Codrin Matei
Managing Partner
Crosspoint Real Estate

08 April 2021

Crosspoint Real Estate is a Romanian born commercial advisory services real estate company, with focus on land development, but also office, industrial, residential, investments, capital markets, research & valuation or project management. They are an international associate of Savills in Romania.

Congrats for reaching 16 years on the market, can you tell us about how you laid the foundation for Crosspoint back then and what the company means to you and to the industry nowadays?

I started my career in the banking sector in the early 2000s, at a time when the financial industry was not as diverse as it is today, and it proved to be a formative period. The desire and drive to own my own business had always been there and the first go to was a financial consultancy firm begun in 2005 with a close friend, that basically operated as a credit broker. We are talking about a period when the real estate industry was in full swing and we noticed a high demand in property advisory services.

I have always kept a very open mind in business and valued friends’ and partners’ opinions, which were all swaying from finance to real estate. I invested in a plot of land, which was sold for a 40% return after only six months and developed an appetite for what this segment had to offer. This potential translated into diversifying the company’s service offering. We bent according to client’s needs, from finding the right land, financing the project and all the way to selling it to end consumers. The 2008 crisis hit home and we had to reinvest and restructure. After a couple challenging years, in which were not sure which way the wind was blowing, it became apparent that real estate was where we were meant to be and we channeled our focus in this direction.

Fast forwarding to present day then, where does your strength lie and what are the main services the market is showing a demand for?

Our strength remained where it began, namely in land transactions. And at present, the highest demand comes from residential developers, for reasons easily anticipated given the particular global crisis we find ourselves in. Office and retail are both suffering, and Romanians’ appetite for larger, more modern dwellings is on the rise, as is purchasing power. Industrial is also growing fast and contrary to common belief there is still quality land available in Romania, with good infrastructure access. Where we come in is in identifying the opportunity, presenting it to potential buyers (this stage often includes a small feasibility study showcasing what could be built on the land and what opportunity it holds in terms of ROI) and brokering the actual transaction.

Real estate brokerage is a highly competitive branch of work in Romania, what is it like from the inside and what are some challenges applicable to the local market?

Unlike in the United States, for instance, where no transaction takes places in the absence of an expert broker, in Romania we are talking more of a Wild West scenario. The legislation does not require for real estate brokers to get a license, which means there are all kind of practitioners on the market, from extremely to not very professional. Despite this, those who do their job well are doing so though clear differentiators – the goal is to be a deal maker not a deal breaker and go beyond merely showing a property and drafting a basic contract.

 

There is also a psychological skill often required when intermediating real estate transactions, as we need to account for people’s egos, which can get in the way of rational decision making.

In general, and particularly recently given the pandemic context, Romania’s financing climate is seen as somewhat cautious or restrictive – what do you think of the opportunities here?

The opportunities are there for those who plan long term. Banks are indeed offering stricter terms now and are more prudent in terms of whom they lend to. Romania on the one hand has high yields, but investors have to look at the spread, taking into account the financing cost, which in Romania is higher in comparison to a CEE median. If we manage to bring Romania to par with CEE in terms of amortization then the attractiveness would be exponentially higher and investors would flock.

What is your message about Romania’s real estate climate and where do Crosspoint’s future plans play into it? What was the motivation behind associating with Savills?

Romania has so many strong points, for instance it has become an undisputed IT hub with over 30% of office rental requests in 2020 coming from the IT&C segment. Industrial parks are also booming here, with land still available for grabs. As for residential, in 2008 it used to take ten years for an average person to accumulate the advance on a flat, whereas now less than half of that time is enough. Additionally, Romania is wide open for the development of alternative products such as student housing or data centers, which are already successful products Europe wide.

We joined hands with Savills in 2017 to help a local, organically grown company such as ours compete with corporate giants the likes of CBRE or JLL. This umbrella opens up a global network of customers and services, bringing clear benefits. Future plans include the consolidation of our industrial business segment and the focused development of our residential branch. Service wise we already offer an A to Z array minus property management. We are planning to grow our team to 30 people by the end of 2021 and keep taking well calculated decisions.

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