Power Broker

The Storm Chaser: Alexander Chudnoff on Post-Sandy NYC Recovery Efforts

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.

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