In this episode of Broker’s Angle, Hal Coopersmith sits down with Gregg Cohen, principal at CRESA, to delve into his journey from a career in investment banking to the world of commercial real estate. Gregg shares his fascinating transition from equity sales trading to becoming a leading tenant representative in the commercial real estate sector.

Transcript

Hal Coopersmith: Welcome to Broker’s Angle. I’m Hal Coopersmith, and today we’re speaking to Gregg Cohen, a principal at CRESA. Welcome to the podcast, Gregg.

Gregg Cohen: Hal thanks so much for having me. I’m so excited to be here.

Hal Coopersmith: So how did you get into the commercial real estate business?

Gregg Cohen: Well, it’s actually a second career for me. I spent my first 20 years working as an, in an investment bank as an equity sales trader. But I had an interesting aha moment when I was working as a sales trader. I was hired by a company to open up their New York office, and in that process, part of it was looking for the company’s office space. So initially what I did was I reached out to a few people that I knew to, to ask if anybody knew somebody who was involved in that business. Sure enough, I met a gentleman who, whose whole business was focused on commercial real estate, focused on office leasing. And it was tenant representation. His name was Norman Bobrow. And, , I quickly learned that Norman had been doing this for about 35 or 40 years at that point and his whole business was focused on solely representing tenants.

Which, as I went through the process of looking for office space for my own company that I was a part of, made a lot of sense to me. Here was somebody who only represented tenants, in what can be a very convoluted and process that I felt way over my skis because it’s not something I did every day. So, I registered that just to the back of my brain and then a number of years later, after we successfully exited that business, we sold it to a bank called Northern trust out in Chicago. It was my opportunity to say, what do I want to do for the next 20 years of my life? , I could have stayed at Northern trust, continued down the path of sales trading, but it didn’t really feel like it was a viable long term, , role, I’ll say, as far as an industry. So it was my opportunity to say, what do I want to do next? Reached out to a number of people in commercial real estate. One of them being Norman Bobrow, who I had met four years prior, and I shadowed Norman for a day, and I had about 50 sort of informational interviews in lots of different parts of real estate. I learned about the syndication about investment sales, and the overarching message was you just need to start doing it. So, go get a job in in brokerage and in leasing. So, went back and approached Norman. I had mirrored him for a day. I came to him with a proposal of here’s, here’s a business plan, here’s first 100 people that I’m going to reach out to and he said, if you want an opportunity, here’s a desk. Here’s a phone. You’re not getting a salary, but I’m here to support you 100 percent in your, in your efforts to help you close deals. And away we went. And that was, that was seven years ago now.

Hal Coopersmith: And what was it like learning commercial real estate, particularly as a second career?

Gregg Cohen: It’s been a wonderful experience all throughout. I think, when you’re in institutional equity sales or in that world, you don’t think you have a lot of, often the conversation is, what else would I do? Cause I don’t necessarily have a lot of transferable skills. But what it very quickly learned,  or I realized was that, the customer service part of it, that client service was one of the most important lessons that I learned, the ability to respond quickly, to deliver information to your client in a timely manner, just to give a really high level of service was something that I learned from that industry that was incredibly translatable to be able to deliver, to deliver that to clients and potential clients. And that was something that was received incredibly well from the onset. Here was somebody who didn’t necessarily know commercial real estate, but who knew about a high level of touch to the client and, and then going on the journey of learning the buildings, learning the landlords, recognizing who the large anchor tenants are in buildings, the dynamics of what’s the difference between one part of town versus another, the pricing difference, learning about the value that exists in the subleasing market.

I mean, they were. Inherently, that world was very similar to this world in that you have a product and you’re trying to match a buyer and a seller. A lease or, you know, a lessee and a landlord in, in the case of commercial real estate. But it was really matching buyers and sellers and creating something out of nothing. In that world, it was equities, it was, you had a block, block of merchandise, a million shares of stock, and you’re trying to find a buyer and a seller. This is very similar, a lot longer life cycle, right? From what I call from, idea to implementation can be a multiyear process when it comes to office leasing. But it was a, it was, it was a fantastic learning experience.

Hal Coopersmith: What are you doing to get your name out there to get clients in the door for your business?

Gregg Cohen: I think, a multitude of efforts. I think you can’t just focus on one way, certainly first and foremost is do great work. Doing great work for clients and making sure that a client that you have now is a client that you hopefully have for life. And from that is the knock on effect of, ideally, referral business that comes from clients who had good experiences who then know other people who do that. A large portion of what I do is, is outreach. And, and I’d say that that’s the majority of really what all commercial leasing,  advisors do, which is how do you get your name out there to have a presence, right? If you look at, a gentleman like Bob Knakal, he says it’s not who you know, it’s who knows you, right? So it’s how do you, get recognition by enough people to be able to be someone who can be a trusted advisor. And I do that through, through networking. I do that through relationships like we’ve built from working on deals together with, with tenants. I do that through, through social media. I do that through the writing that I do for my blog and for my website, for LinkedIn. It’s a, it’s a multitude. I have my own podcast, where I have called conversations with Cohen. So lots of different ways.

Hal Coopersmith: What’s a notable deal that you worked on that you may have been a little bit difficult or challenging that you’re proud of?

Gregg Cohen: What comes to mind is a lease that I helped, sign for, help the company sign a lease for a women’s club down in the Meatpacking District. And what I’m particularly, what’s particularly memorable about this transaction was how I identified the space. It wasn’t,  they had been working with someone, so. The genesis of it was I, I wrote my newsletter and I distribute my newsletter monthly and someone who I knew from 15 years ago reached out to me and said, we know somebody who’s looking to open up a club in New York. Is that something that you deal with? Or can you introduce us to someone? And I said I’d love to learn more about it so I can see if I can help. , they were looking for a 15,000 square feet in the meatpacking district and they had been working with someone, but they didn’t have an exclusive agreement with that person. And at this point in my career, I was really working on any project that was coming my way. So I thought I’ll work on this without having the exclusive agreement. And because I knew where they wanted to be, I took their requirement, which was 15,000 square feet, could be over multiple floors or over one floor, but they wanted a cool sort of vibe, high ceilings in a boutique space. And, I remember very clearly, it was a rainy Tuesday morning around 9am, and I walked every block of the meatpacking district and took note of every building. I had already reached out to many of the landlords, but I wanted to just take stock of every building to see if there was any opportunity.

And I walked, I started the south end and I walked up past 14th Street again, walking by every building, taking note of it and comparing it to what I had already had my notes. And sure enough, I got to 15th Street, if you know where the, there’s that Starbucks, the, I’ll call it the fancy Starbucks, experience on 15th and, around the corner from the Apple Store. I walked by a brick building that was four floors and it wasn’t on CoStar. It wasn’t, it just wasn’t recognized. And I took, the number down and I went to open the door to see if it was open. And sure enough, it was open and there was an elevator at four floors. I didn’t say there was no signage or anything. I took the elevator to the fourth floor and sure enough, I walk in and there’s all these boxes and there’s a couple of guys, they’re working, moving things around. And it was leased to Starbucks. So Starbucks was using that as overflow space for their, for their shop but nothing else was occupied. It was all just sort of storage. So, I took note of it. I went back to the office to figure out who the landlord was. I reached out to the landlord and said, Well, interestingly, Starbucks is giving back that space and we have two floors available.  get your name out there? We have the third and the fourth floor and the fourth floor had double height ceilings because they had removed,  one of the floors to be able to, they had bought that building, they had bought that building and the building next door and they needed the extra, air rights to build to the building next door.

So we had double height ceilings on the top floor and then we had access to a roof that we didn’t know what could be done with it. I presented this to the tenant. And sure enough, they hadn’t seen this space. They flew over from London. One of them flew over from London, one of them saw it over, Zoom. And sure enough, we went to lease on that space. While, while the person that they were working with for two years, hadn’t uncovered it. And that was my opportunity. And sure enough, after zoning issues and after trying to figure out how we were going to make the roof accessible and building an elevator to get to the roof to make it handicapped accessible, we were able to sign that lease for 15,000 square feet for a woman’s club.

Hal Coopersmith: That is a great story. Fantastic, fantastic story. So on the flip side What’s, a transaction or deal where it was a bit challenging in terms of getting it over the finish line or not even getting to the finish line at all?

Gregg Cohen: Well I have an interesting story about, working with a client, being referred to a client from overseas, from Latin America, by some residential real estate agents who knew someone who was opening up a hedge fund in New York. And we worked on that assignment for probably a year. They were looking for a certain particular space.

We found them a space. And we had negotiated a lease. And three days before the lease was supposed to be signed, the gentleman was arrested by the FBI for a Ponzi scheme. Allegedly a Ponzi scheme. Needless to say, that didn’t happen. It wasn’t executed. But, these are the crazy stories that occur in office leasing.

Hal Coopersmith: And what are you seeing in the market now?

Gregg Cohen: It’s a very interesting, , question because there are so many different parts to that. My initial response is what part of the market, but if we talk about  Midtown as one example, I have I have a theory, which is spaces being leased up on Sixth Avenue. We’ve got 90 percent occupancy on Sixth Avenue. You’ve got 90 percent plus occupancy on Park Avenue and what I think we’re started going to start to see. We’re starting to see a little bit of it is the value play of 3rd Avenue where you have some pretty significant holes and vacancy,  some buildings north of 40 percent vacancy.

I think you’re going to start to see some of those buildings start to fill up because they’re running out of options on what I’ll call the spine and on Park Avenue.  The big trends are people want to be near transportation hubs. We know that, but that’s real. Three plus years of not commuting through a pandemic made people realize, I don’t want to get into New York City and have to travel again. So being near, Grand Central is really important, especially with the introduction of the LIRR to Grand Central a year ago. The amenities, we’re certainly seeing,  pricing reflect demand for amenities. My question is will the amenities actually be used? But I don’t know. I don’t know. I think it’s too early. And on that note of too early, we’re still very much in the early innings of how people are going to work going forward. So, perfect example is in the financial industry. There were a lot of banks who had decisions to make about their real estate during the last few years, but now with this mandate that folks have to be back in the office based upon the decision by the regulators, some of these banks are actually out of space.

So I could see that creating an increased demand. There’s tons of value to be had in the region between 34th Street and 40th Street. You know, there are deals that can be done in the twenties and thirties. And as far as activity by sector, it’s no surprise if you’ve been reading the newspapers, the law firms and the financial firms that have been the most active, and technology is maybe starting to pop its head up, but what we’ve seen, especially given our involvement  in the Ernst Young Entrepreneur of the Year Awards, is that technology companies there are just so many of them that are able to work completely remotely and, and do it well. So they’re still decreasing the amount of space that they need.

Hal Coopersmith: You work with a lot of law firms. We’re a law firm too. What are some unique aspects to law firms in their office space that you see are important in their office space?

Gregg Cohen: In their lease or what I see, or what I see is sort of interesting themes that are, are happening with law firms in their space.

Hal Coopersmith: Interesting, let’s say interesting themes.

Gregg Cohen: I think when you get to the medium and larger firms, despite what you read in the headlines, they’re actually taking the same amount, if not more space. In fact, of the 3. 1 million square feet of leases that were signed last year by, by law firms in New York City, 80 percent of them were for the same, if not more space, which I think is very counter to what you may have read in the headlines. I think when you talk about the smaller, you know, the five and six person law firms, they are decreasing their space. Why? I think that’s a function of some of the smaller firms being more partner heavy and some of some of the older partners being able to work remotely and wanting to work remotely so that the need for space isn’t as great while at the higher end because there’s so, so much of a race for talent, especially so many lateral moves occurring that there needs to be, amenities and special space to be able to be created, created for their employees. Number one, for their, for their partners and their associates. And number two, what I’m seeing is law firms are making a lot more collaborative space in their offices, not only to be more inclusive within their own community, but also to provide a place for their clients to be able to host meetings, to be able to work. And, that creates a draw for them to be able to interact with their clients.

Hal Coopersmith: That is a wonderful note to end things on, Gregg Cohen, thank you for being a part of Broker’s Angle.

Gregg Cohen: Hal, thanks so much for having me. This was fun.