Banking vet Dostal joins ranks of independent loan brokers

STAN BULLARD

In the banking world, Michael Dostal has just taken the lender’s version of a walk on the wild side.

After almost 30 years in commercial real estate lending with four different banks (though some changes came through mergers), Dostal has just entered the commercial real estate mortgage brokerage and loan servicing business as an associate at the Independence o ce of District Capital.

Commercial real estate loan brokers swap the stability of a bank’s steady paycheck for potentially larger earnings for nding loans for property owners and developers. And of course, the downtimes that go with that as well.

same, which will make (Dostal) a real asset for District,” Leonard said. “While (Walter) and I have followed our clients out of town to make deals, Dostal knows more people outside of Cleveland than we do.” ways thought that when things get tough, the value of mortgage brokers is more profound.”

Dostal also is landing at District Capital at the relative ground oor.

Although District Capital is based in Detroit, it was just launched as a larger rm geographically in January 2023.

Dean Razek is president of the Greater Cleveland Mortgage Bankers Association, a trade group that provides professional development opportunities for lenders on both the lender and borrower side of the table.

MGB Development, which has ofces in Southlake, Texas, and Savannah, Georgia, built the pet property at 20400 Emerald Parkway and through Health Care I LLC sold it to an a liate of Realty Income.

Sarah Berger, a spokesperson for MedVet, said in a phone interview that the company uses a variety of techniques to construct properties through owning them or leasing them depending on the best way to deploy its capital at any given time.

“We’re thrilled with the new property,” she said. “It’s a much larger facility than we had previously and will allow our practice to grow. We have three additional specialists that are joining this location.” Previously, MedVet was in a smaller building, also near I-480, in Brook Park.

In the case of Realty Income, veterinary practices are a natural expansion area for the company, which has recently acquired casinos and dental practices beyond the traditional freestanding restaurant or other retail business. Its website said it owns 12,200 properties.

MGB Development’s website does not disclose the company’s size, although it builds for medical, hotel, o ce and industrial properties. However, a map shows it had built properties across the country from Massachusetts to Oregon. e Cleveland property it just sold was its second in Ohio, according to the map.

Stan Bullard: sbullard@crain.com, (216) 771-5228, @CrainRltywriter

In Dostal’s case, he left a post as managing director and commercial real estate regional manager for Ohio with CIBC U.S. e U.S. operation is part of Toronto-based CIBC, which stands for Canadian Imperial Bank Corp.

Dostal, in an interview with local District Capital principals Jim Leonard and Brock Walter, said he left commercial banking for several reasons of his own.

“I wanted a more exible approach to the workday,” Dostal said. “I want to spend more time on nonpro t boards and spend more time on my personal real estate. ese are exciting times in banking. I hope to contribute to District Capital and have an impact on the region.”

His CIBC unit closed $1 billion in commercial loans over the last six years. CIBC commercial real estate loan sta ers continue to work in the region, though a successor has not been named.

Leonard, a District Capital managing director, said Dostal brings to District skills in underwriting from the lender’s side and knows more about the nance industry than most newcomers.

“ e core competencies are the

District Capital was formed by the combination of three previously independent commercial real estate mortgage companies. ose included the District Capital rm in Detroit, Crossroads Real Estate Advisors in Indianapolis and Westwood Real Estate Capital in Cleveland, Leonard and Walter’s predecessor rm. e rms decided they could make a larger contribution together by leveraging their varied lender, customer and industry contacts.

In the wake of two large bank failures, skyrocketing interest rates as the Fed hikes rates to combat ination and tightening credit terms because lenders are growing more cautious, it might seem an odd time to go freelance.

Walter and Leonard said they cannot disagree more. When they formed their rst mortgage brokerage company in 1990, commercial mortgage interest rates were 12%, while now they’re 7%.

“ at was a heck of a lot harder than it is now,” Walter said. Many borrowers are also disappointed when they re nance commercial properties now than just a few years back, because higher equity requirements mean they can take less out in a re .

“We think this is the time to gain market share,” Leonard said. “Not everyone’s go-to bank is as active as it might have been. is is a great time to talk about re nancing construction loans with people who weren’t open to it before. We’ve al-

“I’ve always seen it as a di erence in stability for the individual,” Razek said in a phone interview. “As a bank lender, you aren’t going to everyone to see how to get the best loan for your customer.”

Razek also noted mortgage brokers are able to co-invest with their clients, which bank brokers are not permitted to do. He said some life insurers are not only making permanent loans but construction loans, something they have not done for years. Firms such as District have those insurer relationships.

“It’s more of a sales position,” Razek said. “You’re competing with a handful of companies in that space.”

Making shifts when the world changes is part of Dostal’s background. Before going into banking, he worked in underwriting and lending as an economic development sta er for the city of Cleveland and later served as executive director and commercial real estate manager for the Ohio City Inc. community development corporation. He remains active in Ohio City and looks forward to chairing the property owners board for the Ohio City Special Improvement District in the future.

Dostal joins a sta of three other producers and a full-time sta of six at District Capital.

Leonard said District Capital established its o ce on Rockside Road with the inception of the company at the beginning of the year.

“We have an open design, a roaming desk system,” Leonard said. “We needed an o ce so there would be a place to train people new to the business.”