A family affair: how the Cordaros continue to grow their portfolio

Daniel Cordaro and his family started building their property portfolio 25 years ago. Thanks to their strategic investment strategy, they currently own two mixed use buildings in Sydney’s thriving Inner West.

“When we first started, we were focusing on residential property – we would buy a block of land, build townhouses and sell them,” he explains. “The problem with that model is the market fluctuates each year. If you miss the timing and have to sell in a trough, the return can be minimal.”

So, over the past 10 years he and his siblings have evolved their approach: hold onto local properties, and grow more steadily.

“We look for opportunities where additional value can be added to the property. That could be through further development work, or finding blue chip tenants who can increase the yield of the building. And that’s worked out very well for us,” says Cordaro.

One of Daniel’s brothers is a GP, and he observed the growing need for health services in the community. So the sites have been developed to provide with medical suites for physiotherapists, radiology and other specialists, along with a small number of apartments and a café.

“Medical services is a fairly recession proof industry. And it also helps us manage a more diversified, defensive tenant base. We look for income and growth in the long term,” Cordaro says.

Despite a profitable track record, the Cordaro family’s bank was pressuring them to reduce their debt levels. So they started searching for a banking partner who would support them in growing their portfolio – and allow the equity mix to remain.

“We wanted to partner with a bank that would be on board with our journey. A bank that looks at our business and says, "This is great, how can we be part of that,” says Cordaro.

That’s when their accountant introduced them to Macquarie Bank. Cordaro was surprised by the bank’s favourable terms.

“Macquarie is like a well-kept secret. They were able to maintain our debt level and provide a very competitive rate.”

With a large number of siblings and spouses involved as investors, this added a layer of complexity to the structural requirements for the new facility. Each property has a trust, with units within issued to individuals depending on their level of investment. Cordaro was impressed by Macquarie’s expertise in working through more complex property transactions like this.

“Macquarie definitely understand and are geared up for this type of transaction. They treated the trusts like a special purpose vehicle, which simplified things. Indicative approval was given very quickly, they made a complex loan assessment process easy.”

Doing business with family can get complicated. That’s why the Cordaros set up property trusts properly from the get-go.

“You need to have everything documented and make sure everyone has an understanding of what they're getting into. That way you're not relying on personal relationships when you want to move forward with a good opportunity,” says Cordaro.

Assurance also comes from a strategic banking partner. Treating the Cordaro’s portfolio of investments as a business that generates income and profit, Macquarie gives the family the confidence they need to move forward with new opportunities.

“We know that when we find the right property with the right return, Macquarie will come onboard,” says Cordaro.

For Cordaro, confidence in a banking partner also comes from their level of engagement.

“Macquarie has shown they are interested in supporting a deal. They're not a bank that thinks they're doing me a favour by lending me money – we’re in business together.”