Banking: This broker’s clients aren’t afraid to pay “sparkling rents” for prime locations

What’s your secret sauce for attracting customers?

It’s not always about getting in and winning business – I also bring great resources.

We track real estate activity in the hedge fund and private equity industry and every year I write a white paper which has become the standard for tracking high-end deals made in the market that year.

We’ve been doing this report since 2008. Having this unparalleled knowledge of the market is like musical chairs. One of the biggest risks in the market is opportunity risk – missing opportunities that might be under the radar, and we don’t let that happen.

Do Financial Services Firms Tend to Rent the Most Expensive Spaces?

The more mature companies are, the more they want something that reflects their image.

Often it’s not the big institutional tenants. They’re a little less price sensitive, so it’s definitely an industry that some buildings are built around. If you look at 1 Vanderbilt or the Seagram Building, there’s a certain cachet of tenants wanting to be in an exclusive club and rent isn’t the main driver.

What are private equity firms and hedge funds looking for?

I would say that it is rather a very demanding clientele. Often they want something unique and top of the house. It is the best space in a building, views, outdoor space or high ceilings. Occasionally it will be more about how they design the space and what they put into it in terms of aesthetics.

For many companies, it has been difficult to bring people back to the office and to maintain a culture and cohesion. Office space has been a platform to accomplish this.

What was your favorite offer?

In 2017 we were tasked with finding a new headquarters for Discovery Communications [owners of the Discovery Channel and Animal Planet]. They had several expiring leases in Manhattan and had recently acquired the Food Network.

We focused on a few modern glass and steel buildings, but as we neared the end of the mission, we found an off-market opportunity at 230 Park Ave. South which was vacant.

It was a late 1890s building in Flatiron, and it ended up being the client’s favorite. It is one of the few single-tenant buildings in the city.

How have your clients approached leases during the pandemic?

In 2021, there were more leases signed for rents above $100 per square foot in Manhattan than in any previous year. Even though we were coming out of Covid, these people just wanted the best and weren’t afraid to pay sparkling rents.

It looked like it could have gone the other way, with people sticking their heads in the sand, but it didn’t. What we tried to do during [the early stages of] Covid was creating flexible situations. Most of the agreements we entered into had termination rights. They have the option of expanding or reducing the space.

Who was your first client?

State Street Bank in 1996 and I’m happy to say that I still work for them.

I got lucky in the mid-1990s before hedge funds became a household name. I was able to serve a niche, and over the years I was able to develop real expertise.

I’ve worked with clients many times over the decades, it’s very rewarding.

Often the work I do is when the business is nascent, and over the years it gets much bigger, much more successful. It’s very gratifying to see companies grow from small to big and find their footing.