Six Questions for Lee & Associates NYC’s Herskowitz

NEW YORK CITY-Opening a new brokerage office poses many challenges, not least of which is the recruitment of brokers. Joel Herskowitz, who comes to Lee & Associates NYC as a 27-year veteran of the industry, has seen a lot during this time in terms of the vagaries of both the industry and the economy. It leaves him uniquely qualified to recruit talent to the firm, a challenge that he’s taken on as part of his responsibilities as the COO of the newly formed office.

Herskowitz was executive managing director at Newmark & Co. and he most recently served as the president and CEO of Grubb & Ellis New York. There were notable stops along the way, including time spent at Cushman & Wakefield and Cohen Brothers Realty Corp., where he was vice president of leasing.

Lee & Associates NYC, he tells GlobeSt.com, is his last stop, however. It’s an exciting opportunity, he says—not just for him, but for the brokers he’s actively involved in recruiting. Herskowitz sat down with GlobeSt.com recently to talk about his career in the industry and his recruitment efforts at the new Lee & Associates NYC office.

GlobeSt.com: What’s exciting about this opportunity at Lee & Associates NYC for you?

Herskowitz: The opportunity is to help build a company—and I have a passion for that, I thrive on that. But the opportunity is not just what it is to me—it’s what it is to everyone who works here, to the brokers that I’ll be bringing in. When I walked in to a Lee presidents' meeting in San Francisco last July, I met the presidents of what were then 42 or 43 offices and they had one thing in common—they are all very entrepreneurial. Often in our industry your average broker does a deal, earns a commission and goes on to their next deal. A lot unfortunately never really accumulate wealth. Some do—some are very successful at doing that, but most don’t. The brokers here have an opportunity to invest and receive a return. Each can put up venture capital for the newly formed Lee offices as they expand around the country, particularly now on the east coast since mostly its been west of the Mississippi.

GlobeSt.com: Can you talk about what Lee & Associates tends to focus on in terms of both the market and the asset class?

Herskowitz: Across the country, again, it’s a mix, but in very general terms Lee does industrial real estate and Lee is also a broker for office leasing, for retail leasing and for investment sales. Here in our office the focus will be office leasing and retail leasing, in equal amounts. New York City per se, as you’re on this island, is not the hub of industrial real estate. We will of course transact brokerage for industrial deals because of the boroughs and Long Island and so on. When business comes from around the country we will help facilitate that business, but the thrust of what we’re going to be focusing on here will be office leasing and retail leasing.

GlobeSt.com: Who are you reaching out to in your recruitment efforts? And how has the current jobs market affected recruitment?

Herskowitz: I’m speaking to a dozen brokers, all office, three of whom have sizable landlord rep businesses, and the balance tenant rep. All are brokers who have been in this business, I would say, ten to 25 years. And all are brokers who understand that this is a great opportunity for them—brokers who understand that, as a package, when they come on board here, they will instantly make more money and have the opportunities to invest not just in our office and the other Lee offices, but in the real estate deals Jim [Wacht] and Peter [Braus] will be going in to.

There’s a saying that a bad market is a horrible thing to waste, and it’s really true. I’ve found through the years that it was always easier to recruit in softer markets than in strong markets. When brokers are very busy and they’re busy picking up the gold in the street, they’re not focused on the idea of a move. They’re not focused on what is perhaps making them unhappy where they are because they’re busy making money. And in times that are a bit quieter you tend to think about what is making you less than excited about where you are. Today if you look—and I’m certainly not going to be specific and name the names of the firms—but there are firms out there that have recently been sold. There are new initiatives in these firms, new cultures. There are other firms that are kind of in limbo. I would say there are more brokers looking to make a move right as we speak than there have been in years. A certain percentage of the brokerage industry is always transient. In today’s environment, both in terms of the economy and in terms of what’s going on specific to other firms out there, there are more brokers who would be willing to listen to the Lee opportunity.

GlobeSt.com: Are there benchmarks that you’ve set for yourself to meet in terms of recruitment? In six months or a year do you have a certain number of people you want to bring on board?

Herskowitz: We have a pro forma and we have a targeted sweet spot in terms of production. And it’s always nice to meet your goals and it’s even better to exceed them. I’m a pretty metrics-driven person and I will tell you that in thinking about putting Lee together here in New York, Jim and Peter and I would have been very satisfied to hit six, seven stand-up doubles in year one. And yet we feel that right out of the box we’re hitting two home runs. The reception that I’m getting is wonderful. Out of a dozen people, half reached out to me.

GlobeSt.com: As far as the people you’re reaching out to, are you finding yourself calling brokers at larger firms or smaller firms?

Herskowitz: I don’t think of it in terms of the firms that the brokers are coming from. I have good relationships with every brokerage firm out there. It’s more about the individual and it’s about forming a firm where there is going to be a collaborative effort. We are not going to be a giant firm and it’s important that all the brokers that I recruit play well in the sandbox—they share information, they share ideas. They’re here for their own good but also for the good of all. That’s a very important focus to the building of this firm.

GlobeSt.com: You’ve made several moves throughout your career. How did you know when it was right to make a move yourself?

Herskowitz: Truthfully there are times that I chose to make the move and times the move was forced upon me. Then there are times you know you can’t advance further—there’s somebody in a spot you might want and that person is a good person who’s going to be there… you know when it’s time to move on. I can tell you clearly that Lee & Associates NYC is my last position. I’m not saying that in a fatalistic sense, I’m saying that in the sense that I have great hopes and beliefs in what we’re doing here and I’m not 35 anymore.

I spoke to two brokers today that are only with the firms that they are with a couple of years, I spoke to a broker today that’s with the firm that he’s with for 25 years. There are reasons that people move—sometimes very personal to them. There are situations where brokers start to feel unloved, disenfranchised. The checklist of what makes someone happy in a firm is pretty long and the checklist of what can make someone feel unwanted in a firm is equally long.