AmTrust President Jonathan Bennett On Modernizing the Company

Transforming the 31-story tower between Park Place and Murray Street has become one of Bennett’s first priorities. Bennett hopes to turn 200,000 square feet of office space within 250 Broadway into a hub for technology and media tenants, and is rebranding that space as 1 Park Place. Gerner, Kronick + Valcarcel is overseeing the redesign, which is expected to wrap up in 2023 or 2024. The rest of 250 Broadway is taken up by the New York City Housing Authority, which renewed a lease for a separate 200,000 square feet in 2020. 

The renovations include an expanded lobby; a 14,000-square-foot fitness center in the basement for any squash, pickleball or basketball enthusiasts; and a new 18,000-square-foot amenity space dubbed “The Overlook” — equipped with a cafe, lounges and conference rooms. A Cushman & Wakefield team is marketing the building, either in 3,012- to 29,182-square-foot chunks or in a 200,000-square-foot full-building lease.

The tower is just one example of how Bennett is trying to modernize AmTrust’s properties, including outfitting the firm’s Chicago buildings with VTS Rise, a tenant app for booking conference rooms or organizing deliveries, and getting AmTrust on the World Wide Web. (AmTrust hasn’t yet selected its property application provider for New York City). 

Incredibly enough, the real estate firm didn’t have a website until Williams New York designed and launched one for the company earlier this year. Bennett is also amentiizing the firm’s other flagship property at 59 Maiden Lane in the Financial District to attract tenants to fill its 50,000 square feet of ground-floor space. His remarks have been edited for length and clarity.

Commercial Observer: Why did you first get into real estate?

Jonathan Bennett: I had actually always enjoyed and was always interested in real estate, but I viewed it as something that I was going to do as my career matured. I started off in high-tech investment banking. In March of 2000, there was a stock market crash, which, after everything we’ve gone through and looking back historically, it was just a small correction. At the time, it was a wake-up call for me, because I had been involved in a lot of startups that ended up going out of business. I thought I’d rather go into real estate now because, if I’m going to work really hard doing all the things that you do to build a company, I’d rather invest in assets that exist in the real world rather than in thin air.

So no Metaverse real estate for you then?

It’s funny you say that because everything comes full circle. We just started talking about it. That goes hand in hand with the tokenization of physical assets, which seems like it may be starting to gain some traction. Never say never!

You were at Nakash Holdings for almost 11 years. What convinced you to join AmTrust?

This opportunity was to reinvent the portfolio. It was an exciting project for me to get involved in, to take a big office portfolio at a really interesting time in the real estate world and in the office world. Obviously, it’s not the most in-favor asset class today, but like the classic Wayne Gretzky cliche goes, “I want to skate to where the puck will be, not to where the puck is.” 

It seems like there’s been an extreme overreaction to what’s going on in the world of office. The pendulum swung in a particular direction. Everybody’s working from home in pajamas, and what you read is that’s how it’s going to be forever. I think there’s an opportunity to create a lot of value. I think that there have been a lot of changes in the world of office real estate, but I don’t think that it’s a disappearing asset class. Everything changes. It’s going through some changes, and this was a good opportunity for me on a large scale to come in and direct that.

You’ve been there for about 10 months. What are you changing, and how are you shaking things up?

I have definitely taken many steps to flatten the organization. The company has been around for some time, but it felt tired. When I interviewed I pretty much met with every person that worked in this organization, and spent a minimum of 20 minutes with them — trying to get to know them, understand them, how they got here, what’s working, what’s not working and how can we fix it? A common takeaway was people wanted to be empowered. People wanted to feel ownership over the work that they do. 

There were processes that have been put in place, that went back many years, that required updating, and putting more responsibility in the hands of the people who want that responsibility. That was a common theme across the board. We’ve started that process and, from what I hear, people are excited about it. 

In addition to that, investing in technology is a big part of what I do, and I’ve never walked away from technology. I think that technology has only become more critical. That goes from the operating systems that we use to run our business to the apps you use as a tenant coming in and out of buildings. Frankly, when I started here, the company did not even have a website. So there was a lot to do, in addition to hiring and trying to bring on some enthusiastic, experienced talent that wants to go on this ride with me.

Could you give me an example of flattening and reorganizing the business?

Take reporting style. Previously, reports were generated from the top. Data was collected and was parsed and we created the reports in the corporate headquarters. You end up with a monthly report for the entire company that’s a 100-page report, and then that would be sent around to the recipients, who are supposed to read that report. I don’t think it’s going to surprise you when I tell you that you have to write to your audience. No one’s reading a 100-page report. It’s just not happening.

What would make a lot more sense, and what I was used to, is each property manager is going to be the person that will send the monthly report. The monthly report will go to the same recipients who once got that mega-report that used to go around, and that does a lot of different things. First of all, it makes the property manager more responsible for that building because nobody knows it as well as they do — they’re the ones who are there every single day. Now their name is on something that’s going out to owners and executives, and they feel like they’re part of something. It establishes an open conduit of communication, so that I know no matter what, at least once a month, I’ve got a touch point with that person. If you’re a property manager, the president of the company is going to be reading something that you’re putting out every month. 

The reaction to that has been absolutely stellar. Every single one of these property managers, they don’t look at that as more work, they look at that as smart work.

Could you give me an example of investing in technology, other than getting the company a website?

There are a few different initiatives that are happening simultaneously. We are kicking off an accounts payable system, removing the laborious tasks of invoices coming in and then figuring out how to organize all those invoices and get them approved in order to get them paid. This all happens on a website.

Another area of technology that we’re investing in is, of course, all of our buildings are going to have apps for the tenants. All forward-thinking, innovative ownerships will be doing this if they’re not doing it already. The apps provide all kinds of other tenant experience components as well. Cultural activities, food and beverage, physical fitness — all these things we’re putting into the palm of your hand. We are at the tail end of deciding on a provider, and we spent a lot of time doing due diligence to try to figure out which one’s going to be the best fit.

Are there any new markets or new asset classes you’re looking to expand into?

We’re definitely investing in new markets. We’ve started to invest more into multifamily. We have done two transactions, one in Phoenix [at 555 North Fifth Avenue] and one in Tampa [at 160 West Tyler Street] — about 350 units in each of those markets. I have a hospitality background so we are looking for hospitality assets that make sense as well. We’re going to continue to look at markets like Phoenix, like Tampa, Austin and maybe Charlotte — growth markets that have a tremendous amount of activity. We are not abandoning the New York and the Chicago markets, and we’re spending a lot of time looking at deals in those markets as well.

We’re very opportunistic. We don’t have a specific mandate that we’re hampered by. It’s more about if we think that it makes sense, and it’s somewhere that we’d want to spend our time, we’ll pursue it. We are also engaging in new partnerships with other companies and other operators. We see a large amount of deal flow from other companies that are looking for partners. The strategy is definitely opportunistic right now; it’s not tied to a specific asset class or specific location.

What sort of new tenants are you trying to attract, particularly for your properties in New York like 250 Broadway?

1 Park Place is in a fantastic location, right across from City Hall Park, the Woolworth Building and the Four Seasons downtown. You’ve got all kinds of high-end food and beverage coming in, you’re steps away from Oculus, Eataly and the Apple Store. What’s going on in this neighborhood is I think somewhat underreported in terms of all the development that’s happening here. There’s all kinds of amazing stuff that’s going on down here, and it’s not quite yet reflected in all of the tenancies. You’re seeing some of it, but that’s where I see our opportunity.

We’re creating a new arrival — an underlit canopy with this incredible sense of arrival, a big video screen, a tenant amenity lounge on the second floor with an attractive food or beverage operator, retractable windows where you’ll be able to have indoor and outdoor space overlooking the park.

Do you have any idea or has anyone expressed interest in the space?

We are seeing technology, media and financial companies touring the market. We think it would make a great headquarters space for somebody coming out of one of those industries, and it’s an alternative to what people might think is where they have to be today. The transportation around here is great. The food and beverage is great. There’s so many other businesses that are located in this area as well. World Trade is filled with them, and we are definitely a great location.

The overlook in the sports courts at 250 Broadway — did you add those spaces because of COVID? Or were you always going to add them?

I wouldn’t say that it’s because of COVID. I came in here only a few months ago, so I can’t tell you what people were thinking beforehand. But I think the right business to be in today — if you want to attract the right kind of tenants and change the narrative from just talking about how much is this going to cost to “This is a place where I would want to be” — I think that that’s a step in the right direction. 

And I think that’s how you lease up buildings and attract the right kinds of tenants — the ones that are thoughtful and  growing businesses. Because those businesses, they have employees. They want to bring those employees back to the office. And in order to get their employees back to the office, attract new employees and retain existing employees, they want to offer them a meaningful experience at work. And we’re partnering with them to try to make that happen.

Celia Young can be reached at cyoung@commercialobserver.com.