The Fashions Change, the Fundamentals Don’t: Steven Kaufman on His Firm’s Evolving Relationship With Gotham
Jotham Sederstrom Sept. 28, 2010, 8:46 a.m.
Last year, the Kaufman Organization celebrated its 100th anniversary. As was the case in 1909, the family-owned concern leases much of its space to garment and fashion industry tenants, including trophy showrooms at 1407 Broadway. But, as times change, so, too, do tenants. Kaufman President Steven Kaufman, 61, sat down to discuss his firm’s evolving relationship with the fashion industry, last year’s centennial celebration and his all-access pass to the Sesame Street set.
The Commercial Observer: Is the Kaufman Organization in buying mode, or selling?
Mr. Kaufman: We’re in a buying mode, and we’re very close to making an announcement about an acquisition, which I wish I could talk about now, but I can’t. But I will say that it is an office building in Manhattan. So we’re looking forward to making an announcement about that soon.
How long have you been in buying mode?
We’ve been looking. We had an association with Bob Savitt and Tom Block, which ended at the end of 2007. And we managed a number of properties for them–about five major office buildings. When that ended, we purposely did not reduce our overhead and our infrastructure here so now we’re prepared to take on new management and leasing assignments. So we’ve been actively looking since then.
Before now, what had been the Kaufman Organization’s most recent purchase?
Our most recent acquisition had been a few years ago. We bought a building at 130 Prince Street in Soho. But we sold it a few years later. So there’s nothing really new.
How has leasing changed since the downturn? I hear it’s become more difficult.
We have two operations. We have a leasing business and a management business. And my management business is mostly managing buildings that we own. Many of them are in our core portfolio that the Kaufman Organization has owned for many years, going back to the 1920s. We also do some third-party management for buildings that we don’t own.
Our leasing business is largely a promotional leasing brokerage company, meaning we have approximately 15 brokers. In general, they work the Manhattan office-leasing marketplace–moving companies from one place to another. We also are the exclusive leasing agent for 1407 Broadway, which is a 1.1 million-square-foot office building. We have other leasing assignments at 260 West 39th Street and 550 Seventh Avenue, where we are hired as exclusive leasing agents.
My leasing brokers don’t necessarily work on the Kaufman properties. We work with other brokers. Our reputation is that other brokers like working with us. Our reputation is of being very easy to work with. Our lease is not a complicated lease. We’re known as dealmakers in the industry. We don’t like keeping our spaces vacant. We want to keep them full.
Last year was the Kaufman Organization’s 100th Anniversary. Congratulations.
I had someone do some research in the city archives. I remembered my father telling me that his father–my grandfather, who started this company–that he used to own a building at 45 East Broadway, which is Chinatown now. But at that point it was the Lower East Side. I actually rode my bike down there a few weeks ago–just to see what the neighborhood looked like. It’s a great neighborhood. I wish we still owned that building. It’s the heart of Chinatown. Chinatown spread.
But, anyway, I had this archivist friend of mine go and do some research, and he found the deed. And the building was bought by Samuel and Fanny Kaufman–who are my grandparents–in 1909. He did his investigation a few years ago. There’s a building in the Bronx that we still own, that we’ve owned since 1919, but I knew that my grandfather had been in the clothing business on the Lower East Side before the Garment Center existed, and I knew about this building.
So, anyway, I found out they bought this building in 1909 and I say, ‘Ah, that’s the real start of the Kaufman commercial real estate business.’
So is the 100th anniversary an emotional benchmark for you?
I think for George Kaufman and I it’s good to know that we have this longevity, and I’m proud of the fact that we have substantial office buildings on Seventh Avenue that were built by my grandfather Samuel in the 1900s that we still own.
Is the Kaufman Organization as closely connected to the garment and fashion industries as it was 100 years ago?
We’re still closely connected. George is on the board of FIT, and he’s always been very connected to the fashion industry. Our buildings are less fashion-oriented than they used to be. The garment industry has changed. There’s very little manufacturing of garments that goes on here, so some of our buildings that used to be filled with garment factories and garment shipping space, now they’re office buildings.
So the connection to the garment industry is not as strong as it was, but it’s still there, very much. Certainly, the fact that we were retained as the leasing agent for 1407 Broadway I think speaks to how alone we are in the garment industry because that’s the prime showroom building in the garment center.
Has that change been easy to adapt to?
That’s been good. That’s been a positive development. Certainly, from a building owners’ point of view, having buildings that were garment manufacturing and shipping now being used as office space, it’s certainly a positive.
So, if not the next 100 years, what’s in store for the Kaufman Organization in, say, the next 10 years?
We’re looking to expand and make acquisitions. We have a number of equity partners we’re working with; and we have a very capable management and leasing organization here in which we could run buildings for institutional owners. And we’re looking to get involved in that sort of thing today.
You own the Kaufman Astoria Studios in Queens, where 30 Rock and other television shows tape. Do you ever peek in on the set to check out some of the celebrities?
I’ve been there, but a lot of these sets out there are closed sets.
But you can get in if you want to, can’t you?
Well, if I wanted to, sure. When they had Sesame Street there, and I think they still do, I took my kids to see the Sesame Street show. But my kids are grown up now. So I have no reason to go there anymore.