Property Grunt

Monday, October 06, 2008

Another great moment in real estate marketing: Massey Knakal

I miss his hair.

Tom Acitelli of The New York Observer presents a bit of commentary from Bob Knakal about the market.

Bob Knakal Will Not BS You About the Wall Street Crisis

Massey Knakal chairman Bob Knakal prefaces his latest commentary thusly:

Now I know that some of you will jump down my throat and accuse me of wearing my rose colored glasses and laying some broker BS on you just based on the title of this installment. So let me first acknowledge that, looking at the financial sector as a whole, we are in troubled times and in unchartered territory. Our entire “free market” philosophy is being challenged, 158 year old fi nancial giants are going bankrupt and the Government has seized the country’s largest insurance company. Inflation is high, credit is tight, mortgage delinquencies are rising, foreclosures are rapidly increasing, consumer spending is slowing, consumer confi dence is in the toilet and people are liquidating money market accounts based upon fear and these accounts have always generally been considered as good as cash. Budget defi cits on the City, State and Federal level are ballooning and not too many people are talking about how to address them. The Misery Index, which is calculated by adding the rate of infl ation to the rate of unemployment, is being referenced in the Wall Street Journal. This index hasn’t been discussed since Jimmy Carter was in the White House.

But! There are silver linings in the city's building-selling arena. Mostly, the credit crunch of the past 12 months and counting has driven property prices downward in some cases, particularly in Upper Manhattan, creating opportunities for those investors wanting to seize them. (Mr. Knakal's commentary can be read here.) Generally, sales are down or flat.

[T]he market has softened, but not significantly. We expect that prices may have fallen another 5% or so and volume appears to be steady as we get the word out about the relative health of prices. Is there a reason to be optimistic? Notwithstanding my first paragraph today, I think so.

Massey Knakal is considered to be one of the premier commercial brokers in New York City. They have taken a very aggressive approach to commercial real estate which seems to reach the level of a Darkon tournament.

Their business model focuses on acquiring exclusive commercial listings and establishing offices or as I would like to call them, outposts. Their brokers are required to know everything about their respective territories.

I have had the pleasure of seeing Mr. Knakal speak at two events I attended before he cut those fabulous locks of his. He is quite an engaging speaker and you will always learn a thing or two after from his talks.

That being said, I do share his cautious tone but not his enthusiasm for silver linings. Already it has been reported that interest is beginning to wane from foreign buyers for commercial real estate.

If you don't believe me look at his advertising.

Whenever Massey Knakal sends out these post cards there are only two words that are featured which are "sold" or "sale".

The two words that are featured are "Bid Deadline".

Closing a commercial real estate sale is far more difficult and time consuming then any co-op deal. It takes a lot of hand holding and even if a commercial broker gets a slam dunk offer on the first try, they are looking at least a year before the deal closes. Which is why the first two years of a commercial broker's career they are eating ramen and if they are still around they are having dinner at Peter Luger's.

In my opinion, the brokers at Massey Knakal have nor the time nor the resources to coddle buyers. All they want to know is if you have the money and if you are committed. It wouldn't surprise me that the sellers of this listing are also pushing them to unload this property ASAP.

Maybe this was just anomaly. But when starts getting involved in real estate, there is definitely some serious s**t happening in the real estate market.