Each One Teach One: Massey Knakal Broker James Nelson
Al Barbarino Feb. 26, 2013, 10 a.m.
James Nelson recently ushered a dozen Colgate University undergraduate students on a tour through The Abingdon, a West Village nursing home-turned-luxury condo where some units, which sold out this month, ran for more than $10 million.
With the help of his team, Mr. Nelson, a partner at Massey Knakal, sold the property at 607 Hudson Street for just over $33 million to Flank Architects in 2011 on behalf of nonprofit group VillageCare, which previously ran a nursing home there.
Much like the undergrads, the investment sales heavyweight traveled The Abingdon’s hallways with looks of awe, as Jon Kully, a principal at Flank, led the group into its sprawling condos. The building bore no resemblance to the nursing home Mr. Nelson had first stepped foot into in 2007. “They had 200 beds packed in there, and it wasn’t up to code, and it was in desperate need of renovation,” he said. “This was a complete transformation. It really was amazing what they did, and to know that I had a small part in making that happen was great.”
Mr. Nelson, who completed 42 sales worth over $440 million in 2012, co-founded the Colgate Real Estate Council to give students at his alma mater the opportunity to experience New York City firsthand, before jumping in headfirst.
He brings them under his wing in much the same way that Massey Knakal Chief Executive Paul Massey, also a Colgate alumnus, did during an on-campus career fair just before Mr. Nelson joined the firm in 1998.
“There’s no substitute for seeing people in action and making the rounds,” Mr. Nelson said. “They get a snapshot of what everyone does in this business, and for us it’s a great recruiting tool.”
The stroll through The Abingdon strengthened many of the students’ aspirations to become the real estate developers of the future, but Mr. Nelson assured them, both in words and through a series of lectures and information sessions held at Massey Knakal and at real estate firms throughout the city, that there would be teeth to cut before jumping to that level.
The story behind the sale of the former nursing home, its eventual relocation and the rise of The Abingdon is the real meat and potatoes of real estate.
“The brokerage industry is a great introduction for some to get a real diverse experience in the business, because you see every point of the transaction, from beginning to closing,” he told them.
VillageCare approached Mr. Nelson in 2007, wanting to sell its building and to build a state-of-the-art facility elsewhere in the city. He would ultimately grant it both wishes, tracking down Mr. Kully from Flank, another Colgate alum, as the man for the job at 607 Hudson.
Mr. Kully was willing to put up a 25 percent deposit, which gave VillageCare assurance that the deal would go down and the means to get a construction loan for the new facility, Mr. Nelson said.
The negotiations paved the way for both the now-sold-out condos at The Abingdon and the VillageCare Rehabilitation and Nursing Center at 214 West Houston Street, which opened in October 2010.
“His expertise and skills made all the difference in making this transaction happen,” said Emma DeVito, president and CEO of VillageCare. “His ability to stay on top of issues that arose was a tremendous asset in moving the sale of our historical building forward.”
Ironically, Mr. Nelson, a triathlete and father of three young children, had less of a postgraduation game plan than did the students he hosted at The Abingdon. The English major thought maybe he would move out West and become a screenwriter, but he happened to sneak a last-minute résumé in with Mr. Massey at that late-’90s career fair.
“It was certainly luck,” he told this reporter last year. “Fortunately, Massey Knakal did not require a cover letter back then. I had a résumé, I submitted it, and the rest is history.”
Mr. Nelson has been involved the sale of more than 260 properties and loans with an aggregate value of over $1.9 billion during his career at Massey Knakal.
A notable recent chunk was the sale of a portfolio made up of 11 multifamily walk-up apartment buildings in Greenwich Village, Murray Hill and the Upper East Side for $73 million.
“To be able to pick up 300 units at once was a very rare sale,” he said. “We were looking to close it by the end of 2012—and in short order.”
Another deal arranged as the capital gains tax deadline loomed was Mr. Nelson’s sale of the the Tristar Portfolio, a five-building portfolio of mixed-use assets in Greenwich Village, Soho and the Lower East Side made up of 100 residential and 14 retail units, which netted just under $50 million.
A number of adjustments and surprises enlivened the sales process, with Mr. Nelson’s team grappling between selling the buildings together or separately, and ultimately selling them to a joint venture between RWN Real Estate Partners, Dalan Management and Standard Property Company.
Mr. Nelson called the fourth quarter of 2012 “like nothing I’ve ever seen in my career … fast and furious.” Massey Knakal posted 100 closings in December alone, and Mr. Nelson personally closed eight sales in the last two weeks of December.
“The challenge now really is the lack of product that’s out there,” he said, noting that inventory levels in November and December, around 550 listings, have dipped to roughly 425. “And we still have the same amount of buyers out there—even more.”
But, he added, “The saving grace is that all those owners who sold last year to cash out weren’t reinvesting the proceeds. But now that the capital gains have gone up dramatically, I do believe we’re going to see a lot more 1031 exchanges. That could have a multiplier effect.”
Matt Nickerson, a member of Mr. Nelson’s team, which also includes Douglas Shafer, Mitchell Levine, Caroline Hannigan and Matthew Bowman, joined Massey Knakal just over two years ago. He said he conducted nearly 90 tours with clients before the sale of the TriStar Portfolio.
A relative newcomer to the firm, Mr. Knickerson interviewed for the spot on Mr. Nelson’s team upon college graduation, swayed to do so by a family friend familiar with the firm. He had been eyeing a broker position in Brooklyn.
“I kind of fell into it, so I consider myself to be incredibly lucky,” he said. “It has been a blast working for him.”
Mr. Nickerson recalled a recent deal where three contracts out to potential buyers came back the same night. All three were pulling out. But Mr. Nelson sat at his desk the next morning, at 6:30 a.m., “cracking a smile on the phone,” canvassing to get the deal back in motion.
“That, to me, speaks volumes about the kind of person he is,” Mr. Nickerson said. “If you asked me what my biggest takeaway of James is, it’s his optimism … it’s always what can we do, how can we stay positive.”
In no small part, it earned Mr. Nelson Massey Knakal’s 2012 Gerald W. Bridges Award for company-wide Salesperson of the Year, for the sixth year in a row (“I’m not keeping score,” Mr. Nelson quipped), and the Ofer Yardeni Award for Manhattan Salesperson of the Year.
The celebration, at Caroline’s on Broadway, was filled with “lots of laughs,” and was another opportunity for Mr. Nelson to bring the firm’s veterans together with its next generation.
“It’s really amazing to see how much we’ve grown,” he said. “When I started in ‘98, there were 20 people, and now we’re an organization of 200.”
His other noteworthy sales have included 102-08 West 57th Street to Hilton Land Vacations for $63 million; 625 Broadway for $60.9 million; the Portman Portfolio for $55 million; the 99-year land lease of 10-12 Bond Street, valued at over $60 million; and 100 Vandam Street for $27.5 million.
In December 2010, he sold a Bleecker Street portfolio of six retail properties with tenants like Marc Jacobs, Burberry, Michael Kors and Mulberry for $34 million, garnering the third-highest price per square foot ever paid in the U.S. at that time.
“When we put it on the market, we received offers that were definitely strong, but it was not until they put in Burberry and Michael Kors that we stabilized the investment and were able to push it over the edge,” he said. “At that point it was record price, but that sounds like a bargain today, so I think the buyer there, American Realty Capital, was definitely forward-thinking on that.”
Mr. Nelson credits his success to a work ethic ingrained in him since his days as captain of Colgate University’s swim team, and more recently as a triathlete—and to his team, which he considers irreplaceable.
“You look at the sales that I did last year, and there’s just no way I could have done all that on my own,” he said. “I’ve got a great team here that has assisted with every aspect of transactions, from the underwriting to execution, so I’m really grateful to them.”