Bearish Before It Was Cool

How did you resist the temptation to buy at $1,000 a foot?

Mr. Gural: First of all, we’re not sellers. So the only way you can make money doing that would be to buy and sell. And, if you look at it, that’s who was making money. A guy would buy a building; he would hold it a year; he would realize quickly that he’s not making any money; and then the broker who sold him the building would come to him and say, ‘You know, I could sell this building to a client of mine, and give you a $50 million profit.’ … When you do this long enough, you know that bad things always happen. You know, things just happen. Tenants go bankrupt that you never expected to go bankrupt. Or they merge.

Does the apparent shortsightedness of so many other people in the industry boggle your mind?

Mr. Kuhn: It’s not shortsightedness. It’s about risk. Everybody has their own threshold of risk.

What do you see the next year looking like?
Mr. Gural: I think you’ll see leasing activity. I think you’ll see a lot of renewals, because I would think most landlords are not going to let a tenant leave, if they can help it. … I think you’ll see a lot of stories about buildings going back to the bank.

How are you going to fill the void left by Scott Panzer and his team leaving for Jones Lang LaSalle?

Mr. Kuhn: That’s the easiest question you’ve asked. Look at the statistics for the first six months in Crain’s; we did great. We had our best year ever. So, I don’t know how to answer this question without slamming Scott, because I don’t want to do that, but what I want to say is, there are very few brokers that make such an impact on a firm that it’s going to matter.
Mr. Gural: We retained a lot of Scott’s clients, because a lot of Scott’s clients were …
Mr. Kuhn: … were Barry’s business. Don’t forget. Barry was Scott’s mentor. Scott may deny it at this point. I don’t think he would. And a lot of that business was Barry’s business. And I think people underestimate in the tenant-rep world how much Barry contributes. And so, we lost one of the 20 top brokers. And we lost maybe one of his top 10 clients, so I don’t think that it’s an issue.

Last question: Do you think the whole Cushman & Wakefield/CB Richard Ellis rivalry is overplayed?
Mr. Kuhn: No, I don’t. I’ll tell you why. We’re talking New York now?

Mr. Kuhn: Here’s the interesting thing. On a global basis, the rivalry is CBRE/JLL. C&W has lost a lot of market share in a lot of places. But you’ve got to remember that [Bruce] Mosler and [Steve] Siegel have their own little rivalry.

Do they?
Mr. Kuhn: Absolutely. It’s a friendly rivalry, because they’re friends. But on top of that, Steve was at C&W. He went to CBRE. They’ve stolen guys back and forth. But in New York City, JLL is really not a factor. You look at Crain’s, you saw the list! So, we were always the third guy looming. … We would like to think that’s going to become less of a rivalry because of us.

Bearish Before It Was Cool