The Chatty Young Man in a Hurry: Eastern Consolidated’s Newest Partner on Note Sales, Foreign Buyers and the Lessons of Avenue M
Jotham Sederstrom July 20, 2010, 9:53 a.m.
To say David Schechtman set the bar impossibly high as a first-year broker for Eastern Consolidated may have been the understatement of 2005.
That was the year Mr. Schechtman, fresh off a five-year stint as a litigator, entered a $215 million deal on behalf of a major New York City hedge fund for the structured 50 percent purchase of the St. John’s Freight Terminal, believed to be the largest floor plate in Manhattan.
The mega-deal was heralded as the largest ever inked by a first-year Eastern Consolidated broker and still stands, to this day, as among the small firm’s biggest real estate transactions.
But rather than wilt under pressure, Mr. Schechtman carved out a niche as “a leader in debt sales,” as this paper once called him, unloading a steady stream of mortgages and mezzanine loans years before the recession would draw new blood to the rapidly growing field of distressed assets.
Now, with more than $143 million in sales inked this year, the talkative young broker is already on par to tally his best year yet at Eastern. That he was named last month as the firm’s 13th partner is simply icing on an already loftily high-tiered cake.
“For me, being made a partner here was, most importantly, a symbol of permanence,” said Mr. Schechtman, a youthful 35 and senior director of the firm’s Loan Sale and Turnaround Group. “Since graduating from law school, I’ve only held two jobs. This is job number two and, hopefully, the last place that I’ll hang my hat.”
Not one to rest on his laurels-The Commercial Observer‘s “10 to Watch in 2010” and Real Estate Weekly‘s “Most Promising Broker of 2006,” to name just a few-Mr. Schectman has continued his frenzied sales pace with a bevy of note sales and new deals.
In the first and second quarters of this year, he drew several foreign buyers to the New York market, in particular through the $43 million sale of five garage condominiums above 57th Street. He also sold property at 133 East 84th Street and Lexington Avenue for a family real estate firm for $10.3 million, he said.
He also recently sold the notes of several stalled condominium projects to third-party investors, most of them real estate operators who own or develop similar properties in the city. Mr. Schechtman said those notes sold for under $10 million in most cases.
Another note he expects to sell as soon as this week involves an estimated $14 million one owed to Wrightwood Capital by a developer who intended to convert a 14-story office building at 315 West 35th Street into residential housing. After Mr. Schechtman reached out to what he described as “several thousand” debt players, he found a buyer rumored to be linked with Isaac Chetrit, the cousin of real estate investor Joseph Chetrit.
“We went out to several thousand people and there was frenzied interest,” said Mr. Schechtman, who said a deal could be finalized as soon as Thursday, but claims he has not dealt directly with Isaac Chetrit. “It isn’t an embellishment when I say we have a hard deal with a nonrefundable contract, which is going to exceed by 10 or 15 percent where we thought the loan would have sold at.”
MR. SCHNECTMAN WAS born in Canarsie, Brooklyn, but fled with his family to Long Island as a young child. Despite the move to the suburbs, his father, Dennis, continued to practice podiatry from a building in Sheepshead Bay that he later purchased, a business decision that allowed the boy his first glimpse into the real estate world.
“Visiting my father and visiting his tenants were my very first memories,” recalled Mr. Schechtman of the 10,000-square-foot building on Avenue M, which his father purchased in 1971 for what, at the time, was a princely $100,000. “Sitting on the stoop of that building, talking to the people who were living there, taught me so much, and I watched him eventually get to the point where he celebrated no longer having debt on the building.”
Despite an early interest in real estate, Mr. Schechtman’s family pushed him to attend law school at Benjamin Cardozo once he graduated from the University of Delaware, in part, they said, because of his habit of being a genuine chatterbox. He promised he would pressure his own children-little Leo and Evelyn-to do the same.
“I’m very fortunate that my parents forced me to go to law school, and I’m very fortunate that my wife told me I’m a mediocre lawyer at best,” said Mr. Schechtman, who says that when he applied for jobs after college he was rejected by 365 law firms, including six times by DLA Piper, the group he would eventually work for.
Still, he said, it was the lessons he learned as a litigator that prepared him for his later work with distressed assets and debt sales as a broker.
“I knew early on that I loved the cerebral part of the law, I loved the rules and regulations and working within those parameters,” said Mr. Schechtman, who lives in Westchester with his wife, Caryn, whom he met while working at DLA Piper. “But what I really loved was getting to ‘yes.’ I loved the idea of marrying two or three or four parties in a deal.
“When I love something, I can’t stop doing it,” he continued, after a lengthy explanation on how his former profession related to his work as a real estate broker. “And I knew that I didn’t have that passion for the law, but I did have the passion for the application of the law-for marrying people and consummating the deal.”
Realizing he had been holding court, Mr. Schechtman hesitated for a moment before suggesting what comes naturally for a person for whom raising the bar is de rigueur.
“Am I running for office here or what?,” he asked before answering his own question in the negative. And then, with nary a pause, he kept on talking.