The Insider's Edge To Real Estate Investing with Jonathan Iger

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 10,000 things you need to be doing to enrich 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 ask 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 unbelievably 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 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, has the ability to rent space within any of our Oasis locations. Those are our amenity spaces throughout our portfolio. The properties that do have Oasis, but you as a member can, can use that space. So again, you know, you think about 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, decided to bring management in house for our commercial properties. And there was this corporation, Sage Realty Corporation, laying around. I think they like, like 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, with, with two separate names and tie 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, you know, 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, so maybe talk about kind of that evolution and maybe kind of your, you know, in that transition, that family dynamic, if you're Kind of stepping up at CEO, I would imagine. You 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, 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, 2gans of, or the meatpacking, we. 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. I wish I could. I can tell you that rents on a price per square foot were probably somewhere just north, over a dollar. Okay. And I think, you know, from a.

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 town.

It's one of the few. It's unique. Yeah. Yeah. So thank you for that. But in the early 1950s and again, 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 absent Youngs and the JLL and the CBREs, you know, real estate service providers, as local retailers are 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, they worked with real estate developers like ourselves and others across the country. So again, you know, not to go sidetracked, but, but before we really got into office, you know, we were building retail locations for JCPenney in Provo, Utah and other areas because they didn't have that expertise. But the point being is, is in the early 1950s, both because of where William Kaufman was within the growth of the company and his 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 races. We developed 711 Third Ave which still exists today, currently owned by SL Green, but the original lobby is there. And William Kaufman's approach to both development and then years later, property management, which is the stated vision of Sage now, is to enrich the lives of people at work. And for us we just see that that definition has changed over the last 70 years. So in the early 1950s this was unheard of. Today you can still walk by and go into 711 Third Ave and look at the elevator core. And the elevator core is not clad in marble or 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 2nd 11 3rd Avenue, but there used to be a sculpture by an artist, Jose de Rivera. Sculpture was 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, to your own home. Right. Coming out of World War II, the advent of the GI 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 farmland, still very much a farmland country. It was going to be a high rise office building. A cohesive, branded experience across all of our properties. So it doesn't matter if you're, if you're paying 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 437 is being offered at 77 Water street the same way that if you stay at a Marriott hotel, the Marriott in, even in the same city, right. The Marriott Midtown may have a pool, 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, be, it's unbelievably consistent. And so that's what we're bringing. So our vision is, is very much to be the Marriott of real estate in the future. And whether you're in a SAGE property years from now in Los Angeles or D.C. or Chicago, five 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. You say, I work in a sage. Yeah. Because if I asked you, hey, you know, where'd you go on your last vacation? Tell me. Wherever, you know, say, oh, where'd you stay? Right. You're not going to say, oh, I stayed at 1325 Market street right. I stayed at 27 W 57th Street. I stayed at the Park Hyatt, I stayed at the Ritz Carlton. I stayed at the Merit, I stayed at the Motel 6. Yeah. And we, we see commercial real estate going that direction.

Wow, you said so many good things there. And that last point, you made me think about that and it is so true. But what I love about this story and William Kaufman's vision even at the time, I'm a big fan of Simon Sinek. I had a 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? A bottom line? I mean, yes, that has to be running a business. That has to be part of it. But that mission statement that your, your, your grandfather was a great grandfather, great, grand, great 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 that 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's the. Then how do you go about accomplishing that?

Yeah, I think, you know, if you put up, you know, where do we want to be in 30 years? The, the most equatable piece would be we would like to be the Marriott. And that's not just one band, right? Marriott. We want to be the Marriott Inc. Not Marriott. So Marriott Inc. Has over 30 brands underneath their umbrella, right? And yes, we Very much see our growth both within the city and hope is across the country. We think that's actually where the brand becomes even more powerful, is a national, potentially global presence over time 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 Sage Passport. So anyone who works in a SAGE property is a SAGE member and their 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 and secured it.

And it worked.

And it worked. We went, we went. Yeah, exactly. 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 giving my driver's license? Security guard, now you're taking a picture of me now. Something's being printed out now, half the buildings, security guard standing there and everything. So anyway, you know, our members have, have, have access to any of those and the power only becomes more expansive as the brand grows and you have more locations. So, so, so Jonathan, I gotta ask.

You because 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 this 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. Yeah. 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 where SAGE would be the OPCO and then a propco would be more of your traditional fund structure and you know, 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. No, we're looking at a much more capital light model. But 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, known as, as a key money clause 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 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 as the OPCO is willing to and understanding that I have to follow all your brand guidelines.

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 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 guideline. The foul 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, that you need to follow. So our model does not again preclude us 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 Jonathan, I've got to ask and clearly you've gotten really deep into understanding the hospitality space and how you bring that to the office. I mean how did was this just research you did on your own? I mean clearly it seems like you have studied the inner workings of Marriott down to 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 free time or is this like, I mean, where are you getting this knowledge from?

Part of it's my background. So I, I had the amazing opportunity for a brief period of time to, to work at Starwood Capital. Yeah, really at the very beginning of my career. And, 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 you weren't taken up from the office at 5pm and you know, it sounds like.

I think part of the reason that Starwood Capital was based in Greenwich was you were faced at 5 o' clock on the reverse commute. And it looked a whole lot better to just stick around till 9 or 10.

Yeah.

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, P and L Investments. I'd love to hear about that. And it sounds like you also founded 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 where I was, was invited, asked to come work at Sage by my grandfather, Robert Kaufman.

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

My grandfather believed whether it was an option for him or not, it was an amazing opportunity provided to him. Both him and his older brother Melvin served in World War II, Mel in the European Theater and Robert in Pacific Theater. And upon returning home, Melvin immediately came to work for the family business. The only person outside of William who, who immediately jumped into the business, Robert Kauman, actually graduated from. I can't believe that, 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 and 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. Right. And he was a firm believer that following kind of 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, that 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, but behind it, and we've had other family members work outside within the company, including my own father, both as general counsel, director of leasing and special counsel through his real estate career. But that's what. So for me, it was never thought, it was never, I'm going to gain experience or knowledge, and then I will end up at William Kaufman Organization, 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. So put me in front of an Excel sheet, 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 I started working, I was 14 and a half legally start to actually paycheck in New York. And I wouldn't say 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 Massey, always say, 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 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, he sees 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 at a SAGE now that you have these kind of experiences. So I, I gotta go back and I, I gotta ask you about this Urban Grab Grad Realty. So was this while you were at gw?

No, no, this was informed by my, not my own personal experience but the experiences that I witnessed shortly after, 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 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'd have a bunch of interviews back then, phone interviews until you got got and, and you could be informed that you know, you got your job and you're starting in a week or two weeks and now you gotta find a place to stay. And so a lot of friends were sleeping on my parents couch where I was staying for a short period of time after college and scrambling to find an apartment. And so I started to say okay, I think I notice a, some call it Blue ocean or you know, simply a problem that could potentially be be solved and monetized. And and then I did a lot of research right at that time. City City Habitats and Bond New York. I'm trying to think of like the larger brokerage companies. You know this is like 2005, 2006, 2005. At the time I think, you know, I started, 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. Right. 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 apartment buyer, a second time apartment buyer and you know, I need an apartment tomorrow. Right, 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, I noticed that there, 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 marketing 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, the smaller liberal arts Northeastern schools, some larger private, you know, schools like, like, 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 on 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 and learn that you can't tell them they have to be in the office at 7:30 became very difficult.

So did you end up selling the company or did it kind of obviously you got these juggernauts and City Habitat ultimately acquired by Corcoran and it's, it's obviously become very professionalized with the advent of 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, we use 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 give a break and things like that. So, but, but it was a nightmare running the company Again, good ideas don't always make good businesses.

But you know that, 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 multi family 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 can 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 what I do know, I think it's been almost 13 years. It happens to be a lucky number for Colgate. But the point is that, you know, we took this kind of online group from LinkedIn in its early days and we just went live with it and now we have, you know, quarterly meetings and events and you know, we really help with the undergrads. 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 career 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 maybe there's someone listening to this right now. Maybe the school doesn't have like a real estate degree or program or whatever it is. Talk about your work there.

Well, transfer to George Washington University. If you have a passion for real estate, you're an undergrad and the program's amazing. I, unlike yourself, I can't take any credit for the formation. We still have a couple OG board members and while not on the board, you know, one individual who should get an enormous amount of the credit is Charlie Bendit from Takano, New York based firm who has done amazing work both for 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 crew. It was a little bit of a mouthful. And, and I think we're, I think maybe just a little bit older than, than Colgan. I think we're about, I think we're approach. I think we're celebrating 15 years next year. There's some things going on behind the scenes for, for that leading up. So, so I, I was exposed through, through, through Charlie and then a couple other active real estate people in, in New York. I think first and foremost, both the way I was raised by, I mean just William Kaufman set the tone. My grandparents, my parents, the most in, in. In giving. If there was ever you know, a cash gift, you know, large cash gifts, but from, from my grandmother, the note always was spend half, spend a third, save a third, give a third. Wow. And, and I think for, for the majority of our family, we, you know, live exactly by third. A third. A third. But but, but it definitely sets, set the tone. Robert Florence Rodney Philanthropic as was really his wife and and so for institutions that have played a part in, in my life and, and my success, not just professionally but but personally. So I, I got to come to, 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 Concentration within GW in the business school. And so what many of us, through the support of our board, but really the people at the center itself were able to effectuate working with the administration at George Washington University was to stand up a, a major, a concentration in real estate for undergrad. But our focus, as you said, our, 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. Country. And so we've spent an enormous amount of time speaking to companies like Abson Young and others of what exactly are you looking for in a, 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 argus you've never done financial modeling 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 Colgate with an English major, I didn't even know what real estate was. I was very lucky that one of our alums posted a job opportunity. But again, I know what it was and clearly if, you know, with that kind of resume today, I would probably would have not 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 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?

Political. I think there are some things that, that, that, that bids take on that you know we, we love to see the city but, but when you really talk about, you know, local government to be able to effectively drill down 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. Improvement districts are supported effectively by an additional tax on commercial real estate within the borders of, 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, in, into meatpacking 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 I joke I brought up Charlie bended from, from from Taconic and and, 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, as owners and asked to tort two Gansborg RV packing buildings. I said quickly 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. My joke it was the most expensive tour because you know, within a week Charlie had me involved in the GW crew up and and Paul Pariser 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. And the credit goes to him and some of the other major stakeholders in, in forming the bid. I got stuck with being the, the treasurer when it was formed and, and Paul was what was our chair and, and led us again through forming that bid and, and then I, I got stuck with it. Kind of like becoming the president of your co op board. But it's, it's, it's been an amazing experience. We've 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 of, you know, surprising someone on Gain Support Plaza with, with a jazz band at some random time of the day to doing really some amazing tent pole events. We had Dinner en Blanc. It was the first time that Dinner on Blanc, for those who don't know, Dinner on Blanc started in Paris and it's this annual pop up event where no one knows what the location is until effectively the day of. You bring your own tables, you bring your own. You have to dress in white. Everything has to be in white. You bring your own food. It's this amazing communal experience. And being part of the bid, you know, we got to set up this huge table on G Street. It was the first time that they ever done it literally in the street. So it took a lot of effort and hard work. And again, all credit goes to our staff at the bid, led by Jeffrey Lefonois in working with the city to allow us to clearly close streets. And we had Mayor Adams show up and dancing the streets, dressed all in white, surrounded by thousands of people. And 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, 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 commend you for that.

Thank you.

As we start to kind of wrap things up, I've got to ask, and maybe it's a topic that we don't talk enough about on this show because you're very focused on, okay, how do you set up the business for success and 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, and 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, you know, national. So it seems to me that you've clearly, you know, you've made a decision here. And so just, you know, for our listeners who are holding assets and thinking about, okay, when should I sell, why should I sell? And you know, what, what is that thought process like?

I think for any investment, you know, too often we look to buy at the bottom, sell at the peak. And from my experience, whether working at P and L Investments, a boutique investment firm, selling my own company, Urban Grad Realty, and then my, 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 sell for this, for this market.

Two black swan events.

Yeah, you know, we did not have Sam Zell 2006, 2007. Right. And 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 this market. For us, I think what, and for those particularly who, who are 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 Rudin's and other, you know, family members, you know, talking about, you know, that, you know, we, 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 405 Park. We've owned 30 broad. We've owned 7 Hanover, technically 5 Hanover. We developed 17 State St. None of these are part of our portfolio today. So first and foremost, you know our today, right. We're, 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, we raise money under the auspices of, you know, it's a five to seven year hold or we are always looking at, 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 the crossroad 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, you know, a con, a conversion to condo. We looked at it as operating, potentially converting to a hotel. And at that time in the market, right, the numbers 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 an emotional aspect to it. I'm sure as most people watching and listening to us, you need to remove emotion when it comes to business. And you know, again, my background is an analyst. You know, 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 a 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 look at the macro. But you know, he always said, you know, every building is a sub market unto itself. And I can attest to that. We own three buildings on third Avenue next to each other and worry about what the interest is or when the mortgage is due. 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, you can tell your, your clients, you know, within Midtown south there's a, you know, buildings that can be sold at still 750 a 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. Miss the market. The only other piece of advice I would give is, you know, just, just let go of the ranks, right? If, if, if you think you have missed, Missed that market point, unless you were unbelievably, well, conf. A lot, it's, it's, it's time to let go. Yeah. So.

So, Jonathan, in closing advice, not just to. Maybe it's the student at GW who's listening to this right now, maybe it's someone who went through their master's program, they're five, 10 years in their career, and they're looking to maybe jump in and become an investor themselves. I mean, what's the advice? What are things that you've done that are consistent throughout your life?

That last piece is probably the more poignant question. I get asked the question a lot with my involvement at the GW for the Real Estate center, where I can. I want to be a developer. I want to be this. 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 she works for me, was like, you know, what do you think he, he should do? And, and I, my opinion was get the first job he can. Like. I, I think there are very, very few. And, and I think it'll become less and less. And we've already seen it. Jobs that have a true linear trajectory. You're gonna become an attorney. That's a linear trajectory. You're gonna become a doctor for the most part. That's a linear trajectory, right? Follow these four or five things, you know, so many more. The stalwarts of our industry in New York and, and probably even in nationally. And, 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 them. So to me, it's experience, right? And one of our most prolific developers in New York City, Gary Barnett, Fat runs in diamonds. Right. You know, I mean, the list could go on and on, right? A list of 20, 30 people, right? 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. About being a global citizen. I think again, it goes to, you know, what, what's the approach? So it's the same advice I would I tell people when, when we're looking to, to hire. Right. I don't care about the degree. I don't care like number one thing, be curious.

Yeah.

Right. Ask questions. And I think one of the key things to be curious is removing fear. Right. 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 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 don't know. Right. So curiosity is key, but you have to remove that fear where curiosity actually becomes. Right. That, that value characteristic where you're actually asking those questions and then just cumulative knowledge. Right. I mean, how many times have has a deal been struck because you're an English major and you were talking about your, your favorite book with someone. Right. And again, I, I learned that from, from, 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, 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 you know, James, tell me what, what's going on with that deal mid block in the 30s and, but then after that, like, I want to know about you, I want to know about your, your kids. And then you found you fall into a natural conversation around common, common interests and goals. The, 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 and the deals and the leases. I want to be home wearing my sweatpants at that point. No. No way.

Yeah. Well, Jonathan, this was awesome and I know the audience is going to get so much out of this. Really appreciate your sharing everything about, you know, business, but so much more than that, right. Everything you're doing for the community, success in life, I mean, just 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, you know, the best thing you can do is share this with someone who you think would benefit as well, you know, forward it along. Jonathan, again, has been incredibly generous sharing his time with this. And again, that curiosity, that knowledge, I love that way that, 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.