NEW YORK CITY—When real estate services professionals work on a large transaction—whether it be a building sale or an office lease—such a myriad of issues could arise that a crystal ball might be handy.
But lacking that, the city's brokers and attorneys have devised a number of strategies for tackling big deals, as several of them tell GlobeSt.com in advance of a panel discussion at RealShare New York. And while they may have different approaches to their assignments, they all have one thing in common: they all work to anticipate any possible problem and arrive at creative solutions before the matter even rears its ugly head.
“From an organizational resource standpoint, what helps to help is to have an interdisciplinary team,” suggests Michael Maturo, managing partner and president, RXR Realty. “We have an in-house capacity across the spectrum of capabilities and the combination of many disciplines—including property management, leasing, investment, finance, legal, construction and more—come together to provide a more complete underwriting.”
Having such teams in place also allows firms to move quickly, a necessity in today's marketplace, he adds. “New York deals move quickly, and if you can't do the say, they die.” Being equipped with experts in multiple areas “gives you intelligence so you can keep negotiations fluid and have good facts in terms of financials and other information.”
A multi-discipline team approach also is taken at CBRE, with a special focus on putting together the right individuals for each project. “We don't have a banking or law firm team, we put together individuals based on a client situation,” explains Michael Geoghegan, vice chairman. Earlier this year, his group was involved in the Citigroup deal at 388-390 Greenwich St. “If we're pitching to Morgan Stanley, for example, they're going to be figuring out highly technical issues, or there could be municipal incentive questions because of the scale of the deal. Building the right team requires an objective view that seeks a variety of skill sets and areas of expertise.”
Some industry practitioners take it upon themselves to be prepared for nearly any client question or concern. “It's a lawyer's role to find out what issues a buyer might raise in order to think of solutions in advance,” declares Michael Werner, partner, Fried, Frank, Harris, Shriver & Jacobson. “You want to find out what's important to the client before you even get into the negotiating room so you're not caught flat footed in negotiating with another party and you can go into the room knowing what you can and can't trade.”
He was involved in two large deals this year: the sale of 25-30 Columbia Heights, in Brooklyn Heights (representing the seller, the Jehovah's Witnesses), and the 21st Century Fox lease at 2 World Trade Center—a transaction that would have been important for the property but ultimately fell apart. The untimely end of the latter deal wasn't due to error on anyone's part, Werner notes. “There were a lot of moving parts and it was complicated to pull all of the pieces together for a deal at terms with which all of the stakeholders were comfortable. We were at the finish line but this is just a reminder that it's not over til it's over.”
For some leasing brokers, the process doesn't change because of tenant size. “Much of the process is similar, you don't want to give short shrift to those who aren't seeking space of 100,000 square feet or more, and square footage isn't always the determinant of complexity,” opines Michael Cohen, president, tri-state region, Colliers International. “It's more a function of the tenant.”
But some changes are on the horizon when it comes to big leases, he predicts. “The city is shifting Southwest, to Hudson Yards and—to a lesser extent—the Trade Center. This is going to create a lot of opportunity in the Midtown core for large tenants.”
Cohen continues, “It will be interesting to see how those spaces get filled. It used to be that for a large Midtown block, the first choice was a bank or a law firm. Now, people will look for TAMI tenants—that's where growth in the city is coming from.”
Disrupt or be disrupted. The industry is evolving into a new era that is forcing players to rethink their strategies, from brokerage to building and everything in between. Join us at RealShare New York on October 5th for impactful information from the leaders in New York CRE. Learn more.
But lacking that, the city's brokers and attorneys have devised a number of strategies for tackling big deals, as several of them tell GlobeSt.com in advance of a panel discussion at RealShare
“From an organizational resource standpoint, what helps to help is to have an interdisciplinary team,” suggests Michael Maturo, managing partner and president, RXR Realty. “We have an in-house capacity across the spectrum of capabilities and the combination of many disciplines—including property management, leasing, investment, finance, legal, construction and more—come together to provide a more complete underwriting.”
Having such teams in place also allows firms to move quickly, a necessity in today's marketplace, he adds. “
A multi-discipline team approach also is taken at CBRE, with a special focus on putting together the right individuals for each project. “We don't have a banking or law firm team, we put together individuals based on a client situation,” explains Michael Geoghegan, vice chairman. Earlier this year, his group was involved in the
Some industry practitioners take it upon themselves to be prepared for nearly any client question or concern. “It's a lawyer's role to find out what issues a buyer might raise in order to think of solutions in advance,” declares Michael Werner, partner,
He was involved in two large deals this year: the sale of 25-30 Columbia Heights, in Brooklyn Heights (representing the seller, the Jehovah's Witnesses), and the 21st Century Fox lease at 2 World Trade Center—a transaction that would have been important for the property but ultimately fell apart. The untimely end of the latter deal wasn't due to error on anyone's part, Werner notes. “There were a lot of moving parts and it was complicated to pull all of the pieces together for a deal at terms with which all of the stakeholders were comfortable. We were at the finish line but this is just a reminder that it's not over til it's over.”
For some leasing brokers, the process doesn't change because of tenant size. “Much of the process is similar, you don't want to give short shrift to those who aren't seeking space of 100,000 square feet or more, and square footage isn't always the determinant of complexity,” opines Michael Cohen, president, tri-state region, Colliers International. “It's more a function of the tenant.”
But some changes are on the horizon when it comes to big leases, he predicts. “The city is shifting Southwest, to Hudson Yards and—to a lesser extent—the Trade Center. This is going to create a lot of opportunity in the Midtown core for large tenants.”
Cohen continues, “It will be interesting to see how those spaces get filled. It used to be that for a large Midtown block, the first choice was a bank or a law firm. Now, people will look for TAMI tenants—that's where growth in the city is coming from.”
Disrupt or be disrupted. The industry is evolving into a new era that is forcing players to rethink their strategies, from brokerage to building and everything in between. Join us at RealShare
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.