Robert Knakal

concrete thoughts

The Biggest Problem with the US Economy Today is…..

For the commercial real estate industry, important economic metrics which impact the market’s underlying fundamentals, include GDP growth and job creation. While both of these metrics have been trending positively, they have not been performing at the level economic text books would predict based upon the magnitude of the Great Recession. Those books teach that economic cycles typically act like a rubber band. The more they are stretched in one direction, the more they should correct in the opposite direction.

Given the severity of the recession, predictions of annual GDP growth of 6 percent to 7 percent were common and estimates of job growth of at least several hundred thousand jobs per month were being equally tendered. Our recovery has been much more modest. But even with these less than thrilling improvements, the commercial real estate market, particularly in gateway cities, has recovered extraordinarily well. If you have read some of my recent columns, you know that I believe 2014 was, by far, the best year for investment sales in the 31 years I have been an active broker. Leasing data is very positive and expectations are that 2015 should be an excellent year for rental growth in all sectors, office, retail and residential. Read More

concrete thoughts

Point of Origination

Two weeks ago, I wrote about the Massey Knakal/Cushman & Wakefield territory system and the benefits of that system. When discussing how business is generated and is handled between agents in different territories, I used the expression “origination” to refer to the genesis of a piece of business. I was surprised to receive several emails from readers asking me what origination was, how we determined who the originator was and if, and how, we tracked that metric.

It’s interesting that while originating business is probably the most important thing that we do in the brokerage industry, it is something that is really not focused on in many companies. There are three components of a commercial sale: 1) finding out someone wants to sell (originating the business), 2) securing the exclusive listing (assuming you only work on exclusives), and 3) executing the business. Of these three components, originating business opportunities is where the rubber meets the road. This is the case in any sales organization.   Read More

concrete thoughts

Why Territory Systems Work

There have been some questions about Cushman & Wakefield’s intent to keep the Massey Knakal territory system in place for our New York City investment sales platform. A reporter called me recently to get my perspective on this. I was surprised that someone would question whether the territory system would survive.

So without discussing or referencing C&W’s plans, I thought I would share some background with you about how the territory system came to be, how it works and why it works so well in a dense urban marketplace. Read More

concrete thoughts

How Record-High Demand is Driving New York Real Estate

As we enter 2015 with the wind at our backs in the investment sales market, it seems like a good time to consider the supply/demand dynamics currently driving the industry.

The most important metric for the market is supply. In the 31 years I’ve been a broker in New York City, supply exceeded demand only once, in 1992. That year, the Resolution Trust Corporation dumped hundreds of distressed properties from failed banks. Back then, the few investors who had money were hard-pressed to spend it on commercial real estate. Values at the time were about 70 percent lower than they were at the top of the market in 1988. By comparison, the 38 percent drop in values from 2007 to 2010 was little more than a speed bump. Read More

concrete thoughts

Thanks REBNY!

Over the years of brokering investment sale transactions in New York City and running the recently sold Massey Knakal Realty Services, I have observed qualities that top brokers in our industry share. They have a strong passion for the business, work hard (and smart), think positively, effectively manage their time, set goals and display tremendous integrity. Another characteristic of top performing agents is their focus on networking.

While our buildings are made of bricks, mortar, glass and steel, our industry is a people business, and people generally work with people they know and like. The blocking and tackling of the brokerage business is sending out mailings and making phone calls. But there is no substitute for face-to-face interaction. These meetings are the key to networking, and relationships formed in-person are the most meaningful. Read More


Bob Knakal Explains the Rise and Sale of Massey Knakal

Robert Knakal (Kristy Leibowitz) is now the chairman of New York investment sales for C&W.

I sit here writing my Concrete Thoughts column for the first time as a member of Cushman & Wakefield. My new title is chairman of New York investment sales for C&W following the sale of Massey Knakal on New Year’s Eve (I cannot say more about the sale at the present time). My friend Peter Grant at The Wall Street Journal described the transaction as “a fairy-tale ending” for the firm which Paul Massey and I started quite a while ago. I disagree. This transaction more acutely represents not an ending but a wonderful new beginning.

During the past couple of months, knowing that this transaction was likely to happen, thoughts about my life at Massey Knakal have been running through my mind with vivid clarity—particularly the early days. Massey Knakal was started on Nov. 15, 1988, and the sale closed 26 years and 46 days later. So how did we get here? Read More

concrete thoughts

Did the Door Just Open to Reforming Rent Control?

In a decision made last month, New York’s highest court has decided that tenants who reside in rent-regulated apartments are receiving a “local public assistance benefit.” Essentially, the court determined that rent subsidies are not different from social security, Medicaid, disability, welfare or unemployment benefits. So, if rent-regulated tenants are receiving rent welfare, why won’t a single politician support means testing for those who receive this public assistance benefit?

We all know that the answer to the question at the end of the last paragraph is: votes. But let’s take a closer look into the court’s decision. (And “rent welfare” isn’t a new term. I have been using it in these pages for years—because that is what it is.) Read More

concrete thoughts

Bizarro Brokerages: Businesses can teach us something

Today let’s travel to a place made famous in a Seinfeld episode: Bizarro World. In Bizarro World, there are many countries and each has a commercial real estate market. The size of the markets in each country is different and different countries implement the brokerage business in different ways with different rules.

One of the largest markets in Bizarro World is in the nation of UpSide Down (US). The commercial real estate market in US is massive and, historically, there has been one brokerage company that has essentially had a monopoly on the market. Read More