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The Commercial Observer: How did Zelnik & Company fare in 2009?

Mr. Zelnik: We had small deals going on with the mom-and-pop stores. Some opportunities came along that were best suited for those types of tenants. We had a consistent deal flow in terms of overall gross volumes. As for the organization, I would say we were probably off about 20 percent or 30 percent from year over year.


How did the holiday season shape up for New York retailers?

At this point, we’re reading statistics and everything we’re hearing is inventories were kept much more in control than last year, so that allowed for the retailers to be selling at less discounted prices. Overall, it was more positive than negative.


Besides inventory, were there other ways retailers were able to prepare?

In a less formal manner, it was about retailers just being prepared from a customer service perspective and being more focused on certain inventories. But from a customer service perspective, I think the retailers were on top of things more than ever. Maybe because they didn’t have the crowds that they’d had in the past, there was more customer service across the board, even from the big boxes and the discount operators. I think they were prepared for that. I think it was a big season for some of these retailers to really be focused on the customer more than ever.


What were retailers talking about at November’s ICSC conference?

I thought that the show was fairly positive. A year-over-year comparison can only make it feel positive because the 2008 show was deader than dead. So year over year, it was more upbeat-certainly not as upbeat as things had been in the past, but I took it as a positive overall. There’s a general optimism about the New York City marketplace that to some degree never leaves.


Give me a breakdown of some of your recent transactions this year.

We have done a host of franchise-related retailers. We’re involved with a company, Submarina, which is a sandwich company that’s going to try to compete with the other sandwiches makers, the Subways and the Blimpies of the world. We work the landlord side, but we’ve seen guys like that.


Where and when are they opening?

Sometime in the first quarter in midtown west.


What retail trends are we going to see in 2010?

The biggest and most important trend we’re going to see more of-because I think it started happening in the last quarter of ’09-is transactions. The cliché is, there’s money on the sidelines, but from a retail perspective, it’s about transactions. I think you’re going to start to see and hear about all sorts of deals: Big chains, the continuation of mom and pops getting deals done. I think there have been deals that have been on the fire that have been negotiated. Landlords are looking to position themselves, tenants are looking to position themselves. In the first quarter, you’re going to see a
bunch of things announced-nothing specific, but just deals getting done. For a long time, deals have been taking longer and longer, and that’s been part of the problem. From a pure broker perspective, the good part is that they didn’t die. You have to keep monitoring them, keep them alive, and people didn’t walk away.


Do you expect early 2010 to be as strong as the fourth quarter?

The answer is yes. We’re definitely on an upswing. I don’t expect a 90-degree, straight-up line, but I think we’re definitely on an uptick.


In the past, you’ve worked with the CVS Pharmacy chain and Duane Reade. What’s happening with some of the big drug store chains right now?

From what I’ve been seeing just around the town, Duane Reade has been upgrading their stores. They look fabulous, so they’ll probably continue to do that and they’ll probably continue to reposition and grow. Walgreens has been on somewhat of a hiatus, and CVS continues to pick their spots. They’re the hungriest of the lot.


Zelnik & Company is just two and a half years old. How’s it been going?

That’s my most redundant question: ‘How’s it going?’ [laughs] We sort of had this business plan, but we didn’t expect this [recession]. The answer is, things are starting to pick up nicely. I’m not going to tell you that my road was any bumpier than anybody else’s over the past year and change. But we as a company are coming out of it nicely. I have a team of seven with me now and it’s a group I’m proud of.


Did you have to change your strategy once the recession came, which, incidentally, happened very shortly after Zelnik & Company opened for business?

I hope to not put myself in a position to make those real quick decisions, but this thing hit like a ton of bricks, and we sort of felt it coming, so we positioned ourselves kind of nicely. We made a couple overhead adjustments with the company, but we adapted and sort of played through the storm.


What kind of expansion plans do you have over the next couple of years?

Short term, I’m going to continue talking to a lot of people. I’d say I’ll probably meet or speak to prospective brokers or salespeople, maybe one or two a week. I want to grow the company a little bit. I want to bring on a few more people, but a little bit more on an as-needed basis. I’m not looking to bring on more bodies for the sake of just bringing on bodies because I pride myself on giving everybody in the organization-and my properties-a one-on-one relationship at all times.


Do you expect to maintain your focus on retail or make a shift?

It’s hard not to after 23 and a half years. You know, look, you want to take that and you want to spin off. We’ve talked internally, and we’ve talked about some investment-sales type work, but that’s all we’ve done. We’ve talked about it. I’m not looking to start an investment-sales department per se, but at the same time you keep your eyes wide open, you look for opportunities. I’m a sort of a slow-and-steady person, not knee-jerk. If an opportunity arises, we’ll think it through and see what’s there.

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