The Postgraduate: Newmark Grubb Knight Frank’s Brian Waterman
Billy Gray Jan. 24, 2013, 7 a.m.
Brian Waterman’s 27 years at Newmark Grubb Knight Frank sprang from a 90-second interview with NGKF Chief Executive Officer Barry Gosin in 1986.
Mr. Waterman, now a vice chairman at NGKF, was fresh out of college and considering a career in law. His mentor, Saul Katz, Sterling Equities’ co-founder and president, shot from the hip and said there were already enough lawyers in the world, and that Mr. Waterman should look into real estate, the field that had minted Mr. Katz’s fortune.
Mr. Katz put Messrs. Waterman and Gosin in touch.
Not quite two minutes into the job interview, Mr. Gosin told Mr. Waterman he was hired, and to immediately start canvassing. “It was my first and only job interview,” Mr. Waterman said.
He shared this tale on the 15th floor of 229 West 43rd Street, formerly the New York Times Building, for which he is the leasing agent. It was the morning after the Real Estate Board of New York’s 117th annual banquet—the preferred timing choice of precisely no one involved with the interview. But Mr. Waterman betrayed no signs of sluggishness, perhaps thanks to the raw, currently vacant space that surrounded him, with its 14-foot ceilings.
“You can’t help but be awed by this environment,” Mr. Waterman said of the simultaneously industrial and airy floor with unimpeded westward views (protected by Theater District air rights). “People love the blemishes—the bricks and pipes. Building owners often try to cover up that stuff, but you can’t make a building what it’s not.”
Mr. Waterman’s longevity at NGKF qualifies him as an expert on what New York buildings should and could be. But he repeatedly stresses that commercial real estate is an industry with a permanent learning curve, and that NGKF offers the finest master class.
“I grew up at Newmark,” Mr. Waterman said. “I cut my teeth as an agent working with Mr. Gosin and [NGKF Chairman] Jeff [Gural] on their building portfolios. That was a great education. I always tell my kids, ‘God gave you two ears and one mouth. Listen closely and take in as much as you can.”
A few projects stick out in Mr. Waterman’s mind as watershed transactions that propelled him beyond the pupil phase of his career. There was the 1993 conversion of 305 Seventh Avenue from an office building to commercial condominiums for nonprofit organizations and an intricate—if not migraine-inducing—deal in which he helped the Federal Employment and Guidance Service procure a lease for 175,000 square feet at 315 Hudson Street.
“The FEGS transaction was the big game changer,” Mr. Waterman said. It netted him the Henry Hart Rice Achievement Award for “most ingenious deal of the year” at the REBNY banquet in 1999. I asked if there was any disconnect between being lauded and then ignored by one’s peers as your words get lost in the banquet’s notoriously loud chatter.
“My parents knew I won,” Mr. Waterman said. “They weren’t there, but they knew.” REBNY honored Mr. Waterman again with its Young Real Estate Man of the Year award in 2001. He went on to be the chairman of the Young Men’s/Women’s Real Estate Association. “Believe it or not, I took the reins of that after winning the award,” he said.
NGKF, the city and the commercial real estate industry have all undergone seismic changes since Mr. Waterman’s salad days, when he joined a firm called Newmark & Company. “When I came to the company, there were 22 people working here,” he said. “And—I don’t want to date myself, but—there was one computer.”
“I’ve been through a lot of transformations and iterations of NGKF,” Mr. Waterman said. The financial brokerage firm BGC Partners acquired Newmark Knight Frank in 2011 and last year merged it with Grubb & Ellis, which had sold all of its debt to BGC after filing for bankruptcy.
There was discontent among several G&E brokers over the acquisition and merger, but Mr. Waterman shrugged off the legal unpleasantness as “a blip on the radar.” He praised BGC Chief Executive Officer Howard Lutnick and said that the breadth of the current NGKF and its employees makes the company resemble “a walking encyclopedia.”
Mr. Waterman stressed that through all the acquisitions and mergers and growth from 22 New York-based employees to 11,000 people around the globe, NGKF has stood by its early principles. “The firm has always been about developing a business model that services the client, not about lining the pockets of executives,” Mr. Waterman said. “Looking at what other people do and then what we do, I think we emphasize our intellectual property.”
Access to information and the ability to exchange it is pivotal to success in an increasingly complex industry. “It’s much harder to do business today than it was when I started,” Mr. Waterman said. “There are so many components of a deal, from pitching the business to executing it, and a greater need to run and deliver analytics to a client. Barry always asks, ‘How many arrows do we have in our quiver to help a client?’”
Mr. Waterman’s clients include high-profile landlords and tenants. The location at 229 West 43rd Street—now known as the Times Square Building—is one standout leasing assignment. Blackstone Group bought the top 12 floors of the old Times headquarters in April of 2011 for $160 million. Since then, the technology companies IAC and, last month, 10Gen have leased office space there.
“This building will be interesting because it has a definite industrial vibe, but it will end up with a corporate user,” Mr. Waterman said. He thinks the recent migration of tech firms from Park Avenue South and the Flatiron District to Midtown will continue.
“Everyone’s focused on Park Avenue South, but they’re reorienting themselves and asking if they really need to pay that kind of money,” Mr. Waterman said. He added that 229 West 43rd Street will likely welcome a couple more small users—IAC and 10Gen signed for just under 30,000 square feet each—and then a larger anchor tenant.
The media and tech spheres should also continue to boost the fortunes of 100 Church Street, another noteworthy property that Mr. Waterman represents. SL Green took over the foreclosed building, long known for stubbornly high vacancy rates, from the Sapir Organization in January of 2010. The New York City Law Department renewed its 280,000-square-foot lease there in late 2011. And the health care provider Healthfirst expanded its footprint in the building by 60,000 square feet to 230,000 square feet at around the same time.
“Anybody can play an easy hand of poker,” Mr. Waterman said of the challenge posed by a struggling building. “How you play the crappy hand is what really defines you.” He paused to clarify that 100 Church Street had great bones and a great location, but required a renewed vision from a new owner.
“We always saw 100 Church Street as part of Tribeca,” Mr. Waterman said of the property just north of Ground Zero. “And we saw a trend—even before Condé [Nast] announced [its move to 1 World Trade Center]—that the area was potentially going to be a hub for new media.”
Mr. Waterman’s tenant clients have also included media corporations and the occasional tabloid darling. He represented Universal Music and Bad Boy Records, and brought Rocawear—the clothing line co-owned by Jay-Z—to 1441 Broadway. (Mr. Waterman’s own musical taste runs the gamut from Bruce Springsteen to Jay-Z, and the father of two is familiar with an impressively eclectic lineup of youth favorites, including the crunk rapper Pitbull and trance deejay Tiesto.)
“Representing Jay-Z and Morgan Stanley are different,” Mr. Waterman said. “Entertainment clients are looking for unique products and the ability to really brand their buildings.”
When asked if he would pick landlord or tenant representation if confronted with the broker’s version of Sophie’s choice, Mr. Waterman said, “I’m fortunate in that I don’t have to choose.” He added that the two sides of the commercial real estate coin are complementary.
“On the tenant end, you have to understand client needs,” Mr. Waterman said. “The building either meets them or it doesn’t. And if it doesn’t, a landlord background allows you to develop and structure that deal.”
In addition to nearly 30 years of work on behalf of building owners and tenants, Mr. Waterman has been a consistent advocate for a number of philanthropic causes. “My father died in March of last year, and my brother died two months after that,” he said. “My father never had a colonoscopy and my brother, who received a stem-cell transplant, had lymphoma. Raising money for leukemia and lymphoma treatment is a very big cause of mine.” Mr. Waterman also sits on the boards of the New York City Police Museum and the New Renaissance Basketball Association, which instills a rigorous student-athlete ideal in underprivileged kids.
“That’s one thing you learn at Newmark: be charitable, give back,” Mr. Waterman said.
Mr. Waterman has learned a lot during an adult life spent entirely at the firm. But he remains an eager student. “Working with Jeff and Barry over the last 27 years has been an amazing thing,” he said. “It’s an ongoing postgraduate degree.”