The Dean of Commercial Real Estate
Jotham Sederstrom April 19, 2010, 2:39 p.m.
Framed photos of freshly hooked tuna and a behemoth 371-pound mako shark line the cluttered trophy wall of Howard Kesseler’s Park Avenue office, its shelves a shrine to the rod and reel.
Once a commercial fisherman who snared thousands of pounds of tuna daily during the early 1980s, Mr. Kesseler’s dedication as an angler can be glimpsed in a Daily News article memorializing the 890-pound giant tuna he caught in 2007 just south of Block Island, and the 51-foot sport fish he and his 12-year-old son, Alexander, captain each weekend during the summer months.
What gets lost amid the photos, however, are the awards and plaques the well-respected broker has collected over the years, many of them for big transactions on behalf of the schools he’s done deals for across the city, the governmental institutions he’s planted in Manhattan and the industrial manufacturers he’s helped relocate to Queens and beyond. It’s those underserved business sectors, in fact, that have helped earn Mr. Kesseler his reputation as a master of the niche.
“I have this blue-ocean approach to my business,” said Mr. Kesseler, 46, an executive managing director at Newmark Knight Frank. “About 70 percent of the brokers compete for the same business. They compete for the private-equity business, the law firm business and the high-end private-sector business. And, to me, that’s like fishing in a fleet of 100 boats. I’d much rather fish in a fleet of four boats.”
Indeed, with education and health care widely perceived as two growth sectors at a time when few industries are actually expanding, Mr. Kesseler’s expertise in brokering deals on behalf of private and public schools across the city has kept the New York native—he lives with his wife and son near the Upper East Side—sailing against the economic tide. Recent transactions involving the Rebecca School, the city’s Department of Education and CUNY, among others, helped Mr. Kesseler earn a “Broker of the Year” award from Newmark in 2004, an honor he repeated in 2005, 2008 and 2009.
But the deal that may have cemented Mr. Kesseler’s reputation as a veritable dean of real estate was a 203,770-square-foot lease on behalf of the Claremont Preparatory School, a tony private institution he expanded from nearby 41 Broad Street to 25 Broadway, just steps from the bronze “Charging Bull” sculpture in Lower Manhattan. The deal, valued at $150 million, was one of the largest in the city last year. It was sealed after a 12-month search that included visits to 100 Church Street, among other sites.
In addition to the Claremont deal, Mr. Kesseler completed 47 leases in 2009, for a total of 700,000 square feet worth approximately $350 million. He thinks this year will be nearly as hot, if not more so. And with upward of 300,000 feet of pending transactions and a looming 50,000-square-foot deal with the private 143-year-old Brooklyn Friends School in downtown Brooklyn, he could actually be right.
“It’s become more of a hot market now because these institutions realize there’s opportunity now to expand,” said Mr. Kesseler, who believes decreased market values have inspired many education officials to reconsider their real estate options. “There’s been such an increase in the amount of activity and the amount of schools that are in the market right now, whether they’re charter schools or private schools or special-ed schools; there are really a lot of educational uses in the market place.”
CONSIDERING HIS INTIMATE connection to the state’s educational institutions, it’s worth noting that the 23-year real estate pro graduated from Bowdoin College in Maine, where he studied psychology and economics, two subjects that, he said, have helped him greatly as a commercial broker.
Mr. Kesseler briefly considered medical school as a way to follow in the footsteps of family members, including his father, but soon found himself selling model apartments after a promotion from his bricklaying job with the residential developer Henry Kibel. From there, a real estate career was born, and soon Mr. Kesseler was an on-site leasing agent for Leona Helmsley’s One Penn Plaza, where, during a five-year stint, he negotiated more than 1 million square feet of renewal and new lease deals.
He began working at Helmsley-Spear in 1987 (on Black Monday, in fact) and immediately immersed himself in tenant rep work, running around the city doing small office transactions throughout the early 1990s. One of his first big deals was a 200,000-square-foot condo purchase on behalf of Memorial Sloane Kettering at 633 Third Avenue. It was among the city’s first commercial condo transactions.
Mr. Kesseler did several deals for boutique investment firms and other financial services companies, but in time, the broker decided to seek out a less crowded niche in the industrial manufacturing sector, which was being priced out of Lower Manhattan.
“I focused on moving these industrial tenants out of the Trinity Church portfolio, and out of Tribeca, and I moved them to Long Island City and I moved them uptown,” said Mr. Kesseler, who now heads a small team comprised of Justin DiMare and Jordan Gosin, the nephew of Newmark Knight Frank CEO Barry Gosin.
“I mean, nobody wanted to deal with industrial tenants, but I knew that they were all taking 30, 40, 50 and even 60,000 feet of space,” Mr. Kesseler added. “That was an early niche for me, and it taught me how to deal with people who needed big space and needed things that an office tenant might not.”
With industrial deals all but dried up these days, however, he has focused primarily on the education sector, which he said has recently caught the eye of competing brokers. He likened the renewed interest in those deals to a fishing expedition.
“People want to compete with me in that business, but I’ve earned a reputation and developed a book, and now business comes to me,” said Mr. Kesseler, comparing his career as a broker to his earlier pursuit as a commercial fisherman. “If the business doesn’t come, you hunt it down.
“And what’s happened,” he added, “is they’ve started to look toward my fleet.”