Manhattan-based retail real estate specialist Winick Realty Group is going west. Winick opened its first New Jersey office in early November of last year, with senior vice presidents and founding co-partners Daniel Spector, a 25-year real estate veteran, and Tyler Bennett, with a decade of industry experience, at the helm.
With nine tenants and several exclusive arrangements with prominent landlords already secured, Messrs. Spector and Bennett are optimistic about Winick Realty Group NJ’s prospects in 2013. The Commercial Observer spoke with the partners in Winick’s Midtown office about their incipient developments, the aftereffects of Sandy and Garden State idiosyncrasies.
You both focused on New Jersey real estate before the Winick office opened. What drew you to the market?
Tyler Bennett: I’m a lifelong New Jersey resident, so knowing the market and having done most of my transactions there, it made sense.
Daniel Spector: I’m originally a New Yorker. I was working in a firm that represented retailers in Long Island, including Blockbuster Video. I was helping them expand in New York City and New Jersey. I started doing a lot of work in New Jersey, and after a couple years of commuting over two bridges, I decided that maybe I should move there, as hard as it was for a New Yorker.
TB: [Laughs] Are you moving back?
DS: It’s not too bad, actually.
TB: It’s twofold. First of all, alternative brokerage firms didn’t impress me or take advantage of what I wanted to do in north and central Jersey. Dan came to me, mentioned the opportunity, and I thought the synergies between a New York-based firm and north Jersey would be complementary—and they have been.
Secondly, I wanted to do something different, to create a platform that wasn’t being offered in the largest metro area of the United States.
DS: I wasn’t satisfied with the choices of New Jersey firms, especially after working [at Winick, first in 1995]. You get used to quality people.
Colleagues I’d worked with at Winick for five years—[President] Steve Baker, [Founder and Chief Executive Officer] Jeff [Winick]—were still here. I knew what it was like, and knew Tyler was looking for something new. We came in to meet with the executives and got a taste for what the potential was. And they were very welcoming to us.
When did discussions about opening the New Jersey office begin?
DS: Over the years, every time I saw Jeff or Steve, they’d say, “Why aren’t you working with us?” And I really didn’t want to commute to the city.
TB: Nor did I.
DS: It’s a long trip. We needed this office. If you look at most brokerage houses in New Jersey, you’ll see they’re isolated in their territories. Some work one or two counties in the north, some out west. No one’s really covering the whole state.
TB: It’s a very fragmented market.
Now, as you alluded to, Dan, there are a few stereotypes about New Jersey …
DS: You’re kidding! [Laughter]
But what would you describe as the biggest difference and the most striking similarity between New Jersey and the city?
TB: Obviously the biggest difference is suburban versus urban. Actually, the commissions are a pretty big difference too. [Laughs] A similarity is the bluntness of owners and deal-makers. In the New York area, there’s a sense of direct conversation.
DS: I also think there are many landlords who own property in New York and New Jersey. And if they own a 50-story building here, they may own the mall where we live. They’re used to dealing with Winick in the city. Then they go to New Jersey and ask, “Who is of that caliber? Who can deal with me, because I’m a New Yorker and may be difficult to deal with? Maybe my standards are higher.” And they are; this is New York City. Winick answers those questions for them.
Also, our tenants are very, very busy. The assignments that companies put on representatives of, say, Duane Reade to open 50 stores in a year. We know that’s pretty much insane. We do a great job of making people’s jobs … maybe not easier, but more accomplishable.
TB: On that note, our platform entails having one point of contact. Some retail representatives have a huge territory. And we’re able to provide for our clients a single approach to presentations, whether they’re in the Bronx, Manhattan or Long Island. We want to take the angst and anxiety out of the process. All of our experts are on one team. Most companies don’t and can’t offer that.
DS: Everyone’s running very lean these days, including landlords. We can provide a professional service for the landlords that own property in both states. They can rely on us.
It’s a bridge between Manhattan and New Jersey.
TB: It’s a bridge that hasn’t been there—Manhattan brokers didn’t want to come to New Jersey, and New Jersey brokers didn’t want to come to Manhattan. We’re turning it upside down.
DS: Our office is in the heart of our territory, in Cranford, right off of the Garden State Parkway. And it’s not so far away that we can’t come here to meet with the executive team. And they come to our office to present to New Jersey tenants.
I’ve had experiences in the past where companies have a New Jersey office, but there’s really no connection to the city. They may see each other once a month. It’s really important to keep the eye contact.
It seems like a company’s offices, even in Manhattan and Brooklyn, can run as two separate entities.
DS: Right, they can. It’s not a good way to go.
TB: The difference here is, as founding co-partners in Winick New Jersey, along with Jeff and Steve, we have a vested interest in seeing this succeed. It’s not “Dan and Tyler, go run a show.” And that’s the most profound difference between us and other companies.
What are New Jersey’s prime retail corridors or neighborhoods?
TB: Routes 4 and 17 in Paramus, by four regional malls …
DS: … That’s No. 1, like Fifth Avenue and 57th Street.
TB: Routes 3, 46. Route 1 from Elizabeth down to South Brunswick is a big corridor.
DS: Something worth noting is that a store in New Jersey can sometimes do as much sales volume as a similarly sized space in Manhattan. And rent and overhead can be 20 percent of those in Manhattan.
TB: Also, no market was immune to the recession. But we’ve seen vacancy rates go down and space get absorbed in North and Central New Jersey quicker than most regional and national markets. That’s due to income levels, proximity to New York, density and traffic
How central are malls to New Jersey retail real estate?
TB: Generally we refer to markets in New Jersey as regional markets. And those markets typically have an enclosed regional mall …
DS: A lot of times …
TB: Not all the time, but back when suburban sprawl started in the ’60s and ’70s, the mall was the epicenter, and then the ancillary power centers, grocery centers and residential components, were developed around that.
What’s the latest on the American Dream Meadowlands (formerly known as Xanadu) mega-mall project?
TB: We’re working on a deal there right now. The rush is for the 2014 Super Bowl. I don’t know if the whole thing will be complete and open by then, but a component will be. It’s mostly aesthetic work at this point.
A project like American Dream must hope for appeal beyond New Jersey. Do most New Jersey tenants aspire to draw New York City shoppers?
TB: There are enough people and money here that very few businesses require, or even try to draw from, the Manhattan or city market. Some do. The American Dream will, by way of mass transit.
DS: Having lived there, I don’t think many people in Manhattan are going to New Jersey to shop, although there’s no clothing tax. That said, they’re building a very large mall in Sayreville called The Point, and if they don’t draw people from New York, it’s not going to make it.
Winick’s New Jersey office opened in the immediate wake of Hurricane Sandy. How long a shadow will Sandy cast over the next 12 months?
TB: I think there’s no question we’ll be back. Recovery will create a construction job boom. Right now, people are still digging out, and it’s taking longer than anyone would like. But it has to come back.
Some of our tenants’ units were damaged, but most were up and running relatively quickly. There are lingering effects on consumers worried about their homes. But I think you’ll see a bounce back in the spring and once people collect their insurance money. It will actually be good for some retailers: Home Depot, Lowe’s. And that will create improvement.
DS: Well, I think that’s pretty optimistic.
TB: That’s reality! People’s homes are wiped out; they have to buy furniture.
DS: This season’s going to be tough. I mean, there are no boardwalks. I agree that Home Depots and furnishing stores are quite busy. But there’s a host of issues that have come up concerning the environment, flood zones, insurance and mortgages. One issue is the Shore’s tourism economy—hotels, amusements. Another is the people who live there. Restaurants and boardwalks will be rebuilt. Will the homes? Probably quite a few won’t. This summer’s going to be hard.
Looking on the brighter side of the future, which projects are you most excited about in 2013?
TB: I represent Buffalo Wild Wings and did their first New York transaction, which will open in three weeks on Staten Island. That’s a high potential market for them. We’ll likely do another on Staten Island in 2013.
DS: As far as our company’s concerned—and I swear this isn’t a promo—we’ve signed exclusives with exciting landlords for wonderful developments.
TB: During our first two months in business, we hired a salesperson. We’re shooting for two to four additional people this year. We should be exclusively representing up to a million square feet of properties in the first couple months of 2013.
DS: We like making money and supporting our families. But Tyler and I like making deals and helping tenants and landlords the most. After 20 years, I still go to grand openings. I know it sounds corny, but there’s nothing better than driving up to a new store and seeing a line out the door.
TB: We like being able to see and touch what we’ve done, and making something from nothing.