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Tenant reps become owner's ace.

The tables are turning at Riverbank Realty.

After having represented such prominent tenants as the Government of Israel, the Commonwealth of Puerto Rico, the Government of Mexico, Pakistan International Airways, the Discovery Channel, and Readers Digest, the brokers are not in hot demand by owners who have space to lease.

"Firms such as ours that have a reputation for representing tenants are beginning to be more appealing to landlords who are losing patience with firms that wait for deals to arrive at their doorstep," said Bruce Mosler, chairman and CEO.

Exclusive agencies for owners now include: Heron Tower at 70 East 55th Street; the Banker's Trust building at 345 Park Avenue; Kawasaki's 545 Madison; and most recently, 99 Park Avenue, a former Equitable property; the Minskoff building at 1350 Sixth Avenue; and the textile Center at 469 Seventh Avenue owned by Morris Bailey.

Riverbank Realty is only five years old. In that short time, the five partners have created a company that is considered one of the premiere commercial brokerages in New York City and is on its way to becoming one of the top-tier full service firms.

Mosler admitted Riverbank is moving cautiously into the owner rep area, so that it does not conflict or affect the firms's ability as tenant reps. A. Mitti Liebersohn, a Riverbank partner and executive vice president, added they also want to work with owners that are realistic and responsive to the marketplace.

The owners chose Riverbank because they saw a very aggressive company with brokers knocking on doors, partner and Senior Vice President Paul N. Glickman explained. "We're very active in the marketplace and we're not afraid to go out and find tenants," he said.

Their sublease activity, such as finding tenants for 100.000 square feet for Wang Laboratories, Inc. and 115,000 square feet for Gibbs & Cox, also bolstered Riverbank's reputation.

"We've been so successful in representing tenants that landlords have come to us to help enhance their buildings," Senior Vice President and Partner Mitchell L. Konsker explained.

When Riverbank takes on a building agency, he said, one of the first things they recommend is to upgrade security with such items as video cameras in elevator cabs and central messenger desks.

"In today's environment a tenant is willing to spend more on their rent to have that luxury of additional security," he noted.

Mosler said Riverbank has built relationships with tenants through long term representation. "We've represented Readers Digest for seven years and have done many relocations for them throughout the city," he said.

Riverbank represents several publishing houses, insurance companies and law firms. " Our tenants rep is continuing to grow exponentially," he added

The company has been able to aggressively retain tenants as long as term clients by becoming more full service, Mosler explained. As the company develops a national tenant base and increases its institutional involvement, they are making a full time commitment to respond to those needs by training capable account representatives.

These representatives will provide continuous client contact in order to monitor escalations and see that the terms and conditions of the leases are met. "A commissioned broker has a hard time servicing those needs," Mosler noted. "Because they are on a salary, the account reps can devote their full time and focus on the tenant."

"Our relationship with tenants," Liebersohn said. "is very important to us. Many of them are becoming national in nature and are much more time consuming. We just don't want to hand off our relationships. We will work hand-in-hand with local brokers but always keeping very much involved."

Among its many U.S. deals, Superior Bank R.S.B. was represented in its expansion to 55,000 square feet and relocation to Chicago, Illinois, while the Alliance Funding Company was relocated to 70,000 square feet in New Jersey.

The Partners

Liebersohn came to the partnership from Cross & Brown, while Mosler, Glickman and Konsker were brokers with Pearce Urstadt, Mayer & Greer. As the former president of Harper Lawrence, Inc. Riverbank Vice Chairman Gil Robinov is the seasoned professional that clients, such as the Government of Israel, need to satisfy themselves they are in experienced hands. Robinov said he is an expert in the Wall Street area and actively involved in some major transactions there now.

"Tenants like to know that the group which is going to handle the projects has somebody on board who has been through one of these down markets before and who understands the type of the financial deals that took place in the 70's that are taking place also today," Robinov explained.

Robinov said he felt Riverbank was unique. "The others brings an enthusiasm and excitement to the office," he added.

Aside from the partners, who are involved in every single transaction, and the account reps, there are three other levels of brokers and financial analysts. It is a totally smoke-free working environment.

Jonathan Galef, Riverbank's chief financial officer, said he gets involved with tenants early on projecting and researching with proprietary computer programs such things as property and occupancy taxes, CPI indexes and other lease costs.

"We build in as many possible things and the framework is already there," he explained. "We take what the tenant initially thinks of a $30 a foot deal and try to project it out."

Mosler believes the brokerage industry has to become more service oriented and more financially oriented. "Our relationships have been built on the service so that long after the deal is done, we're there to monitor the escalations and ensure that the terms and conditions that were negotiated originally are adhered to," he said.

Additionally, Mosler said he has seen the complexities of the deal grow on both sides of the ledger sheet so that brokerages have to respond with the necessary expertise. "That means that going into a deal you have to lay the ground work for negotiating a win-win situation." Mosler said. "That's something we take into account every single time out of the box."

Riverbank also tries to do its homework on the financial soundness of tenants, Mosler said. "One of the things landlord have to be concerned about in this environment - when you are having to give so many up-front concessions - is the credit worthiness of the tenant that's going in," he explained.

Foreign business development is ongoing at Riverbank and Mosler believes it cannot be done sitting in New York. He joined Mayor David N. Dinkins on his trip to Germany while his multi-lingual foreign representatives have visited and developed relationships in other countries. First Vice President James de Jong and Vice President Henry J. Goodfriend have traveled to and represented Puerto Rico and Mexico in leasing requirements around the United States.

"Foreign commitment to New York is essential to the future of the city," Mosler observed.

Riverbank is also finding a niche in another area a Senior Vice President Susan Kahaner is building a practice in the non-profit community. Kahaner said the office requirements of the nonprofits generally vary. While some want very inexpensive space in a discreet location, requirements range all the way up to very high-profile space for the enormous foundations. "They are so solid, and healthy and pay their bills, and so respectable - which landlords want these days," she added.

Riverbank plans to continue representing tenants is the renewal process. "That is financially oriented game plan," Mosler said, "because firms today looking at renewals are entitled - and landlords understand this - to some of the benefits of a firm coming in for the first time and committing to the building.

Tenants rarely stay in place for 10 years, Mosler explained, because of the changes in goals and objectives as well as space requirements. "Tenants don't mind, however, locking in today's leases at a low prices," he said. "We're seeing 15- to 20-year deals right now where tenants are trying to lock in options and expansion rights.

"Our share of the market - the niche we have most successfully made our mark in - is the 30,000 - to 100,000-foot deal," Mosler said. "We're doing significantly more business than other brokerages in that range. That's come overtime, through a targeted game plan to focus on companies within industries that show promise in that range."

Many tenants in the size range right now are being represented on an exclusive basis, Liebersohn said. Additionally, they recently closed a 130,000-square-foot deal for the Government of Israel at 800 Second Avenue.

Two full floor leases at Heron Tower were signed in the past month, Glickman said, and the building is now 95 percent leased.

Konsker said they are ensuring compliance with the Americans with Disabilities Act requirements. In a new installation for the Discovery Channel's 31,000 square feet at 641 Lexington, for instance, the tenant will comply within their space while the landlord will be required to comply for all building and bathroom requirements.

As a full-service firm, Riverbank also acted as broker in the sale of 99 Park Avenue. Glickman said, "When our leasing relationship take us into sales we can handle sales. And when our leasing takes us into retail as opposed to commercial, we have a retail department and we have a consulting department, so we're able to handle any real estate assignment."

The partners are also finding that tenants are no longer considering the moves out of the city like they once did, Liebersohn noted. "I'm finding that most of may tenants are perceiving the market to be in a state where they can get great deals in the city and are not leaving," he said.

"There are subleases out there now," Glickman said, "that are very, very, competitive and they're going to be more competitive than moving to Jersey, Westchester or Connecticut. Even direct deals are very competitive."

Mosler said, New York City's future is brighter, but the city has to work on a more broad-based, cohesive and consistent standard for incentives, where, he said, "the beneficiaries are not just the large companies and the largest landlord in New York but landlords in general and tenants in general."

The partners have shown their confidence in the city by forming Pro Active Fire Safety Education NYC, a non-profit organization dedicated to assisting in the financing and implementation of city-wide fire prevention efforts and education. The organization's first project is to raise funds for a Fire Safety Vehicle, a mobile fire-safety education classroom that can stimulate an emergency fire situation.
COPYRIGHT 1992 Hagedorn Publication
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:real estate brokers representing prominent tenants in high demand
Author:Weiss, Lois
Publication:Real Estate Weekly
Date:Jul 8, 1992
Words:1739
Previous Article:Construction contracting suffered in 2nd quarter.
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