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This real estate kingpin charts the path to mega deals

by SuperiorInvest

The best view of New York City might be in a nearly windowless conference room on the 12th floor of an office building in Midtown Manhattan.

Spread across 10 folding tables, a map reconstructed from paper, tape and sticky notes details every block and parcel (27,649 properties) in Manhattan below 96th Street on the east side and 110th Street on the west side.

The map is the work of Bob Knakal, who created it walking down every avenue and street during the desolate first months of the pandemic.

Updated regularly, lots are color-coded with highlighters and sticky notes to show which ones are for sale (green sticky notes), recently sold (red sticky notes), owned by the city (highlighted in pink), or under construction (green sticky notes). reflexes). Highlights in orange mean that many things are underutilized and that a compromise is possible.

For four decades, Knakal has used his obsession with data and creative marketing techniques to achieve exclusive status in the cutthroat world of New York City real estate. He is widely considered by industry professionals to be the leading commercial sales broker by number of transactions in the country's largest commercial market.

“It's not really the real estate business, it's the information business,” Knakal, 61, said during a recent tour of what he calls the Map Room, where his cartographic creation lives.

Since 1984, when he started in Manhattan, Knakal has sold 2,329 properties (offices, townhouses, garages, apartment buildings and warehouses) for a total of $22 billion. His largest transaction was the nearly $700 million 2016 sale of several Brooklyn properties owned by Jehovah's Witnesses, including the Watchtower building in Brooklyn Heights.

Increasingly, he has been involved in major deals shaping New York's skyline, including the $238 million 2014 sale of a parking lot on Manhattan's West Side that is now the Spiral office tower, one of the most heights of the city.

The sales have not only generated significant wealth for Knakal, but have also given him access to elected officials.

The city, and especially Manhattan, has become increasingly unaffordable for everyday people, a message Knakal has emphasized to lawmakers.

He says he cares about affordable housing because creating more of it is vital to the city's future, although he also recognizes that more property deals and development could benefit him.

During a private lunch in Midtown, he urged Gov. Kathy Hochul to do more to encourage the conversion of office buildings into housing. She also recently upset Mayor Eric Adams.

The city, he told the mayor, owns numerous properties that are underutilized and could use redevelopment. He specifically mentioned public housing developments, which he said could be preserved while new affordable and private housing is built nearby on the same lots.

“If we look at these gigantic tracts of land where public housing is located where a thousand people live and which do not generate taxes,” he said. “There is an opportunity for 10,000 people to live on that land, for some of it to generate taxes and create tens of thousands of jobs without displacing anyone..”

Some progressive lawmakers and academics blame the affordability crisis on developers and brokers like Knakal, whose goal is to secure the highest offer for homeowners. They argue that rising sales prices encourage investors to develop projects that can generate higher profits, often resulting in more luxury condos.

“A broker's job is to surround himself with people in power to get better deals, so the closer he gets to the circle of power and money, the better deals he can negotiate and the better money he can make,” Miguel Robles said. Duran, associate professor of urban planning at the New School's Parsons School of Design.

State Sen. Jabari Brisport, a Democratic socialist from Brooklyn, said Knakal should have no say in creating affordable housing.

“He is an example of everything that is wrong with our housing crisis right now, which is that we have allowed housing to be treated as an investment, as a financial asset, rather than a guaranteed right,” Brisport said.

“This is a person who has gotten very rich off the backs of New Yorkers looking for a place to live,” Brisport said, adding that Knakal has used his profits “to buy political favors from the rich and powerful.”

Knakal responded that policies implemented by New York lawmakers in recent years have significantly stalled the construction of new residences and worsened the housing crisis. They have also made developers feel attacked, leading them to start investing elsewhere, such as in the South.

“There is a very big philosophical difference between believing that housing is a right and believing that housing is a business,” Knakal said. “That's way beyond the scope of a real estate broker to understand, but I don't think anyone can argue against the fact that if more supply was added, rents would be more affordable for people.”

Knakal starts each Monday with a notepad with a handwritten list of several dozen owners to call. It's a mix of current clients trying to sell, owners who aren't ready yet, and past clients; some are cold calls.

He makes the calls himself and follows up with emails until he calls the owners.

In a city full of runners, the calls keep his name in mind, Knakal said. He points out to potential clients his long history of representing only salespeople, saying it demonstrates his loyalty.

“Hire me, I'll have your back, I'm on your side because I've seen it all, I've done it all, and I can protect you,” Knakal said, describing his proposal. “That's something other people can't say because they don't have the same background.”

That single-minded strategy is how he landed real estate magnate Harry B. Macklowe.

Knakal cold-called Macklowe for more than two years about a one-story commercial building before he finally got Macklowe to answer, calling him late one night in hopes of eluding his assistant.

It was the beginning of a long-standing business relationship that has so far resulted in more than $350 million in sales, including that first property, on East 60th Street. Macklowe finally hired him to sell it (nearly two decades after the first phone call from him) in 2005 for $11.75 million. The building was remodeled into 42 units of affordable housing.

In his offices, Knakal is surrounded by numbers on printed spreadsheets, in hardcover books detailing his businesses, and on his computer. He keeps track of almost everything and rattles off statistics as if he were reading the back of a baseball card.

In fact, his oversized business card looks like a baseball card, with a photo of him holding a baseball glove on the front and his annual sales figures on the back.

It even tracks your own performance.

In what percentage of calls to former clients do you hear about another owner who might be in the market to sell? Nine percent.

What percentage of potential clients hire you after an introductory meeting? About 26 percent.

What percentage of potential clients who have visited Map Room for the introductory meeting hire you? Hundred percent.

Over the years, he said, his sales figures have reflected the ups and downs of the economy. Property sales have slowed recently, but not as much as during the savings and loan crisis of the early 1990s.

In the first year of the pandemic, Knakal sold only seven properties, the lowest number in three decades. While sales improved in 2022, they have declined since then, driven by a sharp and steady decline in major $10 million-plus deals across the city.

Rising interest rates have contributed to a drop in building values, he said, scaring homeowners into holding on to their properties.

Knakal said most homeowners selling today have no choice as they are forced to sell due to divorce, disputes or death.

“When something happens to put downward pressure on the value, people don't sell,” he said. “The numbers for the fourth quarter are going to be terrible.”

During the week, Knakal splits his time between his office at the Madison Avenue headquarters of JLL, the real estate firm where he works, and another building in Midtown where he rented space just for his map.

Mr. Knakal frequently gives tours of the Map Room and often refers to the map when developers call, sometimes using a magnifying glass to zero in on a neighborhood.

On a recent morning, he guided two executives from the Rockefeller Group, a real estate firm, as they searched for a housing opportunity in Manhattan.

They scanned the map for potential sites. There is nothing for sale on the Upper West Side, Mr. Knakal said. Raising a telescopic pointer over Central Park, he pointed out the lack of green sticky notes in that neighborhood.

Pointing the pointer again, he directed developers toward several available properties on the Upper East Side and Lower Manhattan. None were right at the time: either too small or too expensive, they told him.

One of the developers, Meg Brod, CEO of the Rockefeller Group, said other commercial brokers could tell what was for sale in the city. But none could match Mr. Knakal's vision and knowledge of trends, neighborhoods and opportunities.

“You want to work with a broker who is at the forefront of what's coming in the market,” Ms. Brod said. “We want to be one of the first to know about it.”

Around 6 p.m., Knakal usually attends an event or meeting, part of his goal of attending 261 networking functions each year, one for each workday. He rarely turns down an offer to speak at conferences or appear on a podcast, no matter how small the audience.

Last year, he adopted another type of networking. He hired a social media manager to teach him how to post on LinkedIn and X, and quickly gained a large number of followers sharing stories about past deals and making fun of himself.

He has no plans to slow down or retire anytime soon. “I don't run out of energy,” she said.

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