Centennial Leadership with Jonathan Iger

Welcome. This is the Insider's Edge to Real Estate Investing with James Nelson, the principal and head of Avis and Young's Tri State Investment Sales Group. In this program you'll learn game changing strategies to outperform the market. James will teach you how to source, execute and capitalize on the best real estate opportunities in New York and around the world. Now, here's your host.

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Welcome to episode number 209 of the Insider's Edge to Real Estate Investing. I'm your host James Nelson. I'm Principal and head of Tri State Investment Sales for Avison Young. And today with us we have Jonathan Iger, who is CEO and President of Sage Realty. You're going to be learning about shaping a brand and building a legacy in this conversation. Sage Realty just celebrated their hundredth year in business, so Jonathan's going to be talking about working within a family founded firm and how he's taken this to the next level. Sage Realty has a portfolio of Class A properties across New York City. The organization began in 1924 by William Kaufman and the Sage Collection consists of iconic properties designed by renowned architects and built by the William Kaufman Organization. Jonathan discusses his great grandfather's vision and how it shaped the company's foundation. Along with rebranding the journey from the William Kaufman Organization to Sage Realty. You're going to hear about ways to model tenant experiences and property management after the best practices in the hospitality industry. I know you're going to get a lot out of this discussion. As always, you can go to jamesnelson.com, that's where you can sign up for our newsletter where we compile all the month's activities, resources, white papers and of course the show notes you can find there as well on how to connect with Jonathan we're going to have a brief word from our sponsor and we'll get right into that interview with Jonathan Iger.

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Welcome everyone.

I am here today with Jonathan Kaufman Iger who is CEO of Sage Realty. Jonathan, thank you so much for joining and coming in today.

Thanks for having me. It's a pleasure.

First of all, I've got to say congratulations on the centennial. Right. 100-year-old now, Sage, for those who might know, maybe not from the New York area, because if you're from New York, you definitely know about Sage, but just the history. Originally this was the Kaufman family business. And now talk about the transition to.

Yeah. As I say it. So. Yeah. Thank you. We're celebrating a centennial. The regional organization was formed in 1924 by my great grandfather. And in the 1960s there was this corporation, Sage Realty Corporation laying around. I think they liked the name or the connotation to it. And so since this 1960, Sage Realty Corporation has been the property management arm. Over time that's grown to be leasing and some level of asset management, but it's the forward facing arm. Probably about four or five years ago we made the decision rather than to be out in the market with two separate names and ty very much to. I'm sure we'll talk about this afternoon. Tied to our approach to commercial real estate. We did a rebrand simply as Sage.

And I can already tell and you know, working with you and your team, this is not a sleepy generational family business. I mean, you all are out there again.

We were talking a little bit before.

We came on live about really establishing a brand. So maybe talk about kind of that evolution and maybe kind of your, you know, in that transition, that family dynamic as you're kind of stepping up at the CEO, I would imagine you'd be had a big part of this.

Yeah. Yes. This, this is definitely my, my, my personal vision for the company. But it's a really truly, it's an outgrowth from our approach to commercial real estate for the last 70 years. So we started acquiring larger office buildings back in the late 40s. You know, that was like 200,000 square feet. So actually one property that we still own today, 2 Ganza Fort in the meatpacking. We purchased it at that time. The address was 3350 W. Fourth St. And we closed on that deal in November of 1947, remember the price, what.

That was per foot?

I wish I could tell you that rents on price per square foot were probably somewhere just north over a dollar.

What are they today?

That building blends to just over $90. Yeah, yeah.

It's a spectacular property. I mean, to have an office of that size in, you know, heart of West Village meatpacking. I mean, it is to say kind.

Of the only game in towns is one of the video. It's unique. Yeah, yeah. But in the early 1950s and again we, we were more of a single lot family developer. We had a national presence on retail. So I think most people don't realize in this country, before there was the Ives and Youngs and the JLL and the CBREs, you know, real estate service providers, as local retailers becoming regional, and regional retailers were becoming national. They didn't have a service company like an Addison Young to go to to say, hey, help do the site selection, help me, you know, build the space. They worked with real estate developers like ourselves and others across the country. So. But before we really got into office, you know, we were building retail locations for J.C. penney at Provo, Utah. But the point being is in the early 1950s, both because of where William Kaufman was within the growth of the company and its ability to move into office and seeing a macro shift in the US and he was making a large bet particularly for New York City on ground up office development. And we were off to the race as we developed 711 3rd Ave which still exists today, currently owned by SL Green, but the original lobby is there. And William conference approach to both development and then years later property management, which is the stated vision of, of Sage now is to enrich the lives of people at work. For us, we just see that that definition has changed over the last 70 years. So in. In the early 1950s, this was unheard of. Today you can still walk by, go into 711 Third Ave. And look at the elevator core. And the elevator core is not clad in marble or, you know, oak. It is. It's clad in a mural that was commissioned by us and done by an artist named Hans Hoffman. It's no longer there because it used to be an arcade in order to enter into September 11 3rd Avenue, but there used to be a sculpture by an artist, Jose de Rivera. Sculpture is called Continuum. And the reason that William had placed artwork and not just hung something on a wall, but really made it the fabric of the property is he equated an office building to your own home. Coming out of World War II, the advent of the CI Bill, he believed that we would see the greatest workforce ever created. And that's exactly what happened. And where would these people have to work? It wasn't in factories anymore. It wasn't far land, still very much a farmland country. It was going to be high rise office buildings. And if you were spending more time in your office building, how could he make you feel comfortable? And so I think today we think hanging artwork in a lobby, that's, you know, that's one of a 10,000 things you need to be doing to the lives of people at work. But in the early 1950s, that's that, that's what it was. So we're very much informed by that. And so what, what we have focused on in throughout this rebrand is very much, if I asked you, do you want to work in a William Kaufman organization building, do you want to work in a Sage building? Just the sound of it, right. You know, it sounds better, right? I think to hold on to a name in a sense, and our history is unlearningly important to us, but from a branding perspective, and that's really what we're trying to achieve with our properties and our growth. It's to create a cohesive, branded experience across all of our properties. So it doesn't matter if you're, if you're paid on gross rents, you know, $55 a square foot at 77 Water street or 65 at 777 Third Avenue, or north of 100 at 437 Madison, the experience that you get is going to be consistent. That doesn't mean that everything that's offered at 437is being offered at 77 War street the same way that if you stay at a Marriott hotel, the Marriott, and even in the same city, right, the Marriott Midtown may have a pool in, the Marriott Downtown may not. But your entire experience, from booking to check in to room service, to concierge booking you reservations or assisting you with luggage, whatever it may be, it's unbelievably consistent. And so that's what we're bringing. So our vision is very much to be the Marriott real estate in the future. And whether you're in a Sage property years from now in Los Angeles, D.C. or Chicago, buy properties in, in any of those locations, it's it, it is an exact replica, replicated experience. And we'll know that we hit that if Young's in one of our buildings in the future. And I ask you, you know, where do you work? And instead of saying 530 Fifth Ave say, I work in a sage box. Yeah. Because if I asked you, hey, where'd you go on your last vacation? Help me wherever, you know. I say, oh, where'd you stay? Right? You're not gonna say, oh, I stayed at 1325 Market street office. I stayed at 27 W 57th Street. I stayed at the Park Hyatt, I stayed at the Ritz Carlton. I stayed at the Merritt, I stayed at the Motel 6. Yeah. And we see commercial real estate going.

Wow, you said so many good things there. That last point you made me think about that and it is so true. But what I story and William Kaufman's vision, even at the time, I'm a big fan of Simon Sinek. I had the chance to hear him live at ULI's conference in Vegas and talk about the power of the why. And like, why are we doing this? Are we doing this to make money? Bottom line? I mean, yes, that has to. We're running a business that has to be part of it. But that mission statement that your grandfather was a great grandfather.

Great grandfather.

Grandfather articulated me, I don't think, I mean, I mean, who knows? But I've got to imagine back in the day, a lot of the landlords were, you know, it was a business and this is what it was. And you're thinking more about probably how can you reduce services, spend the least amount of money, then how do you actually enrich the lives of the people that are coming to the building? So I have no doubt this is really where it's headed. And we were talking before as well, but I was at a breakfast this morning and talking about the power of brand and looking at what convenience done right and that consistency. Whereas you travel around the world and you want to do a conference or whatever it is, you know, that convene is going to have that same reliable service. So it makes perfect sense. Now this definitely begs the question because you start talking about other markets and you're going to a sage building. So, you know, maybe just for the audience, talk about the current portfolio and we'll talk about some recent sales as well. But is the vision to have a national portfolio? What. What's the. Then how do you go about accomplishing it?

Yeah, I think if you put up, you know, where do we want to be in 30 years? The. The most equatable piece would. Would be we would like to be the Marriott for Real Estate. That's not just one band, right? Marriott. We want to be the Marriott Inc. Marriott. So Marriott Inc. Has over 30 brands underneath their umbrella. Right. And, and yes, we very much see our growth both within the city and focus is across the country. We think that's actually what where the brand becomes even more powerful is as a national, it protects a global presence over time to, to have properties across. And a lot of the services that we stand up would benefit from effectively that network effect as well. So talk about the portfolio in a moment. But we have an offering known as a Sage Passport. So anyone who works in a Sage property is a Sage member. And there are benefits to being a Sage member. One of those benefits is not just that your company, your employer as a tenant of Sage, an occupant in a Sage property as the ability to rent space within any of our Oasis locations. Those are our amenity spaces, you know, throughout our, our portfolio of the properties that you have Oasis, but you as a member can, can use that space. So again, you know, you think about like enriching the lives of people at work, providing them value, reducing friction in their lives any way possible. I didn't come up with this saying, but I'm a strong believer that outside of health, wealth and family, time is our number one commodity. So we look in every instance, just like checking into this building right now, and what was that experience as a visitor in a commercial office building? And I was saved time because I was sent both by an email and a text message from you or your assistant, right? Effectively a fast pass that I didn't have to check in secured.

And it worked.

And it worked. We went, we went. Yeah, exactly. But we went right to the turnstile, right? Flashed our QR code badge and we went up. That's a much better experience than the typical experience of, here's my driver's license. Why am I even keeping my driver's license? I have a security guard now. You're taking a picture of me now. Something's being printed out now. Half the buildings, you have a security guard standing there and, and everything. So anyway, you know, our members have, have, have access to, to any of those. And the power only becomes more expansive as the brand grows and you have more limitations. So. Yes.

And so Jonathan, I gotta ask you, first of all, I love the vision. It's bold, certainly the national expansion. But if you look at what Marriott has done, or Hilton, they don't own their hotels, right? I mean, maybe 1 or 2% are still owned by the original corporation, but clearly they do it as a manager. So I couldn't help but think, I mean, again, if you're looking to build us out at scale. Let's face it, I mean buying office product is very capital intensive as opposed to if you say hey, we have this expertise, right? We know how to create this brand, this experience. What about all the families that own here in New York that cannot compete with, you know, the big publicly traded owners who have, you know, the resources in house, the depth? I mean is that something that you've ever thought about? Hey, let us buy into your building, let us manage it, let us run it for you. I would think that if you were looking to scale that would be a quicker way to get out there.

Yes. Our future growth doesn't preclude us from participating in the capital stack. It is not going to be driven by the more traditional model. And we explored this a number of years ago effectively. What would be known as an OpCo PropCo approach or Sage would be the OpCo and then a PROPCO would be more of your traditional fund structure and raising money for a GP side and working with strategic equity or simply raising a fund to go out to buy properties that would then be branded and operated Sage, you know, we're looking at a much more capital like model and again it wouldn't preclude us from participating in the capital stack. But it's more akin for listeners and watchers in the hotel industry to what's known as, known as, as a key money clause in, in hotel management contract. So if you're a developer and you're, you have an RFP out your hotel developer you have an RFP out for a standard Marriott Hilton Hyatt type brand. The difference between property management contracts and hotel management contracts. Property management contracts are effectively 12 month contracts. Hotel management contracts are typically between 20 and 30 years. And so by having effectively that guaranteed contractual revenue for that time span in order to, to generate that contractual revenue a Hilton Hyatt Marriott is willing to and understanding that I have to follow all your brand guidelines.

Right?

That and then right.

Which means the pimp and reinvesting. So it's not just hey, we're going to come in and manage and help your efficiencies. Like do you have to elevate the quality of the product?

Right. And you got to spend money just right up front to make sure that all of the napkins follow our brand guidelines. The weather mats, the umbrellas, the uniforms, the brand market in the elevator there's a thousand of those components. Beyond simply here is also 2000 sops that you think you need to follow. So, so our model does not again preclude us and, and many properties would need to be elevated to meet the SAGE guidelines. That doesn't mean every property has to have a high end oasis amenity space. But we do build our amenity spaces on a price per square foot higher than anyone else out there.

Yeah, so, so Jonathan, I've got to ask it and clearly you've gotten really deep into understanding the hospitality space and how mat to the office. I mean how did was this just research you did on your own? I mean clearly it seems like if you have studied the inner workings of Marriott down to the, the foul weather mats, it's just, it's interesting because again you're looking where there's success in adjacent businesses and how do you bring it to, you know, bricks and mortar real estate. So is this something you do in your, your free time or is this like, I mean where are you getting this knowledge from?

Part of it's my background. So I had the amazing opportunity for a brief period of time to work at Starwood Capital really at the very beginning of my career. And Barry Sternlich at that time had just announced his resignation as CEO of Starwood Hotels. He was still effectively at Starwood Hotels. So at that time Starwood Capital was not as active in the hotel industry. But you know when, when your boss is running Starwood Hotels you need to acclimate yourself to and educate yourself on, on that industry. So, so I think that that that's where.

So you were taken up from the office at 5pm and yeah, it sounds like.

I think part of the reason that Starwood Capital was based in Greenwich was you faced at 5 o' clock on the reverse commute and it looked a whole lot better to just stick around till 9 or 10 and then go back to New York. But what an amazing place to work and learn from.

So was that deliberate and as far as you know, the decision of joining the family business? Because I know you also serve as vice president at P and L Investments. I'd love to hear about that. And it feels like you also found this urban grad realty so I want to hear about that as well. So kind of was the thought process, okay, I'm going to go out and learn from, you know, different companies, start my own business and then I'm going to with the idea always, hey, I'm going to land at Kaufman what would ultimately become known as Sage or talk about that.

This was never, there was never a conversation in my real estate career up until the point point where I was invited, asked to come work, work At Sage by my grandfather, Robert Kaufman.

Dude, that was deliberate. Was a. I mean was there kind of this anti nepotism or was it just we want our family to go out and, and gain experience elsewhere or.

My grandfather believed whether it was an option for him or not, it's an amazing opportunity provided to, to end. Both him and his older brother Melvin served in World War II. Upon returning home, Melvin Veeley came to work for the family business. The only person outside of William who immediately jumped into the business Robert Kaufman actually graduated from. I can't believe that NYU's had this so long. Actually graduated from the first real estate class at nyu. So the first person, first class to ever graduate in New York, I believe the country with a bachelor's in science in real estate. And then actually worked for a retail company for about 18 months before he came to work for his father at the William Kaufman Organization. Real estate was his passion and he was a firm believer that following same ethos of you know, enriching the lives of people at work that your life will be enriched if you're, you're not that your work needs to be your passion but that you are passionate about your work. So you know, was, that was his mindset and, and he believed that people should go out and, and find that or for themselves. I'm sure there was a lot of other reasons. Yeah. But behind it and we've had other family members work outside within the company including my own father but as general counsel, director of leasing and special counsel through his real estate career. But that's what. So for me never it was never. I'm going to gain experience or knowledge and then I will end up at Wayne Kaufman Organization Sage Sage Realty Corporation. I was simply just exposed to real estate because that's what my grandfather did, that's what my father did and I was good with numbers and so put me in front of an Excel sheet and you know I'm happy to, to play around with a financial model for hours on end. And so you know you talk to your parents, friends and other people that you know and started working. I was 14 and a half weekly start to actually like paycheck in New York. And once I fell into it I was exposed to it but it wasn't some, some long, long term plan. Yeah.

You know one of my mentors, Paul Matzi always said because his son's now in the business at Brookfield and where he is still today but he always said look we don't. I want my kids working. Other firms get other Experience. And I don't know if that was deliberately because he wanted them to, you know, really have that experience and to make it on their own, so to speak. I know my oldest son's already said, well, dad, when can I show up and start working, you know, with you? And I said, you know, look, first of all, let's not assume you're going into real estate. I keep an open mind. You're in college, there's plenty of time to figure it out. But even if it is something that you love and because to your point, he's got experience, this is what it's like. You need to go out and create your own experience and figure that out. And how much more valuable are you to Sage now that you have these kind of experiences? So I gotta go back and I gotta ask you about this, Irving Grab Grad Realty. Sure. Is this while you were at gw?

No, no. This was informed by my, not my own personal experience, but the experiences that I witness shortly after attending George Washington University. I'm born and raised in New York and so for the few friends that I made outside of New York, kids that I went down to school with, my experience post graduation was I had a job and a number of friends were applying for jobs. End of the, you know, start as early as you can, but right. For many people the job's not lined up and you know, they're doing job applications. They're right. This was way before Skype and Zoom and everything else. So they train or fly into New York, they have a bunch of interviews back then, phone interviews, until you got, got and you could be informed that you know, you got your job and you're starting a week or two weeks and, and now you got to find a place to stay. And so a lot of friends were sleeping on my parents couch where I was staying for, for a short period of time after college and, and, and scrambling to, to, to find an apartment. And so, so I, I started to say, okay, I think I'd notice a, something called Blue Ocean or you know, simply a problem that could potentially be solved and monetized. And, and then I did a lot of research. City Habitats and Bond New York. I'm trying to think of the larger one and store brokerage companies. This is like 2005, 2006, 2005. At the time I think I started researching those and what I saw was that no one was directly marketing to what would be known as the Day one customer. So a lot of people had this mindset like, oh, you get the Renter as a broker, you build that relationship, you maintain that relationship and one day that person's going to grow into a first time an apartment buyer, a second time apartment buyer and you know said.

Buying an apartment today.

Exactly. And but what they were missing was what was the first time renter. Right. I mean yes, they were advertising their typical advertisement. So, so I noticed that there, that there was this gap hole in, in, in the market and that's what we look to solve for. So it I started, I actually started a residential brokerage company and market directly to graduating college students both undergrad and graduate. We did all the market research around you know, basically what are the top feeder schools for jobs into New York City. Many of the schools you, you, you would think of obviously Ivy League, a number of the smaller liberal life Northeastern schools, some larger private schools like Tulane, obviously Duke. And we made a list of about 30, 40 colleges across the country that fed in that we also felt that we could get a good ROI marketing and we were really more of a marketing company. That's what we should have been. That's what we really became over time. Being in your mid-20s trying to operate both a company but also manage 1099 employees that you can't tell them they have to be in the office at 7:30 became very difficult.

So you upselling the company or did it kind of obviously get these juggernauts and City have done ultimately acquired by corporate. It's often to become very professionalized. They have been the street easy but.

Yeah yeah effectively the for a piece of the ip. So at the end of the day after two years or close to at least two summers. Right because that was our peaks right with graduate college students. And one of the things that we were successful in is after we used the data to see that oh we just placed eight of the kids in the Lehman right you know, associate class right into apartments. We then went to the HR department of Lehman and said hey, let's work on a deal where you promote us. Maybe we need a break and things like that. But it was a nightmare running the company. Again, good ideas don't always make good.

Businesses but you know that proactive outreach and I guarantee you there's someone who's listening to this right now who maybe they dream of owning a big office building in New York one day. But they're probably, they have a multifamily right now and or maybe it's student housing. Maybe they're, they're close to a college campus and they're you know that Proactivity, I think is when I kind of listen to the theme of your story and not just kind of being reactive. So I want to talk a little bit about what you've done for George Washington University. So you're now on the advisory board for the center of Real Estate and Urban Analysis. So you know, everybody who's, who's graduated, you know, your alma mater is in my mind, kind of one of your first real networks. Right. And you know, real estate. And I, I could speak from personal experience with the Colgate Real Estate Council that I helped co found. I don't even know how long it's, you know, I do know, I think it's been almost 13 years, which happens to be a lucky number for Colgate. But the point is that, you know, we, we took this kind of online group from LinkedIn in its early days and we just went live with it. Now we have, you know, quarterly meetings and events and you know, we really help with the undergrads for it's a great thing, you know, and my experience, and I'm sure it's the same at GW is when you meet a fellow alum, or maybe it's an undergrad who's calling her for advice. I had someone in my office yesterday from Colgate, like you return the call because someone did, you know, when you were in the seat. So what have you done to help GW create the center of real estate? Right. Because that maybe there's someone listening to this right now. Maybe the school doesn't have, have like a real estate degree or program or whatever it is. Talk about your work there.

Well, transfer to George Washington University. You have a passion for real estate. Yeah. An undergrad and the program's amazing. I, unlike yourself, I can't take any credit for the formation. We still have a couple board members and while not on the board, you know, one individual who should get an enormous amount of the credit is Charlie Beck from Takan.

Oh yeah.

A New York based firm who has done amazing work both for the, the university itself and is integral into what has been the success of what was. Yes, I think the George Washington University center for Real Estate Urban Analysis. I believe we've officially rebranded simply as like the center for Real Estate. Karua was a little bit of a mouth hole and, and I think word, I think maybe just a little bit older than, than cold it. And we're about, I think we're approaching, I think we're celebrating 15 years next year. There's some things going on behind the scenes for that leading up. So I was exposed through Charlie and then a couple other active real estate people in New York. I think first and foremost, both the way I was raised by just William Kaufman set the tone. My grandparents, my parents, the most in, in giving if there was ever you know, a cash gift, you know, with large cash gifts, but from my grandmother, the note always was spend half, spend a third, save a third, give a third.

Wow.

And I think for, for the majority of our family, we you know, live exactly by third or third, a third. But, but, but it definitely sets, set the tone. And Robert Florence Rock he philanthropic. That's what's really his wife. And so for institutions that have played a part in my life and my success, not just professionally, but personally. So I got to come to GW again. The center for Real Estate is within the business school. At the time that I joined the board, we didn't even have an undergraduate concentration that's effectively a major. Right. Concentrations which within GW at the business school. And, and so what many of us, through the support of our board but, but really the people at the, the center itself were able to effectuate working with the administration. George Washington University was to stand up a, a major concentration in real estate for undergraduate. But our focus, as you said, our focus point for the students has been to put them in a position where they are as prepared, if not better prepared than anyone else graduating from any other program across the country. And so we've spent an enormous amount of time speaking to companies like ATS and Young and others. What exactly are you looking for in a graduate beyond a well rounded global citizen? What are the specific skill sets that. And it's, it's pretty surprising how many other real estate undergrad, you know, will study real estate. But maybe senior year you're doing a couple case studies. You've never done artists, you've never done financial modeling within, within the context of real estate. Those are like key core skills.

I think it's such a great thing. I mean when I graduated from Colville with an English major, I didn't know what real estate was. It's very lucky that one of our alums that posted a job opportunity. But again, I know what it was and clearly, you know, with that kind of resume today, I probably would have not yet gotten that shot. And today it's great that real estate has become, you know, one of those industries. You know, used to be everybody just wants to go into finance. You know, the dream go work on Wall Street. You know, certainly the word is out there and I know on this show we get a lot of college students who listen as well. So this is really helpful for you to share that context and I think also for alums, you know, who want to, you know, help kind of share and make this accessible. So Jonathan, I want to talk a little bit about and this also is under your theme of kind of giving back, supporting the community, but your work on the meatpacking bids, the business improvement district. So you know, across the country I'm sure there's a lot of opportunities to kind of help support the community and the place where you live and work. So I've got to imagine that since you've got a prime office asset, you know. Right, right in the meatpacking that, you know, that's certainly helpful. But you know, what's involved, I mean when you just say, hey, it's New York City, you know, they got a big budget, shouldn't they just already, shouldn't they just take care of, you know, the neighborhood or what kind of other things is the bid providing that doesn't already exist there?

Look, I think there are some things that, that, that, that bids take on that, you know, we, we'd love to see the, the city but, but when you really talk about, you know, local government to be able to effectively drill down to, to a neighborhood, particularly when you have a city that's dealing with, you know, five boroughs, 100 plus billion dollar budget that will only continue to grow with our city, you know, bids bids, bids improved districts are supported effectively by an additional tax on commercial real estate within the borders of that bid. And to be able to control and know where that money is going and how that money is being spent and under the auspices. Right. Because again it's a bid, it is a business improvement district. Right. There's a focus on supporting improvement and improving the businesses. Whether that is the real estate owners, the retailers themselves. Yeah. The lives of our, our visitors. Whether that's, you know, international tourism, national tourism, tri state tourism or simply like myself, someone who lives in NoHo and is going to bring their kids, you know, into be packing when there's an amazing event going on. So I think bids in general play played an amazing role that heightens our city and many other cities that have them. This was another one. I joke. I brought up Charlie Bendit from Taconic and I joke. Charlie and Paul Paris are co partners, co founders of Taconic had reached out being very active in the meatpacking district as owners and asked for two gansport our meatpacking we're not selling the property. We've owned it since November of 1947. But I'm happy to take you through and show and tell you what our ideas was. We were about to reposition the asset. I joke it was the most expensive for because you know within a week Charlie had me involved in the GW crew up and and Paul Harrison had roped me in to the at that time I think was the investigative committee and then the steering committee to actually form form the bid. The credit goes to him and some of the other major stakeholders in forming the bid. I got stuck with being the treasurer when it was formed and Paul was what was our chair and led us again through forming that bid and then I got stuck with it. Kind of like becoming the president of your co op board. But it's been an amazing experience. We have amazing staff and, and I think for us we, we just look to elevate what is the, the day to day experience and that could be anything from a surprise and delight moment. You know, surprising someone on can support plaza with, with a jazz band at some random time of the day to doing really some amazing tentpole events. We had dinner en Blanc. It was the first time that Dinner en Blanc for those who don't know Dinner en Blanc started in, in Paris and it's this annual pop up a venue to where no one knows what the location is until finally the day of. You bring your own tables, you bring your own, you, you have to dress in white. Everything has to be in, in white. You bring your own food. It's this amazing communal experience and being part of the bid, you know, we, we got to set up this huge table on Cancer Fort Street. It was the first time that they ever done it really in the street. So it took a lot of effort and hard work and get all credit goes to our staff at the bid left led by Jeffrey Lefloncois in working with the city to allow us to clearly close streets. And we had Mayor Adams show up and dance in the streets dressed all in white, surrounded by thousands. It was amazing.

Jonathan, what I love about your story is I'm sure as being CEO of a company, it's not like you don't have a day job. You're clearly not just involved because there's plenty of people just say okay yeah I'll support this cause and put my name on it but clearly you're doing the work so I really want to recommend you for that. You know, as we start to kind of wrap things up, I, I, I've got to ask. And maybe it's a topic that we don't talk enough about off of this show because you're very focused on, okay, how do you set up the business for success in making your investments. But part of that is also knowing when to sell. Okay, so you're selling two major office assets here in the city. I mean you've owned them presumably for decades. So you know, it not really a question about timing to the market or why you do this or that, but like how do you know when it's time to sell? And I would imagine you're not just going to sell and put the money under the mattress. Or maybe you're following your grandmother's advice and a third, a third, a third. I can't poke holes in that. But I mean clearly this idea of national. So it seems to me that you've clearly, you've made a decision here. And so just for our listeners who are holding assets and thinking about, okay, when should I sell, why should I sell? And what is that thought process like?

I think for any investment, often we look to buy at the bottom, sell at the peak. And from my experience whether working at P and L Investments, boutique investment firm, my own company, Urban Grad Realty, and then my tenure really as a real estate investor, both again before coming to Sage and at Sage, better be early than be late. I think the most of us, we did not have a SAM cell for this, for this market.

We do two Black swan events.

Yeah. You know, we did not have Sam sell 2006, 2007. Right. He wasn't the only one but you know, the most prolific and you know, we're, we're all left, you know, holding the bag in, in this market for us, I think what, and for those particularly who, who were in, you know, family run businesses, again, not, not necessarily just, just real estate, but we're both in real estate and sticking with the topic. You know, there was a Wall Street Journal article written that, that we were part of along with Rubens and other, you know, family members, you know, talking about, you know, that, you know, we, we, we don't sell properties. And at least for, for Sage, the William Kaufman Organization, that's, that's not our history. Our history is we are long term real estate holders. But today before we execute on these two sales, we currently own 3 million square feet of office in New York. As a developer, We've developed over 7 million square feet in New York alone. 711 Third Ave. 4 or 5 Park. We've owned 30 Broad. We've owned 7 Hanover every 5 Hanover we developed 17 Sage St. None of these are part of our portfolio today. So first and foremost, you know our today, right where we're an owner manager of properties and we, our future will be more on the management side. In, in the past, you know we, we were a developer but we're a real estate investor. And so we're looking at you know, as a fiduciary. While we might not be under fund structure or anything like that where we have to sell within 10 years or you know, we raise money under the auspices of, you know, it's a five to seven year hold or we are always looking at the market. We're always looking at each asset. Every time we, before we significantly invest capital into an asset as in New York and across, right we call, you know, repositioning a commercial office asset, not converting. But we're simply repositioning even over the last 15 years before we're going to spend anywhere from 5 to $65 million right in improving that asset. We're looking at the market, we're looking at what is the highest and best use before we reposition 767 Third Ave. We looked at that as a conversion to condo. We looked at it as operating, potentially converting to a hotel. And at that time in the market the number still penciled out to say highest and best use was office. So you know, I think particularly as owner builders, it's harder to let go. There's, there's an emotional aspect to it. I'm sure as most people on, you know, watching and listening to us, you know, you need to remove emotion when it comes to business. And you know, again my background is an analyst. The easiest thing for me is to look at models or options on an Excel spreadsheet and make informed decisions around that. You still have to look at what's going on macro. You have to plant the flag and make some level of assumption right for your model or where you think an industry is going. Where you think maybe a. Something my grandfather taught me was, you know, again we, we look at the macro. But you know, he always said, you know, every building is a sub market to itself and I can attest to that. We yield three buildings on third Avenue next to each other and everybody about what the interest is or what the mortgages do. The each of those properties are attracting different customers. The supply, demand, economic for those properties are different and thus the financial model for those properties are significantly different. They are next to each other. So when people say talk about 3rd Avenue, great you can group 3rd Avenue, you can group Financial District, you can group the Water Street Corridor, you can group Midtown south. But I'm sure you know, as, as you can tell your, your clients, you know, within Midtown south there's, you know, buildings that they can be sold at still 750A square foot and there are other buildings that you know are worth, worth less than the land at this point. So you just have to, you remove emotion, you look at the numbers. You first and foremost act as a fiduciary to your investors. If you're led by that, you still may miss the market. The only other piece of advice I would give is just let go of the ranks. If you think you have missed that market point, unless you are unbelievably well capitalized, it's time to let go.

So John, to be closing advice, not just to. Maybe it's the student at GW who's listening to this right now. Maybe it's somebody who went through their master's program program. They're five, ten years in their career and they're looking to may jump in and become an investor themselves. I mean what, what, what's, what's the advice? What, what are the things that you've done that are consistent throughout your life?

Yeah, that's, that last piece is, is, is probably the more poignant question. You know, I get asked the question a lot with my involvement that the g. GW for the, the Real Estate center bring wave where I can. Right. You know, I want to be a developer. I want to be this like, like what's, and not just within real estate. Right. Someone who works for me, their, their son recently graduated and you know, he passed on a job and works for me was like, you know, what do you think he, he, he should do? And, and I, my opinion was get the first job he can like. I, I, I think there are very and I think will become less and less and we've already seen it, jobs that have a true linear trajectory. You're going to become an attorney. That's a linear trajectory. You're going to become a doctor. For the most part. That's a linear trajectory. Right. Follow these four or five things. You know, so many more of the stalwarts of our industry in New York and probably even in nationally. And I'm sure if you, for the most part there are some similarities, but I'm pretty confident to say that there was no straight line trajectory for just about any of that. So to me it's experience. Right. And one of our most Prolific developers in New York City. Gary Barnett, background's in diamonds. Right. I mean, the list could go on and on. A list of 20, 30 people. Right. Our, particularly for our industry. Our industry is not the. And we talk about this with our students at gw. Our industry is not. Graduate with this degree, get a job at a bank, do that for two years, go over to here, do that for three, do this, expose yourself to these four or five different things. You're going to be ready to be a developer, you're going to be ready to be an investor, you're going to be ready for being a global citizen. I think again, it goes to, you know, what's the approach? So it's the same advice I tell people when we're looking to hire. I don't care about the degree, I don't care. Number one thing, be curious, ask questions. And I think one of the key things to be curious is removing fear. So I've met a lot of people who are naturally curious that curiosity doesn't actually translate because when they're sitting around the table with people like the two of us and we're having a conversation or in a larger group, there's the fear of asking the question. Yeah. Because then the fear is not simply asking the question. The fear is by asking the question, I'm telling them I dealt now. Right. So curiosity is key, but you have to remove that fear where curiosity actually becomes. Right. That, that value characteristic. We are actually asking those questions. And that just cubit of knowledge. Right. I mean, how many times has a deal been struck because you're an English major and you were talking about your favorite book with someone. Right. And again, I learned that from Charlie. You know, just being a well rounded, you know, knowledgeable, you know, person, having your own opinions. You'll garner respect that way. And then you can just have natural conversations. Knowing you and I do this probably 12 plus hours a day when I run into someone at the bar, yeah, of course I want the inside baseball on what's going on. And James, tell me what's going on with that deal mid block in the 30s. But then after that I want to know about you, I don't know about your kids. And then you fall into a natural conversation around common interests and goals. The people that you and I, I'm sure after 12, 14 hours of real estate work that just wants to talk about real estate, the deals and the leases, I want to be home wearing my sweatpants at that point.

This was awesome. And I know the audience is going to get so much out of this. Really appreciate your sharing everything about business, but so much more than that, right? Everything you're doing with the community, success in life, I mean, there's so much here to take away. So I just, I really encourage and I want to thank everybody, those who you know are watching on the live stream, those who are listening now. And the best thing you could do is share this with someone who you think would benefit as well, you know, forwarded along. Jonathan, again, has been incredibly generous sharing his time with this. And again, that curiosity, that knowledge, I love that way that you ended things and being able to ask those questions. So this is what we're here to do. We're here to help you gain that insider's edge to real estate investing. And as always, I really appreciate your watching. Until next week, thank you again.

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