In the midst of the financial crisis, commercial real estate firm Massey Knakal Realty Services has reduced the number of agents by a quarter to 46 from 63, in order to increase the brokers’ territories, the company’s chief executive officer said.
Paul Massey Jr., CEO and co-founder of Massey Knakal, said the reductions were not made in reaction to the weak marketplace, but to increase the potential sales volume for the remaining brokers.
“Everyone will think this is in reaction to economic externalities, but the planning for the growth in territory size has been going on all year,” he said in an interview.
The latest round of cuts was last month. Compared to the start of the year, the number of agents in Brooklyn and Staten Island has dropped to 14 from 21; and Queens and Nassau has declined from 15 to eight, Massey said. Manhattan, the Bronx and Westchester has fallen by three to 24 brokers.
The firm expects to open 12 additional territories in New Jersey over the next year and a half, he added.
Massey Knakal, founded 20 years ago as a brokerage for small- to mid-size commercial investment sales in New York City, was ranked 23rd in a national brokerage survey by National Real Estate Investor in July, with $2.2 billion in sales in 2007.
The city saw a 31 percent decline in commercial real estate sales in the first half of the year, the firm reported last month. Also this year, private employment in the five boroughs dropped by 32,000 jobs in the first seven months, including about 1,500 between July and August in real estate-related fields, according to data from the Bureau of Labor Statistics.
John Falco, a former Queens broker with Massey Knakal who lost his position in the reshuffle, attributed the job reductions to the tough economy.
“All the real estate firms are feeling the pressure from the credit crunch,” said Falco who is nevertheless upbeat about opening his own brokerage firm.
He and broker Rubin Isakharov, who worked together in the Queens’ office, opened their firm, Falco and Isak Realty Services, about a month ago. The firm has four listings in Western Queens.
“It is a great time to build your name. Obviously the volume and transactions will not be the same as the previous year, but some of the best companies have started in hard times,” he said.
Massey said discussions to reduce the number of brokers began in January, and the final decision was made in the spring. Overall employment at the brokerage has dropped to 146 from 191 at the start of the year, he said.
The firm has made upper management changes as well. Ken Krasnow, who most recently served as chief operating officer at Apartment Realty Advisors was brought on Monday as managing director of the Brooklyn office. He is a former executive vice president and director of brokerage services at Trammell Crow Company and before that served for 18 years at Cushman and Wakefield, most recently as executive managing director for the New York metropolitan region. Krasnow, who is not a company partner, will also serve on the company’s senior management team.
The Brooklyn director position has been vacant after departures by Timothy King, who is suing the company for allegedly failing to provide audited financial statements, and his successor, Brian Leary.
The hire was part of a management philosophy change away from brokers leading offices. The Queens office, however, is still managed by broker Tom Donovan, Massey said.
In August, the firm announced that Kyle Mast would run the Manhattan office.