Chasing Manhattan: Westchester’s Own Chase Welles on Big Plans for Big Apple
Daniel Geiger Sept. 4, 2012, 7:15 a.m.
Chase Welles never needed a Manhattan office address to execute big deals. But now he has one, and a new firm too.
For years, Mr. Welles has been one of the city’s top retail brokers despite being based in White Plains—an unusual headquarters for such a prolific and successful deal-maker in Manhattan, well-known for its clubby retail industry.
Recently, however, Mr. Welles relocated to an office overlooking Columbus Circle. Meanwhile, the firm where he is a principal, Northwest Atlantic, merged with the Shopping Center Group, a national retail services company in Atlanta.
The changes are not mutually exclusive. Before the merger, Northwest Atlantic (which will now be known as SCG Retail) only did tenant representation work, a specialty at which it excelled. Mr. Welles represents a long list of top-tier tenants, including Whole Foods, for which he just negotiated a new store on Bedford Avenue in Williamsburg in one of the year’s most prominent and impactful retail deals. The lease single-handedly put Williamsburg on the map for major national retail chains, and it now appears poised to become one of the city’s next great retail neighborhoods.
Mr. Welles’s business partner, David Firestein, is a legendary tenant rep broker in the city, the exclusive leasing deal-maker for Starbucks; he has handled hundreds of leases in Manhattan for the massive chain, whose presence has so saturated the city that its storefront and logo have become nearly ubiquitous within the streetscape.
The Shopping Center Group handles landlord rep work as well, a new area of the business for Mr. Welles and his colleagues that they are eager to plunge into. Being located in the city is essential for this side of brokerage, where an owner’s leasing agent must be ready to show his space on short notice.
“If Mr. Smith calls up because he just saw your sign in the window of a vacant store and wants to take a tour, you have to be able to tell him you’ll be down there in 10 minutes,” Mr. Welles said. “You really can’t do that from White Plains.”
For a Westchester native like Mr. Welles, the move comes with the typical vagaries of commuting.
“My parking budget has definitely increased,” Mr. Welles joked, glancing at his phone, which was sending him periodic reminders to feed the meter downstairs.
“I fucking love it here,” he declared, sitting back at his desk in the new office, surveying a modestly sized space that was bright and clean, equipped with an open layout of desks spaced around a large Ping-Pong table (for the other brokers at the firm, Mr. Welles tells us). It’s the kind of space that seemed to offer a fresh slate.
For years, Mr. Welles extolled to clients the virtues of being a practitioner of tenant-only work, in which there would be no conflicts of interest. After all, a broker who also works for a landlord might be tempted to guide a tenant to an influential owner’s space over another location, in order to cultivate a relationship with that landlord.
That once-potent rationale, however, has appeared to fall out of favor in the leasing brokerage business.
Several brokerage firms, particularly boutique companies like Northwest Atlantic, have moved to align themselves with larger partners, mergers that have often resulted in them broadening their representation to include landlords. A brokerage group led by broker Ginny Pittarelli that was once with the company Madison Marquette, for instance, recently joined with the large retail ownership company Crown Equities. Joseph Sitt, another major retail landlord in the city, meanwhile, has launched his own brokerage firm, Thor High Street.
A competing logic has begun to prevail to justify the mergers, or at least defuse the potential concerns. Landlord work gives brokers a closer knowledge of market conditions like rents and availabilities, key measures that landlords pay especially close attention to in order to price their space and which they often predicate a real estate investment on.
Merging with the Shopping Center Group will also provide Mr. Welles with a sturdier business platform, specifically a national network of offices that can help him better serve New York clients who want to branch out, a common game plan for those who have achieved success in the city. For a broker who rose in the business cultivating big tenants, it seems unlikely that the influence of owners would have much sway on how he would steer a client.
“We got to the point where we started to really see that there won’t be a conflict, that this in fact would allow us to help our clients even more,” Mr. Welles said. “This is a great way to grow and work on exciting projects. It’s a good thing.”
Mr. Welles started in the real estate business shortly after graduating from Columbia in the 1980s. He went for an interview at the real estate company owned by the New York landlord Bob Quinlan, even though his original preference was to find a job on Wall Street like many of his friends.
“They told me they’d like to hire me, and I said, sorry, I’m really looking for a gig in finance,” Mr. Welles remembered. “Then they said, did we mention that the job comes with a unit in one of our residential buildings?”
Mr. Welles wound up working for Mr. Quinlan for years, through his 20s and into his 30s. When he started, he had little experience in the real estate business. At Columbia, he had studied literature. Working around Mr. Quinlan proved to be an education.
“To learn from a guy like Bob, it’s visceral: he teaches you how to take at deal right to the edge, he plays brinksmanship to the full, Mr. Welles said. “To start his business, Bob took 50 credit cards to pay for everything and just charged it. He has a tremendous acumen, it’s making intelligent decisions quickly. When he was renovating a building I remember, the contractor went bankrupt, I mean, this was a big job. A lot of people would be screwed. But Bob put his own construction company together quickly and finished it. That’s the kind of guy he is.”
Though Mr. Quinlan was involved in many areas of the real estate business, such as investing and renovating properties, Mr. Welles began early on to focus on retail at the company. Mr. Quinlan owns dozens of buildings on the Upper West Side, and Mr. Welles became the in-house executive who oversaw retail leasing in the large portfolio.
By the 1990s, Mr. Welles became aware of the lucrative possibilities of working in a traditional brokerage role, as a third-party representative who arranges a deal on behalf of a tenant. In his spare time while working for Mr. Quinlan, Mr. Welles began pitching big tenants, such as Costco, sites that he was aware of in the city. Doing this, he became friendly with Mr. Firestein and some of his colleagues, who had started Northwest Atlantic, a company that was originally founded to handle deals nationally specifically for Costco
“I was sending them ideas for these sites, and they said, ‘Why don’t work for us?’” Mr. Welles said. “David had a lot of contacts. I didn’t have a lot of contacts, being at a small company. He kind of brought me into the big retail circles he’s involved in.”
The firm was based in White Plains, but its location slightly outside the fold of the city didn’t hold Mr. Welles back from cultivating major relationships with a roster of tenants, including Staples, Kohl’s, Au Bon Pain and other major retailers.
Adding to his stature in the industry, Mr. Welles was named the head of REBNY’s retail committee, a three-year chairmanship he just completed recently. The term, which thrust him to center stage at REBNY’s myriad industry events and meetings, made him a recognized face in the business.
Perhaps at a stage of his career where he has begun to feel confident of his place in the business, Mr. Welles has a few controversial views.
“I think Jeff Winick is the top broker in the city by far,” he proclaimed, referring to a retail deal-making executive who is often lambasted by peers for his hard-charging—some say bullying—style in arranging transactions. Mr. Welles said he isn’t biased in his remark: he isn’t a friend of Mr. Winick’s, but has come to the conclusion having worked across the table on deals with him.
“If I have a deal on and I need to get the deal done, he’s the guy I want on the other side, because I know he’s not going to fuck it up,” Mr. Welles said. “The guy doesn’t miss a trick, and he gets deals done. He’s not there to have tea and cookies. He’s there to get the deal done and that’s what he does, and you’ve got to respect that.”
A few months in at the new firm, Mr. Welles is already handling a list of landlord rep assignments. He’s still focused on the tenant side of the business. Rite Aide, a tenant he works with, has quietly begun to expand in the city, a fact he finds remarkable, given the way the big brands like Duane Reade, Walgreens and CVS have dominated the market for drugstore tenants to the point of excluding other competitors.
“Right now we’re doing five stores in the city,” Mr. Welles said. “Rite Aide is not sleepy; they’re making a shocking amount of money.”