Don’t Mess With Texas? Transwestern’s Lindsay Ornstein and Patrick Robinson Take Manhattan, One Broker at a Time
Daniel Edward Rosen Sept. 25, 2012, 7:15 a.m.
The Park Avenue office of Transwestern’s scrappy New York City branch has the feel of a tech startup. A disassembled Ping-Pong table rests inside a conference room. The firm’s principals share office space with their employees. Meetings are sometimes held on the outdoor patio, which overlooks a frenetic Midtown scene. It captures the young, boutique feel that Lindsay Ornstein, 35, and Patrick Robinson, 53, have been aiming for ever since Transwestern—a Texas-based commercial real estate services, investment and development firm—tapped the duo to open up its New York City offices in 2011. Mr. Robinson and Ms. Ornstein, who previously worked together at Staubach before the firm was acquired by Jones Lang LaSalle in 2008, discussed Transwestern’s big steps into the crowded and competitive New York City marketplace.
The Commercial Observer: Is it difficult to start a real estate brokerage services firm today, especially with such a glut of established firms and upstarts like Avison Young in New York City?
Lindsay Ornstein: I think the timing is more important than the competitive set. Opening during a down cycle is optimal. We have displacement in the marketplace, we have people who are uncertain about their future and have been experiencing some degree of unhappiness at their current place, and that is an optimal time to be looking for new talent.
Patrick Robinson: I think that it depends. We would not want to be starting a firm from scratch in a market that is as highly competitive as New York, and there’s already some very good firms here. We’re starting a regional office for an already well-established national firm with a lot of client base and a lot of resources. I think it would be challenging for a company that doesn’t already have a client base or resources here in the United States or internationally to try to compete against. We’ve been around for almost 35 years and have an established reputation all over the country, and broad services and a deep bench. It’s just a matter of expanding into this locale. What we’re doing is hiring local people with experience in this market to join that platform. Never easy, but it certainly [has] a much higher probability of success being part of the Transwestern team. I think it would be brutal to try to start a new-firm startup in this environment and in this market particularly, as competitive as New York is.
You knew each other at Staubach. Would you say Staubach launched in New York in a similar fashion?
Mr. Robinson: Very similar. In 1996, I was the founding principal of [Staubach] and we had a great 10-year run. It was a very similar situation. It was a firm based out of Texas with a similar culture of teamwork and collaboration and transparency. After a great, great run with them, it was time to do something strategic for the shareholders, and we sold the firm to Jones Lang LaSalle. That enterprise came to an end.
Ms. Ornstein: I think that’s part of the reason we’ve had such good initial success, is that Pat’s done this already. It’s a similar culture; he knows how to build a company from scratch.
The track record of that, in the past, we’ve just translated that into the Transwestern platform, which again, is similar, with a broader breadth of services.
When Staubach was in the New York market, was there a similar downturn in the marketplace?
Mr. Robinson: It was mid-market: the run-up had already started to happen, and we had a little bit of wind in our sails, but it was similar dynamics to now.
What are some of the tenant deals that you have done in the past few months?
Ms. Ornstein: Caplin & Drysdale, a law firm. Advent International, a private equity firm right here at 375 Park Avenue.
Mr. Robinson: Kelso & Co. We did a disposition for Fiserv, which is a national client. There was a sub-sub-sub-sub-lease we just finished up—
Ms. Ornstein: Millstein & Co. That one just closed, the ink just dried.
In terms of recruiting, you guys picked up Alyson Berg from Studley and John Grotto from The Durst Organization …
Ms. Ornstein: We have another big one starting in two weeks, who we will announce very shortly.
Can you give us a hint?
Ms. Ornstein: It’s investment sales, coming out of a long time ago, one of the big investment sales companies—
Mr. Robinson: —has been on the landlord side for a while, and is now coming back to investment sales.
Will John Grotto be doing strictly agency work?
Ms. Ornstein: It will be everything, but with an eye toward retail.
Does Transwestern have a strong retail representation in the city?
Ms. Ornstein: We have a gentleman named Rick Rizzutto in New Jersey. He’s really active.
Have you recruited all the people you need? Or are there some specialists you need to bring in?
Mr. Robinson: I think we have all four legs to the stool: Tenant rep, landlord leasing, property management and investment sales. So we have all of those areas.
Ms. Ornstein: We also have sub-specialties. We have industrial and retail also.
Mr. Robinson: So we have people in those seats, but we’re absolutely still looking for experienced talent that matches our cultures, so that we can continue to fill in the bench. Right now, if a client comes to us and says “I have XYZ assignment,” we’re highly confident. Whether it’s tenant or landlord or property management or investment sales, we can execute on it today. That’s in a very short period of time of being here. Over 40 people we’ve hired, but we will continue to expand the bench—but we are not looking to be a big firm. We are looking to be a meaningful player in the market and compete on all assignments. But big is not a goal at all. We’d rather be a significant firm with a boutique feel.
Ms. Ornstein: Our CEO [Larry Heard] calls it a “global boutique.” We’ve been very deliberate in our hiring. I’ve been in on over 225 interviews, Pat’s been in on well over 300 interviews. We’ve only hired 40 [people]. It’s been a very thoughtful process, and we’re very selective. Who we hire, especially initially, sets the tone and the precedent for our culture in the office itself and our reputation in the industry. We’re hiring really smart people with great reputations and high levels of integrity, [who] reflect well on what we are trying to build.
When I walked in your office, I noticed the Ping-Pong table, the unopened beers alongside the soda. This is something you see inside a tech startup’s office. Other than being a nice recreational option for your office, is it used to recruit as well, or do you use it for potential clients?
Ms. Ornstein: It’s strictly for us. We’re happy to have our clients come in and use it too—
Mr. Robinson: —we should do a client tournament.
Ms. Ornstein: We should do a round-robin. But to me, it personifies our office. It’s a way people can have fun, interact together. We do potluck lunches, not just for our company, but with our building staff. We do that once a month or once a quarter.
We do a lot of things as a team in a fun way to build the camaraderie and the culture that we are trying to foster.
Do you have any building representation assignments?
Ms. Ornstein: In New Jersey, yes.
Are you expecting to announce anything in New York City?
Mr. Robinson: We would very much like to (laughs). Listen, the bad news is … nothing meaningful is easy to get accomplished. It takes a lot of hard work, and there is a certain progression of time. The good news is, we’ve done all the heavy lifting, and now we are in a position [where] we’re starting to talk to clients and prospects and do meaningful discussions, and we’re actually doing some very formal presentations at this point in time for major leasing and management assignments, and we fully expect to win our fair share of those.
But we’re just at the point where that kind of progression of business cycle is giving us the opportunity to pitch. We’re hoping that our business plan is kind of at the point now where we can bear some fruit.
Ms. Ornstein: We should, in theory, be announcing a win this year, in 2012.
Do you have benchmarks in terms of dollars earned, how many square feet you manage or lease out? Or is it more organic?
Mr. Robinson: There [are] no benchmarks or numbers. The goals are simple. We would like to be a highly profitable firm, with a high revenue per broker, and we’d want to have a reputation of people and quality of work that we can compete for any assignment in the market. Other than that, it’s definitely not a numbers game. It’s a quality game.
Mr. Ornstein: That’s the beauty of being a privately held firm. You can be patient and grow it the right way and not force growth … We also have no debt.
Mr. Robinson: We have been profitable all through the downturn and we’re managed very conservatively, and financially we are in very strong shape.
Ms. Ornstein: Last year was the strongest year in the company’s history.
Mr. Robinson: I think there are two areas of growth: One is the Northeast—they’re investing heavily here—and we’re building out an investment platform as well, based out of Texas. It’s a national investment platform, so we’re looking for acquisition properties to acquire on behalf of our client base. Those are the two growth areas, so to speak, but again, no quotas. Do it the right way and it will work out.