Jane Adler is a Chicago-based freelancer writer.
A Sign of the Times: Clients' Knotty Problems Call for Big Ideas.
Meet four commercial pros whose bold moves have taken them far.
August 1, 2000
Landing a deal with a top-tier client. Breaking into a new international market. Being named No. 1 salesperson in a global commercial company.
Those kinds of accomplishments are anything but lucky breaks. They’re the result of years of hard work, specialty education, impeccable timing, and, most of all, the ability to serve customers beyond their wildest expectations.
That’s the stuff we were looking for when we set out to identify four commercial practitioners—specialists in industrial, office, property management, and retail--for this month’s cover profiles.
Our four subjects--Donald Schnabel, SIOR, New York; Wilma M. Warshak, SIOR, Seattle; Adrian A. Arriaga, CCIM, McAllen, Texas; and Edward H. Boudreau, CPM, Dallas--talked with REALTOR®Magazine about a favorite recent deal. When hearing them talk about those projects, it became clear what gives these professionals their edge.
Read on for insights from these four standouts on snagging the killer deal--and keeping discriminating clients happy.
Office: Donald Schnabel, SIOR
Tip: Don’t only think of your clients’ requirements. Understand their business and present ideas to help that business.
Donald Schnabel thinks big.
Imagine a neon sign as big as two basketball courts plastered on the front of a New York City office building. Behind the sign, picture a showcase broadcast studio and visitor’s center where people can watch capitalism at work.
That was one of Schnabel’s big ideas, and he made it happen.
Last year he convinced The Nasdaq Stock Market--which was straining from the burden of increased visitor traffic in its offices--to lease space in New York City’s Times Square. Schnabel turned Nasdaq’s burden into a blessing, helping the company raise its public profile. He also helped negotiate an agreement for the Nasdaq sign out front, a $37 million eight-story flashing electronic placard facing Times Square that dazzles tourists and, it is hoped, a few investors, too.
Big ideas come naturally to Schnabel, vice chairman of New York--based Julien J. Studley Inc., where he’s worked for 35 years. He has represented office tenants, managed lease negotiations, and--for a number of years--directed the company’s consulting practice.
Schnabel gets credit for another big Manhattan real estate deal, Citicorp Center, built in the early 1980s in midtown. He assembled 17 parcels for the Citicorp office site. The whole deal took four years to complete, he says. Some of his other big clients include British Airways, Salomon Brothers, and United States Trust Company of New York.
The tough, time-consuming assignments appeal to Schnabel the most. They’re the ones that get his creative juices flowing and spawn the big ideas. The Nasdaq deal, for instance, took years to evolve. In 1988 Schnabel arranged an office lease for Nasdaq totaling 100,000 square feet at 33 Whitehall Street, then a new building in New York’s financial district. The office space included a small visitor’s center that showcased some of the basics of electronic trading.
At the time, Nasdaq had no intention of becoming a regular stop on the New York City tourist circuit, but it was soon overrun with visitors. Groups clogged the elevators, making life difficult for the other office tenants in the building. The landlord finally called Schnabel and told him the tours had to stop. Schnabel suggested that Nasdaq look for ground floor space somewhere else. “They weren’t interested,” he says.
Meanwhile, Times Square was undergoing a remarkable rehabilitation, changing from a seedy plaza into a family-oriented venue for TV networks and big-time theaters. A new 1.1-million-square-foot office tower, 4 Times Square, had street-level space available, and Schnabel wanted Nasdaq there.
At first, Nasdaq didn’t bite. But Schnabel found an internal ally, a Nasdaq marketing exec who saw the site’s potential. “He was hooked,” says Schnabel.
Nasdaq took the first two floors of the office building. In the first-floor broadcast studio, TV journalists report stories about Nasdaq companies. The second floor visitor’s center welcomes tour groups, lots of them.
Of the whole deal, Schnabel seems most pleased with the signage: the fact that Nasdaq didn’t lease just a portion of the massive electronic sign but took the whole kit and caboodle, loaded with ticker symbols, video monitors, and billboards. “It’s the most technologically advanced sign in the world,” marvels Schnabel, adding that the sign was up and running in time for millennium celebrations last December. “The Times Square space offers the world’s highest profile signage.”
There’s nothing like seeing your success in lights.
Industrial: Wilma M. Warshak, SIOR
Tip: Success is finding the right fit for you and then working tirelessly at it.
Imagine your home phone ringing at 9:30 one Sunday night. On the other end is Amazon.com, which has hand-picked you to select sites for its distribution centers worldwide.
Just one catch: No one can know who the tenant is--not your colleagues, not your friends who work at Amazon, not even your general manager.
That’s just what happened to Wilma Warshak last year.
Over the next several months, Warshak, SIOR, senior vice president of Colliers International in Seattle, combed 40 states and overseas to find seven sites in the United States and Germany totaling more than 4 million square feet.
“It was exciting to be part of such a historic deal--setting up the infrastructure for the General Motors of the Internet,” she says.
With all eyes on Amazon.com, anticipating its major expansion, Warshak kept the deal under wraps. She avoided the Amazon offices for fear of being recognized. She called brokers in cities she was scouting from the road so they wouldn’t know where she was based and gain clues about Amazon’s identity. She closed the first deal, in Reno, Nev., on her cell phone while sitting in her car outside a Starbucks.
In addition to entrusting her with its secrets, Amazon gave Warshak authority and responsibility beyond the site selection and negotiating that is customary for a broker.
Warshak worked directly with the architects, attorneys, and various Amazon departments, which she says made the deals come together much faster than if she’d been confined to working through one Amazon contact.
“I could see the red flags and knew what questions to ask of engineers, architects, and builders.
“With such tremendous trust placed in me, I gave everything I had to those deals,” she says. “I felt it was the summation of everything I’d learned over the years.”
Warshak might never have gotten the chance if she had not been so persistent about finding work in industrial real estate 13 years ago.
Despite her six years’ experience as an architect, Warshak couldn’t get brokerages to take her seriously. When Colliers wouldn’t return her calls, she showed up at the office at 6:30 one morning and sat in the reception area, waiting to nab the president and make her pitch. He never showed up that day, but another partner in the firm took note of her persistence. “He liked that I didn’t observe the rules, so he hired me,” she says.
Today Warshak is the top U.S. producer for Colliers International, and her tenacity has earned her topflight clients, including UPS and Boeing Corp. Last year she sold an 800,000-square-foot Boeing property to a telecom developer for almost $28 million.
Deals like these, as well as smaller industrial sales and leasing projects, have put Warshak among Colliers’ top 25 brokers for most of her 13 years with the company. She attributes her success to plain, old-fashioned hard work.
“I’m kind of quirky. I don’t play golf, I don’t dress for success, and I don’t schmooze people,” she explains. “But I work really hard, I’m trustworthy, and I get things done.”
Her first year at Colliers, Warshak worked 13-hour days seven days a week, then worked from 8 p.m. to midnight as an architect to pay her bills. Money was so tight she rented out most of her apartment to a boarder and had to borrow other brokers’ cars to meet clients.
Warshak perseverance against those odds stemmed from her belief that brokerage was a better career fit for her skills and temperament. “I was never going to be a top architect. But I thought I had that potential as a broker.”
That she had.
Retail: Adrian A. Arriaga, CCIM
Tip: Deals with foreign investors take time: They have to trust you first.
Mexico lies just a few miles away, yet it’s worlds apart from the Texas border town of McAllen, where Adrian A. Arriaga runs his real estate business.
Arriaga’s keen understanding of the cultural differences between Mexico and the United States has inspired Mexican investors to seek him out. Recently, it helped him cinch a $2 million deal on an underperforming retail center. And it’s helped his company’s earnings soar: His goal for 2000 is $1 million in gross closed commissions.
Arriaga’s company, AAA Real Estate & Investments, is a study in how a small company can serve international real estate clients. The company--which employs his wife and son and a secretary--specializes in property management, sales, and leasing, working with national retailers such as Service Merchandise, Pier 1 Imports, and Applebee’s. But the company has made big strides since Arriaga went south of the border in 1982 and began working with Mexican investors. Today he manages about 300,000 square feet of Mexican-owned property, primarily shopping centers. All the properties are located on the U.S. side of the border in the Rio Grande Valley. He has 12 active Mexican clients; others would be in the market, he says, if more good properties were available.
Selling Mexicans on the value of owning U.S. real estate isn’t hard. Because of the stable U.S. economic climate, Mexicans like U.S. properties, Arriaga says, particularly income-producing ones. Money holds its value better here than in Mexico, where inflation runs about 30 percent a year.
“We create wealth by sheltering the investor’s currency in real estate,” says Arriaga.
Arriga’s biggest challenge has been winning Mexicans’ trust. That takes patience--more than you’d need working with a U.S. investor, he says. Mexicans want to get to know you as a person before they trust you, he says. “I often do business at breakfast, lunch, or dinner. It’s not unusual to spend three to four hours at a meal, but working out a deal that way creates confidence.”
One way Arriaga builds confidence is by speaking his customers’ language. His clients, primarily wealthy individuals from Mexico City, are fluent in English and Internet savvy. But they’re more comfortable conversing in Spanish.
Arriaga is of Mexican descent but didn’t grow up speaking Spanish. “The only D I got in college was in Spanish,” says Arriaga, who has bachelor’s and master’s degrees from Texas A&M University.
Although learning Spanish wasn’t a priority in his youth, he made it a priority for his business, visiting Mexico and speaking Spanish as often as he could. Now bilingual, Arriaga writes property reports for his customers in Spanish. But, he cautions, it takes more than a mastery of the language to earn the trust of a Mexican investor.
“You really have to love Mexico if you want to succeed in business with Mexicans,” he says.
Professional titles, such as Arriaga’s CCIM designation, also help create confidence with a wary foreign investor. So does a sharp image. Temperatures in McAllen can soar to 100 degrees, but Arriaga is one of the few local practitioners who always wears a suit and tie. On Fridays he puts on a sport coat--his idea of casual.
Americans who tackle the trust issue may also need to work at educating new Mexican investors about how real estate transactions work here. Example: The recent $2 million sale Arriaga arranged involved a 65,000-square-foot retail center that needed a face-lift and a new marketing plan. The buyer wanted to pay cash for the property because he feared the 20 percent-plus interest rates common in Mexico, he says. “We [Arriga, along with the investor’s attorney and CPA] finally convinced him to put down only 50 percent and to get a low-rate U.S. mortgage, which also gave him a big tax break.”
After the purchase, Arriaga signed two new anchor tenants for the shopping center--Blockbuster Video and Kinko’s. The property now generates an annual return of 23 percent, which has prompted the investor to buy another retail center with upside potential.
A believer in the power of the printed word, Arriaga hands out 10 business cards a day, whether he’s here or in Mexico. He also sends thank-you notes, a practice he considers a lost art.
Maybe so, but it’s an art that hasn’t lost any of its power for Arriaga.
Property Management: Edward H. Boudreau, CPM
Tip: Focus your business as much as you can. Don’t manage by accident.
Ed Boudreau showed up in Orlando, Fla., to pitch his property management services just as the first homes were closing at Celebration, the innovative master-planned community founded by The Walt Disney Co.
Boudreau hadn’t set his sights on landing Celebration as a client, but when he discovered through personal contacts that the community was considering outsourcing the management, he jumped at the opportunity.
As it is, Boudreau acted just in time to be part of history. “Six months earlier and the issue of association management wouldn’t have come to the top of Celebration’s list,” he says. “Three months later, they’d have found a different solution.”
Capital Consultants Management Corp. (CCMC) now manages both the residential association and the retail and office associations in the charming, made-to-order town of 3,000 residents.
Built to foster interaction and neighborliness, the much-studied Celebration features houses fronted by porches instead of garage doors and a blend of apartments, town homes, and luxury homes. When its first residents arrived in 1996, they were greeted by a full-grown downtown--restaurants, shops, a first-run movie theater, a bank, a post office, a school, a health center, and a town hall (now home to CCMC’s community services manager). There are 1,300 single-family homes and town homes, 650 apartments, and more than a million square feet of commercial space.
“The community is truly the product here, more than the homes,” Boudreau says.
That makes CCMC perfect for the job. Half the 45,000 units the company manages are in large-scale, master-planned developments throughout the Sun Belt, where CCMC runs the community association as well as the common area property maintenance.
In such an environment, the community association is extraordinarily important, offering activities and amenities, channeling information, and acting as a focal point for residents.
No community illustrates that point as well as Celebration. “The manager is much more involved in bringing people together as a community than in punishing people for letting their grass get too tall,” he says. “Even the way the covenants are enforced is gentle, with personal phone calls taking the place of form letters.”
One of the biggest challenges for Boudreau has been adapting to Celebration’s residents, who are passionate about the community they’re helping to build and have high expectations. “Celebration thrust us front and center into the service business,” he says.
In addition to overseeing the parks and pools typical of large-scale developments, Boudreau’s company manages Celebration’s recreation program, which employs a full-time director. The association also runs an Intranet and a monthly electronic town meeting, where residents’ questions are answered live on closed-circuit TV.
“We’re locked into Celebration’s vision of how important community building is,” says Boudreau. “If you can’t get people involved, it’s just another place to live.”
Key to getting the Celebration contract, Boudreau says, was demonstrating his 27 years of experience right out of the box. He addressed a number of matters the developer hadn’t had time to consider--standard issues such as trash pickup and swimming pool passes, as well as long-term issues like financial reserves and bringing residents into the decision-making process.
Perhaps the biggest surprise for Boudreau has been the level of public and media scrutiny focused on Celebration, with journalists and buses of tourists arriving daily from all over the world. Interest is so intense that even mundane, day-to-day details have become media fodder. “Virtually every planned community in the country has covenants relating to exterior home colors and window treatments,” he recalls. “Celebration’s made the front page of The New York Times.”
Even after four years, that scrutiny remains, Boudreau says, though it has shifted from sheer curiosity to examinations of Celebration’s success as an early foray into new urbanism.
If the media spotlight has added to the challenge of managing Celebration, it’s brought rewards too. Getting the Disney-owned development on CCMC’s client list has helped Boudreau acquire new business and even aided in recruiting, he says. “Having this type of exciting community in your portfolio attracts employees who want to be a part of it.”
Perhaps best of all, the experience has been significant for Boudreau himself. “To pass the quality filter of a company like Disney has given me personally a lot of confidence that no other prospective client would ever give me tremors.”
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