IIDA Perspective - Spring/Summer 2013 - 19

Most recently, he has written the definitive
guide to finding and fitting out corporate office
space in Manhattan. Released in March, Leasing
NYC is a must-read for any business on the move—
and the designers, architects, engineers, and other
professionals who assist in that effort (or who
may be relocating themselves). Although the
data focuses on New York specifically, the book’s
lessons—and the process it outlines—are
applicable to any city. The volume is also a visual
treat, with images by top architectural
photographer Adrian Wilson, including case
studies of offices that Lorberbaum brokered.
Perspective met the entrepreneur at another of
his sideline businesses—the Midtown coworking
space WorkHouse—to discuss how he collaborates
with clients, what attributes those clients look
for in office spaces, how to fight for a good lease,
and how he advocates for good design.
What does your role as a real-estate advisor entail?
Centric is a boutique firm that does high-quality
work for select clients. They retain me to either
be their real-estate broker or to help them hire
a broker, in which case I then spearhead the project
internally. I like to lead a team and oversee
the construction; I’m very involved in projectmanagement meetings. Basically, I’m there until
the client moves into their new office.
How did this book come about?
I’d recently sold a business and was in a position
where I could afford to experiment a bit. I wanted
to do brokerage differently from everyone else.
Which meant: Stop selling. And start helping
as many people as possible.
By which you really mean: Write a book
and give away your trade secrets! Thanks for that.
I asked myself, “Who can I give the best gift to?”
It’s the person on the client side who’s handling
the relocation. Not the project manager at a
corporation—they have real-estate departments
staffed with very qualified people who know
pretty much anything I could teach them—
but someone at a family business or a privately
held company that has one or two offices and
only leases space every 10 years. The person who
gets saddled with that thankless task is usually
a CFO or a general counsel.

On an elevator recently I overheard two hedgefunders talking about leases their respective firms
had recently signed. Both were similarly sized
spaces in the same building, and one of the guys
was bragging about what a great deal he’d gotten.
I happened to know the two brokers involved,
so I did a little research and discovered that the
person who thought he was getting a good deal had
actually overpaid. That exchange made me realize
how little people know about real estate and leases,
and how poorly educated they are by their broker
Are brokers deliberately not educating
their customers, or is the customer not asking
the right questions?
It’s a highly reputable industry and I think
brokers are, for the most part, good people. I liken
it to the Pareto principal, the 80/20 rule: 80 percent
of brokers are hardworking and honest. But the
20 percent that are earning the lion’s share of
commissions? They are all very talented, but…it’s
a cutthroat business. That was the biggest turnoff
about brokerage for me: I don’t like to be in an
internally competitive environment. At brokerage
companies, people lock their drawers. If you find
someone else’s lead sitting on their desk, and
you have a contact at that firm, you’d go behind
their back in a second.
You just confirmed the cliché of the unscrupulous
real-estate broker!
It can be cutthroat internally, but brokers are
forthright and honest with their clients; they won’t
bite the hand that feeds them.
What’s fascinating, though, is that this business
is allowed to exist. Originally, brokers only
represented landlords; tenants didn’t have reps.
The way the industry evolved, people routinely
represent both sides—and no one seems to care.
I’m not looking to grandstand, but in most
industries you’d never have this circumstance
where the person you’re relying on to handle
the largest fixed expense of your business is
someone who’s completely conflicted, who
may even represent your current landlord.
So, getting back to the guy who overpaid:
What did he not know?
The two guys were focused on the price per square
foot, not the all-in costs; there’s a huge difference.
Also, what happens is: If the landlord needs $85
per square foot but the client has deal comps
that show the market at $65, then the landlord will
charge $64—but on more square footage. And
nobody measures! And to those who do measure,
they just say, “Well, that’s the way it is.”

perspective

Table of Contents for the Digital Edition of IIDA Perspective - Spring/Summer 2013