For Savills’ David Lipson, the Focus Is Beyond Office Leasing

In 1989, as David Lipson was preparing to graduate from Oxford’s Christ Church college, he wrote a thesis about a roadbuilding debate in the British Parliament 60 years earlier. 

The gist of it, as the Savills North America CEO tells it, was that the American market, thanks to the oncoming Great Depression, was in turmoil and the British automakers had the opportunity to take over the export market. But there was an issue of scale: Britain had fewer roads, therefore less a need for production, and the cars they did make had smaller engines because there weren’t roads to drive fast on. Less of a problem was that the leading manufacturers in the United Kingdom at the time weren’t interested in overtaking the market.

“The two main manufacturers in the U.K., they’d been bicycle makers who had started building cars, and they were wealthy beyond their dreams, and that was enough for them,” Lipson said, speaking in May from the Park Avenue office of Savills North America. “They’re thinking, ‘I dominate this market, this is my world.’ They didn’t think about the broader world.”

He added, “I always think about that.” 

At the beginning of the year, after nearly 35 years at the company, Lipson, 57, replaced Mitchell Rudin as the CEO of the tenant-focused commercial real estate firm’s North American operations. In the position, Lipson is tasked with leading roughly 40 offices and over 1,000 brokers, analysts, advisers and all manner of supporting players who advise on all aspects of the world’s largest commercial real estate market, North America. 

It’s a tumultuous time for commercial real estate, and Lipson acknowledges this with a refreshing clear-headedness. Last year brought the lowest transaction volumes in a decade across the industry, an indicator to Lipson that it was smart to continue diversifying Savills’ offerings beyond the company’s historical focus of leasing office space on behalf of tenants. 

“We are one of the only businesses in which a company of our size competes directly against the biggest companies in the industry,” he said. “Scale is a big challenge. There’s also an incredible opportunity there. We’re not looking to be the biggest. That space is taken. It’s not a space we’re interested in playing in, either.” 

Instead of trying to take on industry giants such as JLL (JLL) or CBRE, Lipson has chosen to continue leading the company by being what he describes as the smartest about what it offers to clients. Under Lipson’s leadership, Savills North America sets out to dominate the areas they operate within — and that is enough for them.

Lipson, who hails from the “Archie Bunker district” in Astoria, Queens, started at what is now Savills in 1987 after stumbling into an internship through an interest in buildings kindled by his architect father, along with a bit of naivete about what he was actually signing up for. Besides, he was spending the summer in Washington, D.C., thanks to a cushy housesitting gig, and he needed a job to go along with it. 

“The material described the company as the leader in tenant representation,” Lipson said. (The company in question was then known as Studley.) He thought it was a nonprofit helping residents of the nation’s capital evade eviction. He quickly learned that wasn’t the case. And, yet, by the end of the summer, he was hooked. This was after he graduated from Harvard in 1987 with an economics degree and before earning his bachelor’s with honors at Oxford in politics, philosophy and economics. He returned to the company full time in 1989.

Lipson’s worn many hats at Savills over the past three decades. He was a leading broker in D.C., where he ushered the company into becoming the first firm to represent the U.S. General Services Administration, which is responsible for overseeing most nonmilitary government real estate. He helped establish equity investment funds for Studley’s partners prior to Savills acquiring the company in 2014. Then he moved over to corporate growth and acquisitions. Along the way he’s also served as mid-Atlantic leader, a vice chairman and president for North America.

“I just always want to try something new,” Lipson said. “That’s one of the things that’s great about the real estate business. It’s not homogenous.” 

While Lipson admits it’s an unusual time for commercial real estate, he disputes the narrative that’s sprung up around it. “That’s one of the things that’s getting lost today. When people talk about the market, they talk about vacancy and they talk about office real estate in such bad shape. That’s just looking at it like every building is the same. You just can’t be more wrong.” 

In Lipson’s view, it’s not the pandemic that caused such a dramatic downturn in office values and asking rents.

“This is a phenomenon we’ve been seeing since 2009,” he said. “It was accelerated by the pandemic, but it wasn’t started by the pandemic.”

In the wake of fiscal belt-tightening during the Global Financial Crisis, companies realized they had too much space and could scale back without compromising on the quality of their work, Lipson said. (And what, in his view, is real estate but a tool for creating productive businesses?) That space reduction in turn led to a flight to quality — another much-
discussed trend post-pandemic but one with deeper roots. As companies scaled back, they funneled some of that savings toward leases for better-quality space, according to Lipson.  

This shift wasn’t recognized as a slump before 2020 because of the capital markets, Lipson said. While offices in prime locations like New York and Northern California still had tenants knocking, demand across the country was tepid. As proof, Lipson notes “there was no growth in net-effective rents across the country between 2010 and 2020.”

Savills isn’t itself immune to the effects of the market. CoStar reported that Savills North America’s revenue fell 12.5 percent to about $374 million in 2023 — it accounted for about 13 percent of the brokerage’s nearly $2.8 billion revenue — as real estate transactions were thwarted in part by higher interest rates and continued uncertainty over the economy and return-to-office trends. 

To save revenue and diversify income streams, the North American division amplified its attention to growing its industrial practice, cut costs, and increased its focus on global occupier services. Cost-saving initiatives at Savills have not meant personnel reductions. It’s something Lipson is proud of — and gets at the core of how he thinks about the company he now oversees.

“We were the only big real-estate firm where that didn’t mean layoffs,” he said. “Our people are our business. That’s one of the ways we manage our company — to make sure we retain our most important assets in down times.”

Tom Fulcher, mid-Atlantic region lead for Savills North America, said Lipson is the kind of co-worker who makes people feel valued and whose presence makes things better, particularly in times of problem solving.

“He doesn’t act like everything’s better when he’s involved,” Fulcher said. “It’s just his personality and willingness to be there, to be adding whatever value he can.”

For the company, 2023 was “a year of deferrals,” Lipson said, but not a year of “deals died.” In 2024, deals are happening at a slightly steadier clip. Savills’ North American division has historically been more focused on larger, one-off transactions in cities. What 2023 showed was that those alone are no longer reliable. 

Instead, the company is pursuing diversification into industrial and logistics and global occupier services, as well as life sciences and consultancy and project management.

Lipson doesn’t think of this all as a top-down solution. For him, it’s as much about putting tools into the hands of Savills’ brokers to help their clients understand the needs of the workplace and workforce.

“My job is to provide our people with the tools to be successful, and that makes the company successful, to do more business, to sell more, to provide additional services, but it’s all putting more tools in people’s hands on the front line,” he said. Those tools include a wide range of things that include research, technology to help revenue producers, and even the leeway to pursue the business employees are interested in servicing.

Some of Lipson’s quips about empowering Savills employees could be read as lip service.  Colleagues say that’s just who he is, however. Raymond Ritchey, senior executive vice president of owner BXP, has collaborated with Lipson on major deals over three decades.

“He’s got tremendous street cred with his clients, but more importantly his teammates at Savills,” Ritchey said. “Very often he’s responsible for adjudicating disputes within the brokerage firm. He always resolves the issue in what’s in the best interest of the firm and the individuals, not necessarily who is the biggest producer.”

Ritchey said Lipson is not only personally involved in philanthropic endeavors, but will support fundraisers put on by landlords, tenants and co-workers. Fulcher said he’s seen the same, with Lipson reaching into his own pocket to fund Savills team members in Washington, D.C., and salaried staff who want to participate in the Juvenile Diabetes Research Fund’s annual Real Estate Games. Every event costs $40 per person to participate in, Fulcher said.

“For every event someone says they want to go to, David says ‘I’ll just cover that,’” Fulcher said. “This is not a business expense. It’s something he covers personally, and I don’t think he gets a receipt packet and takes it off on his taxes. He just does it.” Savills is currently ranked fifth of 49 teams for fundraising for the 2024 games in early June.

Donn Williams, adjunct staff and former vice president of real estate and facilities at nonprofit policy think tank RAND Corporation, has worked with Lipson since the mid-1990s and agrees that he’s the real deal. “You don’t fake it for 30 years,” Williams quipped of their relationship.

Lipson’s manner of speaking is quick and decisive, and thoughtful. He’s fit and put together, but not in a flashy way. Colleagues confirm he hasn’t sat in his office since 2014, opting instead for a standing desk except for when he’s traveling and standing isn’t an option. Lipson just changed offices, but said when he gets to hanging art in the new space a “napkin drawing” of a scene from a company retreat by Kelly Givens, a vice chairman and director for California’s Orange County, will take pride of place, as it did in his last space. 

“He’s always distinguished himself as humbled, gracious, but also as a person who isn’t afraid to take a strong position in defense of his client,” Ritchey added.

As Lipson sees it, his clients and brokers are facing the same fear right now: uncertainty. For clients, it’s the uncertainty over whether their real estate is serving their business and will continue to do so over the term of a lease. 

He gave an example: A tenant signed a 500,000-square-foot lease and just finished building it out in March 2020 when lockdown began. It wasn’t the cost that concerned the company — many businesses thrived over the pandemic — but it was uncertainty over whether the space would still serve their employees, because the nature of work changed so dramatically over the past few years. He said clients are having a hard time committing to the long-term decision that is real estate when they can’t even see six months ahead. Lipson said the company, which he declined to name, kept the space and is “doing fine.”

Brokers are at the mercy of their clients’ uncertainty too, stoking worry over the length of time it’s taking clients to make decisions and whether deals that stretch out over months or years will ever be finalized. “The percentage of transactions that don’t happen deep into the processes, across the industry, is up, there’s no question, because of uncertainty,” Lipson said. “People need real estate. We don’t care, as a business, if the market shrinks by 30 percent. If the real estate market is 70 percent of what it is, that’s fine. It’s the uncertainty about what it’s going to be.”

Amid the uncertainty, Lipson sees an opportunity to continue branching out. It will allow Savills to grow in its own corner of the market without scaling beyond its means.

“We haven’t failed to grow. It’s that we haven’t been focused on it,” Lipson said. “And we have the incredible opportunity, and now we have to do it and perform.”