Articles 07.11.11

How to Be a Good Manager

For any of you who must supervise or manage a group of people, I'm sure that you frequently feel like you're “herding cats” (not Katz -- that would be more like a Bar Mitzvah). The number of people in my office has grown substantially over the past several years and one of my toughest tasks is to make sure they are all being managed properly. It's always useful to read how other companies have successfully managed this process. I found the article "Google Rules" very useful.

How Well-intentioned Laws can stifle Productivity and Personal Growth

Several months ago, an employee told me about his desire to work hard and learn the real estate business. He was hired as an assistant property manager and had no experience in that area. But he was eager to learn and wanted to work after hours and on weekends to learn the trade. "Wonderful, I thought" but my HR department quickly snuffed out this flicker of ambition. Apparently, allowing him to do so would run afoul of federal labor laws that prohibit employers from allowing employees to work overtime without paying them additional wages (not just at their base rate but at a premium rate to reflect the fact that they are working overtime). It doesn't matter that it was the employee's desire to work overtime. Apparently, this is a requirement that cannot be waived. Further, it wasn't that the employee would've wound up working for less than minimum wage. He was paid well enough that even with the extra hours that he wanted to work he still would've been paid in excess of the minimum wage rate. As much as he wanted to work and learn as much as he could, and as much as I wanted to see him do so, there was no way of making this happen without opening up a huge can of worms. How stupid!

Wal-Mart Versus Your Local Bodega

The opponents of Wal-Mart (mostly unions and their supporters) are sounding the alarm that if Wal-Mart is allowed to enter the City it will gobble up all the local grocery stores and bodegas. So what?! Visit the neighborhoods that Wal-Mart is seeking to enter. These are neighborhoods that are in neighborhoods that are severely underserved by the larger supermarket chains. As a result, residents of these neighborhoods are doomed to shopping at their local bodegas and mom-and-pop stores. While the image of a bodega and mom-and-pop store can often be quite quaint and conjure up an image of a hard-working family operating a store with pride, the truth is often that many of these bodegas are ripping off their customers by selling overpriced and outdated products in stores that are filthy and unsanitary. It is no wonder that recent polls of New York consumers showed overwhelming support for Wal-Mart. Perhaps injecting a little real competition into the system would be a wake-up call and cause the grocery stores and bodegas that are not properly serving their communities to close and be replaced by better quality merchants.

Community

For those of you who regularly follow my blog you've undoubtedly noticed that I often focus on articles and discussions about creating communities in an urban environment. Here's another article that I found intriguing about the use of good urban design and architecture to transform a sterile urban college campus into a true college community.

Blatant Self-Promotion (A Word From Your Sponsor)

I recently wrote an article entitled "Turnaround tale-A Building Management Case Study" which outlines the steps that Sierra took to turn around an office building that we took over management of last year.

Dodging a Bullet?

Many in our industry feel that we may have dodged a bullet with the recent modifications to the rent laws because the changes could have been far worse. However, before we all breathe a collective sigh of relief, we must bear in mind that the Governor has stated quite emphatically that he supports strengthening the rent laws and that much can still be done by way of administrative changes through the DHCR. Don't be surprised if we start seeing rulings that are unfavorable to property owners. Also, while these laws have been extended for four years, our "victory" may be very short-lived. The fact of the matter is that as soon as there is a democratic majority in the senate, we can expect that the laws will be revisited and substantial modifications will be made. Elections are only 15 months away.

Patriotism

Regardless of your politics, patriotism should never go out of style. We are blessed to live in this country and enjoy the freedom and opportunities that it gives us. I particularly enjoyed the recent article "100 Great Things about America". I'm sure that each of us could come up with our own list as well.

Sierra in the news

Emily Geminder in The Commercial Observer has a nice mention of our lease with pastry chef François Payard and his new shop in Greenwich Village. The 8,000-square-foot bakery and cafe on West Houston Street will come to a neighborhood that is, as our own Peter Braus said, "renowned for its great culinary personalities." Sierra is the exclusive broker for the Y&H-owned building. Ruth Shnay, also of Sierra, represented Mr. Payard, along with independent broker Nevin Danziger, in the negotiations for the 15-year lease.

Delicious news!

Articles 2.03.10

Two interesting articles.

From the New York Housing Journal: deadbeat tenants getting you down? Believe it or not, there is something you can do to deal with the deadbeat tenant that only pays rent once you start legal action. Check out "How to Win A Chronic Nonpayment Case."


And from Time Out New York: "100 Best Things... You Must Eat and Drink."
Prepare yourself for the finest burger in the city, plus life-changing fired chicken, pizza, sea-urchin toast, and caramel-chocolate popcorn.

Interesting news from around the city

Trailer Park Hipsters: you have to admire the entrepreneurial spirit particularly when it comes to real estate in New York.

I remember the "beach barge" that several years ago some nightclub operators created by pouring sand in a barge and mooring it to the Manhattan side of the East River. It lasted about five days before the city shut it down. I was not surprised then when I heard that some fledgling young real estate moguls decided to create a trailer park in an old warehouse in Bushwick.

I decided to take a look for myself and drove out there one Saturday morning. It was difficult to locate since it's behind an unmarked door. However, when I got inside I found half a dozen broken down trailers set up with numerous twentysomethings milling about.

"Interesting," I thought. When will the city shut them down?"

As it turns out, while it lasted little bit longer than the beach barge, the trailer park was recently shut down by the fire department.


Click here for a trip around the world, guaranteed to make you smile!

I particularly like the bearded guy in Paris.


Another sign of the times: one imaginative and entrepreneurial company seeking to take advantage of a terrible real estate market has taken a chapter from those airport vendors offering to wrap your suitcase in plastic and are offering to wrap unfinished condominium construction projects in plastic so that they can be put on hold and resumed later.

Sierra in the News

Real Estate BisNow has a mention of John Szoke Editions' long-term lease for the third floor of 24 W. 57th St. Sierra Realty Corp.’s Peter Braus represented the tenant, while Promenade Real Estate Corp.’s Steve Pressler represented owner APF Properties.

Real Estate Weekly also mentions our new hire, Stephen B. Carter.

The Mann Report has a very nice article on the amazing Marianne Thorsen, our new Senior Managing Director. We are thrilled and delighted that Marianne, one of the city's most high-profile and creative professionals has made Sierra her home. Please join us in welcoming Marianne Thorsen!

The Mann Report is also kind enough to mention our new lease at 267 Lafayette Street (on the corner of Prince Street) with terrific clothing and shoe retailer Flight Club.

Thanks to Real Estate BisNow, Real Estate Weekly, and The Mann Report!

Sierra Realty awarded exclusive agency for 229 East 60th Street

The Mann Report mentions that Sierra Realty's own Jeffrey Anderson and Barry Sanet have been awarded exclusive agency for 229 East 60th Street, an elegant brownstones between Manhattan's Second and Third Avenues. The space is used for offices and lovely galleries and showrooms. Congratulations to Jeffrey and Barry!

Executive Moves

Crain's New York Business kindly mentions our new hire, Stephen B. Carter, who was appointed senior vice president of residential property management. He joins Sierra Realty from Manhattan North Management, where he had been vice president and director of property management. Please join us in welcoming Stephen!

Sierra in the News: More for Less

Read this interesting article in Crain's by journalist Adrianne Pasquarelli.

Restaurateur and nightclub owner Frederick Lesort is at it again—but this time, he’s setting his sights a bit lower.Mr. Lesort, who filed for bankruptcy protection for his Frederick’s Madison eatery in April and closed Frederick’s Downtown over the summer, is starting a French eatery where everything on the menu will cost less than $20. His plan is to cater to cost-conscious NewYorkers.

Sierra in the News

Crain's New York Business has published my letter, Wal-Mart Debate Rages. Read it here. Thanks, Crain's!

Articles 09.16.09

The recent issue of CHIP (Community Housing Improvement Program) has published my article, "The Apartment Inspection Checklist." Recent court decisions, as well as proposed legislative changes, should serve as wake-up calls to those of us who own and/or manage multi-family properties. Read the whole article here.

Sierra in the News

Our friends at Real Estate Weekly mention that we've been appointed managing and leasing agent for 648 Broadway, ten stories and 50,000 square feet of cast iron -- it's an amazing space. The landmark 19th building is at the convergence of the most vital downtown neighborhoods: SoHo, Washington Square, the East Village, and NoLiTa. Thanks, Real Estate Weekly!

Articles 06.18.09

Some neighborhoods in New York are still hot notwithstanding the recent downturn in our local economy. I am pleased to see that Sunset Park in Brooklyn makes this list. I can attest to the strength of this neighborhood based on our successful experience with our condo conversion in this neighborhood. See the article "Hot or Not."

"Bulk Sales of Condos Spreading" describes recent efforts of developers to sell units in a low velocity market.

Three articles discuss the current economic situation in New York. The news is not all bad. The economic stimulus package may have softened the impact on the city. Moreover, unlike our experience during Republican administrations (who can forget following 9/11 the formula for the allocation of Homeland Security dollars that treated New York the same as North Dakota?), New York has received a very significant share of stimulus dollars. It helps that New Yorkers currently play a very significant role In the current administration and in Congress. The new urban agenda that is being adopted in Washington will certainly benefit the city over the next four years. See the three articles "Recession NYC Job Lost Estimate Ease", "Wall Street Job Losses", and "Where Does New York Stand".

"Central Perk" describes how New York's Central Park is not only just a green oasis in the center of the city but also a veritable gold mine as well.

For an excellent overview of some of the legal issues involved in the taking over of troubled properties see the article "Beyond the Workout."

Looking for cheap eats in Midtown? The website Midtownlunch is a perfect resource for finding excellent street food and cheap restaurants in midtown.

Interesting fact: the average retail space per capita in the United States is 20 ft.” per person. In the outer boroughs, it is a paltry 6 ft.” per person. Less than one third the national average. Why? The barriers to entry in New York are exceptionally high, which discourages retail development.

Sierra in the news

Our friends at The Mann Report have my article on the budget crisis now affecting NYC and some ideas for addressing it. Read it here.

Articles 05.08.09

Not all neighborhoods in the city are affected in the the same ways by the current economic conditions. The article "Four Neighborhoods Roll with Punches" describes how businesses in the four outer boroughs (yes, there is life outside of Manhattan) are dealing with current market conditions.

Has taxpayer bailout funds lessened the impact of Wall Street's demise on the city's economy? The author of "Something Slowing Plunge" seems to think so.

"Not that Bad" -- I don't know, is this supposed to be good news?

OK, baseball season is boring, football season is many months away, and your teenage kids won't even acknowledge your existence. Rather than sitting around and watching reruns of "Seinfeld" go explore some of New York's more interesting blocks. The article "New Yorkiest Blocks" describes certain blocks in the city that are worth exploring. Any time I get fed up with the city all I need to do is go out and explore a new neighborhood and I am reminded why after over 50 years I still love living here. There is always something new and exciting to experience.

For those of you who love to eat -- and who doesn't -- check out "Eat Out Awards."

My Kindle: usually I don't use this blog to promote products or services, but I recently purchased the new version of the Kindle digital reader from Amazon and must recommend this to anybody who likes to read.it is easy, convenient and for those of us whose eyesight is not as good as it used to be, the feature that allows you to adjust the Font size really eases the burden of reading tiny print. I use it to read all my newspapers and magazines (my New York Times and Wall Street Journal are downloaded automatically every morning) and when I travel I don't need to pack 10 pounds of books.

Sierra in the News

Another nice mention of us in Real Estate News in their On the Real Estate Scene section. Thanks!

Real Estate & The City –- Bitten to Death by a Duck

In the midst of one of the most severe economic downturns that the City has experienced since the 1970s, the government on all levels is contending with the same elevated costs and lower revenue as the private sector. Taxable income and sales are down, jobs have been lost and the number of people in need of assistance has increased.

Increasing taxes may very well be necessary in this time of crisis. But if taxes are to be raised, it should be so that only urgently required revenue is attained without hindering the growth of the private sector. After all, more jobs, higher incomes and increased consumer spending all equate to more revenue for the City, making economic stimulus the most profitable and ultimately sustainable solution to municipal budget woes.

Real Estate’s Essential Role

The real estate industry plays a vital role in the economy of any city, but here in New York it is a load-bearing pillar on par with investment banking and mass media. In fact, $10 billion a year, almost one quarter of the City's annual budget, is paid in real estate taxes every year by the real estate industry. It is therefore in every citizen’s best interest that this industry recover as quickly as possible. As it does, many other sectors will follow its upward lead.

And yet, a litany of factors has coalesced into a perfect storm for local real estate. While not catastrophic for the industry individually, these measures, if adopted, will collectively act to profoundly hinder its recovery. We run the very real risk of being bitten to death by a duck.

Of course we have to start from where we presently stand. Financial losses as a result of the stock market collapse, for instance, cannot be magically undone. We do find ourselves facing a credit contraction that is hindering acquisitions, the funding of building improvements, or the ability to refinance existing mortgages as they roll over. The decrease in rental values for commercial space and apartments alike is simply an unpleasant fact.

The question is, how can these problems be quickly and effectively addressed?

Discouraging Economic Activity

To begin with, changes in Federal, State and City income tax rates on the highest earners –- whose wealth, and the will to spend it, fuels the machinery of New York real estate –- amount to increases from 35 percent to 39.6 percent, 6.85 percent to 10.3 percent, and 3.7 percent to 4.65 percent, respectively. Moreover, the real property tax rate was increased 7.5% in January, 2009, while tax assessments for 2009/2010 also increased significantly in spite of an across the board reduction in real estate values.

Finally, an increase in the city sales tax is proposed, from 8.35% to 8.75%, as is the elimination of the clothing purchase exemption. This will hurt local retailers, further hindering real estate’s recovery.

Changes Proposed to Rent Regulations

Many bills have been proposed to tighten the regulation of rent-regulated housing. These proposals include an increase in the threshold for luxury deregulation, or the all-out elimination of it. Another would modify major capital improvement increases so that they become surcharges that expire once landlords have recouped their investment, rather than permanent increases. Other changes have been proposed as well that if adopted will discourage investment, slow rent growth and severely affect real estate values.

Miscellaneous Fodder Feeds a Fire, Too

There are also the costs that are less easily categorized but which add up nonetheless. Among these is a recession-prompted, exponential rise in the number of tickets being issued and fines being levied for minor infractions. Another is bureaucratic delays in processing permits and applications, which adds significantly to the cost of doing business.

All of the above, when taken together, will have an extremely pronounced effect on the real estate industry. While many are still only proposals, it looks likely that many will indeed become law. If that happens, recovery in the real estate industry will be greatly delayed. Jobs will be lost and real estate as an asset will continue to decline in value.

Moreover, rather than helping tenants as rent regulation is intended to, these new policies would make many rent-regulated buildings not just unprofitable for their owners, but a major liability. A substantial number of properties, particularly in transitional and marginal neighborhoods, will be at risk of falling into a bad state and being abandoned as owners become unable to afford their maintenance. As investment in real estate is discouraged, many tenants will be condemned to living in substandard housing

If these things happen, the cost to the City will more than exceed the gains realized from tax increases and regulatory changes, quality of life will decline for some of the neediest residents, homeowners will be unable to sell their properties for their actual worth, and construction workers and other laborers who build developments and rehab existing properties will remain un or under-employed.

The loss of both property value and taxable salaries will have profound implications for the City and State budgets, both of which depend heavily on estate, transfer and related taxes, amounting to several billion dollars of income annually.

It is therefore in the best interest of all New Yorkers that a carefully thought-out strategy be adopted involving a balance between economic stimulus and urgently-needed revenue for the City. As it stands right now, we may just lose our balance and fall further into recession.

Sierra in the News

Our good friends at Real Estate Weekly mentioned our new Sierra Realty Corp team member, Jeffrey Anderson, a former architect, who has joined our commercial brokerage division. Welcome Jeffrey -- and thanks to Real Estate Weekly.

Excelling in Tough Times

The next several years will present serious challenges to all businesses. With unemployment rates rapidly escalating, banks cutting off credit, and consumer confidence plummeting, many businesses will fail or see their revenues significantly decrease. By adopting the right approach and attitude, however, a handful of businesses will be able to take advantage of the opportunities this market presents them and will strengthen and grow their businesses during these times of economic contraction. What can you do to strengthen your business over the next several years?

For a printable checklist for how to excel in tough times not only in the New York Real Estate industry but all businesses, click here.

• Reduce Expenses: Review every recurring expense and aggressively renegotiate pricing and credit terms with your vendors. Many vendors would rather reduce their prices or loosen credit terms then lose business. If necessary, switch vendors to those that will provide you with better pricing. Rent is often one of the biggest recurring expenses that a business incurs. Review your lease and evaluate your options for obtaining a rent reduction from your landlord. If your lease is expiring soon, take advantage of the decline in rent rates and aggressively shop for the cheapest possible deal. You may ultimately renew with your existing landlord but having market information available to you and offers in your pocket will let you negotiate the most favorable deal. An experienced and reputable real estate broker can help you here.
• Employees: For an employer this is now a buyer’s market. Take advantage of it. Take a hard look at your employees and determine which are valuable and which are under performing. There is much talent out there to be hired. Upgrade the quality of your staff without incurring an increase in payroll.
• Reconnect with your clients and customers: Don't take your existing clients or customers for granted. Contact each client personally and make sure they understand that you value their business. Each year I make a point of asking each of my clients to review the quality of our services. I meet with them personally to discuss their observations. Now more than ever you need to make each client feel as if they are the most important client of your firm. It is far easier to keep an existing client than to find a new one.
• Evaluate any weakness in the quality of the work that your firm performs: Make sure that you are providing an exceptional product or service. Address any deficiency immediately. Replace any underperforming employees and, if affordable, upgrade your infrastructure.
• Aggressively pursue new business: Many of your competitors will be impacted by this economic downturn. They may be required to make cutbacks in staffing, delay making much needed infrastructure upgrades or take other actions which may seriously compromise the quality of the work they perform. This is an ideal opportunity for the well-positioned firm to increase market share by picking up the dissatisfied clients and customers of these firms. How best to do this?
• Marketing: This is not a time to scrimp on marketing. Use intelligent marketing through public relations, advertising, direct mailing, cold calling etc. to get the message out that you're still in business and provide a quality service.
• Networking: Network like crazy. Attend events where you might meet people who could be potential customers. Let your professionals, vendors and existing clients and customers know that you're actively seeking new customers. Perhaps there are people they can refer you to. Don't be shy! And make sure that all your contacts are aware of all of the lines of businesses and services you can provide. Sierra Realty provides a full spectrum of leasing brokerage and property management services. It is surprising how many of our leasing brokerage customers are unfamiliar with our property management services and vice versa. We continually need to educate them so that they can refer new business to us. Don't assume your clients know everything that you do.
• Leverage your relationships: Use the business that you give your vendors and professionals as a way of encouraging them to refer potential customers to you. When I hire a new vendor or professional I make it clear that I expect them to refer business to my company.
• Incentivize your employees: Think about giving your employees incentives for finding new business for the company. Make your employees "partners" in your enterprise. Incentives can range from gift certificates to a percentage of the business they initiate.
• Get involved: I urge every one of my executives and employees to get involved in organizations outside of work. These can be religious organizations, alumni organizations, charitable endeavors, community groups, sports leagues, political clubs, reading groups etc. The list is endless. Not only can it be amazingly gratifying, it is a great place to develop relationships with people who might be able to refer business to your company.
  

Tough economic times are difficult for all. The uncertainty of what is to come can unnerve even the most seasoned of business executives. Yet by following some of the steps outlined above and taking a proactive approach to the economic downturn, a savvy business owner can not only survive this market but emerge from it a stronger and better company.

Articles 11.04.08

Our most recent batch of articles focuses on the retail sector.

For those of us who've gotten tired of the typical fast food fare (McDonald's, Panda Express, Wok N' Roll) found at local shopping centers "Food Courts for Food Lovers" describes the recent and welcomed trend of replacing traditional food courts with higher end food courts focusing on comfort, atmosphere, and fresh food.

The story "Incentive Enough" describes the unscrupulous accounting trick that one recently bankrupt retailer, Steve and Barry, used to artificially inflate their earnings.

Those of you with empty retail space will be interested in the article "Vacancies to cash cows" which describes how vacant stores can easily be converted into valuable ad space.

Next time you spend 15 minutes lost in a multi-tiered parking structure, think about the article "Beyond Valet Parking". This describes a high-tech parking system that reduces parking time by up to 55%.

"Developers cut 2008 pipeline by one third": does this is article really need an explanation?

Articles 10.31.08

I've put another batch of news clippings relevant to the New York realty market and outlook on the website. Check them out!