Redwood City-based StrongMail Expands, But Not Without Hitch

Eager to extend its reach beyond the West Coast, Redwood City-based provider of interactive email and social media marketing solutions, StrongMail Systems, crept into Manhattan’s growing technology scene the fastest way it knew how: by acquiring the New York-based design firm Magnetik and consolidating in New York.

By the end of 2010, in fact, StrongMail had taken such advantage of Magnetik’s business ties and staff—not to mention 2,000 square feet of office space at 350 Seventh Avenue—that making inroads into Manhattan’s so-called Silicon Alley was beginning to seem easy.

So when StrongMail began to outgrow Magnetik’s footprint a year later, the marketing firm’s top officials approached brokers at the Kaufman Organization for a quick solution.

104 west 27th street Redwood City based StrongMail Expands, But Not Without Hitch

104 West 27th Street. (Photo by Peter Lettre)

“They didn’t want to have to pick out furniture or get their space ready,” said Stephen Benoit, a leasing broker at the Kaufman Organization who represents StrongMail. “They wanted to come in, plug in their computers and be up and running.”

Benefiting from New York’s tech boom, StrongMail spilled into additional space at 350 Seventh Avenue, upping it presence at the property to nearly 3,000 square feet.

“They literally took a vacant office next door to them on their hall and put desks in there and moved people in,” Mr. Benoit said.

In a sector where opportunities favor the expeditious, StrongMail was antsy to slip into a better solution—and quickly. Given the company’s brisk pace of hiring, executives sought 6,000 square feet—at least. The oversize requirement squeezed 350 Seventh Avenue out of contention because the building’s floor plates weren’t large enough, recalled Mr. Benoit. “They really wanted large, open offices, like a lot of firms in their business do,” he said.

Adding to the pressure, StrongMail’s lease at 350 Seventh Avenue had expired late last year, and, ever since, its officials had been renting the office space on a month-to-month basis in an arrangement that was costing the company more than what’s expected of a typical lease.

To be sure, the requirement was a challenge. Midtown South, where StrongMail wanted to relocate, boasts a distinction as the country’s least-vacant office market. On top of that, StrongMail’s ideal midsize footprint was strongly coveted by other office tenants—meaning its executives faced a dense thicket of commercial challengers no matter the space.

“You could literally throw a rock and hit five companies looking for that type of space,” Mr. Benoit said.

Still, Mr. Benoit, a 20-something upstart hired by the Kaufman Organization less than two years ago, said he was suited for the task. Indeed, like many young brokers, he gained his experience and built a reputation by endlessly dialing his way down cold-call sheets.

“That’s how I met StrongMail,” he said. “Hitting the phones. Some people dread it, but I like it. It’s amazing to think that, in brokerage, you can make something out of nothing.”

Mr. Benoit canvassed landlords with urgency, finally hitting a jackpot when he reached Marvin Davis, a landlord who owns 104 West 27th Street and another office building in the area. At 104 West 27th Street, Mr. Davis told of a tenant exiting the building’s ninth floor, a roughly 6,000-square-foot space. The floor hadn’t even been put on the market, he recalled.

“It wasn’t available, which was a tremendous advantage to us,” Mr. Benoit said. “If that space had been on the market, it would have gone very quickly.”

Mr. Benoit negotiated, but securing a lease wasn’t his only concern. One of the attractions was the office’s fully furnished floor, complete with wiring and electricity for workstations and computers, and

StrongMail executives feared the departing tenant might gut the space by night and smuggle the infrastructure to its new location. “We ended up speaking with the outgoing tenant and making sure that they didn’t remove everything,” Mr. Benoit said.

Meanwhile, the building’s landlord, Mr. Davis, wasn’t interested in taking advantage of the tenant’s leftovers. “Marvin ended up telling us that he wasn’t in the furniture business,” Mr. Benoit said. “He let us have the furniture for free.”

StrongMail executives flew in from California to evaluate the space and offer their final blessing. Soon after, they signed a five-year lease. Asking rents for the space straddled the $30s per square foot, which, while relatively inexpensive for New York City, turned several heads among company executives more accustomed to Silicon Valley office pricing.

The lease ranks high among Mr. Benoit’s largest. But judging by his passions outside of real estate, a litany of more ambitious deals is sure to come—each more furious than the last.

To be sure, Mr. Benoit’s career launched in part through a longtime friendship with Michael Kaufman, a principal at the Kaufman Organization. Since then, the pair have bonded by way of drag racing. Mr.

Benoit drives a speedster that roars from 0 to 200 miles per hour in six seconds. That said, it’s no surprise that he understood StrongMail’s need for speed.

“I think most racers and brokers have a similar mentality,” said Mr. Benoit. “Someone who’s not afraid to get their hands dirty.”

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