In this episode, Hal Coopersmith sits down with Elliot Zelinger to talk about how a psychology major pivoted into commercial real estate and never looked back. From old-school canvassing to modern deal-making, Elliot shares nearly 20 years of insights, trends shaping the market, and how relationships have fueled his success.

Transcript

Hal Coopersmith: Welcome to Brokers Angle. My name is Hal Coopersmith. In this episode, we are speaking to Elliot Zelinger. Welcome Elliot.

Elliot Zelinger: Hal. Thanks for having me.

Hal Coopersmith: So what attracted you to commercial real estate?

Elliot Zelinger: It’s a great question. I went to Binghamton University. I was a psychology major and I thought I was going to be a psychologist following the footsteps of my parents, and that it was senior year and I had this revelation realization I didn’t. Know if I wanted to go to grad school. You know, I love the field. I love what I was learning about the idea of more schooling, more science, more experimental. I just said you know what, what’s out there in the business world? And I did an internship that summer for a family friend and I learned the ins and outs of the business working in the South Bronx from the ground up. I learned about construction, rent, collections, so the other side of the business and that led me wanting more. So I had this. Interest in just the business world. Come senior year, didn’t know where to start. And I had an opportunity, with a startup company at the time, just to see if it was for me or not, and I ran with it.

Hal Coopersmith: When you started to run with it, what was it that you loved?

Elliot Zelinger: I just loved, the idea that every day was different. You know, I was out in the street, I didn’t have set hours. It wasn’t capped by a salary, you know, the upside financially was exciting. The ability to hunt and bring in my own business, and just seeing that lifestyle that some brokers were living, that was attractive to me.

Hal Coopersmith: And what are some of the things that you are doing to bring in new business?

Elliot Zelinger: What I do now is a lot of what I did when I started almost 20 years ago. It’s really a lot of canvassing, which is different now than it was when I started. When we were in the business in the early days, we used to walk up and down buildings with notebooks, taking notes, trying to get information, get addresses and today that’s still invaluable, both technology changes. Now a lot of my canvassing is done, through email campaigns, social media, LinkedIn, so I’m using a lot of different resources, but the principles are still there of just getting in the door somehow and on top of canvassing, I rely on my network a lot to help me grow my business. So the biggest source of referrals for me now is existing clients. So I’m constantly re-running the business of clients daily.

Hal Coopersmith: You mentioned you’ve been in the business almost 20 years. What are some of the trends that you’re seeing now that you didn’t necessarily see when you first started?

Elliot Zelinger: I think now, the way deals are structured is a lot different. I think when I started it, lease terms were more concrete, you would say a five year lease or a 10 year lease. and I think there’s been a lot of changes as far as how options, almost every deal I do now has a termination option, a write, a first offer on an adjacent space. There’s all kinds of clauses since covid that didn’t exist beforehand. Tenants are paying more attention to landlords financing. So there’s a lot more nuance that goes into getting a deal over the finish line now.

Hal Coopersmith: And one of the things that you are pretty keen on, at least in your newsletter, is items of additional rent. What’s going into a lease for additional rent? How are you able to focus on that?

Elliot Zelinger: So there’s a lot of additional rents. Some are addressed at the term sheet level. Some are thrown into the lease, and tenants are kind of blind to it when they see it for the first time. You know, for example, a lot of loft leases have water sprinkler charges, guard charges, cleaning might be a tenant expense. So these, it’s important to be aware of these numbers. But in different class A buildings, we’ll see operating expenses. And now, for example, there’s a lot of changes about local law 97, which has to do with the, environmental act and that essentially regulates carbon emissions from buildings. So now all of a sudden, a lot of landlords are trying to pass these potential penalties off to tenants. So in tenancy lease, they’re paying operating expenses and then on top of that, their share of any fines imposed by local law 97, that raises a red flag. So we really have to be aware of the fine print in the lease and how to best protect our tenants.

Hal Coopersmith: And are you negotiating, let’s say a local law 97 provision at the term sheet level or, advising when it gets to lease?

Elliot Zelinger: We’ll try to address it head on, and just put out flat out proposal number one, that tenant’s not responsible for any of these fines I just talked about. Sometimes landlords will agree to it. Oftentimes they won’t. And this is a clause that seems to get pushed aside until we get to the lease, it’s almost not dealt head on, probably intentionally. And then once we get to the lease, it’s a whole other conversation. But you know, first position is to strike it from there. I think the biggest thing for tenants is they want to know what their exposure is. They don’t want it to be open-ended. So even just putting a cap on it, whether that’s a dollar amount per year over the term of the lease, just having some fixed amount that it will not exceed will give tenants comfort.

Hal Coopersmith: And you also do both agency and tenant rep. How do you balance those, those two masters?

Elliot Zelinger: Correct. I think it’s important. I know a lot of brokers, take one side and some only do tenant reps. Some only do agency and it makes sense for that broker. But for me, my tenant rep career really took off when I started working on the landlord side. I think it’s really important to know how landlords think, what keeps them up at night, and just the additional knowledge I have now about construction financing. You know, it’s almost like I’m a monopoly within a building. Relocating tenants, staggering leases, local laws like we just talked about. So that added knowledge I now have can benefit a tenant. You know, now I can look at a deal and say, the rent is 64 square foot, here’s why, and I can address it. And then once you understand how a landlord thinks, that’s when I think we have an advantage as a tenant rep broker.

Hal Coopersmith: Some answers might be obvious, but what are some things that land that are keeping landlords up at night?

Elliot Zelinger: Vacancy. vacancy rate is higher now than it was. I think also we’re in a different post covid world

Hal Coopersmith: Depending on the type of building

Elliot Zelinger: Sure, of course. Lease terms in general, lease terms are a lot shorter now, it’s not uncommon to see leases, you know, two or three years, maybe five years in some cases where landlords are used to underwriting these at 10 years. Construction costs are a lot higher than they were previously. It’s more expensive to build. Landlords have to give more concessions to procure a tenant. So I think when landlords put pen to paper, it’s a lot more expensive and takes longer to lease up a building and that creates challenges, especially when it comes to refinancing.

Hal Coopersmith: And their carrying costs might be increasing.

Elliot Zelinger: Higher interest rates.

Hal Coopersmith: So in terms of your tenant rep career, how that’s grown, is there kind of a signature story or something that, in terms of a tenant rep is something that has been very meaningful to yo?

Elliot Zelinger: I think tenants know that I’m there for them and number one to me is the relationship has to be mutual. And a lot of time my tenants become friends and friends become tenants. And that’s the way my world works. There’s a few great stories I could tell you about. One, there’s a tech company who I met years ago, I’m not going to mention the name. And I met the founders and they had the IT factor and I knew it. I just knew that. These guys had it. And after staying on top of ’em, building a relationship, I did a small lease with them for about 4,000 square feet. In that interim, I got to know them even better, and I invested personally in their series A and series B, fundraising rounds. None of this would’ve happened had I not to know them for the lease process. And on the real estate side, I’ve done two deals with them since, they’ve grown from 4,000 feet to almost 20,000 feet. We’re in the market now. They’ve referred a lot of their friends and clients to me. And there’s the loyalty there in both ways. That’s just a great working relationship. And I have several other examples like that, but that’s one that really sticks out to me.

Hal Coopersmith: And how’d you do on the series A and series B?

Elliot Zelinger: TBD. But I’m excited.

Hal Coopersmith: Well that is wonderful. You mentioned kind of keeping up with your clients, knowing that they are there for you. How do you keep up with your clients and how do you show that you are there for them?

Elliot Zelinger: It’s a great question ’cause, every person is different. Every client is different. Some people want more touch points. Some just want a quarterly newsletter. So a lot of things I do. I do a quarterly newsletter, which we issue to a lot of clients and prospects. Every year I host at least one client appreciation event, which is away from my clients to meet each other also. And I get a lot of satisfaction and pride when clients who don’t know each other met through me and something good happened. A lot of social events, whether it’s networking, golf, lunches, coffees. I try to make that a really important part of my day is once a day if I can, to have some kind of physical touchpoint with a client. It might be me stopping by their office to say hello, dropping off a book, going to lunch, coffee. But it’s really important to me to have face time with clients to know that I’m there for them, not just when there’s a transaction going on.

Hal Coopersmith: Has there been an issue that you spotted earlier that you were able to help out a tenant where you were staying in touch with them?

Elliot Zelinger: All the time. This happens, you know, there might be a case where a landlord hasn’t returned a portion of the security deposit. The tenant’s entitled to a burn down on their deposit per the lease, and whoever’s running the office forgets to send notice to the landlord, and I have to jump in and remind them about that. To remind a tenant about option dates that they have particular dates to renew their lease so they don’t get exposed. It might be jumping in, looking at their construction work letter before they sign a lease to point out that certain finishes weren’t properly described. So a lot of my offense is playing defense.

Hal Coopersmith: Well that is a great note to end things on. Elliot Zelinger. Thank you for being a part of Broker’s Angle.

Elliot Zelinger: Thank you for having me.