Checking In: Jones Lang LaSalle’s Sean Black on Foursquare’s 568 B’way Deal
Daniel Geiger Sept. 25, 2012, 7 a.m.
Foursquare’s Soho offices are bright and open, with a large skylight in the center of the floor that allows sunshine to bathe down on a giant wooden replica of the teardrop-with-a-hole-punched-in-it logo that serves as the company’s locational icon. Look up a bar or a restaurant on Foursquare’s site and this is the tab you will see highlighting its suggestions.
Its prominence is a purposeful reminder of what the company wants to be—a location-based social network that people on the go will use to negotiate daily life—versus what initially brought it fame: a gimmicky online check-in service that has since been handily usurped by not one but two tech giants, Facebook and Twitter.
The tech world is a ruthless place, where battle happens both online and off.
Although it isn’t immediately apparent inside its offices just north of Prince Street and Broadway, where a predominantly 20-something workforce is quietly glued to its computers, the company’s building is itself a component in the battle to regain relevance and profitability.
“Look at this room,” Sean Black told The Commercial Observer last week. “Is this the kind of room where you say to yourself ‘I can’t wait to get out of here?’”
It was a rhetorical question, with the answer clearly being no. We had moved to a small enclosed meeting space, one of several breakout rooms that Foursquare employees can reserve by booking time on an iPad mounted next to its nifty sliding glass doors. Unlike a run-of-the-mill communal space that radiates blandness, the room was outfitted with comfortable couches, plush pillows and a homey décor. Next door was a small private theater for movie screenings.
“It’s a hyper-competitive business, and Foursquare’s product—at the end of the day, the product of any of these tech firms—is its intellectual capital,” Mr. Black said. “They have to compete for the best talent in that industry, and the curb appeal of the space plays a big role in that.”
Foursquare clearly understands this. There were countless details in which creature comforts had been installed or effort taken to create a compelling aesthetic. In the main corridor, exposed steel structural beams with chunky rivets run the length of the floor.
In the office layout that Foursquare inherited, the structural columns had initially been enclosed in a wall. Bringing them out was a nice touch that instilled the space with a feel of the century-old building’s history, a period when the bones of New York City skyscrapers were elegantly laid in cast iron. It was also not an inexpensive undertaking. The paint used to coat the columns is a special fire retardant that cost an estimated $1,000 a gallon.
“There are guys in hazmat suits that apply it, and if they miss even a small spot, they have to do the whole thing over,” said a Foursquare executive who identified himself as Derek.
But as employees drift in and out of the company’s well-stocked pantry, which features a pair of Italian espresso machines that hiss and dribble with fuel for the day’s work, it’s easy to grasp the office-as-hangout concept that Mr. Black describes. Just as recent college grads might gravitate to the apartment of the friend that is most conveniently located and outfitted with amenities, so too does it appear logical that young talent might flock to Foursquare—and not a rival—in part because of this working environment.
“You can’t put people in a room with cubicles without them going insane,” Mr. Black said. “There needs to be a way for them to exit from their task at hand where they get to feel like they’re not in an office any longer. The best space doesn’t feel like the office. It feels like home. It feels like the place you want to hang out.”
If it wasn’t for Mr. Black, Foursquare would surely not have this space. An executive at the real estate services company Jones Lang LaSalle, Mr. Black found the office space for the company last year when its former tenant, the book publisher Scholastic, was planning to make it available for sublease. Mr. Black had learned of the availability through contacts he has at Scholastic, and even though the floors, the 10th and 11th in the building at 568 Broadway, hadn’t even hit the market, takers who had also caught wind of the opening were already lining up. Most prominent among them was Tumblr, the popular blog platform.
The office, which is about 58,000 square feet, offered both companies a seemingly transformative opportunity. Each had etched their names into recognized brands that may one day yield tech riches, and yet both, at the time, still only occupied a few thousand square feet. The space at 568 Broadway was a leap into the big time and both companies, ambitious and young, wanted it dearly.
Mr. Black, who has developed a specialty representing tech companies in the city’s cooler office precincts in Midtown South, went to work on the sublandlord. Scholastic desired a good rent like any sublessor, but more than anything, it needed a stable tenant.
“What do you do when you’re competiting against someone just like you?” Mr. Black asked. “Well, I knew that the sublandlord needed, more than anything, security. What are they going to do if they have a subtenant that goes under in a year or two, then they get the space back and there’s less term on the sublease and the office is worth a lot less? They want to know that the tenant they arrange will be there for the life of the lease.”
And so Mr. Black busily presented a picture of Foursquare’s stability.
“We had to show why they should do our transactions, when they had been in heavy negotiations with Tumblr already,” Mr. Black said. “It was a matter of positioning us to give them the confidence. We showed them every financial projection the company has made in the past and how we’ve hit or exceeded those goals. This is a company that does what it says it’s going to do. And we showed them how much growth we are expecting in the coming years. We had just gotten $87 million of venture capital funding.”
Not only did Mr. Black’s approach win favor with Scholastic, it helped avoid a potential bidding war that Scholastic could have easily initiated if it had had a mind to pit the two eager companies against one another to see who could simply pony up.
“We told them that we would opt out of a bidding war,” Mr. Black said. “We said to them that, yes, you might get a dollar more with someone else, but that it wouldn’t matter if they ended up giving the space back. And that’s why you should do the transaction with us.”
Mr. Black’s preference to meet The Commercial Observer in Foursquare’s headquarters not only provided a reference for one of his greatest brokerage triumphs, it highlighted a somewhat humorous twist for a man who makes his living finding his tenants the perfect home. Mr. Black himself abhors the office environment, preferring his days to be a perpetual cram of meetings, networking and dealmaking.
He found one of his biggest clients, WeWork, a booming office-suite company that he has helped in recent months, lease in excess of 100,000 square feet at several locations in the city, by noticing its sign hanging from a building while he walked down the street.
“I was on Lafeyette, and there was a big WeWork sign at 154 Grand of a guy breaking a computer and that seemed really interesting to me, and so I started doing research on the company,” Mr. Black said. He wound up helping the company take 75,000 square feet at 175 Varick Street last year and 44,000 square feet over the summer at 261 Madison Avenue.
“Sean doesn’t try to broker me,” Mark Lapidus, an executive at WeWork, said over drinks recently. “If we tell him we’re looking for this kind of an office space in this kind of a location, he doesn’t come back to me and say, well, here’s what you can get, like a lot of brokers will. He’ll go out and he’ll find it for you or get you the closest thing he can. He doesn’t try to turn you away from your goals as a company.”
Mr. Black certainly knows his craft, but his background, no doubt, also plays a role in his ability to fight hard for feisty upstarts like WeWork and Foursquare. Spending the early part of his childhood in Texas, the son of a Jamaican father and a mother of predominantly Irish descent, Mr. Black experienced firsthand the struggle to excel among his peers.
“In Texas, you were either white, black or Mexican, and I didn’t fit into any of those,” said Mr. Black, who is 41 and has exotic good looks, olive skin, freckles and wiry red hair. “And so I was bullied.”
By the time Mr. Black was in high school, he and his mother had relocated to Toronto. Mr. Black got an early start in the real estate business. His uncle was a successful commercial leasing broker, and by the time he was in college, Mr. Black began working with him. Like many young brokers, he was assigned grunt work, trolling through buildings to map their tenancy in order to create stacking plans for the company. It was doing this that Mr. Black discovered he had the kind of gift for conversation that is an essential skill for most brokers.
“I would go into offices to get information about the company, and oftentimes I would bump into the CEO of a company, and I developed a real ease speaking with people like that on the fly,” Mr. Black said. “I would come back to the office with these great leads, and a lot of the senior brokers would be really surprised and impressed, I think.”
It was around this time, at age 19, that Mr. Black began boxing. He didn’t have an immediate love for the sport, he said, but found he was good at it. By the time he was in his mid 20s, Mr. Black had become very good indeed as a top amateur 156-pounder in Canada who had a shot at qualifying for the country’s boxing team for the 1996 Olympics in Atlanta.
But then, Mr. Black’s father, who he hadn’t been in close contact with, was murdered in Jamaica. The details of the killing were foggy, but Mr. Black said it was eventually discovered that his father had been arrested after an altercation in a bar, and that the police officers who had brought him into detention had killed him, perhaps unintentionally, during a beating.
It was the kind of crushing blow that could derail a young man’s life and career, but Mr. Black remembers it as a galvanizing moment. He left Canada and opted instead to try out for the Jamaican Olympic boxing team, a highly competitive slot that he eventually won. He wound up competing in the Atlanta games, losing a close match in round-robin competition.
“I wanted to use my place on the team as a platform to speak out and get justice for my father,” he said.
The strategy worked. Eventually the officers involved in the murder were convicted, Mr. Black said.
“I think that’s one of the biggest things I’ve tried to do in my life and my career: turn what could be setbacks into challenges that can instead become positive triumphs,” Mr. Black said.
“Boxing kind of taught me that. It taught me composure. There’s a guy coming at you trying to take your head off; how do you deal with that? Of all the education that I’ve got, that sport taught me the most.”