Firm coaching conversions.
As president and founder of Dynamic Realty, specialists in the sales and marketing of properties in the New York area, Zackson, 32, believes current market conditions make this an ideal time for converting buildings.
"With the incredibly low prices, it makes sense," Zackson added. "Both parties get great deals -- the tenant and the landlord."
Dynamic is working on two black books for conversions, including a building at the prime location of 48 West 68th Street. According to Zackson, the conversion to condominium of the 12-story building, owned by Benny and Sal Caiola, is ideally-suited in today's market and units will be available next month.
"h's a supreme location, with exceptionally large apartments," Zackson said. "Tenants today are paying higher rents, prices are down, interest is down, for a landlord to convert property now is a great opportunity."
Zackson said his company is also working on conversions at Alpine Gardens, a four-building complex in Jackson Heights, as well as two brownstones on West 16th Street in Manhattan, between Fifth and Sixth Avenues.
"The bottom line in purchasing a building is to buy at the right price," said Zackson. "There's enough room to make a good deal. Dividing a building makes more money, especially in declining times, and conversion's the answer."
Zackson said that he is currently in the process of investigating the purchase of a number of buildings just for conversions, though plans for actual purchase of some six buildings are only in the early, exploratory stages.
In a little over four years under Zackson's stewardship, Dynamic, with offices in Manhattan and Forest Hills, has gained a reputation within the industry as a leading conversion specialist, analyzing property to determine the best return .on an owner's investment.
Last year, Hyde Park Gardens, a 746-unit co-op, was saved from foreclosure as the result of a workout agreement of unprecedented scope, coupled with a sales campaign conducted by Dynamic Realty. The co-op's sponsor had failed to pay maintenance on hundreds of unsold units, forcing the co-op to default on the building's underlying mortgages. The two banks holding these mortgages consequently placed liens on the buildings.
Successful negations involving Queens Borough President Claire Shulman, the attorney representing Hyde Park Gardens Corporation, the Hyde Park Gardens co-op board, Dynamic Realty, creditors representing some 20 lending institutions, and the two banks holding liens on the unsold shares depended heavily on a massive sell-off of apartments pledged back to the co-op by the defaulting sponsor. Dynamic succeedded by putting some 350 units into contract within 90 days or so of the program's 'kickoff. As a result of negotiations, and Dynamic's sales effort, which generated sufficient funds to remove the liens, the lis pendens encumbering the co-op was lifted on Jan. 30, 1992.
Beginning at the Bottom
Zackson, a native of Queens, entered the real estate profession in 1987 when he began working in on-site sales for a rental agent in Forest Hills. He found himself handling an account for Fred Trump and it was the beginning of a profitable relationship. Trump was happy with Zackson's sales performance and Zackson learned about real estate from the senior Trump.
"I received a tremendous amount of learning on how to run a building from Fred Trump," said Zackson. "Even in a down market, he has kept vacancies low. Trump is a real estate genius who built one step better than everyone else because of quality."
Today, Dynamic is marketing agent for all of Trump's buildings in Queens.
Zackson believes it was a tremendous advantage being forced to master the selling of real estate in a down market.
"I started right after the crash, so I only hear how great it was," he said. "I never experienced it."
Eric Moskowitz, currently Dynamic's regional marketing director, was also an early mentor of Zackson's when Moskowitz was president of Realtec Group. He stressed the importance of knowing the market and all aspects of a property.
"It's no longer acceptable for brokers to be sitting around without knowing about co-ops and condos," Zackson said. "It's no longer acceptable for agents to just wing it. People no longer pay a fee for someone just to open a door. They expect us to understand the business and they come to us to get educated."
At his firm, Zackson encourages a team approach to achieve a competitive edge in the marketplace through the sharing of information.
Dynamic, according to Zackson, takes the time to evaluate each property individually to determine the appropriate market, price structure and advertising for that property.
"Not only do our salespeople know the competition, they know the product inside out," said Zackson. "They know and understand the negatives as well as the positives of the 'project they are selling and its position in the marketplace.
"We're selling from the inside out, we're selling investments," Zackson observed. "Look at the prospectus, forget the bathrooms and windows. We sell investments for people to live in."
When Zackson rounded Dynamic, the company had eight employees. Today, the company employs 40 and will expand to 70 this April when Dynamic opens a new corporate office on Fifth Avenue near 17th Street in Manhattan.
"We hire the most experienced brokers in the business or new trainees," Zackson said. "We want top-of-the-line or people we can train the proper way."
Some of the properties marketed and sold on an exclusive basis by Dynamic include Wainwright Condominium, The Meadow, and the James Monroe in Forest Hills; Hampton Court and Hyde Park Gardens in Kew Gardens; The Anitas and The Vermont in Rego Park; Croyton House in Riverdale; 19 Grace Court and properties on Hicks Street in Brooklyn Heights; and properties throughout Manhattan, including conversion of the Chelsea Commons.
All Dynamic assignments, Zackson said, are staffed with on-site sales people and supervisors.
Zackson cited examples where using a firm like Dynamic is better than using an auction to sell apartments because, he said, a full-service real estate brokerage can help increase prices while stabilizing the market.
"Unfortunately, while the auction method has a successful history with some products, when it comes to housing, particularly co-op housing, it is fraught with danger," said Zackson.
According to Zackson, an auction company was retained to dispose of 141 occupied and 15 vacant units at a Queens co-op. Prior to the auction, Zackson noted, Dynamic sold 84 units in the 314-unit co-op, with prices ranging from $25,000 to $35,000, while pre-auction sales arranged by the auction company resulted m prices dropping to an average of $12,500 per unit, and on the day of the auction the average occupied apartment sold for $7,000.
"You need a total strategic concept in selling," Zackson said. "Unlike an auction company, we know how to create a market to sell the least desirable apartments in a building. An auction is only concerned with selling the most likely at the highest price."
In an attempt to broaden its client base, Dynamic Realty recently formed a subsidiary company, Dynamic Worldwide Properties (DWP), a full). integrated international real estate organization with an affiliate in Hong Kong.
Zackson stated that DWP works with a worldwide network of sales affiliates to bring the best in American real estate across the seas while allowing its investors to enjoy the security and confidence of dealing with familiar local firms.
"Opportunity abounds today in the international real estate marketplace," said Zackson. "The recession has reduced the supply of domestic purchasers while deflating U.S. property values. As a result, we are finding it easier to secure the right properties for our ready, willing and most able overseas."
|Printer friendly Cite/link Email Feedback|
|Title Annotation:||Dynamic Realty advocates building conversions|
|Publication:||Real Estate Weekly|
|Article Type:||Company Profile|
|Date:||Mar 31, 1993|
|Previous Article:||Insurance and the independent contractor.|
|Next Article:||Appraisal Institute testifies in Congress on credit crunch.|