There have been some questions about Cushman & Wakefield’s intent to keep the Massey Knakal territory system in place for our New York City investment sales platform. A reporter called me recently to get my perspective on this. I was surprised that someone would question whether the territory system would survive.
So without discussing or referencing C&W’s plans, I thought I would share some background with you about how the territory system came to be, how it works and why it works so well in a dense urban marketplace.
We hit upon the original concept for a territory system when it became evident that we were not in the commercial real estate sales business, but in the information business. In New York, a 100,000-square-foot property on the north side of the street can have a very different value than a 100,000-square-foot building on the south side of the same street. Often, these idiosyncrasies are not obvious, and “knowing the streets” provides insight. The more time a broker spends in a particular neighborhood, the more they get to know the local character and the dynamics.
So assigning brokers to specific neighborhoods was the cornerstone of our strategy. Fine-tuning the correct size of each territory and developing the appropriate sharing mechanism when one broker originated a transaction in another broker’s territory were among the components that took us years to get right. But our focus was always on neighborhoods.
The system allows each agent to be a specialist within a certain submarket. Knowing every property within a territory—and all of the comparable sales, buyers, sellers, zoning changes and new developments in that territory—affords agents, especially newer ones, an easy way to differentiate his or her services from thousands of competitors.
It also allows newer agents to climb the learning curve much faster, as it’s much easier to get your head around a submarket than it is to figure out what is going on with all of the 165,000 investment properties that exist in New York City.
This specialization provides a competitive advantage when seeking new business. Early in our careers, we were able to obtain exclusive listings because we knew the local market well.
By clearly defining each territory, we promoted cooperation among agents, who shared information about buyers (we only represented sellers) in a company-wide database. This ultimately led to a technology-driven database of property owners, which was updated in real time whenever one of our agents interacted with an owner. Without well-defined territories, such a database couldn’t exist.
An expert on a particular neighborhood was always available to work any transaction team, which allowed agents to provide sellers the highest level of service. Agents with far-reaching relationships can make money all over the city. Last year, Team Knakal sold 142 properties, with a market value of approximately $2.2 billion. These properties were located in 32 of our 50 New York City sales territories. We could never have done that type of volume without the benefits of a territory system.
I hope we’ll be operating the platform for years to come.
Robert Knakal is the chairman of New York Investment Sales for Cushman & Wakefield and has brokered the sale of approximately 1,700 properties in his career having a market value in excess of $12.5 billion.