Joe Sitt: International Man of Mystery
Daniel Geiger July 31, 2012, 7 a.m.
Joe Sitt reclined in his office wearing the sly little smile of someone who knows something more than we do.
“Another retailer that we represent asked us if we could find them a space in Tehran,” he said.
Mr. Sitt seemed fascinated, not appalled (Mr. Sitt’s family is Syrian Jewish) or the least bit bewildered by the request.
“So many of the European retailers are operating stores in Iran,” the head of Thor Equities explained to The Commercial Observer. “We’re a little bit in a bubble in the U.S. Adolfo, Desigual, Mango, Diesel, I don’t remember which ones, but two out of four already have stores there. [In] Saudi Arabia, Mango already has 50 stores there. I have another request for Equador. Zara wants more stores in Venezuela. I’ve had requests for Russia. Those are some of the examples that show you the world is changing.”
Mr. Sitt can relate to clients like these, which he caters to through a relatively new arm of his real estate empire, a brokerage business called Thor High Street.
He too ventured off the beaten path to get where he is today; by many accounts one of the city’s most prolific and successful investors with a focus on retail properties.
His first acquisitions after graduating from NYU in the mid-1980s were in the Bronx. Gaining a flavor for inner-city retail tastes and needs by way of these early purchases, he founded the women’s apparel brand Ashley Stewart, which, only in America, grew into a successful clothing chain catering to plus-size shoppers.
Following success with Ashley Stewart, Mr. Sitt focused on building acquisitions across New York City, including in Coney Island, where in 2006, after a Stillwell Avenue shopping spree, he announced plans for a $1.6 billion resort more reminiscent of Las Vegas than the neighborhood in which he was born in 1964.
But to hear Mr. Sitt and his colleagues tell it, though his career has been on a dramatic upward trajectory in recent years, operating a retail business more than a decade ago was, nonetheless, one of the most thrilling chapters of his professional life.
“I enjoy it,” Mr. Sitt said last week. “It’s my own personal background, being a retailer.”
“I’ve worked for Joe for 17 years and the reason I stay is because he’s a visionary,” said Melissa Gliatta, an executive at Thor Equities. “Because if you go to anyone’s desk, there’s stacks of international fashion magazines on it. Joe is an information junkie and that has become infectious. He’s a retailer at heart and he’s passionate about finding that smaller shop in Argentina who’s going to be the next big thing.”
Brokerage is both a vicarious thrill, Mr. Sitt said, and, given his background, a service he is uniquely qualified to provide.
“[When I was a retailer] a lot of my energy went into site selection, so it was a natural progression for me to go from being a retailer to going on to rep retailers in the retail space,” he said. “There are not a lot of folks who have the experience of being a retailer and being a landlord.”
Of course, when Mr. Sitt started High Street about a year and a half ago, it also raised eyebrows in the real estate community. Few real estate owners of prominence have had luck establishing brokerage businesses of commensurate success. Indeed, it would seem difficult for even well-capitalized startups to compete in the leasing business against well-established corporate services companies like CBRE, Jones Lang LaSalle and Cushman & Wakefield, which typically win over large retailers with their global reach and market data.
“As I see it, the brokerage arm is just a way to gain knowledge of retailers’ plans in advance so that the investment side can be out in front with acquisitions in targeted areas,” one prominent retail broker told The CO.
“I don’t know the depth of what they’re really going to offer, where it begins and ends,” a friend of Mr. Sitt’s said, not wanting to be quoted for fear of insulting him. “Retail is such a high-touch business and there are all sorts of sensitivities. How some retailers will ultimately view a landlord handling their leasing … I think there are some questions about that. I’m not sure if, in the end, it amounts to one-offs or a comprehensive third-party solution.”
Mr. Sitt isn’t the only major retail investor who has seen opportunity and has made moves to get involved in arranging leasing transactions.
Crown Acquisitions, a rival of Thor Equities, last year acquired a brokerage group from Madison Marquette to give the firm, which is also a major owner of retail in the city, a hand in arranging deals outside of its own portfolio.
Ms. Gliatta dismissed the idea that the big services companies have deeper transactional capability because of their broad geography and market intel.
“Data is readily available, on CoStar or Property Shark—in this new world of modern technology it’s all out there,” she said. “What you can’t get is industry expertise and the relationships and commitment that we offer here at Thor High Street. In a world of communications where everyone talks over emails, Joe is a get-on-the-phone kind of guy. It’s a relationship-driven business, but service is going out the window because people lose the touch of verbal communication.”
Andrew Heiberger, a business partner of Mr. Sitt’s who has developed residential projects with him and now operates Thor’s residential brokerage company, Town Residential, described the depth of Mr. Sitt’s financial backing as what gave Town the ability to emerge as one of the city’s top high-end leasing and sales companies.
“When I wanted to start another brokerage company, I knew it wouldn’t be possible without a major amount of cash to start this,” Mr. Heiberger said. “You need a partner, and Joe believes in me and the business.”
The international scope of High Street could be one of the savviest components of Mr. Sitt’s vision for High Street. The buzz has been on for years about surging emerging markets like Brazil and China and India, but Mr. Sitt has clearly set his sights on following retailers who are interested in pushing farther.
“I’m not just bullish on Brazil, I’m bullish on Latin America,” Mr. Sitt said. “Personally speaking, I’m not any more bullish on Brazil than I am on Colombia or Mexico or Peru or Panama. We’re putting more boots on the ground in Latin America. We had about four executives there, now we’re scaling up to 12. They’ll be based in Mexico City and we’ll have satellite offices in Panama and Brazil.”
Markets like these and others—Mr. Sitt mentioned Africa as a potential future focus—offer fewer established brokerage competitors and, subsequently, a level playing field for a company like High Street to become active in growing economies.
“The world is made up of seven billion people, and by 2050 we’ll add another three billion people to that—that’s a staggering number,” Mr. Sitt said. “People translates into demand.”
Elaborating on how his vision fits in with the world’s changing demographics, Mr. Sitt continued to add and project numbers with extraordinary detail, as though he had memorized Census Bureau statistics, which he probably has.
“In a study I had done for a particular tenant: Tanzania has about 45 million people, in 2050 it will be 145 million. Congo has 66 million, it will 150 million. Nigeria has 160 million, it will be 390 million. Are you listening to those numbers?” he asked, midstream.
“Ten years from today, you’ll be looking back and you’ll remember that you were sitting in this office and we were discussing how the world is going to change and you’ll remember you heard it here first.”