By the Numbers: Robert Knakal and the Statistics Behind his Success

Robert Knakal has long had a simple philosophy about selling real estate.

The way he sees it, there are approximately a million buildings in the city, and the broker that gets to sell any one among the multitude that will hit the auctioning block at a given moment is, sometimes, simply the person who happens to pitch their services to the right seller at the right time.

robert knakal By the Numbers: Robert Knakal and the Statistics Behind his SuccessTo that end, Mr. Knakal figures he can either call you, or you can call him.

“During the early 1990s, after the recession and when the market was dismal, we used to have a contest to see who could get to 40 owners a day,” Mr. Knakal recalled earlier this month.

“Even if that person hung up in your face.”

Although it’s one of the biggest and most lucrative markets in the world, Manhattan’s real estate industry is famously close-knit. But for those who break into the club, assignments from clients and attention from the real estate press usually follows.

Still, few in the city’s commercial real estate industry have risen to Mr. Knakal’s prominence, and fewer still have labored as hard to do get there.

In what was once considered a novelty, Mr. Knakal, now a governor on the board of the Real Estate Board of New York and a columnist for The Commercial Observer, first garnered attention as a young broker by tracking real estate sales figures in the early 1980s—well before such careful analyses became commonplace at real estate firms.

Since then, he and partner Paul Massey, with whom he founded the brokerage firm Massey Knakal in 1984, have escalated the technical practice of data gathering and showcased ever more sophisticated skills.

In recent years, Massey Knakal has held regular quarterly breakfasts that showcase the blitz of detailed statistics and market measures it tracks. Even in an industry now brimming with data, the firm’s numbers stand out by virtue of the fact that it sells a higher volume of transactions than many of its rivals combined, meaning it can aggregate more data. And at the company, save for perhaps Mr. Massey, no one wields that data better than Mr. Knakal, using it as a tool for prognostications about the market.

“I’ve always been sort of a wonk with statistics,” Mr. Knakal said, modestly.

The pursuit has served him well.

When the real estate market crashed in 2008, even prominent brokers were left feeling washed up amid the dearth of deals that followed. Mr. Knakal seemed unfazed during the period. His knowledge of New York real estate’s ebb and flow, as well as his knack for weighing the impact of macroeconomic events on the local market, made him a sought-after consultant, as sellers and buyers alike struggled to uncover the new realities of value and demand. While the consulting work and portfolio evaluations he did during the time were either free or low cost services, it allowed him to both develop and deepen ties to major clients like banks and large private sellers and sow seeds for new business that would sprout when the market revived.

The work paid off. As sales picked up, Mr. Knakal became a leading seller of a popular product type of the time, mortgage notes, which banks were clearing off their balance sheets at a discount.

Last year, he sold a nearly $30 million mortgage for Barclays bank tied to a development parcel across from the West Side rail yards, 350-366 Tenth Avenue. Before that, in 2010, he sold the $60 million mortgage against the downtown office building 5 Hanover Square to the real estate group Savanna, which then took control of the property.

Mr. Knakal’s biggest year in sales volume happened, predictably, in 2007, when he sold approximately $800 million in real estate. For a capable dealmaker, the cards were stacked in his favor: The city was flush with easy capital, prices were at a peak, and both sellers and buyers were ferociously engaged in deals.

Yet in 2010, by all accounts a dismal year, Mr. Knakal claims he did about $500 million of transactions, a respectable tally that actually earned him more commission dollars than 2007 because the dearth of smaller deals he was doing that year actually earned him a higher commission rate.

“I’m pretty confident that 2012 is going to be my biggest year ever,” Mr. Knakal said. “It’s already proving to be true so far.”

While Massey Knakal specializes in smaller transactions, Mr. Knakal has differentiated himself from that formula by brokering larger deals than the firm usually handles.

Last year, he sold two buildings on 29th Street and Broadway to the hotel developer Jon Lam for over $70 million. In recent weeks he handled the sale of three portfolios of apartment building, for roughly $40, $50 and $60 million respectively. He also just completed the sale of a development parcel in Williamsburg for more than $20 million to an investment group led by the prominent New York owner Joe Chetrit.

He sold a $7 million building in Brooklyn for the Jehovah’s Witnesses, an organization that owns more than a billion dollars of real estate in the borough and is in the process now of liquidating its holdings. The group is a cloistered religion, yet Mr. Knakal has become a trusted broker for the valuation services he has performed for the organization through the years. The pace of deals shows no sign of letting up. Mr. Knakal is in the process of marketing an industrial building in the Bronx that he thinks will trade above $40 million. He’s also in the process of negotiating to add parcels onto hotelier Jon Lam’s Broadway development site.

Mr. Knakal chalks up a big portion of his success to Massey Knakal’s territory system. Brokers at the firm are assigned certain submarkets in the city where they are encouraged to become specialists. According to Mr. Knakal, it is the best way to do deals because, in a city where pricing can vary dramatically by neighborhood, it allows a broker to develop the knowledge and focus to better source and execute deals. Criticism has also been lobbed at the approach. Some rivals say that it hems brokers into a narrow geography.

Mr. Knakal’s own business is a counterpoint to that claim. His home turf is in Midtown, but he often handles sales outside of that boundary, partnering with whichever broker at the firm works in the territory a deals takes him. In this way, Mr. Knakal is beyond just a public face to the firm, but also an originator of business for more than just he and his own team.

“I look at the model and credit it for a lot of my success,” said Mr. Knakal, who acknowledged that while he knows much of Manhattan, he’s not as well versed in other boroughs like Queens and the Bronx. As such, he benefits from having the specialists in those markets as his partners.

Nonetheless, a large part of what continues to drive Mr. Knakal, who will turn 50 in May, is his love for the business, regardless of the borough.

“I still get pumped up when a client hires me,” said Mr. Knakal. “It doesn’t matter if it’s for a small property in the Bronx—I get excited about it.”


{{ story.sponsored_byline | safe }}

{{ story.featured_attachment.caption | safe }}
{{ story.featured_attachment.caption | safe }}

Buildings in this story

Organizations in this story

People in this story

Activity in this story

Loading next story...