Father & Son in a Family Business | The Stoler Report-New York’s Business Report

Father & Son in a Family Business | The Stoler Report-New York’s Business Report


♪ [THEME MUSIC] ♪>>>FAMILY BUSINESSES. IF YOU READ THE STATISTICS, IT IS NOT EASY TRANSITIONING FROM ONE GENERATION TO ANOTHER. SO HOW DOES A FAMILY WORK TOGETHER? HOW DO THEY LIVE TOGETHER? DO THEY ASK FOR ADVICE WHEN THEY TRY TO SELL THE BUSINESS? WHAT DO THEY DO? WHAT ARE THE INTRICACIES? TODAY I HAVE ASSEMBLED A FAMILY WHO HAS OWNED A BUSINESS WHO RECENTLY SOLD A SIGNIFICANT PORTION OF THE BUSINESS TO TALK ABOUT THE TRANSITION OF A FAMILY BUSINESS, FATHER AND SON BUSINESS. MY GUESTS INCLUDE THE FOUNDER OF A COMPANY, NORMAN STURNER, THE CHAIRMAN OF MHP REAL ESTATE SERVICES, AND HIS SON, DAVID STURNER, WHO IS THE PRESIDENT AND CEO OF MHP REAL ESTATE SERVICES. SO AT 16 YEARS OF AGE, YOU GRADUATED HIGH SCHOOL AND YOU GO TO ST. JOHN’S AND BECOME AN ACCOUNTANT.>>>HOW DO YOU KNOW THAT?>>>PRETTY GOOD RESEARCH. IT IS 1971. YOU’RE SELLING MUTUAL FUNDS OR SOMETHING LIKE THAT. AND YOU AND A BUDDY OF YOURS SELLING LIFE INSURANCE AND MUTUAL FUNDS DECIDE TO PUT TOGETHER SOME MONEY TO BUY A BUILDING OFF 9TH AVENUE AND 57TH STREET. 467, I BELIEVE IT WAS. SO TELL ME ABOUT THE COMPANY WHEN YOU STARTED IT. WHAT HAPPENED DURING THE TRANSITION, AND HOW YOUR SON OVER HERE WHO WORKED IN CONSTRUCTION GOT INVOLVED WITH THE BUSINESS.>>>WE STAYED IN BUSINESS FROM 1971, SOLD OFF A SEAT ON THE STOCK EXCHANGE, GOT OUT OF THE INSURANCE BUSINESS, OUT OF THE MUTUAL FUND BUSINESS, AND WE ARE IN THE REAL ESTATE BUSINESS. IT WAS 1971 AND NEW YORK CITY WAS AT THE DEPTHS OF THE MARKETPLACE, AN HOUR AWAY FROM GOING BANKRUPT AND NOT BEING ABLE TO PAY THE ANTICIPATED NOTES.>>>AND WHAT DID YOUR PARENTS SAY? YOUR FATHER WAS A PAINTER. YOU’RE LEAVING PUBLIC ACCOUNTING. YOU WORK FOR LAVENTHOL, YOU ARE INVOLVED, YOU SAY I AM GOING TO GO INTO THIS NEW BUSINESS. YOU JUST SAID THE CITY IS IN DREDGE. WHAT DID YOUR PARENTS HAVE TO SAY?>>>MY MOTHER, GOD BLESS HER, SAID DO WHATEVER YOU WANT. MY FATHER SAID, IF YOU NEED ME TO PAINT THE OFFICE, I WILL DO THAT. BE YOUR OWN BOSS. IF YOU ARE YOUR OWN BOSS, YOU CAN NEVER GET FIRED. HE CAME TO THIS COUNTRY AT 12 YEARS OLD. THE ONLY THING HE COULD DO WAS USE HIS HANDS, WHICH HE DID. HE ACTUALLY STARTED BEING A BOXER, PROFESSIONAL BOXER, UNTIL HE GOT KNOCKED OUT ONCE TOO MANY AND THEN DECIDED IT WAS NOT GOOD –>>>FOR A SHORT JEW.>>>FOR A FIVE FOOT FOUR JEWISH GUY, THAT WAS REALLY A TOUGH GUY. SO HE BECAME A PAINTER. FIRST A HOUSE PAINTER AND THEN A COMMERCIAL BUILDING PAINTER. HE DID THAT UNTIL THE DAY HE DIED. AND HE ROSE MYSELF AND MY TWO OTHER BROTHERS TO BE YOURSELF, BE YOUR OWN BOSS.>>>WHAT DO YOUR OLDER BROTHERS DO? THEY COULD HAVE GONE INTO BUSINESS WITH YOU PERHAPS. THEY HAD A SUCCESSFUL REAL ESTATE GUY NOW, MURRAY HILL PROPERTIES OVER THERE.>>>THEY WERE ALREADY IN DIFFERENT PARTS OF THE COUNTRY AND MY OLDEST BROTHER WAS AN ACCOUNTANT WITH A BIG PUBLIC COMPANY AND DID NOT LIKE THE IDEA OF REALLY WORKING FOR A LIVING. HE IS STILL ALIVE. MY MIDDLE BROTHER WAS ONE OF THE GREAT SEMIPRO TENNIS PLAYERS AND DID WHATEVER HE COULD PART-TIME TO MAKE ENOUGH MONEY TO BUY TENNIS EQUIPMENT.>>>A COOPER UNION TRAINED ENGINEER.>>>WHEN YOU’RE LIVING IN NEW JERSEY, YOU HAVE TWO SONS. DID YOU EVER THINK YOU WANTED YOUR SONS TO JOIN THE BUSINESS?>>>NO, IT NEVER CAME UP. I FELL INTO IT BY ACCIDENT. SOMEBODY WALKED IN AND SAID DO YOU WANT TO BUY 469 WEST 57TH STREET, 37 APARTMENTS, $70,000?>>>IT WAS ACTUALLY ONE OF HIS EX-CLIENTS WHO WAS UNDER CONTRACT WITH A HARD DEPOSIT AND COULDN’T FIND THE REST OF THE MONEY SO IT WAS NOT ORGANIC BY DESIGN, IT WAS BY HAPPENSTANCE.>>>SO WHEN YOU WERE GROWING UP, DID YOU EVER THINK YOU WANTED TO GO INTO BUSINESS?>>>WE WOULD DRIVE AROUND NEW YORK AND HE WOULD POINT OUT THE BUILDINGS AND IT EXCITED ME. I DID NOT KNOW WHAT CAPACITY I WOULD BE ABLE TO ADD VALUE, BUT COMING OUT OF COLLEGE, HE GAVE ME DIRECTION AND SAID GO LEARN SOMETHING I DON’T KNOW, AND THAT WAS CONSTRUCTION.>>>WHAT ABOUT YOUR BROTHER?>>>MY BROTHER WAS REALLY ON HIS OWN PATH. HE WAS A TRAINED LAWYER. HE WAS ENTREPRENEURIAL ON HIS OWN. HE ALWAYS WANTED TO FORM HIS OWN BUSINESSES AND WAS SUCCESSFUL DOING IT.>>>IF HE WAS AN ENTREPRENEUR, REAL ESTATE WAS A GREAT THING.>>>BUT NOT FOR WHAT WAS AVAILABLE TO HIM. HE WAS THE ENTREPRENEUR AND IT WAS HIS BUSINESS.>>>DO YOU THINK IT WOULD HAVE BEEN A CONFLICT IF YOUR OLDER BROTHER WAS INVOLVED WITH NORMAN?>>>MY GUESS IS THE SEAT WAS HIS AND I DID NOT WANT IT. I WANTED TO BUILD THE SERVICES AROUND THE COMPANY. TO BUILD THE SERVICES, PROPERTY PROJECT LEASING AND ASSET MANAGEMENT WAS SOMETHING I FELT I COULD DO.>>>AND ANDY WAS MUCH MORE HIGH-TECH COMPUTERIZED.>>>SO YOU ARE 27 WHEN YOU JOINED MURRAY HILL PROPERTIES. AND YOUR FATHER HAD TWO PARTNERS RIGHT?>>>UH, TWO. MICHAEL GREEN AS WELL. CORRECT.>>>HOW WAS IT TO START WORKING WITH YOUR FATHER AND HIS TWO PARTNERS? BECAUSE I KNEW BOTH OF THEM. UNIQUE INDIVIDUALS. TWO TOTALLY DIFFERENT TYPES OF PERSONALITIES. YOU HAD THREE DIVERSION PERSONALITIES, WORKING TOGETHER IN A BUSINESS. AND NOW WE HAVE THE 27-YEAR-OLD SON.>>>TWO POINTS THAT MADE IT PALATABLE FOR BOTH OF THEM. ONE, I WAS BRINGING VALUE AND ADDING VALUE WITH THE SKILL SET THEY NEED NEEDED. THEY WERE BUYING MORE HALF EMPTY BUILDINGS, MORE NEGLECTED BUILDINGS, BUILDINGS THAT REQUIRED CAPITAL IMPROVEMENTS. AND HE WAS SMART ENOUGH TO KNOW YOU’RE NEVER GOING TO ANSWER TO ME. YOU ANSWER TO MICHAEL GREEN, HE IS YOUR BOSS. SO WE NEVER HAD TO INTERACT. HE PUT A BUFFER BETWEEN US.>>>IT HAD TO BE. AS I HAVE SAID IN THE PAST, I WOULD COME HOME AT NIGHT AND BEAT UP THE DOG, AND I DON’T OWN A DOG. AND MY WIFE WOULD SAY, YOU KEEP DOING THIS, YOU WILL NOT SEE YOUR GRAND CHILDREN BECAUSE YOUR SON IS NOT GOING TO TALK TO YOU ANYMORE. IT IS VERY DIFFICULT FOR A PARENT TO, A, HAVE A GROWN SON WHO HAS MENTAL CAPACITIES AND PHYSICAL CAPACITIES TO DO WHAT YOU CANNOT, AND HE IS STILL YOUR SON, SO HE HAS TO LISTEN WHILE HE DOESN’T. HE DOES NOT HAVE TO LISTEN.>>>I DID 90% OF THE TIME.>>>IT’S VERY DIFFICULT TO UNDERSTAND THE CHANGE IN THE RELATIONSHIP.>>>THE GOOD AND THE BAD SITUATION IS THAT YOUR SON GREW — YOU SPENT 27 YEARS WITH THE COMPANY?>>>24.>>>AND DURING THOSE 24 YEARS WE HAVE HAD 9/11, WE HAVE HAD A RECESSION, WE’VE HAD A LOT OF CHANGES OVER THERE. YOU HAVE LEARNED A LOT OF THINGS DURING THIS INTERIM PERIOD.>>>I’M BLESSED WITH THE FACT THAT HE IS HERE AND THAT HE HAS JOINED AND THAT HE HAS NOW TAKEN OVER THE THINGS I DON’T WANT TO DO.>>>I HATE TO SAY WHEN BABY BOOMERS LIKE YOU AND I, GET A LITTLE OLDER, WHEN YOU DECIDE YOU MAYBE WANT TO TRANSITION, DID YOU EVER REALLY WANT TO TRANSITION YOUR BUSINESS, OR DID YOU WANT TO KEEP OWNERSHIP ON THIS BUSINESS UNTIL AS THEY SAY THE DAY –>>>CAN I ANSWER THAT?>>>YES.>>>HE DID NOT WANT TO SELL AND I DID NOT WANT HIS POSITION. IT WAS THAT SIMPLE.>>>THEY TOLD ME THAT YOU DO NOT MAKE POCKETS IN SHROUDS, SO YOU CANNOT TAKE YOUR KEYS WITH YOU. IT WAS TIME. IT WAS THE PERFECT TIME ACTUALLY. WE HAD BEEN PAID HANDSOMELY FOR THE TRANSITION. IT GAVE ME THE ABILITY NOT TO DO EVERYTHING, NOT TO SIT AT THE FIRST DESK AT THE FRONT DOOR TO SEE WHO IS COMING AND GOING, BUT RATHER TO TURN THAT OVER TO HIM AND SAY OKAY.>>>BUT BEFORE YOU AND DAVID AND YOUR PARTNERS OWNED 100% OF THE BUSINESS. TODAY, YOU OWN A MINORITY SHARE OF THE BUSINESS, WHICH IS OWNED BY PRIVATE REAL ESTATE FIRM. EVEN THOUGH YOU ARE THE CHAIRMAN AND YOU ARE THE PRESIDENT, YOU STILL REPORT TO SOMEBODY BASED IN FLORIDA WHO IS CONTROLLING THE BUSINESS. WE ALL WORK FOR SOMEBODY IN THE END, BUT IT IS A DIFFERENT TYPE OF THING.>>>WE HAD THE CHOICE OF WHO OUR BOSS WOULD BE THOUGH, AND I THINK THAT WAS THE LUXURY THAT HE WANTED IN TO MANHATTAN. THERE IS A VERY HIGH BARRIER TO ENTRY IF YOU DO NOT HAVE AN EXISTING INFRASTRUCTURE TO RUN AND BUY AND SELL IN THIS BUSINESS IN THE CITY. SO THE LEVERAGE WE HAD WAS WE HAD A BRAND HE WANTED, AND HE KNEW HE DID NOT HAVE TO CHANGE MUCH OF HOW WE OPERATED AS OPPOSED TO MAYBE THE SIZE AND STRUCTURE, THE TYPE OF ACQUISITIONS THAT WE WOULD PURSUE. WE HAD SIMILAR ALIGNED INTERESTS. WE KNEW WHAT HE WANTED HE KNEW WHAT WE WANTED. WE DID GO OUT TO 25 GROUPS AND HAD EIGHT OR NINE BIDDERS QUIETLY, BUT WE DID NOT PICK THE BEST BID. WE PICKED THE MOST QUALIFIED AND THE MOST ALIGNED INTEREST.>>>WHAT HAPPENS WHEN THE FOUR-YEAR EMPLOYMENT CONTRACT ENDS AND YOU WORK THERE AND YOU’RE RUNNING THE BUSINESS BUT YOU ARE RUNNING THE BUSINESS WITH AN INDEPENDENT BOARD OF DIRECTORS THAT IS WATCHING OVER YOU. THAT IS WHAT THE SITUATION IS, CORRECT? HOW DO YOU ADJUST NO LONGER BEING THE GRAND POOBAH OR THE CHIEF WORKING FOR SOMEONE ELSE. BECAUSE FOR 50 YEARS YOU DID NOT REALLY WORK FOR ANYBODY.>>>I TELL PEOPLE FOR THE FIRST 50 YEARS, WHAT I WANTED I GOT I SAID, AND THEY DID. NOW I ASK AND IF THEY DON’T WANT TO DO IT, THEY DON’T DO IT.>>>SO WHAT HAPPENS WHEN THEY DON’T WANT TO DO IT?>>>WE DON’T DO IT.>>>HE GOES HOME.>>>AND YOU KICK THE DOG.>>>NO, NOT ANYMORE. I KICK MY BANK ACCOUNT, I DON’T KICK THE DOG. YOU REACH A POINT — SATURDAY NIGHT WE WERE AT DENVER JEWISH DANCE –>>>LARRY SILVERSTEIN’S EVENT.>>>MY IDOL. HE WAS NOT A MENTOR, BUT HE IS AN IDOL. YOU TRANSITION OUT. I AM GOING TO BE 80 YEARS OLD. I STILL WANT TO WORK EVERY DAY. BUT IF THEY DO NOT WANT ME, 3.5 YEARS FROM TODAY, THAT IS FINE.>>>YOU BRING UP AN INTERESTING FACT. ON MY OTHER SHOW, I DID THE LIFE STORY OF MARTY BERGER. SO MARTY DISCUSSES WHEN LARRY WANTED HIM TO JOIN THE COMPANY. HE WANT HIM TO JOIN THE COMPANY TO BE THE PRESIDENT, BUT NOT THE CEO. LARRY SAID, I AM 82 OR 83. I STILL WANT TO RUN THE BUSINESS. HE KEPT IT FOR A COUPLE OF YEARS. HE DID NOT MAKE THE TRANSITION UNTIL HE WAS 86. IT IS VERY HARD TO MAKE THAT TRANSITION.>>>IT IS. BUT AGAIN, AS YOU JUST SAID, I’VE GOT ANOTHER CONTRACT, THREE MORE YEARS. I WILL BE 82, 83, AND THAT TRANSITION WILL NOW HAVE PUT DAVID FOR FIVE YEARS IN THE POSITION AS THE PRESIDENT RUNNING THE COMPANY. IT IS SO HARD FOR SOMEBODY, ESPECIALLY A CHILD, TO LIVE IN THE SHADOW OF A WELL-KNOWN PERSONAGE AND CERTAINLY BY 50 YEARS I AM A WELL-KNOWN PERSONAGE, NOT GOOD OR BAD BUT WELL KNOWN. IT IS VERY HARD TO LIVE IN THAT SHADOW. NEIL LIVED IN THAT SHADOW FOR 40 YEARS.>>>THE ONLY DIFFERENCE IS, AND I’VE MADE IT PERFECTLY CLEAR, I DID NOT CARE ABOUT THE ACCOLADES AND I DID NOT CARE ABOUT — I ACTUALLY SAID A BUNCH OF TIMES DURING INTERVIEWED, I WANT TO BE RICH AND NOT FAMOUS. AND IT IS STILL TRUE. I LOVE HIM AS A FIGUREHEAD. HE IS STILL LOVED BY EVERYONE. I LIKE THAT HE TAKES SOME OF THE BRUNT OF THE PRESSURE AS FAR AS BEING THE HEAD AND I GET TO DO WHAT I GET TO DO BEHIND THE SCENES.>>>WE ARE IN THE CITY OF NEW YORK WITH 8.5 MILLION PEOPLE. WHAT DO YOU ATTRIBUTE THE SUCCESS OF TRANSITIONING YOUR BUSINESS TO DAVID, OKAY? BECAUSE IT IS STILL YOUR BUSINESS, EVEN THOUGH IT IS A PUBLIC COMPANY. HOW DO YOU TRANSITION IT? HOW DO YOU ACCLIMATE YOURSELF TO BE READY TO DO THAT?>>>THINGS LIKE THIS. YOU COME TOGETHER WITH YOUR SON AND YOU LET HIM BE THE NAME AND THE TITLE OF THE COMPANY. IT IS NOT A MOMENTARY TRANSITION. ON MONDAY YOU ARE THE PRESIDENT AND ON TUESDAY YOU ARE NOT. IT TAKES TIME. HE WILL BECOME THE FIGUREHEAD THAT I HAVE BEEN FOR ALL THOSE YEARS, AND I ACCEPT IT. I LIKE IT. IT IS TIME. AS MY OLDEST SON TOLD ME, YOU CANNOT HAND DAVID THE KEYS FROM YOUR DEATHBED. IT IS NOT FAIR. BE THERE WHILE YOU TRANSITION, SO THAT IF HE NEEDS — AND WE GO THROUGH A WEEKLY LUNCHEON WHERE IF HE HAS A PROBLEM WE SAY IT AT LUNCH AND IF I HAVE A SOLUTION HE TAKES IT, AND IF NOT, NOT. IS IT DIFFICULT? OF COURSE IT IS.>>>HOW’S YOUR BROTHER TAKE CARE OF THIS? DID HE RECOMMEND TO YOU, DAD, YEARS AGO THAT YOU SHOULD HAVE TRANSITION THE BUSINESS EARLIER?>>>NO, BECAUSE DAVID WAS NOT THERE EARLIER. HE SPENT SEVEN YEARS — IT WAS A PERIOD OF HIM LEARNING AND TELLING ME WE NEED TO DO THIS AND DO THAT AND CHANGE THE POSTURE. BUT ANDREW IS SUPER SUCCESSFUL, AND HE IS A SERIAL ENTREPRENEUR. HE HAS GONE THROUGH SIX OR SEVEN ITERATIONS OF WHAT HE DOES NOW>>>AND SOLD THEM ALL, VERY SUCCESSFULLY.>>>HE DID NOT HAVE THE NEED, A, TO LIVE IN NEW YORK, WHICH HE DID NOT WANT TO DO. NOT ONLY IS HE SUCCESSFUL, HE LIVES ON A BOAT, A YACHT. LAST SUMMER HE TRAVELED FROM FLORIDA TO MAINE ON A BOAT. HE LIVES THE LIFE THAT YOU READ ABOUT OR YOU DREAM ABOUT.>>>HE IS MORE WELL-TO-DO THAN US PUT TOGETHER. HE HAS DONE VERY WELL FOR HIMSELF.>>>HE’S VERY SMART.>>>WHAT DO YOU RECOMMEND TO –>>>NOT COME IN TO THE BUSINESS.>>>THAT I UNDERSTAND. BUT HE’S SITTING HERE AND HE’S IN THE BUSINESS RIGHT NOW. WHAT DO YOU RECOMMEND WHEN PEOPLE SAY TO YOU, NORMAN, TELL ME WHAT WAS THE SECRET SAUCE IN MAKING THE TRANSITION A LITTLE EASIER?>>>LOVE. AND I AM NOT BEING PHILOSOPHICAL. HE IS A CLONE OF ME. I LOVE HIM TO DEATH.>>>DITTO.>>>WE SIT SIDE-BY-SIDE WITH A SINGLE WALL BETWEEN US. THE DOORS ARE ALWAYS OPEN. I KNOW HE IS CAPABLE OF BRINGING THIS BUSINESS TO THE NEXT LEVEL OVER THE NEXT FIVE YEARS, AND IF THEY DECIDE THEY DO NOT WANT A CHAIRMAN OF THE BOARD, I’M FINE. I REALLY AM. I HAVE BEEN ASKED TO REPORT TO SHACK INSTITUTE AND SEE IF I WANT TO TEACH PART-TIME.>>>ALONG THOSE LINES, I WILL TELL YOU ONE THING WE NEVER DID. THE MINUTE WE STEPPED OUT OF THE OFFICE IT WAS OVER. NO MATTER WHAT FIGHT WE HAD. NO MATTER HOW ANGRY WE WERE AT EACH OTHER — AND I QUIT THREE TIMES OVER THE 25 YEARS I HAVE BEEN HERE — I LEFT THE OFFICE.>>>THERE IS QUITTING AND THERE IS QUITTING.>>>I NEVER WENT AND GOT ANOTHER JOB AND WENT TO WORK FOR SOMEONE ELSE.>>>SOMETIMES YOU QUIT AND YOU LEAVE FOR A YEAR OR –>>>NO, IT WAS OVER IN 24 HOURS OR A WEEK.>>>THESE WERE ANGRY MOMENTS.>>>FURTHER, WE WOULD GO OUT THAT WEEKEND AS A FAMILY AND WE WOULD NEVER TALKED BUSINESS. WE ALWAYS MADE FAMILY FIRST.>>>WHAT ABOUT THE GRANDCHILDREN? DO YOU SEE THEM COMING INTO THIS BUSINESS?>>>NONE OF THEM. EXCEPT POSSIBLY MY SON BECAUSE HE IS GETTING HIS ARCHITECTURAL DEGREE BUT HE WANTS TO DO HOSPITALITY AND RESTAURANTS. HE DOES NOT WANT COMMERCIAL OFFICE. AND HE’S DONE INTERNSHIPS WITH LARGE COMMERCIAL ARCHITECTURAL FIRMS.>>>HE LOVES THE IDEA THAT WE ARE BUILDING A HOTEL. LET ME DO THE NEXT ONE, THAT KIND OF THING.>>>WE WON’T BE DOING A NEXT ONE.>>>I SAID IT WAS MY FIRST AND LAST.>>>THAT WAS A FLUKE.>>>OVER THE YEARS YOU HAVE RAISED MONEY FROM FAMILIES FOR YOUR FUNDS, AND MANY OF THESE FAMILIES ARE REALLY FAMILY BUSINESSES. MANY OF THEM FROM THE COMMUNITIES, LOCAL COMMUNITIES. THEY HAVE A DIFFICULTY. HOW HAVE YOU REACTED AND WORKED WITH THE FAMILIES WHO WERE PARTNERS WITH YOU, SAYING YOU HAVE DAVID RUNNING THE BUSINESS NOW. WERE THEY UPSET THAT YOU PUT YOUR SIBLING OVER THERE? MAYBE THEY WOULD SAY DAVID WAS A BETTER OPPORTUNITY, SOMEONE COULD HAVE DONE THE JOB BETTER?>>>NO ONE HAS EVER TOLD ME THAT THE ONLY FAMILY THAT WENT TRANSITIONING AND WAS STILL WITH US WAS THE KERRY FAMILY. I HAVE NEVER HAD A WORD THAT DAVID IS NOT YOU.>>>BUT I’LL GO FURTHER. I’VE BEEN WORKING AT — EVEN THOUGH HE WAS THE SENIOR AND WAS RUNNING THE DEALS, EVERYTHING WE DID REQUIRED MY INVOLVEMENT FOR THOSE ACQUISITIONS AND ALL THAT I OFFERED IN THOSE TRANSACTIONS, MY PARTNERS, HIS PARTNERS, KNEW WHO I WAS, KNEW MY SKILL SET, KNEW MY CAPABILITIES, SO I THINK THEY GOT COMFORTABLE OVER 20 YEARS OF BEING HIS PARTNER AND MY PARTNER.>>>NOW THAT YOU ARE THE PRESIDENT AND CEO, WHAT ARE YOU GOING TO DO DIFFERENT THAT HE DID NOT DO?>>>MAYBE HOLD, NOT SO QUICK TO SELL FOR A QUICK RETURN BUT POSSIBLY WAIT OUT LONGER PERIODS OF TIME.>>>PART OF IT IS A DIFFERENT AGE AND GROWING UP.>>>PART OF IT IS IT DIFFERENCE IN THE WAY THE REAL ESTATE MARKET HAS CHANGED. WHEN WE WERE BUYING FOR $25 FOR BRICKS OR $200 FOR BRICKS, THE VALUE ESCALATED IN SHORT PERIODS OF TIME. WE ARE GETTING CLOSER AND CLOSER TO REPLACEMENT COSTS. ONCE YOU GET TO THAT LEVEL THESE UPTICKS ARE REDUCED.>>>DO YOU WANT TO CHANGE THE OPERATION, THE FOCUS OF THE BUSINESS? DO YOU WANT TO GO INTO DIFFERENT AREAS?>>>WE HAVE ALREADY STARTED TO GO INTO MULTIFAMILY AND RESTAURANTS, ON A THIRD PARTY BASIS FOR OPPORTUNITIES THAT WE HAVE SOURCED TO CLIENTS OF OURS AS WELL AS OPERATING. WE HAVE RECRUITED A FEW RESTAURANT BROKERS WHO HAVE STARTED TO DO ASSET SALES IN THAT SPACE. AND WE ARE PRESENTLY LOOKING AT TWO DEALS THAT ARE MIXED-USE. COMMERCIAL AND MULTI-FAMILY. SO WE ARE STARTING TO LOOK BUT I WILL GO FURTHER, WE’RE LOOKING IN THE BRONX. WE NEVER LEFT MANHATTAN. OF 162 TRANSACTIONS –>>>THERE WAS ONCE YOU MADE A RIDE TO PURCHASE, NEW YORK, OK?>>>SOLD THAT VERY WELL, THANK GOD, TO CARLOS SLIM. HE STILL OWNS IT PRESENTLY.>>>BUT YOU DID MAKE THE TRANSACTION –>>>IT WAS A RARITY AND HE DIDN’T LOVE IT.>>>IT WAS TRIPLE NET LEASED BY THE TENANT. 100% BY PEPSI. WE LOOKED AT IT AS A COUPON RETURN.>>>WHEN WE LOOK IN THE REAL ESTATE INDUSTRY, THERE HAVE BEEN SOME NOTABLE FAMILIES WHO HAVE HAD PUBLIC STRIFE AND DISAGREEMENTS, OKAY?>>>TERRIBLE.>>>MOSTLY FATHER AND SON, NOT TOO MANY FATHER AND DAUGHTERS. WHY DO YOU THINK THESE FAMILIES HAVE THESE DIFFICULTIES?>>>THERE IS A LACK OF LOVE, LACK OF RESPECT.>>>OR ENTITLEMENT.>>>THERE’S SIMPLY A LACK BETWEEN THE TWO PEOPLE.>>>I THINK YOU SAID LACK OF RESPECT, THAT IS THE REAL KEY. WHEN YOU DID THIS TRANSITION ON THE BUSINESS, TAKING INTO CONSIDERATION DEALING WITH THE STATE ATTORNEYS –>>>I WILL JUST GIVE YOU MY LOOK AT IT. WHEN I WALKED INTO THE ROOM, THE FIRST TIME, AND IT TOOK TWO OR THREE YEARS TO GET THE SALE DONE. I TEND TO SUCK UP ALL THE OXYGEN. AND IT WAS NOT WORKING. BECAUSE I FINALLY CAME OUT AND REALIZED THAT IT WAS NOT WORKING, SO I SAID TO DAVID, YOU GO TO ALL OF THE NEGOTIATIONS. WHATEVER YOU DO, I WILL SIGN. I NEVER WENT INTO A SINGLE NEGOTIATION WITH THE BUYER.>>>ACTUALLY, I WAS PUSHING THE IDEA OF LEVERAGING THE BRAND BECAUSE OUR FUNDRAISING, IT WAS DISCRETION, WE COULD NOT GET IT. THE WAY WE TRANSACT, WE NEED DISCRETION. SO ULTIMATELY IT WAS A MATTER OF NEED AND I THINK ULTIMATELY WE GOT THE BEST PARTNER OUT OF IT BECAUSE WE RAN A QUIET, SMALL PROCESS, HE LET ME RUN IT ALL. WE PICKED THE PEOPLE TOGETHER BECAUSE WE WANTED TO MAKE SURE WHO WE WERE CHOOSING WERE PEOPLE WE WANTED TO WORK AND BE PARTNERS WITH. WE ULTIMATELY CHOSE NOT THE BIGGEST CHECK BUT THE BEST PARTNER.>>>I NEVER SAW THE PAPER UNTIL I HAD TO SIGN IT. NEVER. NOT ONE TIME.>>>WHICH IS INTERESTING, ESPECIALLY IN CERTAIN ASPECTS. ONE MIGHT CONSIDER YOU A CONTROL FREAK.>>>I DON’T BELIEVE THAT. I HAD NO REASON TO BE A CONTROL FREAK.>>>YOU WERE A CONTROL FREAK BECAUSE YOU RAN YOUR OWN BUSINESS.>>>HE CONTROLLED IT SO THERE WAS NEVER AN ARGUMENT SO HE NEVER HAD TO BE A FREAK ABOUT IT. BECAUSE NO ONE ARGUED WITH HIM. EXCEPT ME.>>>FOR 40 YEARS, YOU AND I –>>>SO YOU GO TO A CLOSING, THAT IS WHEN YOU READ THE PAPERS? AT THE END?>>>WORSE I ASKED DAVID TO MAKE SURE I HAD HEALTH INSURANCE AND LONG-TERM DISABILITY. EVERYTHING ELSE, DAVID. YOU WANT TO DO IT, BECAUSE YOU ARE HERE THE NEXT 10 YEARS, I WILL SIGN IT. AND HE DID. HE WALKED IN, HE SAID, I DID IT. SIGN IT. AND I DID. AND NEVER WALKED IN THE ROOM.>>>WHAT DID YOUR WIFE SAY ABOUT THIS?>>>SHE LOVED IT. ABSOLUTELY LOVED IT.>>>GOT HIM A PRETTY DAMN GOOD DEAL.>>>SHE WORKED OVER 35 YEARS AS A MEDICAL ASSISTANT. WHEN WE MOVED INTO NEW YORK PART-TIME, SHE SAID, JUST GET YOURSELF MORE PART-TIME. DO MORE THINGS.>>>TO CREDIT BANYAN, THEY HAVE BEEN A GREAT PARTNER.>>>SO WHAT ARE YOU DOING IN YOUR SPARE TIME NOW THAT YOU ARE CHAIRMAN BUT NO LONGER THE CHIEF OPERATING OFFICER.>>>I LOOK FOR PROPERTY, I TALK TO OTHER OWNERS, AND I TELL DAVID, HERE IS WHERE I AM LOOKING FOR THE MONEY. OTHER THAN THAT, UNFORTUNATELY, I HAVE NO HOBBIES. THIS HAS BEEN MY HOBBY FOR 50 YEARS. I AM TRYING TO FIND THINGS LIKE MAYBE TEACHING ONE OR TWO DAYS, A DAY A WEEK, A MONTH BECAUSE I HAVE TALKED TO THE DEAN TWICE BUT I’VE NEVER MET HIM YET.>>>I BET YOU ST. JOHN’S HAS A REAL ESTATE DIVISION. THEY WOULD LOVE TO SEE AN OLD ALMUNI.>>>I’VE TRAVELED TO YALE TO SPEAK TO THE REAL ESTATE GUYS. I HAVE BEEN ASKED TO SPEAK AT WHARTON. I SPEAK, I HAVE SPOKEN IN THE PAST A LOT. NOW I WANT HIM TO DO THAT. I DO NOT TO BE THE FACE OF MURRAY HILL ANYMORE.>>>SEE THE GOOD PART IS, THE FACE OF MURRAY HILL OVER THE LAST COUPLE OF YEARS, TRUE IT’S BEEN YOU, BUT IT’S BEEN TRANSITIONING THAT PEOPLE HAVE SEEN IT. THE PICTURES, THE ARTICLES HAVE PUT DAVID AND NORMAN –>>>THAT WAS BY DESIGN.>>>MY CRYSTAL APPLE SAYS TRANSITIONS WORK OUT, ESPECIALLY IF THEY ARE GOOD PEOPLE. I AM PRETTY CERTAIN THIS TRANSITION WILL WORK OUT. THANKS FOR BEING HERE TODAY.>>>I’M TELLING YOU, IT IS RESPECT AND LOVE.>>>THANK YOU.>>>THANK YOU. ♪ [THEME MUSIC] ♪

You May Also Like

About the Author: Oren Garnes

Leave a Reply

Your email address will not be published. Required fields are marked *