In the late 1990s, international law firm Weil Gotshal & Manges was eyeing a reconfiguration of its office space at the General Motors Building. With a significant portion of the lease remaining, the building’s then-landlord, Corporate Property Investors, was not compelled to negotiate a new deal.
With the landlord’s unwillingness to negotiate in mind, Howard Grufferman—then with Studley, now vice chairman at Colliers International—took his client to the market. Weil Gotshal, which at the time did not have a primary reception floor, was looking for something different, and the firm looked “everywhere,” according to Mr. Grufferman.
Eventually, a tour of a building near Columbus Circle made news in local papers, prompting Corporate Property Investors to reignite the fledgling negotiations over a new lease. The result culminated in 500,000 square feet of space and an entire rebuilding of the General Motors Building’s systems, including vertical transportation.
“We were very successful, both in terms of building the brand and making the space track the brand,” Mr. Grufferman told The Commercial Observer from the offices of Fortress Investment Group, a longtime client, at 1345 Avenue of the Americas.
Mr. Grufferman has nearly 30 years of experience in the New York real estate industry, spread across tenures at Studley, Grubb & Ellis and now Colliers, which he joined last fall, electing not to switch over to Grubb & Ellis’s successor firm, Newmark Grubb Knight Frank. The decision to leave, Mr. Grufferman said, was motivated largely by the lack of respect shown to Grubb & Ellis’s individual brokers by all parties involved.
“I was very disappointed in the way that senior leadership at Grubb handled the individuals, I was very disappointed by the way that the acquiring company [BGC Partners] was treating the individuals, and I was very disillusioned with how the Real Estate Board turned its back on the individuals,” Mr. Grufferman said. “It was time for a change.”
The disappointment stemmed largely from the fact that revenue generated by brokers at Grubb & Ellis was determined in bankruptcy proceedings to be an asset of the firm and was available to the court in liquidation proceedings.
“Effectively, the money went away,” Mr. Grufferman said.
As reported by The Commercial Observer at the time, BGC Partners, the firm that acquired Grubb & Ellis, won the right to commission payments owed to Grubb brokers. The firm said it would distribute those payments only to brokers who remained with the new firm for a specified period of time.
Mr. Grufferman’s disappointment with the way things ended at Grubb does not overshadow his pride in many of the deals he worked on there. In fact, one of the transactions he is most proud of from his 12-year tenure at the firm was never even completed.
In 2001, the Grubb team had developed an understanding that the telecommunications industry, particularly the fiber optics business, was underserved in New York City. While copper-wire communications were centered at 60 Hudson Street, there was no comparable facility for the fiber optics industry.
In search of a solution to the problem, Mr. Grufferman and his team examined a Con Edison grid map and found that at the corner of Broadway and Leonard Street, three grids converged on each other, a unique occurrence in New York.
Grubb then reached out to what was at the time the largest fiber optics firm in the world, a division of Tyco, and to the landlord of the property, which was then a surface parking lot. Representing both sides, Grubb & Ellis put together a deal for a purpose-built building, a credit tenant lease, in industry parlance.
Designed by architect Rick Cook, who would later design the Bank of America Tower at 1 Bryant Park, the plans were set in motion.
Then September 11, 2001, came, and “the world was never the same,” as Mr. Grufferman put it. In the wake of the subsequent turmoil impacting Downtown Manhattan, the deal fell by the wayside.
“Everyone in the mix still mourns this, because it was such a great idea,” Mr. Grufferman said. “Considering the state of the world, the building really should have existed; it would have served a purpose.”
The failed deal was not without its lessons, according to Mr. Grufferman, who learned that the secret to making a deal is problem solving and teamwork. “Everyone had the same goal,” he said, quick to add that his team still got paid.