In the midst of the Savings and Loans Crisis of the early 1990s, Massey Knakal, a three-year-old commercial sales brokerage, was facing the prospect of going out of business for the second time in a matter of months.
By late 1990, the commercial sales market had all but dried up. Rather than pounding the pavement closing deals, Paul Massey and Robert Knakal were instead sitting in the office cold calling and playing solitaire—not on a computer but with a real deck of cards. Things got so bad that the firms’ partners had to fill out applications for numerous credit cards—$60,000 worth—to make ends meet.
With overhead at $15,000 per month, the firm reached a point when there was only $15,000 in the bank.
“We considered going to Atlantic City and putting the $15,000 on black,” Mr. Knakal said.
Close to shutting the business down, the firm got a last-second reprieve, closing the sale of a block of three buildings on East 50th Street between Second and Third Avenues.
“Throughout that process, we kept our heads down and kept believing we could succeed, but it was a very scary time,” Mr. Knakal added.
This month, Massey Knakal will celebrate its 25th anniversary, a clear indication of the firm’s staying power despite weathering two serious market downturns. Today, the company boasts $17 billion in total sales across 4,500 transactions while growing to a whopping 175 employees in New York metropolitan area, officials said.
Founded in 1988 when Messrs. Massey and Knakal were young, upstart brokers at Coldwell Banker, the eponymous firm was born of a partnership that started four years earlier.
Having just graduated from the University of Pennsylvania’s Wharton School of Business, Mr. Knakal arrived at Coldwell Banker on the back of a series of summer internships at the firm—the same internship program Mr. Massey had completed in Boston.
Both in New York, the young brokers quickly realized that the elder statesmen of the firm were not keen to share their experience with the new employees. Instead, Mr. Knakal looked to Mr. Massey for partnership.
“My boss said to me, ‘Massey knows what he’s doing; hang around him,’” he recalled.
The advice proved prophetic. Not long after teaming up, the duo devised a plan to work together, splitting their business 50/50.
They’ve been partners ever since.
“We have the same work ethic, we both come from a relatively modest background, and we wanted to come to the big city and make something of ourselves,” Mr. Knakal said of the relationship. “It made the partnership very cohesive.”
Within a year, the two men were named directors of Coldwell Banker’s sales group and a further year later had grown the team from four to 15 brokers. Soon, however, the pair began to feel their hard work was not being compensated in line with their production.
Offering a solution, Messrs. Massey and Knakal made a proposal: to make their team a separate profit center within the company.
“They didn’t respond to that proposal, which in hindsight is not very surprising,” Mr. Knakal said.