Four More Years? CBRE’s Matt Van Buren on First 16 Months as Pres.
Jotham Sederstrom Nov. 9, 2012, 8 a.m.
In August 2011, Matt Van Buren took the reins as CBRE’s tristate president, a position held until then by Mr. Van Buren’s friend and mentor Mitch Rudin. Since then, the brokerage veteran’s responsibilities have expanded to include operations across Long Island, Connecticut, Upstate New York, Northern New Jersey and, of course, the five boroughs of New York City. The Commercial Observer caught up with Mr. Van Buren four months after his one-year anniversary to discuss the goals he has accomplished, what lies ahead for CBRE and his predictions on Manhattan’s most formidable market, Midtown.
The Commercial Observer: You accepted the role as CBRE’s tristate president a little more than a year ago, correct?
Mr. Van Buren: Let’s call it 16 [months].
Can you give yourself a report card?
Financially it’s been a good time for our firm, and market-wise it’s also been a good time. When I walked into the job, I was very fortunate. This is a good job. This is a tremendous company, a great platform, and we have a lot of talent here in New York. So that was all in place.
And I’m happy to say that, during the first year or so—during my time in this position—those things have continued to produce results. Financially, we look strong. Operationally, we’re strong, and we’ve made some nice new additions to our operation here over the first year that I’ve been on the job.
What were some of the firm’s goals 16 months ago when you came in?
On the financial side it’s always clear, and we drive toward those goals constantly. Operationally, it’s a little more interesting. I had a couple of things in mind, having come up through the ranks, that I wanted to focus on, that we’ve made some progress on. One was [expanding] our marketing and research capability, which really does have an impact on our customer-facing activities—gaining new customers, servicing our customers well, doing deals to the next level.
I think most people in the industry would say CB has a research and marketing capability that’s in many ways the envy of the industry. But we still felt there was room to grow, so we made very significant investments both in growing those two parts of our organization and in further integrating them. So we’ve added some new staff.
Was that something on your mind 16 months ago?
Yes, I thought it was a real opportunity. It was a very good part of the business that I thought we could benefit from disproportionately by making better. So we did this with purpose.
Have you put a premium on specialization, as many brokerage firms have?
The sophistication, both from a financial perspective and an overall perspective of our clients, is absolutely rising. They are smarter and better informed, and they are often professionals on their way up. As an example, the way that an accounting firm versus a law firm versus an advertising agency makes their money actually becomes a part of how they think about how they occupy space, and how expensive it is, and how operationally it works. And to be specialized as a services provider is absolutely an advantage.
We’ve had pockets of specialization within our brokerage operation that [were] traditionally largely self-selected by the broker, though encouraged by the company, and now we’re much more focused and purposeful with that. We actually have business plans for our young professionals—where they’re going to specialize, be it a vertical industry or a specific geography, or even on a specific type of assets: small building versus larger
A specialization—a niche, if you will—is not your only business, but it does become your calling card, and that’s valuable.
If one of the conventional stories about Midtown South is the wave of tech tenants, what’s the big story about Midtown right now?
It’s an interesting moment in Midtown. Just thinking about vertical industries: banking and finance has gone, and continues to go, through a fairly tumultuous time, although I would say it’s muted at this point relative to three or four years ago.
But fundamentally, the financial services industry may be finding its way to a bifurcated industry, with commercial banks separated from investment banks. The worrisome news about that is … you can look at the list of the top 20 banks and the top 10 foreign banks and say, well, they’re probably not likely to grow in their occupancy because their businesses are splintering. They’re being regulated in a different way, and they’re figuring out what they want to be and how they’re going to make money. And that equals uncertainty—and that’s not what usually drives big, long-term decisions about real estate.
But we may find that this mid-level investment banking business may be a new form of occupier. If you look at the largest hedge funds and other speculative private equity firms, those are elements of the financial services industry, the largest of which occupy real space in Midtown. And there are many of them, so what we may find is a concentration of huge bank deals, with the square footage of these leases smaller because the industry has restructured itself. That’s what I perceive as happening.
What’s your take on the real estate industry’s response to the Midtown zoning proposal?
I was on a panel the other day with some other executives in services firms and owners, and that question came up. And the moderator decided to call on me first, and it was very interesting because I sensed real tension in the panel, and I can understand how owners may not have an interest in certain sections of the city … being aggressively developed. It adds more potential competition for occupiers.
So I answered the question this way, the way that I think I would always answer it: There are many components to the real estate industry—owners versus service companies—and then each entity individually has an interest. But if you step back from all that and say, ‘what do we want for the city?’ What I perceive is that there are a few fundamental things.
One is, we’re a city built on industries that are almost completely dependent on humans. So you’re going to have to have an affordable way—and a way to allow a lifestyle that those humans want—because those humans tend to be highly talented.
So if you’re going to attract and retain that intellectual capital, you have to have a place to live, not just work. At the macro level, everyone can generally agree that we need to build our infrastructure, because we have to support the economy.
The second thing is, you have to have a balance between where people live and where they work. At any moment in time there will be an argument for, you know, ‘we have 15 percent availability at the worst point of the last down cycle,’ to ‘we don’t have enough office space, we’re down to 4 to 5 percent from the top of the last boom.’ The answer is that those boom periods, that’s a part of the American economy, the cycle of capitalism.
The city is in partnership with our industry, because our industry does a lot of the living and the dying and the paying of the taxes. And the individual interests have to be put aside for the longer term, because this is a city, a great city, and a city at a peak moment. But if you want to stay there, you’re going to have to earn it, and you’re going to have to invest back into the city.
From a personnel point of view, do you commit more resources to Midtown?
Midtown is by far the largest of [the] three submarkets. It’s an extremely large market, and it has the highest rents, so it’s the most lucrative market by that measure of the moment.
I would just put in a plug for downtown, however, to say that in a month or so there will be a flood of available space released out into the market as the major firms recognize now that 1 World Trade Center is available. There’s even more World Trade Center available in 3 and 4 to come, and then the World Financial Center will have availability, hitting the statistics. You’re going to have a moment in time where rents and availability will rise dramatically at the same time. And what does that tell you? That the stock has gone up in quality. So I think anyone watching this activity and not watching downtown is missing a huge story.
Mary Ann Tighe served as chairwoman of the Real Estate Board of New York, and Rob Speyer will be taking her place beginning in January. Was there any benefit to having one of your own as the head of REBNY?
Not a benefit in a purely commercial way, but for me, yes, the benefit was that it’s an honor and it’s a recognition by some of the most powerful people in the industry, to serve in that role. I think Rob is going to be awesome in that role, by the way, but that role is not a simple ceremonial role. That role is a real operational role, and it has a real impact on this city.
So from the perspective that a leader in a service company—a woman in the real estate industry, and one of our own—would actually be selected and then serve with real distinction in that role, that only helps the CBRE brand. There’s no doubt. To me that was the benefit—that it’s yet another thing that this firm does well.