Presented By: Meridian Capital Group
How Adam Hess Became One of Brooklyn’s Leading Investment Sales Experts
We recently sat down with Meridian’s Adam Hess, a Senior Managing Director in the firm’s Investment Sales division, for a question and answer session.
Q: What led you to investment sales?
I was an attorney from 2000 to 2005 when I began to get tired of the long hours away from my family. I also felt like there was rarely a successful outcome in litigation—the majority of cases settle and everyone compromises to the point that no one is happy. When I finally left my job as an attorney, I started networking to figure out what I wanted to do next. When my father, father-in-law, and close friend from college all suggested I pursue a career in commercial real estate sales, I decided it was a sign and started chasing down the best opportunity possible, which turned out to be a job at Massey Knakal covering a small territory in Sunset Park. I learned quickly that the successful sale of a property is completely different from litigation—when you sell a building, your client is usually very happy, and in many instances, it changes their lives for the better.
Q: What do you like most about your job?
I love interacting with people and resolving problems in complex transactions that others may find unsolvable. I’m at my best when there is a bump in the road in a transaction and outside-the-box thinking is required. I think that’s what truly differentiates my approach from others.
Q: What do you regard as the greatest success in your career to date?
I think establishing the significant market share that my team and I have had since 2011 in the highly competitive Brownstone Brooklyn market is a very notable accomplishment. Many of these years, we accounted for as much as 35 percent of the multifamily and mixed-use transaction volume in Park Slope and the surrounding neighborhoods. We have contributed to the growth of the Brooklyn market in a tangible way, and maybe most importantly to owners, have driven the dramatic increases in property values that we’ve seen since we entered the market. This achievement validates our approach, the relationships we’ve developed, and most importantly, the level of service we provide to clients.
Q: What was the most complex deal you were involved in?
Two deals immediately come to mind. The first is One Prospect Park West, an $84.5 million deal purchased by Sugar Hill Capital Partners that was in litigation for two years while we were in contract. The entire transaction essentially had to be negotiated the twice; first to get the contract signed and then again to resolve the litigation and get it across the finish line. A more recent deal that was also unusually complex was the sale of 368 Myrtle Avenue, 584 Myrtle Avenue, and 134 Kingsland Avenue. We had to find three separate buyers for the three properties, and because of the seller’s loan structure, all three buyers had to sign contracts and close at the same time. Trying to coordinate a simultaneous closing with four attorneys, three buyers and four banks was, to put it mildly, not a small task.
Q: How would you describe your clientele?
My typical buyer is usually either a Manhattan-based fund, long-term family ownership, or a friend-and-family-type fund led by individual investors. My sellers are typically repeat clients; many times, the funds and long-term family owners will come back to me to sell their property once they have stabilized the asset and want to maximize the return on investment by selling to achieve peak value. I also see myself as the champion of the small owner, someone who owns typically between one and three buildings. These clients usually have one shot to sell what may be the biggest asset of their lives and need to maximize every dollar when selling.
Q: What makes you and your team unique?
My team is very focused on multifamily and mixed-use properties, making our knowledge and experience on the subject matter among the best in the industry. Thanks to my legal background, we also understand that a deal is really only at the 50-yard line when a term sheet goes out. The contract negotiation is where real bumps in the road can arise; my unique legal experience is a benefit to moving these complex deals forward. Additionally, because we work so closely with the debt and equity teams at Meridian, we are able to exercise more control over a transaction from start to finish.
Q: What learning experience or professional development most helped prepare you for leadership?
I’ve participated in organized athletics all my life and coached my kids’ sports teams. I’ve learned through these experiences that I naturally gravitate toward being a leader in any situation. Once you have confidence you can lead people, and you believe in your ability and desirability as a person, everything else flows from there.
Q: What are some trends you are seeing for 2019?
There was a lot of uncertainty in 2018, including rising interest rates, changes to the tax code and a pending shift in the regulatory framework for stabilized apartments, to name a few. I think some of these concerns will stabilize in 2019, buyers and sellers will have better data to work with when pricing in risk, and as a result we will see transaction volume increase significantly in 2019.
Q: How has the industry changed since you first started out?
When I first started at Massey Knakal nearly 15 years ago, commercial brokerage in the boroughs still had a bit of a Wild West feeling to it–a lot of small brokerages operating in a very old-school manner. Today, the boroughs offer some of the most desirable and stable real estate assets in the world, and thus the institutional brokerages are committing major resources to the marketing and sale of properties in these markets. In the end, this has accrued to the benefit of owners; they get better representation from highly-skilled brokers with more resources to market properties, which in my opinion, is how it should be. Now, with a firm like Meridian that essentially offers one-stop shopping, we have the best in the business on the debt teams, the leasing platform, and the sales side; the representation owners get will take another quantum leap forward.
Q: You’ve been in this business a long time now. How do you stay relevant?
Work hard, stay in constant contact with people, always keep your eye on the ball, and stay focused on the fact that this is a relationship business—your reputation is your most valuable asset.
Adam Hess, Senior Managing Director at Meridian Investment Sales, can be reached at (718) 534-9201 or firstname.lastname@example.org.