The self-immolating spectacle of Wall Street has cast a paralytic spell over Manhattan’s commercial brokerages. Buildings don’t trade. Leases don’t close. Real estate professionals take extended vacations. Only a few brokers have resisted the spell. They are this year’s power brokers.
The contingent of eight selected this year is by no means all inclusive. It is, however, representative. It includes three brokers who, at the start of 2008, were extraordinarily well placed to survive the storm and used their contacts and reputation to rise above the turmoil—Eastdil’s Doug Harmon, and CB Richard Ellis’ Paul Amrich and Richard Hodos. All three work at the top of the market and have continued to do so, the spectacular economic meltdown only mildly throwing them off their game.
The remaining five power brokers aren’t the sort of huge-number, mega-deal players you might expect to see on a list like this. But economic turmoil, like all societal turmoil, upends some social orders. These five are set apart by the mere fact that while the rest of the industry sits still, they are actually doing business. Not tons of it, mind you. But business is business, and these five have cornered the market on the least sluggish of the sluggish sectors—the small-to-midsize deal: Peter Von Der Ahe, vice president for investments at Marcus & Millichap; Bob Knakal, chairman at Massey Knakal; and Jon Epstein, Charles Kingsley and Yoav Oelsner from Cushman & Wakefield’s capital markets team.
Doug Harmon, of Eastdil Secured, was perhaps the best positioned of investment brokers in 2008. When the devastatingly overleveraged Harry Macklowe empire collapsed, when the once mighty titan was forced to both sell the GM Building and hand over a septet of trophy buildings to creditors at Deutsche Bank, Mr. Harmon was there waiting, landing the plum assignment of selling the seven midtown scrapers.
Despite signs that the market was softening, Mr. Harmon succeeded in selling off first one, then another of the so-called Equity Office portfolio to buyers from California (Park Avenue Tower and 850 Third Avenue) and Japan (527 Madison Avenue) to Chicago (Tower 56) and New York (1301 Avenue of the Americas). Now, word has it that New York’s George Comfort & Sons is angling for the remaining two—1540 Broadway and Worldwide Plaza.
Those sales enabled Mr. Harmon to eclipse $5 billion in trades this year. Sure, that’s down a bit from 2007 and 2006, when he traded $15 billion and $12 billion, respectively, but still not a shabby showing in an ever darkening climate. Mr. Harmon credits flexibility for his ability to maneuver in the new market.
“You couldn’t be stubborn,” Mr. Harmon said. “You had to realize it was a lot easier for prospective buyers to turn down a deal this year than to take a leap of faith and purchase property.”
Take those words to heart. The year won’t be getting any easier.
“Everyone was hoping that the EOP transaction would be a catalyst to reignite the market,” Mr. Harmon said. “That didn’t happen. Month by month, it seems to have gotten more difficult, and with Bear and Lehman being impacted the way they were, that has a dramatic effect on New York.”
While Mr. Harmon moved buildings in a truculent city, Paul Amrich of CBRE filled them. With his thrice-weekly 7:30 a.m. meetings and his creativity, Mr. Amrich brokered 650,000 square feet, and closed what is likely the sexiest deal to come out of office real estate in 2008—the Burberry lease at 444 Madison Avenue.
Westbrook Partners bought the old New York magazine tower at 444 Madison last November for $310 million. At the time, the 42-story scraper was a Class B building (i.e., nothing special). But Westbrook was committed to spending more than $20 million converting the 42-story tower to Class A. And the firm hired Mr. Amrich to remake its image.
“We were extremely involved in architectural meetings and material choices and we had to market the building in a way it had never been seen before in the marketplace,” Mr. Amrich told The Observer.
To make the 70,000 square feet of anchor space more attractive, Mr. Amrich and his team, Patrice Hayden and Fernando Urrutia, suggested that Westbrook promise that the prospective tenant would get to replace New York magazine’s name atop the building. Burberry leapt at the opportunity. (What tenant wouldn’t leap at the chance to have its name in the skyline?)
“That’s probably the best deal we’ve done all year,” Mr. Amrich said.