But there are still some innovative lenders who we talk to."
The firm has bought three vacant pubs: one in London, two in the regions, which they pre-let to a restaurant, bar and supermarket. It has also bought some council land in Sussex to sell to a retirement/care-home operator, in addition to buying into a Central London hotel.
Perhaps surprisingly, Mr Coffer did not follow the traditional route into property. He gained a journalism degree at City University and secured a job at the Sunday Times having previously worked on the paper's "fat cat" executive pay survey, which reports the salaries of chief executives of FTSE-100 companies.
In 1999 he moved to property magazine Estates Gazette, becoming news editor at the age of 23. It was there that he fell in love with commercial property and built up a useful contacts base.
"I could pick up the phone to John Ritblat one minute, Elliot Bernerd would have to take my call and know who I was, and the next minute I'd phone a bright graduate at Jones Lang LaSalle. It was great. I loved the access to people and I used that to learn."
He spent five years there before joining Kier Property in 2003. "They weren't a Jewish company, nor had any Jewish contacts or typically Jewish concepts about how property should be. I thought ‘there's no point me running round like every other Jewish boy trying to do typical investment deals with the Jews'.
"The managing director said: ‘We want to buy your contacts book and ability to source new deals; in return we will train you'."
As head of acquisition, he was instrumental in securing several major transactions, including the former Beatles headquarters in Savile Row and the deal he is most proud of: teaming up with the Ministry of Justice to deliver the United Kingdom Supreme Court in Parliament Square. He left Kier to set up the EPF in 2007.
He said: "I don't think I would buy anything today and expect the value to have gone up for no reason by this time next year. Values will continue to drop for another year or so. I believe we will return to some level of normality in two or three years' time.
"There had to be a correction. Values could not keep going up as they were. Yields couldn't go any further down. The world had just gone meshuggenah. It's going to be a painful two years ahead. I think we have maybe averted a depression but not averted a recession by any means."