The Office Market Arborist

Why is it that they have such egos? They’re very sensitive, too, aren’t they?
Because to be a really good broker you have to be very competitive. If you’re not very competitive and you don’t have that internal desire, this nonstop competitiveness, I don’t think you’re going to be a top broker. And if you think about it, that’s why athletes also have egos. You know, why do you think an athlete gets upset when another athlete who’s in another team hears about the salary another guy’s making? He says, ‘I’m better than him and I should be making more.’ So there is this competitiveness, both internally and externally. We all want to be the best. So there’s a type of person who gets attracted to this business. If they’re mild-mannered and they’re not competitive, I don’t think they’re going to be a star.

What’s the longest real estate title you’ve ever seen? How many words?
Mine is getting long. You know what, to tell you the truth, I don’t pay any attention to the titles. As a matter of fact, when I’m talking to some of these guys coming over here, and we’re talking about titles, and they say I want to be senior managing director or executive managing director? Listen, titles are so inconsistent. When I started in the business, though, for some reason there was some consistency. When I started in the business, if you made $100,000, I think all the firms had this standard that you could be called an assistant vice president. And so people knew: ‘Oh, you’re an assistant vice president!’ And that was really meaningful. Now, if you wanted to go to a firm with 10 people, you could be a vice chairman. I don’t think it’s relevant.

As the economy improves, what do you expect to change in the marketplace?
In my opinion, the first thing that changes is not going to be rent. It’s going to be the tenant improvement allowances. I think that you had a lot of these large banks subsidizing some of these big deals, and the tenants were taking advantage of receiving allowances. It could be the $80-a-foot range, which is unheard of. I mean, typically, in a lousy market, the highest you were seeing was $55 a foot in work. So this is beyond obscene. I do think what’s going to happen, and I’m starting to feel it a little, landlords are saying, ‘I’m not going to do that deal.’ They’re holding firmer.

Are there landlords who are still stubborn?
There are some landlords that aren’t even in play. And they haven’t been for years. They’re either out of touch with the market, or their buildings are in such trouble that you can’t even show them. So it’s funny. When a broker puts together a tour he may stay away from a number of buildings because of the financial health or the landlords are out of touch. When a broker represents a tenant, he wants to do a great job for the tenant, but he also wants things to be in an orderly process. If a landlord has a reputation, or his agent has a reputation, of being rigid, he’s not going to show the building. So you kind of focus in on, ‘I can see doing business with these people.’ So it’s not just the rent. You’re putting someone there for a long term.

Are you as busy as you were 15 months ago?

What I always tell my team is that our business is like a tree with branches, and every person you meet, or deal you do, is another branch; and that’s going to lead to another twig, and another twig, and that’s how you build a business—when it’s filled up with law firms and accounting firms and technology. Because everything you do helps you go to the next piece of business. You have more credibility. So we are busier because the tree keeps on getting thicker. And that’s a good thing.

jsederstrom@observer.com

The Office Market Arborist