The Storm Chaser: Alexander Chudnoff on Post-Sandy NYC Recovery Efforts
Jotham Sederstrom Nov. 13, 2012, 7:15 a.m.
Alexander Chudnoff, a commercial leasing broker who takes pride in strengthening relationships with clients through “impeccable service,” was especially busy in the aftermath of Hurricane Sandy.
The Jones Lang LaSalle executive managing director was dividing his time last week between volunteer efforts in the Rockaways, where he provided hot pizza and coffee to storm victims, and getting on the phone to make sure his Downtown Manhattan clients could stay open. Though it was a difficult time, the activity of making connections was just what attracted Mr. Chudnoff to the business in the first place.
“I love to make calls. I love to canvass,” he said. “I like to develop the relationship.”
In some cases, the storm required short-term arrangements, such as lining up space with other clients or in Jones Lang’s own offices, he said. In others, clients were able to proceed with minimal disruption, as when Dentsu Holdings USA returned to work at 32 Avenue of the Americas when Rudin Management opened the building the Monday after the storm.
At 42, Mr. Chudnoff has helped broker some of the biggest, most complex transactions in the New York market, including the relocation of Cantor Fitzgerald LP and Fred Alger Management Inc. after their offices were destroyed in the 2001 terrorist attacks on the World Trade Center. Working with colleague Mitchell Konsker when the two brokers were with Cushman & Wakefield, Mr. Chudnoff helped shepherd Cantor through a series of moves, eventually consolidating its headquarters into 225,000 square feet at 110 East 59th Street and 40,000 square feet next door at 499 Park Avenue.
Another major client has been Li & Fung USA, which occupied a modest 12,000 square feet of New York space when he and Mr. Konsker first started working for the global supply chain manager about 12 years ago. Since then, they’ve completed deals for Li & Fung’s U.S. unit on 1.1 million square feet of New York office space, including about 600,000 square feet in the Empire State Building.
“What distinguishes Alex to me is he has very down-to-earth roots; he works very hard,” said Anthony Malkin, president of Malkin Holdings, who has worked with the Chudnoff-Konsker team on a number of transactions over the past decade. “There’s no question that the leasing by LF USA made a huge difference for the Empire State Building.”
Mr. Chudnoff has also advised hedge funds and private equity firms including Highbridge Capital Management, Third Point LLC, Atticus Capital LLC and Capital Z Partners. He’s represented landlords including Vornado Realty Trust, SL Green Real Estate and Stellar Management. Working for RFR Holdings, he signed up Wachovia Bank NA (now Wells Fargo & Co.) to a 225,000-square-foot lease at 375 Park Avenue, better known as the Seagram Building.
Mr. Chudnoff is quick to share credit with four colleagues he’s worked with for virtually his entire career: Mr. Konsker, Matthew Astrachan, Paul Glickman and Mitti Liebersohn, all vice chairmen at Jones Lang LaSalle. Mr. Chudnoff compared their working relationship to the connection between brothers and estimated that, between them, they are involved in anywhere from 50 to 100 transactions at any given time.
When the five brokers left Cushman & Wakefield in January 2011, Bloomberg News called them office-leasing “rock stars,” reporting that they’d departed because of differences over the company’s direction—and noting that Jones Lang shares jumped 3 percent after the news.
“We run a small business within a business,” Mr. Chudnoff said last week. Jones Lang offered a better platform in terms of the “sophistication of analytics,” and a greater international footprint, especially in Asia, he said.
Mr. Chudnoff was born into the real estate business. His father, builder Marvin Chudnoff, was a confidant of Edward S. Gordon, and Alex grew up surrounded by such New York real estate titans as Elihu Rose and William Rudin, whom he counts among his mentors.
Still, he didn’t initially see himself becoming a commercial real estate broker. He studied business administration at Old Dominion University and went to graduate school at the University of Texas, where he prepared for a career as an entertainment lawyer or agent.
“I admired my father, but I didn’t sip from the same juice” he recalled. In 1997, however, he joined Cushman & Wakefield, where he “warmed” to the excitement of forming relationships and doing deals for clients.
“The energy that surrounds getting that first meeting is more exciting than the close,” he said. “The opening of a door is the hardest and most challenging thing we do.”
Mr. Chudnoff is optimistic that New York’s office market will pull out of its current lethargy, saying leasing demand from financial firms may pick up now that the election has settled some uncertainties about tax and economic policy, assuming the government can take steps toward resolving the impasse over the U.S. budget deficit. Manhattan’s office vacancy rate ticked up half a percentage point to 10.5 percent in the third quarter from a year earlier, including a 15 percent vacancy rate in the expensive Fifth Avenue/Madison Avenue submarket, which is among the most dependent on financial firms, according to Cushman & Wakefield analysts.
“Things aren’t great right now, but they’re not nearly as bad as others are making them” out to be, Mr. Chudnoff said. The growth of the city’s technology sector has helped stabilize the market during the financial industry’s slump, creating demand for space that’s being put back on the market, he said. Manhattan’s sublease vacancy rate stood at 1.7 percent in the third quarter, compared with a 7.9 percent direct vacancy rate, according to Cushman & Wakefield. In the Fifth Avenue/Madison area, the sublease vacancy rate was 3 percent.
The market has changed as new technology companies and hedge funds have gained sophistication in their approach to leasing space, Mr. Chudnoff said.
“We’re seeing the era of the smarter client,” he said. Whereas some tenants “used to lease space solely because of an address,” companies today are more likely to be concerned about auxiliary charges such as operating expenses, real estate taxes and cleaning costs, as well as issues such as sublet and assignment rights.
He said companies are becoming more aware of how antiquated New York’s stock of office space has become.
Their demand for column-free spaces, greater slab heights, backup power capacity and other amenities bodes well, he said, for the new space being built on the West Side.
- Wells Fargo
- SL Green Realty Corp.
- Old Dominion University
- Li & Fung
- Empire State Building
- Mitti Liebersohn
- Paul Glickman
- Capital Z
- 32 Avenue of the Americas
- 499 Park Avenue
- Dentsu Holdings USA
- Mitchell Konsker
- Alex Chudnoff
- Marvin Chudnoff
- Cantor Fitzgerald
- Bank NA
- Jones Lang LaSalle
- Bloomberg News
- Edward S. Gordon
- Atticus Capital
- Vornado Realty Trust
- Third Point LLC
- Fred Alger Management
- Cushman & Wakefield
- William Rudin
- Matthew Astrachan
- Stellar Management
- 110 East 59th Street
- Elihu Rose
- Rudin Management
- Hurricane Sandy