Jack Terzi of JTRE on Growing, Organically
Gus Delaporte June 18, 2013, 11 a.m.
Shortly after launching his eponymously named real estate business, Jack Terzi was approached by Apogee, a thrift store chain that operated 18 branches in Minnesota and Maryland, about opening in New York and New Jersey, which, compared with the chain’s traditional markets, were a “totally different animal.”
To facilitate the process, JTRE conducted traffic reports and demographic studies to identify the right markets to pinpoint across the region.
“We explained to them, go to Fulton Street in Brooklyn and pay the big rent,” said Mr. Terzi, chief executive officer of Jack Terzi Real Estate. “Pay over $1 million in rent, because you’re going to make three times as much as you did outside [New York].”
Since those early conversations, JTRE and Apogee have gone on to complete 12 transactions totaling 1.5 million square feet.
Mr. Terzi started JTRE in 2008, at the height of the Great Recession. Then a retail broker at Hidrock Realty, the Gravesend native noticed much of the firm’s focus was placed on hotel and office deals, and decided to concentrate on his passion for retail born from his family’s business, which sold clothing and toys.
“I had the relationships with the owners and the tenants,” Mr. Terzi said. “I was confident it was the right time.”
Mr. Terzi has worked aggressively since then, expanding the business from just two employees—he and a colleague—to 30, spread across JTRE’s brokerage, acquisitions and consulting divisions.
Waking at 5 a.m., Mr. Terzi begins his day with a workout and then gets to work, reading industry news and answering emails before tending to clients until 10 at night. “I’m always going,” Mr. Terzi said of his schedule. “I’m all-in, all day.”
JTRE likes to focus on clients from outside the market that are looking to expand to New York, like Apogee, or clients with ambitious growth plans, such as Organic Avenue.
“We don’t do the Duane Reades and CVSes,” Mr. Terzi said of JTRE’s business model.
Organic Avenue, an organic juice and food retailer, signed up with JTRE with hopes of expanding in New York, but Mr. Terzi had competition from a larger brokerage firm. As with the majority of his clients, Mr. Terzi insisted on an exclusive agreement.
“Not to sound arrogant, but with all the work we’re going to put in, it’s not worth it without it,” Mr. Terzi said. “If we’re going to give it everything, you have to commit to us.”
The agreement with Organic Avenue has yielded a unique retail platform. When the retailer first started working with JTRE, it was only interested in 1,000-square-foot spaces on the best corners, but the brokerage was encountering quality options in the 2,500-to-3,500-square-foot range, and the landlords could not be convinced to break up the spaces.
As a solution, JTRE offered to combine Organic Avenue locations with similar health and fitness tenants, unearthing quality opportunities.
Having created a presence in the New York market, JTRE is expanding nationally, working with Italian furniture store chain Modani on locations in Miami, Los Angeles, Atlanta and other major cities. In support of his national business, Mr. Terzi was in Miami last week and spent the early part of this week in Los Angeles.
Mr. Terzi’s travel schedule is all to maintain his firm’s focus on its clients, which includes a concierge service.
“Whatever our clients need, we try to add more value,” Mr. Terzi said, noting that he does not like to use the term “full-service,” because most firms that make that claim don’t deliver. Services offered by JTRE include hotel and dinner reservations, car service and assistance with apartment searches.
“If the client needs something, we do it,” Mr. Terzi said.
Catering to client requests includes offering unique solutions to difficult problems. When Spanish retailer Desigual approached JTRE about securing both retail and office space in New York, it requested something desigual: different.
Though the task of finding retail space in Herald Square near Macy’s proved relatively simple, finding corresponding office space was more trying. A commercial space at 35th Street and Avenue of the Americas fit the bill, but a restriction on billboards made branding difficult.
Searching for a solution, JTRE showed renderings of branding painted on the side of the building to the landlord, an owner-operated pizza shop. Both the tenant and the landlord were pleased with the outcome, and now Desigual operates its corporate headquarters out of the property.
The Desigual deal is an example of JTRE’s emphasis on people and relationships, which, rather than a specific sector of the retail industry, is the firm’s niche, according to Mr. Terzi.
“I want you to tell me exactly where you want to be, and I’m going to create that opportunity for you,” Mr. Terzi said. “That’s our specialty.”
Mr. Terzi’s open discussion of his business is at odds with his hesitance about the press. A New York Post story from last year describing a tempestuous relationship with a former employee, who was suing him for six months’ wages, more than $120,000 in unpaid commissions and $5 million in damages, has made him wary of publicity.
The lawsuit, settled out of court, accused Mr. Terzi of throwing scissors at his former employee and urinating on the man’s clothes, according to the Post. The lawsuit also claimed that the employee’s contract included 12-hour days, fines for lateness and a four-year noncompete clause, according to the report.
Mr. Terzi filed a lawsuit against the former employee asking the court to uphold the noncompete clause, a case Mr. Terzi said he won.
“A former employee we were suing for violating a noncompete and trying to steal clients went to the press with crazy allegations and lies, and the Post wrote it on page four,” said Mr. Terzi, who was awarded a settlement from his accuser, according to the Post. “When I won the case, they put out a little blurb.”
Mr. Terzi’s wariness of the press is in spite of the fact it was the Post itself, specifically the paper’s real estate column, that motivated his career in the business.
“It looked easy: $100 million here, $200 million there,” Mr. Terzi said of the industry, adding that he had enlisted the help of many mentors along the way. “There’s no better business in the world than real estate.”
Though he lives in Manhattan, Mr. Terzi was raised in Gravesend, Brooklyn, where his family’s retail business also motivated his career in real estate.
“My family was in the retail business, so when we had dinners it was always about retail,” he said. “Everywhere we would go, it would be either retail or real estate, so we pretty much combined them.”
The future for JTRE includes a handful of flagship deals currently in the pipeline, including one for Hello Kitty in Times Square, where the company is targeting 15,000 square feet.
“It’s going to be American Girl-esque,” Mr. Terzi said of the potential space. “It’s their 40th anniversary next year.”
In the shorter term, Mr. Terzi’s summer plans never get in the way of potential business.
“I probably get more leads going to St-Tropez and Capri in the summer than I do here,” he said.