The Trophy Agent: RFR’s Steve Morrows
Gus Delaporte July 30, 2013, 9 a.m.
Ten months ago, Clayton, Dubilier & Rice, one of the world’s oldest private equity firms, was looking to expand its space at the Seagram Building. Having spent a number of years occupying the entire 18th floor of the iconic building and a portion of the floor above, the firm was on the prowl to take the entire 19th floor.
With four additional tenants sharing space on the floor, complicated negotiations were imminent. Steve Morrows, executive vice president and director of leasing at owner RFR Realty, began devising a solution with his leasing team. The answer involved two lease terminations and two relocations within the building—all at the same time.
“In order to do this deal, which equaled about 36,000 square feet, I had to negotiate five deals to make the one bigger deal,” Mr. Morrows recalled.
Despite the fact that one tenant occupied just 2,000 square feet, if that single tenant had expressed reluctance to accommodate Mr. Morrows’s plan, the entire deal would have collapsed. “We worked very hard and, based on the relationships, we satisfied everyone’s needs,” he said.
Mr. Morrows’s pride in his work at the Seagram Building is evident. Having joined RFR Realty in 2002, the former accountant took a lead role in leasing at the building before being promoted to director of leasing for the entire New York portfolio three years ago.
“I consider myself very lucky to have the privilege to work in this building,” he said. “Without question, it is one of New York’s most important buildings.”
It is a responsibility Mr. Morrows does not take lightly, recognizing the type of high-profile clients who covet space in the building, including private equity funds and family offices. “It’s an asset that’s desired,” he said of the building.
His affinity for the Seagram Building does not overshadow Mr. Morrows’s focus on the remainder of RFR’s portfolio, which includes Lever House across Park Avenue and 17 State Street Downtown. Having closed nearly 300,000 square feet of leasing at Financial District properties and achieving the highest rents in the Downtown market, Mr. Morrows indentifies the latter building as the “premier boutique trophy asset” in Downtown Manhattan.
In light of the firm’s success, Mr. Morrows is quick to recognize the other members of RFR’s in-house leasing team, including A.J. Camhi, Oliver Katcher and Ryan Silverman. Overseeing the entire operation is Aby Rosen, principal at RFR, who, Mr. Morrows contends, possesses the ability to create unique professional environments.
“The team is collectively responsible for our success; it’s not about any one individual,” he said.
Mr. Morrows cites Mr. Rosen’s reputation as an art collector and connoisseur as part of the RFR principal’s real estate vision. Outside of his own personal collection, Mr. Rosen has helped to curate a number of installations at RFR’s properties.
The Lever House Art Collection and a rotating art program at the Seagram Building are just two examples of art displays enjoyed by RFR tenants. Pieces on display have included Jeff Koons’s Balloon Dog sculpture and Urs Fischer’s Untitled, a contemporary sculpture of a teddy bear.
Mr. Morrows began his commercial brokerage career at Abramson Brothers and Newmark, before becoming an owner’s representative for JMB Realty and then for Rockrose. At Rockrose, he was responsible for leasing at Carnegie Hall Tower. Over time, his responsibilities there grew to acquisitions, including at 300 Park Avenue South and 90 Broad Street, before he joined RFR in 2002.
Having spent time both at brokerages and as an in-house leasing agent, Mr. Morrows offers a unique perspective on the industry. At RFR, instead of being commission-motivated, as some brokers are, Mr. Morrows claims he is building-motivated.
“When we, as a group, lease our properties, we look at the impact of every deal,” he said. “It’s not just about the deal—we are tenant ambassadors, and the tenant must feel that they are being serviced.”
While the majority of RFR’s leasing is done in-house, some projects necessitate the outside help of brokerage firms. In the case of recent acquisitions at 285 and 350 Madison Avenue, that meant enlisting the help of CBRE’s Mary Ann Tighe and Peter Turchin, respectively.
The building at 285 Madison Avenue will be completely rebuilt and repositioned. As reported by The Commercial Observer, prior to RFR’s acquisition of the property, the building experienced a fatal elevator failure.
An example of what may be expected at 285 Madison Avenue can be seen farther Downtown at 160 Fifth Avenue in the Flatiron District, where a completely renovated building has been repositioned to attract the tech and media tenants flocking to Midtown South. The submarket’s emergence has not been lost on Mr. Morrows.
“Ten years ago, I was doing deals in the West 20s and the West teens for $10 and $12 per square foot, while buildings on Fifth Avenue were $18 per square foot,” he recalled. “Now they’re going to $80 and climbing.”
The change, Mr. Morrows contends, is attributable to the changing desires of creative tenants, who once clambered for glass-and-steel buildings and are now pursuing older brick properties.
Downtown and its burgeoning residential community have also seen a significant shift during Mr. Morrows’s time in real estate. Once a stronghold of the financial services industry, lower Manhattan has emerged as a destination for media and technology companies.
“Downtown has a much broader tenant base than it had in the past,” he said.
Farther north, change is less apparent. Despite triple-digit rents, Mr. Morrows is confident that Class A buildings in Midtown, many in RFR’s portfolio, will remain desirable.
“Those buildings always maintain their appeal for traditional types of tenants such as finance, banking and law,” he noted, adding that he expects rents at the Seagram Building to surpass $200 per square foot in the near future.
Mr. Morrows’s introduction to real estate came as an accountant at Schroeder Real Estate, which he joined from a public accounting firm. Shortly after joining, he realized that his career lay elsewhere.
“After about a year or so of being an accountant, I realized I was not the accountant personality type, and I moved to real estate on the transactional side,” he said.
Mr. Morrows’s career shift is, in part, influenced by his upbringing. The Jersey City native, who now lives in New York, credits childhood visits to the city as an early introduction to the ins and outs of the Big Apple.
“Whenever you live in an environment, you feel it—it’s inside of you,” he said.
Outside of the office, Mr. Morrows is involved in charity work, largely in support of enhanced senior living. He serves as president of the board of directors at Carnegie East House as well as on the board of the James Lenox House Association.
“I have an elderly mother that lives in a facility that needs care, and as a result of that, I have chosen to given back in that arena,” Mr. Morrows said of his charitable work.
The father of a 5½-year-old son, Mr. Morrows is also busy on the weekends.
“The last thing I did was I went to a water park,” said Mr. Morrows of his off time with his son. “He’s bringing me back to my youth, that’s for sure.”