City's most prolific brokerage sets its sights on New Jersey.
The realization was made all the more apparent by the company's practice of partitioning Manhattan into territories its brokers would then individually specialize in, a method of operation that assured thorough coverage of the market, but one that was also destined, given the ambitiousness of the firm's principals and the limited geographic size of the market, to encounter boundaries.
"We asked ourselves what we should do," Knakal said, describing his and Massey's concern when there finally was no territory left in Manhattan that their brokers did not cover. "Do we go into office leasing, do we go into store leasing, do we do financing? We said, we know how to sell buildings, we don't know how to do those other things, so let's just broaden our presence. So we opened up the Queens office."
After entering Queens, the firm, which sells nearly all product types from residential rental apartment buildings to industrial warehouses to retail strips, went on to open locations in Brooklyn and more recently, the Bronx, where it just leased a 5,000 s/f branch office. The firm's entry into the boroughs, which are rife with the types of properties and deal sizes that Massey Knakal typically handles, has proven to be a lucrative venture. The firm's Queens operation has since grown and now occupies a 14,000 s/f space and in Brooklyn, where its growth has been even more dramatic, the firm recently leased a 19,000 s/f office in the borough's bustling downtown.
Besides the five boroughs, Massey Knakal now counts Long Island and Westchester as markets its brokers cover. The firm is planning to expand even further by soon entering the New Jersey market.
"We think that a lot of growth will still occur in the boroughs and areas surrounding the city," Knakal said. "Our biggest regret is that we didn't go there five years ago. Most brokerage companies that do what we do weren't doing a lot of business in the boroughs, but in the last year or two you've seen a lot more move in, but no one else has made the same commitment that we have. We've invested millions in our facilities to try to capture as much market share as possible."
While it doesn't handle individual deals in the hundreds of millions of dollars, Massey Knakal nonetheless ranks among the top earning commercial brokerages as measured by the total value of the sales it brokers. The firm's average deal may rank well under $20 million in fact, but the firm makes up for that in sheer transactional volume.
From the sale of a $70,000 lot in the Bronx to the $179 million disposition of a portfolio of apartment buildings for Macklowe Properties, the firm's biggest deal to date, Massey Knakal has sold more buildings per year than any other brokerage in the city for the last five years running.
Given the quantity of deals the firm handles, it was selected by the Metropolitan Transportation Authority in April 2005 to broker the sale of a portfolio of fallow and underused properties, plots of land, and air rights the authority owns throughout the five boroughs and surrounding metro area--a group of roughly 14,000 assets that has been valued at over a billion dollars. Given the size of the assignment and the fact that some of the properties included in the portfolio are in areas outside of the city where Massey Knakal doesn't yet have a presence, the firm partnered with CB Richard Ellis, where Massey and Knakal first met and where they worked for four years before staking out on their own in 1988.
"It's a huge assignment that will keep us busy for the next three years," Massey said.
"Right now, we're analyzing the portfolio to see which assets can be packaged and sold together. We have a great relationship with CBRE and they'll be able to bring in more corporate buyers."
Bob Knakal's career in real estate might not have begun had it not been for a small misunderstanding during his first summer off from college. Attending the Wharton School, he said that like many of his classmates, he had dreams of becoming an investment banker and so, as soon as the spring semester ended, he drove around northern New Jersey, where he grew up, dropping his resume off at as many financial firms as he could find. Along the way, Knakal spotted a Coldwell Banker office and, mistaking the residential real estate brokerage for a bank, stopped in.
"They set up an interview the next day and I looked them up to prepare for the interview and when I saw they were a real estate company I almost didn't go," Knakal said.
"But they were the only interview that I got so I took the job and literally from my first day I loved it, it was a great environment, a lot of energy, the people there worked hard and made a lot of money."
Knakal went back his next two summers and upon graduating, started at CBRE as a sales broker. There he met Massey and the two of them being the youngest brokers in the office, decided to work together the start of what became a lasting business partnership.
"I've worked with Paul 22 years and I've never had an argument with him," Knakal said.
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|Publication:||Real Estate Weekly|
|Date:||Aug 16, 2006|
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