County commercial real estate firms compete for talent, contracts
Updated 9:03 pm, Wednesday, June 26, 2013
The commercial real estate market in Fairfield County is warming up. Lease rates show signs of rebounding in the retail sector, and even with an office-vacancy rate hovering around 20 percent, an improving economy is elevating the hopes of building owners.
Behind every deal, commercial real estate firms and their brokers are vying for contracts with property owners and buyers or leaseholders.
In southwestern Connecticut, which has some of the highest-priced commercial real estate in the country, the competition to represent properties can be heated, as can the rivalry to lure the best, most experienced brokers.
Moving to a new job can be stressful, but Siegel, a Westport resident, said the transition to Colliers was easy because of his many acquaintances there.
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"There are a number of brokers that made moves in the past year. Usually brokers are contacted in non-aggressive ways to find out if they would consider a change. Sometimes, change in your life is a good thing," said Siegel, 64, who started his career as a "canvasser" at Cushman & Wakefield, working with a senior broker. "I had to go out and knock on doors. I was fortunate to start with a market-dominating company. Now, my responsibility is to develop relationships on the property and tenant side. That's how you get to know the market."
Being a mentor to young brokers at the Colliers office will be one of Siegel's responsibilities.
"That's what charges me up. I'm team oriented," said Siegel, whose resume includes marketing and leasing a 350,000-square-foot office park on behalf of ING Clarion in Greenwich, and arranging 170,000 square feet of leasing at 440 Wheeler Farms Road in Milford on behalf of Hines/Sterling Equity.
He represented IBM International in its 500,000-square-foot sale of 200 Purchase St., in Purchase, N.Y., to Mastercard International, and completed a 40,000-square-foot headquarters relocation on behalf of IMS Health in Norwalk.
Those successes impressed Joe Harbert, president of Colliers International's eastern region.
"Michael Siegel is a sophisticated deal maker, is adept at building teams and is a dedicated mentor to young professionals and rising stars," Harbert said. "Michael will be a tremendous asset as we continue to enhance our practice groups and build market share in the Connecticut and Westchester markets."
Market share is a phrase for survival of a brokerage firm in this competitive region, and having the right personnel working as a team is essential, he said.
There has been an uptick in brokers moving to other firms as those agencies consolidate their operations, said Harbert, who moved in early 2012 to Colliers from his position as chief operating officer for Cushman & Wakefield's New York tri-state region office.
"It trickled north from Manhattan, and now you have the activity of trying to convince brokers to come to other firms," he said. "It's easier to do in a slower market. In a busy market, they are happy making money. We're having the most movement I've seen in the Westchester/Fairfield County market in years. It's a people business. Part of my job is to know where brokers are in their careers."
A broker who recently made a move from Cushman & Wakefield to the Greenwich office of Newmark Grubb Knight Frank was Gregory Frisoli, who said he wanted to be in a smaller office where he could be more involved in decision making.
Last month, NGKF announced the addition of Jacqueline Durels from Colliers as senior managing director and Tim Rorick, also from Colliers, as a managing director. Also arriving as a managing director was Jodie LaRocque from Barclays Capital, where she was vice president.
Most recently, NGKF welcomed as a senior managing director Stephen Westerberg from Colliers.
Frisoli said he does not expect the move to impact his position when working on a deal with a broker from his former firm.
"I maintain my great relationships with all my former colleagues," Frisoli said, touting the support of Barry Gosin, the CEO of NGKF, as a hands-on leader. "He lives in the Westchester County market. That's a huge reason why one wants to work with him." Frisoli said he also was impressed by NGKF's ability to act as a lender through its affiliation with Cantor Commercial Real Estate. NGKF was purchased in October 2012 by BGC Partners, which is affiliated with Cantor Commercial Real Estate. Cantor Fitzgerald & Co., is BGC Partners' controlling shareholder.
"Brokers can sell a building and also provide debt for the building," said James Ritman, head of NGKF's Greenwich office, allowing them to make commission twice and levering their relationship. It's about quality of service. If you give brokers more tools, it's good for the broker, but it allows you to serve clients better."
Siegel's departure was a loss for CBRE, but the Stamford office will rebound, said Robert Caruso, senior managing director, commenting that CBRE may have started the commercial real estate broker game of musical chairs last year when it attracted brokers Brian Carcaterra, Michael McCall and Peter Hansen from NGKF.
"There's a constant flow of need for new people. We go through an annual review of our brokers to be sure the talent we have is the best. They must be consistent with our values," he said, adding that other brokerage firms often court his brokers. "When you're number one in the market, there's a target on your back. All we can do is provide the best environment for our people."
Competition to attract brokers and represent properties has never been keener, Caruso said.
Talented brokers are always in demand, and good brokerage firms must work to provide them with the tools and environment to keep them from straying, said Jim Fagan, senior managing director of Cushman & Wakefield's Stamford office.
"If you're a one-trick pony, you're like a flip phone compared with an iPhone," said Fagan, who has worked in the Fairfield County market for 30 years. "Our model is based on collaboration. My job is to provide the best environment for our professionals to do very well. A rogue broker can go, if he wants. We work very hard to get professionals who are collaborative, who keep the client first and foremost in their mind."
It's those brokers who develop a rapport with building owners and companies that Fagan appreciates, commenting that they are the reason why his firm gets new business. For the landlord, the broker is the biggest procurer of potential tenants.
While brokers from different firms compete for clients, they must have each other's respect and trust, he said. Otherwise, deals can be jeopardized.
"It's very competitive, but you have to be cooperative. You need a sense of fair dealing. People who aren't like that get found out very quickly," Fagan said.
Felix Charney, a principal in Summit Development in the Southport section of Fairfield, chose Cushman & Wakefield's Stamford office to market office rental space at the 216,000-square-foot Lee Farm Corporate Park in Danbury, which this year sold for $16.9 million to a partnership of Summit and The Grossman Cos.
Commenting that he has a good relationship with several brokerage firms in Fairfield County, Charney said he chose Cushman & Wakefield because of its familiarity with Greater Danbury and the central part of the county.
"In our building in Danbury, our objective was to make it attractive to the Norwalk and Wilton markets. They have a dominance and relationships in those markets," he said. "I've been in commercial development 31 years. Jim Fagan has done a wonderful job for us. We look at marketability as a partnership."
Seasoned brokers offer clients different techniques in marketing properties, and smaller firms can have an advantage over the large brokerage companies, said Bruce Wettenstein, a partner in Vidal/Wettenstein Real Estate in Westport, which represents commercial properties and corporate tenants across Fairfield County.
"A smaller firm like us -- we're a boutique firm, and we have five seasoned brokers," said Wettenstein. "We're all on the front line. It's competitive. In a down economy, it's more grueling and aggressive."
Wettenstein's firm is marketing the sale of an 83,000-square-foot building in Bridgeport that housed W.E. Bassett, which was acquired by Pacific World in 2011. They also represented the venerable city legal firm of Zeisler & Zeisler in leasing a 12,000-square-foot space in the building to the law office.
"The reason we chose them is because they were recommended by the law firm of Cohen & Cohen in Bridgeport," said Jed Horwitt, a partner at Zeisler. "They may be small, but they are experts on the Bridgeport market."