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 CASE STUDIES

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After Michael Sonnenfeldt sold his second company, EMMES & Co., he created a peer-to-peer learning group for entrepreneurs like him who had recently had liquidity events and were eager, as he was, to learn best practices for preserving wealth while also exploring issues of relevance, legacy, family, philanthropy, and the big “What’s Next.” What began as a single group of six entrepreneurs in New York City has grown into TIGER 21, the premier peer-to-peer learning network for high-net-worth wealth creators. TIGER 21 has over 750 members across 60 groups in over 30 cities across the United States, Canada and Europe, with a collective net worth of over $70 billion. In 2019, the private equity firm Education Growth Partners was brought in as a growth capital partner to enhance member offerings and support TIGER 21’s expansion around the world. Sonnenfeldt continues to serve as Chairman, and majority equity holder. In 2020, TIGER 21 was recognized for its industry thought leadership by Family Wealth Report at its Seventh Annual Awards ceremony.

In 1989, Michael Sonnenfeldt invested in Solar Outdoor Lighting Inc. (later renamed SOL Inc.), a Florida company that manufactured the first generation of solar powered streetlights. The company had a promising set of products, but faced headwinds that necessitated additional capital raises throughout the 1990s and early 2000s. As the primary underwriter of SOL’s equity, Sonnenfeldt owned 90% of the company by 2007.

While SOL struggled to become economically successful, it played a growing role in responding to humanitarian crises by quickly installing solar lights after disasters to enable essential services to continue at night. After the 2010 earthquake in Haiti, the SOL team was one of the first on the ground, and donated half a million dollars’ worth of outdoor solar lights for the airport, emergency medical clinics, feeding stations, and search and rescue sites, enabling around-the-clock humanitarian efforts. After the 2011 tsunami in Japan, SOL lit up a pier so local fishermen could begin fishing at 4 a.m. and get their lives back on track.

Even though SOL was not yet profitable, Sonnenfeldt’s decades with the company only strengthened his commitment to solar energy. At the same time, innovations in solar panels and battery storage were increasing efficiency and decreasing costs in dramatic ways that paved a pathway to economic success in the solar lighting space. In 2010, Sonnenfeldt invested in another solar company, Carmanah Technologies, a public Canadian company that manufactured solar-powered landing lights for airports, solar-powered marine navigational aids, and solar street lights in competition with SOL.

It took nearly five years, and substantial capital and patience, but in 2014 Sonnenfeldt merged SOL and Carmanah and put the combined entity on a path to profitability. Sonnenfeldt became the Chairman of Carmanah and, in partnership with a talented CEO, John Simmons, delivered on both of Carmanah’s bottom lines: profit and impact. Carmanah grew from an enterprise value of $6 million at its low point in October 2013 to approximately $140 million in August 2019 when it was taken private and MUUS sold its final tranche of shares.

By merging SOL into Carmanah, Sonnenfeldt was able to preserve the mission of SOL, recoup decades of losses, and achieve a strong return on the investment. The success story has been a lasting lesson on the power of patient capital in delivering financial returns and sustainable impact.

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In 1991, when the real estate market in the United States was in free fall, Michael Sonnenfeldt saw opportunity. In response to banks failing at the highest rate since the Great Depression, the government established the Resolution Trust Corporation to acquire “bad banks,” protect their depositors, and reposition the assets the banks once held.  Over the course of a few years, billions of dollars of real estate loans and assets were auctioned off to try to restart a real estate industry which had largely frozen up.  Sonnenfeldt seized the moment and led the successful bid to acquire a loan portfolio from the former Ensign Savings Bank. They acquired 78 Mortgages, mostly nonperforming, with a face value of over $200 million, at auction for approximately 20 cents on the dollar.  From that first acquisition, Emmes and Company was formed. The company went on to lead another nine acquisitions under Sonnenfeldt’s leadership, totaling 200 mortgages and properties encompassing 20 million square feet.  During Sonnenfeldt’s tenure as founding Chairman, the firm acquired approximately $1 billion of assets, and delivered a 38% IRR on the invested capital of approximately $300 million from institutional and family office equity partners.  The firm was relatively unique in that it created a diverse and flexible team to reposition assets of almost every property type, leading the asset management, property management, leasing, construction and redevelopment internally.  Sonnenfeldt exited Emmes & Company in 1998.

HARBORSIDE FINANCIAL CENTER

While working on the New Jersey waterfront in his teens, Michael Sonnenfeldt envisioned the conversion of the 2.5 million square-foot Harborside Terminal warehouse in Jersey City into the new home for Manhattan’s high-tech office expansion plans. Originally built in 1929 for intermodal freight and warehousing, the Harborside Terminal had become a space for industrial and warehouse tenants, and had long been in decline. Sonnenfeldt approached the owners with his redevelopment idea, but they were not interested in undertaking the project. At age 25, determined to develop the property, Sonnenfeldt recruited a seasoned development partner, David Fromer, with whom he was able to secure the financing necessary to acquire the Harborside Terminal.

Building a staff of nearly 100 people, Sonnenfeldt and Fromer undertook the transformation of the Harborside Terminal, in what was then the largest commercial renovation in the United States. The immense efforts required to complete the redevelopment were well worth it: when the renovation began, there wasn’t a single commercial high-rise under construction on the Jersey City waterfront; however, when Harborside was sold after the first million square feet of conversions four years later, the surrounding area had transformed. The Governor’s Waterfront Development Office told the New York Times that the renovation of the Harborside Terminal “helped to spur interest in all waterfront development” on the Hudson River across from Manhattan. The transformation of the Harborside Terminal warehouse into the Harborside Financial Center remains one of the most successful real estate deals in New York Metropolitan History.