32: Leo S. Ullman - The Ironman

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Welcome. This is Real Estate Investing Live from New York with James Nelson, the principal and head of Avis and Young's Tri State Investment Sales Group. In this program, you'll learn about the world of commercial real estate and find out why it is one of the largest investment opportunities in New York and around the world. Now here is your host, James Nelson.

Welcome to show number 32. This is James Nelson, your host of Real Estate Investing Live from New York. And with us today for our Investor Spotlight is Leo Ullman, who is founder of vastgood Properties and formerly CEO of Cedar Shopping Center. Leo has a truly remarkable story. As a child, spent almost two and a half years in hiding with another family to survive during the Holocaust. And afterwards coming to the US had quite a story where he was a Marine, where he spent time at Harvard University getting into real estate, taking a company public. And now even today, well on into his years, he is still competing, doing triathlons and has even completed an Ironman in Kona. So an incredible story that you'll hear shortly. And then back with us for the last segment of the Brokers Sales Brokers panel with David Chechman, Marion Jones and Brandon Polakoff to round out the conversation. But before we get to that, it's time for the Week in Review powered by the Daily Beat. This week, the story driving the day is that there has been some positivity and that hotel occupancy rates across the country have risen for five straight weeks, offering a glimmer of hope that the economy's gradual reopening and the start of summer will foster a tepid recovery. The occupancy rate for the week ending May 16 was 30%, 42.4%, with nearly 11 million room nights sold, up from a low of 21%. And a million room nights sold for the week ending April 11th. The recovery is expected to be particularly hard, that being said, for upper tier hotels, which cater to corporate travelers, business groups and convention guests, according to the Wall Street Journal article. Elsewhere, the seven largest REITs that specialize in mostly high end apartments each collected at least 94% of their total rent payments in April, according to recent earning statements. Some landlords are even increasing rents. AIMCO said it's raising rents in Northern California apartments that house Facebook and other tech workers whose jobs haven't been affected by the pandemic. Apartment REITs also reports success adapting the world without in person apartment showings, leasing new units based on virtual online tours alone. UDR said all its traffic during the pandemic has been virtual including apartment tours conducted on Zoom. And this was according to a Wall Street Journal article in financings. Victor Segura's Leg Investment Group has secured 133 million in financing from ACOR Capital for its residential condo project at 109 East 79th Street. Upon completion, the 19 story building will span 145,000ft with 33 units. Interesting to note to grow a close on this financing during the pandemic. Lastly, some good news in that Blackstone, Kayne, Anderson Capital Advisors, Starwood Capital Group and other investment firms are sitting on roughly 300 billion of equity ready for deployment. By comparison, property sales totaled 570 billion in 2019. Every commercial property owner has its specific problems with mom and pop landlords that own a handful of apartment buildings, retail centers or other assets are in for a much more compromised position. And this is according to the New York Times article. So with that, we're going to take a quick break and word from our sponsor and we will be right back with that interview with Leo Ullman.

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And now it's time for our Investors Spotlight. And with us today is Leo Ullman from vastgood Properties who is a member of the New York Bar, having practiced law for 35 years. Starting his career at Sullivan and Cromwell, he spent time at the U.S. office of Foreign Direct Investments and then returned to private practice at Baker McKenzie and then forming firm Ullman, Miller and Rubell. While still practicing law, Mr. Ullman formed a real estate management company in 1978 to source and manage a large number of US real estate assets. In 1998, Mr. Ullman, through a friendly tender offer, acquired a control of a small real estate investment trust, cedar Income Fund, Ltd. With only four properties and a value of $13.5 million at the time, and reincorporated it under the name Cedar Shopping Centers, Inc. Under his guidance, Mr. Ullman grew Cedar to approximately 1.7 billion in asset value over about 100 properties. And in 2005, he was named Entrepreneur of the Year by Ernst & Young. Mr. Ullman retired as chairman, CEO and president of Cedar Shopping Centers in June 2011, founding Basgood Properties at the time he's got an incredible story, having been born in the Netherlands, attending Harvard, being in the US Marine, has incredible charitable and civic pursuits, having served as the chairman of the foundation for the Jewish Historical Museum and also on the development committee for the U.S. holocaust Memorial Museum in Washington, D.C. so, Leah, thank you so much for joining us today.

Thank you very much, James, for having me and for the flattering bio.

Perfect. Well, you have an incredible story, and I know our listeners are going to be amazed to hear everything that you've accomplished over the years. And typically we start with kind of the childhood and what interested you into real estate. But I think your story, having grown up during a very challenging time and during the wartime, maybe you could share with our audience a little bit about your experience and how you survived and ultimately made it here to the U.S.

Well, I was a hidden child in World War II. My parents had to give me to the resistance in the Netherlands while they went into hiding. And I wound up with a policeman and his wife who took care of me, loved me, helped me survive through the war, pretended I was their grandchild. And after the war I was reunited with my parents, whom I didn't recognize at that point because I had left them when I was three years old and they came back when I was six and a half. And at that point we got together again in a year or two after the war, we left Holland because my parents were very afraid that the Russians might actually take over the rest of Europe. They'd already taken over Eastern Europe, and they didn't want to be under a occupied enemy ever again. And we wound up in suburban New York. My grandmother left shortly after the war, was able to find a house for us in Port Washington, New York, on Long island, and that's where we landed and that's where I still live all these many years later. We were just very, very lucky. My father, after losing all of his money in a textile Business. Shortly after we arrived in the US wound up in a 5 and 10 cent business with a brother in law and a cousin of my mother. And that introduced me to the retail business and I've loved it ever since.

Wow, what an amazing story. I'm sure we could spend the entire interview just talking about that sequence of events and how you survived. And wow, as you mentioned, incredible luck and cooperation and so happy that you all found your way here. So as a child and as your father opened up this 5 and 10 cent store, did you find yourself doing odd jobs around the shop or what was your child like childhood like once you made it here to the U.S.

Well, ever every opportunity that I had I was in his store or that of one of his colleagues. And I did window displays, I took care of the Hearts Mountain pet supply areas, I waited on customers, I kept the store open at night, I did anything and everything that I could. And I was especially fond of notions. We were specializing in notions which buttons and rick rack and sewing needles and all of those sorts of things were a specialty of our stores. And that's where we could make some money because we couldn't do it on selling toothpaste.

Well, you know, we've listened to some of the stories from some of the other legends in the business like yourself, I mean it seems the consistent occurrences that many of you spent a lot of time early on working hard, you know, chipping in. And I'm sure that work ethic has stayed with you. So from there I know you went off to boarding school and then it was Harvard. Did you know at that time what you ultimately wanted to end up doing?

No. And I'm still not sure that I know I was always interested in both law and business. I wound up going to both law school and business school together and graduating in the same year. And while I practiced law for, as you mentioned, 35 years or so, I also developed a real estate business at the same time and split time and mental focus on both.

When I read your bio and I saw, and I was trying to do the math, it looks like you graduated Harvard in under four years. And then you said simultaneously doing a business degree. So I know you're being very humble, but I'm sure that was no small feat.

Well, I was always in a hurry. I graduated Harvard in three and a half years. I really majored in lacrosse. I wasn't very. I took a term off, went into the Marine Corps, made up the term by taking some extra courses, mostly ROTC courses, graduated with my class and Then went to law school and took business programs in the summer, even though I had to do my Marine Corps duty in the summer as well. Again, I was always in a hurry. I married my seventh grade sweetheart from Port Washington. We married while I was still in college. So I was always in a hurry to get these things done and get them behind me. Wow.

So you find yourself in New York at Sullivan and Cromwell, one of the top firms, and even Baker, McKenzie today. I mean, these are very well known names, and you decide to start your own firm. What was it that compelled you to do that? And what was it about the law profession that you enjoyed the most?

I think I was scared out of my mind at Sullivan and Cromwell, so I knew I better do something a little bit different. And what I did have that was somewhat unique is that I went back after law school and worked in Holland for a year and a half as the editor of an international tax publication. And as a result of that, I met a lot of people in Holland. I kept up the language. I edited a loose leaf publication on taxation of dividends, interest and capital gains. And as a result of that, I did start to develop some following. And I thought that I should take the leap and go into private practice. And Sullivan and Cromwell actually gave me some business which, believe it or not, at the time, Sullivan and Cromwell didn't do real estate. It was somewhat below their dignity. And my first clients in my firm, which was a firm called Altman, Miller and Ruble, the first clients were Robert Tishman and his company, and Sheldon Solow no less. So I started with a real estate connection when I opened my own firm. And my initial contacts and clients were mostly almost entirely Dutch.

So for those of you listening to the show who are new to this, those two names that Leo mentioned are also certainly legends in New York real estate. So I'm sure that you had incredible experience and learned a tremendous amount from them. So while you were practicing law, it said that you started to source and manage a large number of these U.S. real estate investments for private investors. So how did that work?

Well, I started by representing Dutch pension funds who were investing directly in those days in U.S. properties. And during the course of my representation, I did start representing some Belgian wealthy, mostly Catholic families. And for one of those families, I arranged to rescue the investor from all sorts of terrible investments where, like in Europe, he relied on people without having a writing and he trusted all sorts of brokers. And he wound up with some terrible properties. And I rescued those. And he offered to me a subordinated interest in some of his properties because I didn't have any money. And after he got a substantial yield, I was able to take a small piece. And importantly I was able to use depreciation deductions, which were very helpful to me because I was making some money practicing law. And eventually that side business, which at the time was called Mvest Properties, that became more and more serious to the point where ultimately in the year 2000 or so, I completely stopped practicing law.

I would imagine by then, because in 1998 you had acquired control of the small REIT Cedar Income Fund. So the. I'm sure that was no small feat and a pretty technical acquisition. Had you ever done anything like that or how did you come to the idea that instead of just buying properties on a deal specific basis that you decided as your first full foray to go out and buy a publicly traded company?

Well, it was barely publicly traded at that point. It was on the pink sheets. It was a REIT that had been basically dormant for more or less 10 years. It was created by a US affiliate of one of the major Dutch insurance companies located in Cedar Rapids, Iowa. And I came across it through the Dutch connection and they had these four properties that had no relationship one to the other. And I thought that perhaps we could buy this, raise a little bit of money on behalf of my Belgian investor and acquire it. Because I came under the impression that if we had a reason, life would be really simple and people would just throw money at us and it would be just terrific and very easy. Of course I learned that it wasn't all that easy, but it was a major step. But appreciate we wanted to buy control of this entity for just very little money. And what happened is that all these investors came out of the woodwork and offered their shares. So we wound up owning the company and it was worth at the time in total plus minus $13 million.

So you had some of your personal capital, I was going to say, but then you brought in investors and then you were about to say, did you borrow some of the purchase price for that?

We did. We borrowed from a hedge fund with some 21 year old guys who rode bicycles to our meetings and we borrowed from them at or near 20%. But we did get it done and it was very, very exciting. Maybe the most thrilling thing I've ever been involved in.

So in five years you then Cedar shopping centers has an IPO with a value of 178 million. So how do you go from 13 and a half million in value to 178 in that short of a time frame?

Well, basically what we did is we threw a lot of balls into the air. We entered into purchase contracts subject to closing on the public offering. We entered into purchase contracts with deferred closings of various sorts where we could purchase extensions of the closing date. And in that manner, we acquired several retail properties. And we were able to fold in a few that that we had purchased with my Belgian investor. And we bought out the Belgian investor. And that was part of the initial funding of the REIT and part of its initial property ownership structure.

And I know in your bio I shared with the audience that ultimately that portfolio would be worth 1.7 billion. So we know where the movie is going here. But before we get there, would it even be possible to do a deal like this today? I mean, we've got a lot of investors listening and maybe they're already, you know, they have a nice sized portfolio. Maybe they've been doing this on a one off. But the idea of using a public vehicle to scale a portfolio, what do you think the potential is for that today?

I think it's very, very different today from what it was when we did ours. First of all, there were very REITs in those days and very few retail REITs. So I think it was a different landscape. And with $100 million of properties, for example, you had a real estate business these days to go public. I think you couldn't possibly consider it unless you had a true net worth of more than, say $500 million. And there are lots and lots of REITs out there at this moment in the retail business and in general far, far beyond what it was 20 years ago.

So, and that's very helpful. So you were once you were able to leverage this structure and again, you did amass an incredible portfolio for the shareholders. So was it ultimately that access to capital? I mean, what came first? Was it really having these opportunities that the public markets responded well to, and then you get more investors to buy in. But how did you scale this?

Ultimately, I think we were able to benefit from Merrill lynch as lead underwriter for us, which was extremely helpful. And then also with Raymond James and others as providing guidance, which was very important. Legg Mason was another. They provided guidance and that helped us tremendously. And in those days, we were able to use the proceeds from our public offering to get acquisitions and to leverage it at 75% LTV or something of the sort to buy properties and grow pretty quickly. And we had a story and we were believable and people could convert from their private non liquid ownership to the REIT and get the shares and ultimately cash those in. So it was a good story at the time. And we were able right at the outset to get very lucky and get a couple of the major asset managers to invest in our stock. And there was a so called REIT mafia in those days and five or six of the major investors came in and that helped us very, very much. And we were able to do add on offerings and to issue a little bit of debt and so on and so on. We got to that number fairly quickly. And people ask how do you grow a portfolio like that? Well, the most simple answer, and it sounds stupid, is you offer more than other people are willing to offer. And we paid for our acquisitions and our timing was good. And the property profile in terms of focus on supermarket anchored properties in secondary markets with predictable and financeable cash flow was a good product and still is in my mind.

So who and did you focus on a certain geographic region or how did you know what a good opportunity was?

Well, we had invested already on behalf of our Belgian investor in some retail properties in Pennsylvania, in Harrisburg, in Lancaster and Philadelphia. So that became our focus. And those properties which we own together with other partners proved to be good properties and we learned a lot from it. And the principal anchor for these properties was in general giant supermarkets which of are owned and were owned by a Dutch company. And there was thus that connection as well. And we thought and still think that's a very good product in that part of the world which is the Mid Atlantic states. And focusing primarily on somewhat smaller markets beyond the Boston Washington corridor.

As you think back on the roughly 100 acquisitions over the years, are there any transactions in particular that stand out? Maybe because the creativity or were especially profitable? Are there any in particular you can think of?

Well, there's one that I think we'd be most proud of at this moment and that was the conversion of covered mall in Camp Hill, Pennsylvania and in effect demoling it, turning the stores inside out, eliminating the roof, adding a very large giant with 38 or more change orders to the point where it grew from perhaps 40,000 square feet to 103,000 square feet and also creating some nice new outparcels, creating a medical office building, creating a Planet Fitness building and so forth and so on, or an LA Fitness building I should say, and creating value which went from approximately 6 or $700,000 to 6 to $7 million in NOI in a few years. And a property that's still a very good property.

So to me, that sounds like a lot more than just repositioning existing assets. So development has been a big part of, or what was a big part of CDER's success while you were leading the ship there? And if so, for our listeners, how should they be thinking about expansion opportunities?

I would like to say that development really was not a major part of our story. We got extremely lucky with that one. Otherwise, our focus has always been much more core and core plus. So the development part of it would be peripheral rather than an essential focus. We got very, very lucky with that Camp Hill property. Those things don't come along that often, and we essentially do not gamble on that. Our focus has been, again, supermarket anchored core, where we can add a parcel here and there or add some new tenancies or redevelop in some manner, but much more at the periphery rather than the core focus.

Got it. Did you ever think about moving into more urban, some of the primary cities, or were you very comfortable and finding plenty of opportunity in the cities that you were targeting?

Well, in the period before we created Cedar, we were very much involved in all sorts of properties. We owned properties in New York City on Lower Broadway and on west street and on Washington Street. We did co op conversions in the northern part of the city and in Manhattan at 96th street and also in Brooklyn. Our partner with many of those properties was Time Equity, which is Francis Greenberger's company. We did a lot actually in the city with Frances, and in Philadelphia we also had some urban properties which we liked very much, but we went the other route just, just maybe because it's more easy, it's more digestible and it's more predictable and it's more explainable than the added value play in the major cities. And what we liked in Pennsylvania, and this sounds stupid, but people are pretty normal in Pennsylvania. A handshake meant something in the areas that we were doing business. And it was a very different atmosphere than New York City, for example, for us.

Well, that makes a lot of sense. And we're actually going to have Francis on in a future show. And he's certainly been a mentor of mine over the years, and we had one of his employees, Jeff Ravitz, on the show. So I've definitely seen a lot of connection here on the shows. And it proves that the real estate business is never a small world. So in addition, outside real estate, I mean, you've had some incredible accomplishments. Not only your service with the Marine Corps, but you went on to become a marathoner. You've done Ironman triathlons. If I'm not mistaken, you completed Kona, which I think is one of the toughest ones to get into. Is that something a more recent pursuit, or was this going on? Have you always been. You said you played lacrosse in college. Did you start racing shortly thereafter?

Well, now the two really aren't connected. I installed. He was a terrible goalie in college, but I was the goalie. We had tremendous attacks, so we wound up doing real well. But no, I didn't carry that far beyond.

A good offense is a good recipe for defense, I think, is the expression.

Absolutely. But in 1992, together with my kids, we decided to run the New York Marathon. And we did, and we loved it. And then they all stopped. And I sort of thought, you know, I sort of like that. And I knew how to ride a bike, and I was always a pretty good swimmer. My father was a very good swimmer. So I thought I'd try a triathlon. And. And I liked it. I got into the Kona, Hawaii Triathlon, and I did that Ironman. And I've done two other Ironman and a bunch of half Ironman. I just loved being out there, and I'm still doing it. I did five triathlons this past summer. And in my age group, if you show up, you get a medal. I just love being out.

Wow, that is amazing. So would you say that. I mean, kind of looking at the consistency throughout your story, it seems to be that the common theme is your hard work and your perseverance. I mean, would you say that has been your key to success throughout your career?

I don't think so. I think, if anything, the important thing is to create some trust and believability. And for me, structurally, with my investments, I have a really, really difficult time asking people for money. And yet these deals that we're in are basically syndicated deals with friends. And what I've insisted on, and it sounds strange, but I. I think it's something I'm rather proud of, is one, I'm willing to take risks, believe it or not. I'm willing to guarantee loans because if I don't believe in a deal, nobody else will. I also have never taken a promote. I don't like to take promotes, even though I originally was able to get into the business because of a promotion. But I invest with my investors. We all share Paris Pursu. I don't want to make money off their backs, so to speak. And I think that's pretty unusual. And I feel.

I would say so.

And I feel good about that. And I think my investors, therefore are pretty loyal and I hope they are in current times because we will be challenged.

Yes. So tell us about Fast Good properties. First of all, how did you come up with the name?

Fastgood is the anglicized version of the Dutch word fasthout, spelled V A, S, T, G, O, E, D, which is the Dutch word for real estate. The literal translation is fixed assets. And so I wanted to keep that Dutch link. It doesn't necessarily mean that we have vast and good properties, although we like our properties very much. But it is the Dutch word for real estate. And I do have at all times some Dutch investors in our business.

Wonderful. And are you still active today acquiring or are you managing what you have? I guess this is the portfolio that you acquired after season.

It is portfolio I acquired after Cedar, but I am very much in an acquiring mode and I have partnered up with a wonderful guy named Bob Whelan from the west coast at this point, though he's originally from the Philadelphia area as a Naval Academy grad. And we have purchased together now nine properties during the past year and a half or two years, including a seven property portfolio that was originally acquired by me while I was at Cedar. And then it was ultimately acquired in a joint venture where I owned a tiny piece or vastgood owned a tiny piece. And the balance was Prudential Insurance Company through its PGIM Group. And we purchased those seven properties from PGIM just a few months ago, say six months ago at this point. And those seven properties are all anchored by giant supermarkets. And it's a very, very nice portfolio. So we're very proud of that transaction. And we're constantly looking to keep acquiring and we've acquired properties within the last months and are looking to do so continuing going forward.

Fantastic. So what advice would you give to an aspiring investor today?

Well, assuming they had no money, if I was talking to my grandchildren, one of whom I did talk to about it, I would say create a breakfast club with a few friends and together buy a property and enjoy the process and see if you like it and manage that property for your investment breakfast group. And the alternative, if you're doing it by yourself, buy a two family house and run it and then buy a four family and then an eight family family. And this is how fortunes are made in this country and especially among the families in New York. That's how it started. And I would not be afraid again to put your own money at risk and to take some risks and to treat real estate with what it is. It's all common sense. There's no magic to all of this. This isn't Google. It's common sense. And if it makes sense, take the risk and do it well.

That's a great way to end. So thank you so much for sharing your story with us. I mean, what, what an incredible journey you've had and so much success along the way. But again, really doing it the right way and giving back. And so we just really appreciate your taking the time and sharing your story with us today.

James, I greatly appreciate you're willing to listen to the story. It's very small compared to the big boys. But I, we're proud of it and we're very, very grateful that you are interested in it.

Wonderful. Well, for our listeners, please stick around. We're going to have a quick break from our sponsors and we'll be right back. This is James Nelson, your host of Real Estate Investing Live from New York. We'll be right back.

A different approach to putting our clients first. Avis and Young's Tri State Investment Sales Group sells multifamily office, retail, development and specialty sales throughout the New York metro area. As experienced thought leaders in our industry, our 35 member group is available to help you make informed investment decisions by advising you on your current holdings or identifying new opportunities in the marketplace. Our one unified team is built on an industry unique platform which promotes unparalleled collaboration and teamwork. We share core values of hard work, integrity and expertise. We put our clients first providing tailor made strategies to achieve superior results. Please Visit us at aytristateinvestmentsales.com and follow us on Twitter, LinkedIn and Instagram amesnelsonnyc to learn more.

Welcome back everyone. This is James Nelson, your host of Real Estate Investing Live from New York. Really lucky to have back with us our brokers panel, David Schekman, who's senior managing director at Meridian Capital Group, Marion Jones, who's a managing director at Ackman Ziff, and then finally Brandon Polakoff who's a senior director at Avis and Young's Tri State Investment Sales Group. Welcome back everyone. Thank you for joining us.

Thank you.

Yes, we've talked in the past about what to consider from the buyer's perspective. We talked about how new investors or even established investors should be working with brokers. We also talked about buying on market versus off market for today's show. Wanted to talk about considerations when you're looking to list your property. So Marian, if you want to kick it off for us, for an owner who is looking to sell their property? I guess what should they be considering? Whether they want to sell off market, should they be selling on market and. And if it's the latter, what kind of questions should they be asking?

I think that's a great question and I would answer it that I think every process can and probably should be a little bit different. And as we all know, we're entering kind of an unprecedented period. We are probably looking at months at best, and at worst, perhaps years of a little bit of a slowdown and sort of having to rethink some of the ways we do things. So one of the, you know, I think fundamental characteristics that you're going to want your own real estate advantage is how can they access to the opportunity that you want to present to the marketplace. So not every process needs to be a big, broad marketing process. We work exclusively with clients on the sale of assets where for a variety of reasons we might not choose to go broad. We will handle the presentation of the asset in a much more quiet fashion. It gives it the feel of perhaps an off market or a narrowly distributed offering. At the same time, we might be multi tracking that asset for a recapitalization with our colleagues on the debt and equity side of our business. So that gives us the ability to come to our clients and have multiple methods of execution. They can compare in real time whether an outright sale or some form of a recapitalization is best for them. In other opportunities, we will advise our sellers that you need to be very broad. We need to go broad. We should get press attention on this opportunity and that's going to yield the best fruit, that type of process. So I think it's not only sort of all of the normal credentials, right? Are you experienced in this type of product? If it's multifamily, what is your multifamily experience? If it's development site, how well do you know development sites? What is your ability to really appropriately communicate zoning complexities to the buyer marketplace? All of those sort of questions about credentials and expertise. But beyond that sort of, how can you strategically position this asset in a very dynamic and competitive and tough marketplace? And I think that you want to ask your broker, your advisor, how strong they are strategically and what they've been able to do in the past in order to yield unexpectedly strong results in otherwise tough times?

Great.

That's a really great way to kick things off. David, same question to you. What should owners be thinking about when they want to sell their property?

Well, not to sound like Captain Obvious, but When an owner decides to, which very often we all are, when an owner decides to sell a property, I don't insult them by saying what are your goals? Like many lawyers or other advisors do and they should be doing. But oftentimes because we all know that the goal is to sell it for as much as I can. But very often there's a close second in there. The amazing thing about the tri state market, even in a decent market or a slightly ascending market, but certainly in a fervent or ascending or a robust market, a dirty little secret is that income producing properties, very often experienced brokers, if you bring three of them into a room, we're all going to tell you the price within a 5 to 8% band of value. And so many of the owners in New York, especially as real estate has become more institutional, they're professional owners. Technology has also allowed that one off owner, excuse me, or what we would previously call a non professional real estate owner or a family owner. So many of them with technology have a good idea of what their property is worth. So the goal is to sell it for as high as you can. But now, especially in a challenged market, or I dare say, let's just, you know, take the veil off of it, a descending and troubled market, oftentimes the goal is speed and certainty of execution, provided the price is in a certain level. We just completed the sale of four buildings in the aggregate it was a $37 million deal. And the seller said look, my dream is 40, but I'm a seller into the market provided I'm above 35, which is music to a broker's ear. But this seller and the matriarch of this family that has 28 different voices said to us, we're actually shockingly unified. We need speed, we need a 10 to 15% deposit and we need a 60 day time of the essence close. Well, I sat back and I said, wow, that's a tall order in any market, especially to get, call it 95 to 98% of what we think the zenith is. So these days I think sellers have to be cognizant of not just pricing but market forces. Is a bank going to be involved? If they are, that's going to slow it down. Even though very often and thank goodness we still have a lot of portfolio lenders and non conventional lenders who can act quickly. But the next question is speed, certainty of execution and other factors keeping things out of the public eye, transacting other things like releasing deposits, things that are going to enter into this market which are going to be important, for instance, dealing with arrears, especially in the March, April and May time period, your collections are going to be down. So the owner may say, you may have gotten me close to my price, but I'll take the penultimate or even the third highest bidder because they're going to allow me to collect some arrears years from now or they're going to allow me to hold paper or even maintain a de minimis interest in the property for tax purposes. Selling has become a heck of a lot more complicated and I think that exclusives are wonderful. But the number one question is what are our goals and what does the package look like that I have to shoehorn and own a buyer into?

Really well said. Really well said. So Brandon, on that note, and yeah, there's, you know, different. David asked the right questions. It's, you know, everyone wants the high price but you know, does it need to happen quickly? Certainty of execution. I would always rank up there at the top of the list, regardless if it's a traditional marketing campaign or a compressed one. But let's say you've got a client and they're not under distress or they don't need, they can go with the typical marketing time frame. How would you typically roll out a sales campaign where the goal would be to really maximize the exposure? What would, what are the things that you would do for a seller to get the word out there to get the top price?

Yeah, very good question, I think. And something I would just speak to. And obviously when we speak to real time information, I mean you and I both know, I think that's something that's important is organic competition at the end of the day is going to yield the best terms, the best price. The more people that want something, the more they're willing to sharpen their pencil, work around kind of what a seller is looking for. I mean, and in terms of the buyers out there, we're currently negotiating during this terrible quote unquote time, you know, most of the local buyers are on the sideline and we're currently negotiating two contracts that we hope to wrap up soon with foreign high net worth individuals. And if you looked at a couple of the recent transactions that took place in the Manhattan market, at least there still are foreign buyers that are here. There's users, there's 1031 buyers. So the benefit to what we do and going back to your question is the first thing we do is, you know, we do put the property on all the multiple listing services for our team personally, you know, we have a group of three dozen people that shares a buyer pool. So when we go to market, we have we all, everyone, at least on our team. And really any brokerage team anywhere, typically a team will share in a commission. Ours just happens to be larger. We have a shared pool of buyers that is in the 30 to 40,000 range, as well as brokers that we're going to send this to. And the goal there is to really make sure that we leave no stone left unturned. Social media, as we've all discussed, technology has become very powerful in getting the word out there. And then there's also the, you know, brokerage, as a lot of people like to say, is a burp. I mean, you have to get on the phones, you have to be making the calls. Whether it's an off market broker, an on market broker, a good broker knows who to call. They're tracking who's buying property, who's selling property. They're marketing so many things at the same time that they might see overlap between one listing through another. You know, someone that just missed out on something else. But it's a good fit for them, you can pivot them. So I think that's kind of, you know, again, I think nothing short of making those phone calls and just really to chime in quickly on something else would be the pricing, which we've been speaking about. We've seen time and time again. Right now the buyer pool is a bit thinner and buyers get inundated with sales flyers and they're reviewing it with the assumption that the listing is overpriced. They're quick to move on. They don't try to understand the deal where we've had the most success, as you've seen. And typically our clients that trust us the most know this is pricing it really right at where the reconciled value is versus a heavy premium. Next thing you know, you do have multiple people coming in touring and you end up bidding. You end up actually seeing pricing typically above where you think it's worth because of that organic competition. The worst thing a seller can do right now is overprice their listing, have it go stale. Call buyers, you're chasing the market. It's not the right time to do that. If you really want to see proper execution, you really need to price the property at the reconciled value and generate that organic competition. And that can be local. Your typical buyer. And as we've seen time and time again over the last three years, call it even during a challenging time, there's plenty of foreign buyers and users and high net worth individuals out there that want to park capital in New York City and hopefully the low interest rate environment can only help that.

Great, thank you.

No really helpful points there. We only have a minute or two left. So Marianne, I'm just walk us through that sales process towards the end where. And you're looking to bring it to a head for a client. And in residential, we've all, for those of us who bought homes, you get an accepted offer, everyone celebrates, pressure's off in the commercial world, typically not. So has been my experience where it usually can be down to the wire. So how do these things usually end up? Are you now seeing multiple contracts or the buyers can kind of competing up until the last minute?

Yeah, I think, look, I think that as we speak right now, we're on the cusp of a major sea change. And so I don't have a crystal ball about how processes will be going forward. I suspect the dynamic will be a little different. But I will say that in recent years, even as we have gone in our market through a bit of a pricing correction and a bit of an adjustment, you know, properties that we took to the market that we, you know, we work hard to position them well and to focus on the strategy, we typically do end up with a lot of bidders. And because I think to a certain extent, because we were in a pricing correction, I think that there was over the last few years, there was still great pricing available, there were still a lot of really record breaking deals, depending on sort of which sub markets and which sort of asset flavors you were focused on. But we were able to get really great results with a lot of bidding. What I would mention, I know a lot of your listeners are outside of New York and what I would just say about sort of our processes is that expect it to be highly competitive. So don't be surprised if there are multiple contracts. We always want to have as transparent of a process as we can. Of course we represent the seller. It is our job to sort of, you know, run a process that is fair, but ultimately we have to conjure up as much competition. And sometimes that means that there is a little bit of an uneven landscape among different buyer groups. So I think, you know, to sort of encapsulate, to wrap it up. What I would say to your listeners is expect the unexpected. It is a very competitive marketplace. In recent months, pretty much all of our deals have had multiple bidders. In some situations we have, you know, and we have disclosed this, that we are sending out multiple contracts and we have reached. You know, what we think is sort of the pricing perfection and where we've gone through three rounds and now really the only way that a buyer can differentiate himself is to come back with the cleanest and lightest markup of our contract. And so that can be part of a normal New York City sales process. I suspect that going forward it might be a little bit different. We, as some of my colleagues have mentioned, we're looking at things, I think through the lens of a sea change in the marketplace. We're really looking at moving the contract much quicker, I think, going forward. And I think that that will really push the bidding process to be super quick, super fast, even more so than in the past. And buyers really need to be ready to move at lightning speed through their diligence and be ready to post non refundable at risk deposits, deposits sooner rather than later as we work through some market dynamics that are going to be very challenging in the months ahead.

That's a great way to end. So thank you again everyone for joining us on the show. Incredibles perspective and very helpful for our listeners. So appreciate that again. And that's it for this show. This is James Nelson, your host of Real Estate Investing Live from New York. If you haven't already, please connect with us on social media channels at James Nelson nyc. And please tune in next week and tell your friends. Thank you.

Thank you for tuning in this week to Real Estate Investing Live from New York. Please join your host, James Nelson for another program next Tuesday at 7pm in New York, 4pm p.m. pacific Time on the Voice America Business Channel. All shows are rebroadcast Wednesday mornings at 7:00am Eastern Time, 4:00pm Pacific Time, as well as always on demand. We'll talk again next week.

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