In this episode, Hal and Richard discuss what you need to know about Soho zoning regulations. Susan Penzner and Nathan Stange of Susan Penzner Real Estate share their personal experiences closing noteworthy deals in Soho and Chelsea and how the area has changed in the last 50 years!

Transcript

____________________________________________________________________________________________________________________________________________

Hal Coopersmith:             Welcome to Brokers Angle. I’m Hal Coopersmith. We have a great episode for you where we give you pointers about doing a deal in SoHo and our 30 minute or less interview is with Susan Penzner and Nathan Stange of Susan Penzner Real Estate who say some great things including this.

Susan Penzner:                 So in the early days, I moved Dean and DeLuca to Broadway, which changed the face of Broadway. So I’m very proud of that and things have changed as we know with Dean and DeLuca, but they had a really great run and that store really, really changed SoHo. There was nothing there,

Hal Coopersmith:             But first, Broker’s Angle is sponsored by the law firm of Coopersmith and Coopersmith, a boutique real estate law firm specializing in commercial and residential real estate for over 87 years. This, of course, is attorney advertising, so we are obligated to say prior results do not guarantee a similar outcome,

Richard Coopersmith:              But Hal I think you’ve already out-classed all your predecessors.

Hal Coopersmith:             That is very kind of you to say Richard. So we are going to be speaking with Nathan Stange and Susan Penzner of Susan Penzner Real Estate. They do a lot of work in SoHo. We cover a lot of that in our interview so I figured it would be a good idea to talk about the complications of doing a deal in SoHo. Richard, let’s start with zoning. What should a broker know about SoHo?

Richard Coopersmith:              Well, Hal there is a big mismatch between the neighborhood you see today and its intended uses according to zoning regulations. SoHo should be solely occupied by light manufacturing firms, office tenants and artists and ground floor retail is not permitted as of right in SoHo.

Hal Coopersmith:             Well you said a big one there. Ground floor retail is not permitted as of right in SoHo. If anyone walks around SoHo they’re going to see a lot of stores. How do we have so many stores there?

Richard Coopersmith:              Well, in order for a store to exist in SoHo, it needs to be grandfathered in and it accomplishes that by meeting three specified requirements.

Hal Coopersmith:             So without going into all those requirements, because it does get complicated very quickly for a large establishments that are over 10,000 square feet, I think it’s important for brokers to know that they need to get a variance if they don’t fall under a certain use group.

Richard Coopersmith:              Yes. And while office and retail are permitted above the ground floor, it does get complicated very quickly. So when doing a deal in SoHo, it is always advisable to make sure you have the right permitted use.

Hal Coopersmith:             That’s a great note to go to our interview with Susan Penzner and Nathan Stange of Susan Penzner Real Estate.

Hal Coopersmith:             So if someone Googles you and a New York Times article comes up, “Location, Location, Fashion”, could you tell us a little bit about that?

Susan Penzner:                 I can tell you that it’s true. Location, location, location. I’m really proud of that article. That was a really great time because it was the Yves St. Laurent Men’s store. I met Mr. Borchez through recommendation, which was an incredible experience and we put St. Laurent Men on Wooster Street and it was great, velvet suits and all.

Hal Coopersmith:             So that’s one of the peak being in the New York Times. How did you get started in the business?

Susan Penzner:                 I got started in the business, well, I always loved architecture and I was on my own at a very young age. So I was looking for an apartment and I knew where I wanted to live, on the Upper East Side. I should have gone to the Village, but I wanted to be on the Upper East Side in the 60’s. It was comfortable and I was familiar with it and I loved townhouses and I walked around and I looked at a zillion apartments. And in those days, there was no Street Easy, there was no Google, there were no cell phones. And I met some brokers who had the keys to apartments, agents and I knew more than they did about what was going on. And this one guy, after four flights of stairs or six flights of stairs, we were talking and he said, listen, you should really meet In Town Realty. The guy’s name was Steve Townsend or something and you should meet him. I think you should come work in real estate. And my dream was fashion. So back to fashion through real estate. And I started working for him. I started showing apartments and then I decided that I really couldn’t work for anyone. So from Townsend Realty, I created a company called In town Realty because my idol was this woman called Pat Palmer. She was the woman, she was the queen of townhouses and she had a townhouse on 67th. And I opened across the street from her. And I did it with a friend, a gentleman who was a broker, who helped me get started. I didn’t even have my broker’s license at the time. And I had a gorgeous office. And that was the beginning.

Hal Coopersmith:             And then from the beginning, how did you work your way into the fashion world and doing deals for fashion clients?

Susan Penzner:                 Everything is people I knew and things that interested me. So it was all social related and it was all a recommendation. And I like real estate because I like architecture and I like people and I like interesting people and I like to put them together and so I never really went looking for just customers.

Hal Coopersmith:             You weren’t looking for customers?

Susan Penzner:                 Well I was looking, I wanted to do deals and I wanted to work with people. But I wouldn’t sit in an office and wait for a phone to ring and take a stranger from there.

Hal Coopersmith:             So from there, how did you grow the business?

Susan Penzner:                 Well my office at the time was in a great location and I had people working with me who knew people. So it started with friends of friends and an introduction to a young man whose father was a developer. So we got his apartments to rent. We had filmmakers that were friends with people who, it just, it just snowballed into interesting people. And my next door neighbor was somebody called John Gibson, who was an art dealer who had this really interesting space. We were in this huge, interesting townhouse and he represented Mark di Suvero and Dennis Oppenheim and all these interesting people would come in to his space and we were next door and we’d have coffee. And I started learning more about conceptual art and it just opened up the art world to me a little bit more, even though I studied and loved art history. And I later worked for an art magazine in between.

Hal Coopersmith:             And then you brought on Nathan.

Susan Penzner:                 Well, from the 60’s to 2003 I had been in SoHo for, well through publishing, working in art magazines. And then I had come and gone back into real estate and I had wound up in SoHo and we had an office and Nathan was introduced to me and I think that to me, I don’t know Nathan, perfect pairing because Nathan is really methodical. People adore him. He’s so thorough and we’re a good balance for each other. He reads the entire lease, he does all the numbers. He’s the logical one that says you sure you want to say that?

Hal Coopersmith:             And Nathan, how did you get into the business?

Nathan Stange:                 I moved to New York, as Susan mentioned in 2003. I was actually, you mentioned publishing, but you didn’t get into your publishing experience. But I moved to New York thinking I was going to be in publishing. I was an English major. My poetry editor for the magazine that I worked on in college was working with Susan as her executive assistant. And so I came here with starry eyes thinking I was going to go into the exciting world of New York publishing. And I got here and started speaking with, meeting with friends who had been in it for about a year or two and I was just like, oh man, this is depressing. I mean that was at the beginning of the, we still have books, you know, a few are published. Most of them are electronic, but it was not what I thought it was going to be and in the meantime, my friend from college was like, we’re looking for somebody to help out around the office. April, and so I came in and that was that and I think Susan, what do I remember Susan asking? I remember being asked what my sign was and remember I’m being asked nothing about real estate. It was all about literature and I don’t know if we touched on art, but yeah, it seemed like a really cool office and it was in the middle of SoHo and just like walking into something really amazing.

Susan Penzner:                 Well, that’s perfect. Who else would hire an assistant who was a poet. I mean, in a minute I read that she was a poet at Columbia. I was like, okay, I’m hiring this assistant and then from there was Nathan, I mean it was just perfect.

Hal Coopersmith:             And so what’s the focus of Susan Penzner Real Estate, the two of you right now?

Nathan Stange:                 Well, from my perspective, it’s commercial real estate, office leasing, retail and showrooms and galleries. Of course, we work with a lot of galleries, fashion design oriented tenants, wherever that takes us. But primarily downtown, Upper East Side,

Susan Penzner:                 Upper East Side for fashion, basically. I still hung onto my residential contacts. And so, we’re a boutique, so we’re about people. I still do residential, which is really odd for a commercial company, but they’re mostly referrals and, a townhouse here, a loft there. I was a loft expert when I, from a short time I was at Sinvin Realty and I created a residential department for them and I created management for them, which was incredible because when I left those buildings followed us. And today, Nathan is the exclusive agent for 134 Spring Street and we have amazing tenants that go in there and he handles that himself and management also paves the way for exclusives, which has been great for us.

Nathan Stange:                 Yeah and a lot of long term relationships. You’ve already said when you started, but that building, 134 came into your life when you were working on it, late nineties, early 2000. So it’s just.

Susan Penzner:                 Early nineties maybe. And before that we had the building that Noel Furniture was in. So I developed that building with the developer, sold all the lofts above it. Noel was the co-developer and they had three floors and that was exciting at the time because I was the one in the first condos.

Hal Coopersmith:             And where’s that located?

Susan Penzner:                 111 Wooster Street and the one before that was on West Broadway. So there were very few condos at the time.

Hal Coopersmith:             And one of the things that the New York Times article mentioned is this wonderful quote about how you’re able to match people in places. What’s your technique for that?

Susan Penzner:                 I think it’s my interest in architecture and space and having an understanding of the customers’ needs and communication. I think they choose, I would say the customers want to work with us because we have taste and because we understand space as opposed to, it’s not like renting a 100,000 square feet of office space to attorneys. I mean, that is not the same as walking into an historic building, seeing the potential of how the brand can be recognized in relationship to the space.

Hal Coopersmith:             And so what do you think that you see in spaces that other people are missing? 

Susan Penzner:                 I can’t say they’re really missing it, but maybe their interests aren’t the same and they would rather do miles and miles of space. It speaks to me because actually had I finished college and had I really thought about it, I would’ve been two things, an art dealer or an architect. And my father who was a Russian immigrant was a frustrated architect. And even though he didn’t have a license, I would come home and in my house, the wall would be out because he’d have an idea or he designed an entirely beautiful modern house for our neighbors and got it built. My father was an architect at heart. I learned a lot from him. Weekends we used to look at houses, he had a vision. And I think that everything I do is, I’m very visual. It’s visceral for me.

Hal Coopersmith:             And so you touched on this a little bit, but who have been your main clients and what’s been your main focus as your business?

Susan Penzner:                           I can say that Paul Smith is one of our most important and most interesting clients and Nathan and I have worked together on that and we are still working with Paul Smith. We sold him the building at 142 Greene Street. I worked with Paul across the country in San Francisco, L.A., touched on Chicago a bit, but we still have a strong relationship. So I think, Paul’s one of our most important clients and Nathan is right, we’re partners on that and selling him the building was very interesting because we looked at space for a very long time and this building was fantastic. After he bought the building, he had built this incredible store on the ground floor and then they had offices on the second floor, but then the upper floors we had to lease. And I knew those upper floors because the ground floor used to be Castelli Gallery. There were Richard Serra sculptures in there. Before that, there was another gallery in there. So I go back in the art world to the 60s and the 70s was when SoHo really started. And I knew the building and I knew the volume of space and the height of the ceilings and the arch windows and the upstairs and I just was so excited when it came on. I called him immediately.

Nathan Stange:                 It was such a special building too. I mean you can’t find another building like that. There are very few in SoHo.

Susan Penzner:                 Also, I mean Paul has a vision. Paul wrote a book and it’s perfect. The cover of the book is, the title of the book is, there’s inspiration in everything and if you don’t see it at first, look again. So we were a match made in heaven.

Nathan Stange:                 But then your history in the art world, right? You’re able to use your contacts to go back to all the galleries that had been chosen. So this as an opening, as a gift, when the building sold in their opening, Susan was able to give all the…

Susan Penzner:                 Exhibition catalogs to Paul and he was thrilled because he collects, he loves art and he started selling art before he sold clothes.

Hal Coopersmith:             And so a lot of your business is in the art fashion world. What are the art galleries, fashion tenants looking for and how are you able to appeal to those clients?

Susan Penzner:                 Well, fashion is location, location, location, and whether it’s uptown or downtown, like now the 70s is really important because people who have their clothing or accessories in, well I can’t say Barney’s anymore, but Bergdorf’s and uptown stores, I mean they would probably be away from the 60s and in the 70s and also there’s more activity in the 70s because people are there. They go out shopping three times a day. There’s four generations of women shopping, and hanging out in Santa Rosa or whatever. And so I think Madison is really important, but I think if you want to reach a younger and more hip hop and tourists, it’s a mixture of everything. They want to be in SoHo as well or the Meatpacking. So it’s again, location, location, location for fashion. I think for art, I think in the art world, I think the art world makes the location. It’s like did the artists go there first and the dealers followed or and then the dealers made Chelsea because SoHo became so inundated with fashion that the galleries wanted to get out. I mean they didn’t, they had to hire guards. People were coming in, they didn’t know they were looking at art. They didn’t know what they were looking at. So they deal with like I’m out of here. And the good news there was we knew the dealers. So when Nina Nosei, who was one of the early galleries to move to SoHo, I’m sorry to Chelsea, I had the listing for her space because a lot of the dealers owned their ground floors in SoHo and I was able to just immediately go to Joel Isaacs who worked with Prada and say to Joel, I have this space. And he said great, I have mine. And it’s also about having relationships and knowing who other brokers are working with and being able to pick up the phone and just knowing them.

Nathan Stange:                 I think experiential is also very important that this is what fashion is looking for. People are looking for a specific experience in New York or, or in SoHo that they can’t find elsewhere. For instance, my parents were in town recently and my father and my stepmother and my stepmother was sharing that she has this Chanel bag from the 70s and she went to the store where she lives. We can take it, we can send it away, we can get it fixed. She came here, she went into the store by chance this past weekend. There’s the guy right there who does the leather working, who could work on it while she waited, had she brought her bag. It gives a taste of the brand. It’s why people, why brands or why it’s important that brands are in New York to put their best foot forward and really showcase it. For years there was this idea that every location was a flagship location. There’s a pairing down of that now. But within SoHo that this is where you need to have your flagship location.

Hal Coopersmith:             Susan, you alluded to this with Paul Smith, but any noteworthy deals that you’ve worked on?

Susan Penzner:                 In the early days I moved Dean and DeLuca to Broadway, which changed the face of Broadway. So that, and I’m very proud of that and things have changed as we know with Dean and DeLuca, but they had a really great run and that store really, really changed SoHo. There was nothing there.

Hal Coopersmith:             So how did you sell them on that? How did you sell them on going to Broadway?

Susan Penzner:                 Space.

Hal Coopersmith:             Space.

Susan Penzner:                 I knew the people, the three owners of Giorgio and Joel very well and Jack and because I was a customer. Because he had the cheese store and it was incredible and we became friends and over food and when they started looking, we looked everywhere and nobody wanted to go to Broadway. But Jack, who was the industrial designer, I called up Jack and I said, listen, there’s a space on Broadway. It has like 20 foot ceilings. It has the most gorgeous columns. You can’t see it. There’s an Army Navy surplus store in there and the stuff is piled up. There are boxes covering 10,000 square feet with mezzanines with more boxes. But this space is so beautiful. Come see it. So he came and he saw it and he said, you’re absolutely right. And it had a sub basement and a basement and it was incredible 10,000 feet on the corner. And he said, I’m going to get Giorgio right now. And that was it. We never thought of going to Broadway, but how could we ever get a space like this? It was absolutely spectacular because that part of Broadway was, they were department stores. It started, there was an opera house, I don’t know which corner, not that one, but the next corner up there was an opera house. There were department stores. And then they kept moving up and later their store Wanamaker was on Sixth Avenue. But those are the same style buildings that you see on Sixth Avenue in the 20s. It was this, there you go. It was the space and they knew what to do with it. They knew how to make a food gallery out of it. It was a miraculous transformation.

Hal Coopersmith:             So I want to dig into that a little bit more because you talked about all the boxes and how no one was on Broadway. How did you visualize the space where it was completely different and completely barren for that use and then sell someone on that vision that you’re seeing and translate that to someone else?

Susan Penzner:                 Well, first of all, I knew the people involved had vision. So it was a natural, it was just a natural fit for us to work together because I was looking for that space that would blow their minds. And I found it and Jack Ceglic has the most amazing eye and the most incredible, I mean, he created the look and the brand of Dean and DeLuca. Joel was the business person and Giorgio was the food person. And so it was just such a perfect combination of people. Joel used to be in publishing so everybody had a lot of integrity, a lot of tastes. They cared, they knew about architecture, they traveled around the world. They could relate to the Italian architecture because the cast iron was made in Italy and sent over and added onto these buildings.

Hal Coopersmith:             Nathan, a noteworthy deal that you’ve worked on.

Nathan Stange:                 So probably one of the more interesting deals I’ve been in from a personal standpoint just because I think on every deal there is something to learn. In this case, it was sometimes giving up what seems the most important is really the key to actualizing. The next step in this case, it was Rick Owens who I had worked with in a building and helped grow within a building, starting with a small, but amazing, showroom space on the top floor in a space that hadn’t been touched in 70 years, exposed ceilings, exposed rafters, exposed brick with the plaster on the walls that had been there, just very special space for a brand who could appreciate it. The rest of the building had been completely redone in a modern style. And this was just this little jewel that was left for them when we found it 15 years ago. It had been a ladder company for 70 years and there were still ladders piled up to the ceilings from floors to rafters. I think the count was something like 5,000 ladders on the floor when we first toured it. It was insane. But the lesson that I learned is we are in a situation where there were new owners in the building. Rick Owens was ensconced in the building, Rick Owens really needed to grow and couldn’t figure out a way to make that work. The new owners really wanted their space and there wasn’t a way to make things happen initially. And we talked and we were in discussions for over a year. It had been put to bed. We didn’t think that there was going to be a way forward. And then the president of Rick Owens, who I admire a lot, eventually she came to the decision, you know, I have to give up the space. You have to give up the space that had been so important to the brand for so long. The takeaway being that sometimes you need to give up what is most important to you in order to get what you want.

Hal Coopersmith:             And one thing that people may not know about you is that you are in a book.

Susan Penzner:                 I got a phone call one day, this is quite a while ago. Really quite a while ago. I got a phone call one day from a woman who is soliciting people to contribute to a book. She was representing the publisher. The book was about the real estate world and advice and what advice you would give. And I don’t know why she chose me because there were developers in it and very established brokers, but everybody got a few pages. I think mine was the, was really, as Nathan pointed out, kind of long pages. My subject was integrity, which is really ironic because the book in the end was a Donald Trump book with a picture of him on the cover, to my chagrin, about advice from real estate people to real estate people. So again, mine was integrity. That’s all I can say. And of course at a certain point, I tried to buy every book to get it off the shelves because I was in it. I’ll have one for you.

Hal Coopersmith:             And give it out to people, buy it off the shelves and give it out.

Susan Penzner:                 Take the cover off and give it out. Yeah.

Hal Coopersmith:             Nowadays.

Susan Penzner:                 Yeah, hide it. It’s hidden. But it was fun to write it. It was fun to think of what’s important to me and what is important to me is integrity. And if I were giving people advice, I would say I think integrity is really, really important.

Hal Coopersmith:             But you can shortchange yourself by being included in the book. But there are a lot of big names, big real estate names in that.

Susan Penzner:                 Yeah. It was interesting to be included in it. Yes, it’s history.

Hal Coopersmith:             And people don’t like saying nice things about themselves. So I’m going to ask you each to say something nice about the other. I’ll start with Susan.

Susan Penzner:                 I can’t do a deal with that Nathan. I mean, speaking of integrity, Nathan has patience, he has integrity, he’s smart. I think he should’ve gone to law school because he can read a lease and he picks it apart and he’s protective of everyone. He’s protective of his clients. He can pick up the phone and talk to attorneys about clauses in the lease. I think a lot of brokers just do a deal and they pass it on and they don’t care what happens. And I think we just share so much in the office. I mean, I feel like we’re family. We can count on each other for even things that are less about real estate. I’ve watched Nathan grow and I think I’m really fortunate.

Hal Coopersmith:             Same question for Nathan.

Nathan Stange:                 Thank you Susan. I’ll follow up on that with, I think one of the things I admire most about Susan is just how much she cares about people both in business and you know, her clients where she really gets a sense of what is important to people and how she can help make that happen even if they don’t necessarily know what’s best for them. And then also with your philanthropy, I mean Susan’s involved in a lot of causes that are very important to her.

Susan Penzner:                 Impact Repertory Theater.

Nathan Stange:                 Impact Repertory Theater.

Susan Penzner:                 In Harlem.

Nathan Stange:                 Yeah. And that at the end of the day, I think that’s what is most important in this business. It’s people, it’s your relationship with other people. It’s how you treat people is important. That’s how you have a long career.

Hal Coopersmith:             There are a lot of brokers out there who are probably pitching the same spaces that you are, same clients as you are, but you have won them over. What makes Susan Penzner Real Estate different?

Susan Penzner:                 Sometimes we don’t win them all because I mean we are small and I think it’s really about relationships. But there are people who want the suits as I call them, you know, and we don’t have that. I mean we have suits I guess in Paul Smith. Personalities. It’s making, it’s having those relationships, you know, my favorite deal not too long ago is 909 Madison. Can I mention that?

Hal Coopersmith:             Absolutely.

Susan Penzner:                 Which was a really prominent art dealer who I have such incredible respect for it. And we worked together for almost five years. Did she want a smaller space? Did she want a larger space? When she was leaving a very important gallery and it just had to be right. And this is again about taste. It’s just like finding the space where you walk in and the person goes, this is the space. And that’s another one of those challenges that I love. And this was more space than she originally needed. And it was the most beautiful brick and limestone building on the corner of 73rd and Madison. It used to be the Bank of America, which, you know, and not the Bank of America. Let me stop right there. It was the Bank of New York and then it became like Citibank or something, but it was the Bank of New York. It was this elegant townhouse. But it came on the market and there was a pop up in there and I said to her, you just go in there, try on a pair of jeans, look at the space and if you love it, we’ll get a tour. And we get there and there was a safe downstairs, like gigantic. I mean it was like $300,000 to get the safe out because we needed the space and she shared it with another dealer in the beginning and then took over the whole space. And it was a long, hard deal to make. And Friedland was amazing. They own the building, but there were phone calls in the middle of the night. There were phone calls from Paris, there were phone calls, like what’s going on here and is someone else taking this space? And it was really a frantic, frantic time to get this done. And I live on that block. And so every time I walk out on the corner and I see that building, I have a lot of pride.

Hal Coopersmith:             And so that’s a wonderful note to wrap things up on. But I want to ask this to all guests. One piece of advice you’d give to other brokers. Let’s start with you Nathan.

Nathan Stange:                 Well you have to be honest to your clients, right? Good news, bad news. You have to lay it out there and it’s just easier to put it out there sooner than later.

Hal Coopersmith:             And you Susan?

Susan Penzner:                 I’m not so good about this. I mean as I think as I said, integrity is really important. Dealing with fellow brokers. I really don’t know how you would advise people to work with their own customers and landlords that they represent. But I think it’s just the courtesy and I think the working together broker to broker when one is representing the space and one is representing the tenant, I think you just need that synergy where you’re really working together.

Hal Coopersmith:             Well, Nathan Stange, Susan Penzner, thank you for being on the podcast.

Nathan Stange:                 Thank you.

Susan Penzner:                 Thank you so much for asking us.

Hal Coopersmith:             So that wraps up our interview with Nathan Stange and Susan Penzner. For more, visit Brokersangle.com or follow us on social media @brokersangle and please feel free to email us at brokersangle.com