Since founding it in 1983, Leslie Kaminoff has been president of AKAM Living Services, a management firm that has presided over ritzy condo buildings along Central Park West, Fifth Avenue and West End Avenue, in addition to residences in South Florida. In an exclusive announcement, Mr. Kaminoff, 55, sat down to talk about his brand-new commercial real estate company, the Ashtin Group, and its heavy focus on management over leasing.
The Commercial Observer: I hear you have an announcement to make?
Mr. Kaminoff: Yes, I do. We just last month launched the Ashtin Group, which is another company that falls under the AKAM Living Services umbrella, to do commercial management.
We always did commercial management under our residential name, but we just feel this is such a good market for it right now that we wanted to go out there and take a stab at it. I think it’s a good market because up until now, over the last 15 years, the commercial market was smooth and strong. There really was no down side. Management didn’t matter. It was all leasing. Companies took on commercial management just to get the leasing.
Today, it’s a different story. Management is more important than leasing because leasing is so difficult–it’s so hard to find a tenant. But if you run the building the right way, the tenants are going to come. And that’s our position. We’re going to apply the same standards of management that we do in our residential buildings to our commercial.
Why now, during an economic downturn?
People think I’m nuts. Look, if I was going to open up what I would call a traditional management brokerage firm, I’m out of my mind–because I’m going into a field where I’m competing with dozens and dozens of other companies. But what we’re offering is something very different. We’re offering something different than that.
How long has the Ashtin Group been in the works?
We looked into it for about a year before we decided to jump in.
And was the idea the result of what was happening in the market?
We were just getting more and more calls. We were getting more and more calls saying, you know, ‘The people that are out there don’t care about management. They just care about brokerage.’
And what’s interesting is, in our management contracts, we don’t even mention leasing. In other words, most companies, it’s a management contract, but you’re guaranteed the leasing, and these are the rates. We don’t mention leasing. You know? If we do a good job, you’re going to give us the leasing.
Who was calling you?
We got building owners, and a lot of people who live in our buildings–in our residential buildings we also have people who are affiliated with different commercial properties, and they would call us. And the next thing we saw, we’re running medical suites and all sorts of things, and we felt like, ‘You know what, there’s a real need for this in the market. There’s no one else to fill this niche.’
What kind of buildings do you have your sights set on managing?
I can’t tell you what type of building we’re looking at, but I can tell you what type of owner we’re looking at. We want the owner that understands the intrinsic value in the bricks and mortar, and the lobby and the operations in the building–and sees the true value in the building.
If you’re approached with this and you don’t understand how good management is a stepping stone to good leasing, you’re not for us. I mean, we need someone who’s really going to understand that concept. And leasing is tough these days; and over the next three or four years, they say it’s going to get tougher and tougher. So you have to separate your building from the others. And, really, the only way of doing that is by good management, and good management doesn’t have to cost more money to the owner, which is the other key.
Considering that you aim to focus on management, what will you do about leasing?
We have a company, AKAM Sales and Brokerage, which does sales and brokerage of residential, and we’ve hired two commercial leasing specialists already. But it’s not in our management contract. In other words, if a space comes up and you think we’re doing a good job, give it to us. If you don’t, we probably don’t deserve it.
Will you focus on Manhattan more than the other boroughs?
No, we’ll do all boroughs.
Do you already have a portfolio of buildings?
We’re transitioning a lot of the stuff we did under AKAM Associates now to the Ashtin Group. And then we’ve picked up retail space on [Manhattan’s] Bond Street already. We also picked up a building on West 61st Street, which houses the Gateway School and the American Musical & Dramatic Academy. So we’re out there, and it’s actually sort of going a little faster than we thought it would, to be honest.
So, then, what’s your five-year goal for the Ashtin Group?
We have the same goal for all of our companies. We are firm believers that you can’t manage 600 properties and say you give personalized service. It doesn’t work. So we cap it at a certain number. … So my goal within the next five years is, I’d like to have a portfolio of 70 or 80 commercial properties.
From a real estate perspective, what’s the difference between Florida and New York?
From a real estate perspective, Florida’s commercial space has always been overbuilt, notoriously. There’s always been too much space.
Would you like to add anything else before we part ways?
I think our concept and our approach is a breath of fresh air into an industry that has been operating the same for the last hundred years. If you look at the old line … In fact, they’re not even called commercial leasing companies that do management. I think we’re just coming at it from a totally different angle.
Will your potential clients understand that nuance?
Yeah. I do think they will, and the reason is because they have a leasing company now that manages. They have all this vacant space, but they can’t lease it. So their alternative is either, A, lower the rents, and keep lowering the rents and keep lowering them and lowering them and lowering them until you finally get someone just by the mere fact that you’re the cheapest in that market. Or you go ahead and you fix that product; and through management, you can fix the product; and the most important thing is that it doesn’t cost more money to clean up your building.