Choosing his words carefully, John Powers, chairman of the tri-state region for CB Richard Ellis, told a room full of reporters on April 8 that “conspicuous consumption is no longer socially in.” His delicacy was understandable, representative, as he is, of countless landlords with conspicuously ostentatious buildings.
It’s old news that ladies with bottomless bank accounts should try their mightiest not to flaunt the canary diamonds adorning their ring fingers or the Hermes bags atop their skeletal shoulders. But, as it turns out, something similar may well be happening in the commercial real estate industry, particularly along the marble-sheathed gorges of the Plaza District.
Let’s say you’ve launched a hedge fund and you’re trying to raise money from wary investors. Might it not be in your best interest to demonstrate your conservatism, your deep wells of frugality, by opting for an office on Third Avenue rather than one nearer Central Park?
“It is happening,” said one prominent broker, who asked to remain anonymous so as not to upset his tenants. “I have a client who’s on Park Avenue and wants to get off Park. They feel that it has too much cachet and it sends the wrong signal to their shareholders and to people in general. … People are more cognizant of how they look.”
Concrete examples are woefully scarce, in part because, as one broker put it, “there’s been one relocation in the Plaza district in the past six months! But people definitely want to appear conservative.”
“Sometimes these less fancy addresses help them to make a statement to their employees on how they’re looking to be fiscally responsible,” said Robert Goodman, a senior managing director at FirstService Williams. “We’ve seen it in the case of a number of law firms, who have for years desired that Park Avenue address. These days, they’re coming to the realization that the Park Avenue addresses aren’t as much of a recruiting tool as they were in the past.”
The anti-ostentatious trend has trickled down to the brokerages themselves.
Every year, CB Richard Ellis holds an annual conference at some balmy location to recognize its top employees. This year, the firm had booked 225 vacation packages at the opulent Hilton Cabo San Lucas Beach and Golf Resort, whose Web site boasts of world-famous game fishing, hiking, horseback riding and, perhaps most importantly for the real estate set, proximity to the Jack Nicklaus–designed Cabo del Sol golf course and the 27-hole Palmilla course, also a Nicklaus design.
“Given the state of the economy … we felt it was inappropriate to have that type of event given some of the other measures being taken and constraints on the other areas of the business,” said Mitch Rudin, CBRE (CBRE)’s president and CEO for the tri-state region.
The firm decided the 225 three-day vacation packages should instead go to dozens of charities, like the Wounded Warrior Project. A move that’s both PR-friendly, and, dare we say, rather nice.