Have you been fielding a lot of résumés from Wall Street refugees?
Mr. Colacino: Absolutely. We’re finding incredibly talented people who are available to us in a way that they were never available before. We just hired someone from Lehman Brothers, for example, who has a résumé that’s vastly better than mine. And so, we’re picking up very, very talented, smart people at compensation levels that were difficult to visualize a few years ago. So there’s a silver lining in every cloud.
Do you see more consolidation in the business? Are you looking to consolidate at all with anyone?
Mr. Steir: At this point now we’re the only major national-slash-international occupier-side firm that exists, and we see incredible opportunities in expanding our platform, both here and abroad. What was the statistic you gave me the other day, Mike? What percentage of the business remains fragmented?
Mr. Colacino: The tenant-rep business is about a $5 billion a year business, of which 40 percent plus or minus is concentrated in the major players, us included. That means 60 percent of the tenant rep market is being serviced by small companies, by regional companies, even by individual practitioners. So from a sales perspective, it’s a very inefficient and disorganized market.
Mr. Steir: And we’re an unusually well-capitalized outfit. We have virtually no debt. We’re looking to be the acquirer. We’re talking to people every day. As you know, we took 50 percent more space at 399 Park in this environment. We’re the only major company that has not reduced splits to the brokers and they remain the highest in the business, and we certainly don’t plan to change that.
Everyone talks about all of these looming loan defaults on buildings in the coming years. What impact will that have, if any, on the leasing market?
Mr. Steir: Well, listen, there’s certainly a reasonable amount of assets that are troubled. In the near term, that has an effect, paradoxically, of somewhat tightening the market, because until the picture clarifies, tenant and broker will approach a building like that as toxic to do a long-term lease. I mean, one would have to be insane.
Mr. Colacino: On the other side of the equation, the buildings that have no complicated CMBS structures and therefore have simplicity, they’re actually more valuable. For example, 399 Park has no mortgage on it, and it’s not a coincidence that we’re going to 399, because we understand the capital structure, and there is no risk associated with a mortgage or CMBS.
