Bestreich Realty Group President Derek Bestreich got his start in the industry in 2009 as a broker at Marcus and Millichap and launched his own eponymous company seven years later with partners Luke Sproviero, Steve Reynolds, Erik Rodriguez and Adam Lobel. The commercial real estate investment sales group focuses on central and northern Brooklyn neighborhoods such as Carroll Gardens, Crown Heights, Clinton Hill, Bedford-Stuyvesant, Bushwick and Flatbush, and it has closed on transactions including a $19.1 million multifamily property at 770 St. Marks Avenue and an $11.4 million mixed-use property at 66 Graham Avenue. Bestreich recently spoke to The Real Deal about how his career got started, his company’s expansion plans and why he thinks the Brooklyn real estate market still has room to grow.
This interview has been condensed and edited.
How did you get started in real estate?
I started my career working for a cell site lease acquisitions company. I basically cold called landlords at buildings that had cell towers on their rooftops, and I’d offer to buy the cell tower lease for the company I was working for. All that time I was cold calling these landlords, I just became really intrigued by real estate. I met with all these owners, and I just really wanted to understand the real estate market. Then the market that I was in collapsed in 2008 with the economic downturn, and I decided to become a real estate broker in January of 2009.
What is the hardest part of your job? What about the most fun?
The most difficult part of being an investment broker is just dealing with the sheer amount of rejection because most people are not selling their properties. I have guys that come in here, and they have to deal with “not interested, not interested not interested” all day and maybe get one or two people that might open the door just a little bit. That’s where most people fail as brokers is just the sheer amount of rejection they have to overcome.
The best part is the thrill of the deal. It never gets old. Putting a deal together and winning and knowing that you succeeded, that you’re going to get your fee, and you’re going to get rewarded, it’s a thrill.
Describe a typical day in the life at your job.
I get to the office around 8:15 a.m. Basically, my day is just full-time offense: working with other guys in the office trying to get listings and trying to sell the listings that we have. Everyone sits in an open office. People are shouting “What about this deal?” or “I’m working with that buyer!” It’s just really high energy, and the days just fly by. I normally leave here around 7:00 p.m. I live a mile from work, so it’s an easy commute.
What sorts of real estate trends are you seeing in your neighborhoods? Where do you see the market going in the next five years?
For the longest time, people bought rent regulated buildings and wanted to try to add value to those buildings. That still exists, but demand has shifted toward free market properties and development. Right now, Brooklyn is practically one big development site. It’s just a massive trend towards renovation and construction and new development, and I see it continuing. There are old owners in Brooklyn that have owned for decades that haven’t sold, and there’s an amazing amount of capital that’s trying to be deployed into Brooklyn, so I think the market still has a lot of room to grow.
What do clients find most surprising about the neighborhoods you focus on?
I think people are surprised at the changes that have happened in these neighborhoods in the past five years. It’s interesting because you can go to Bushwick, which was not really a place where people would want to live five years ago or especially 10 or 20 years ago, and today, it’s got some of the coolest new construction in all of New York City. And what’s interesting is neighborhoods like Bushwick or Crown Heights or Bed-Stuy, any of these markets, they’re starting to get a better building stock than a lot of Manhattan. It’s better construction, better renovated, better laid out units, and it’s getting that cool factor.
Do you have plans to expand to other neighborhoods/boroughs?
Yes, we do. We’re in discussions to move our office to lower Manhattan. I want to position the company so we can start working in upper Manhattan, the Bronx and Queens and become a full New York City firm because right now we’re just a Brooklyn firm.
What tends to attract investors to your neighborhoods? Conversely, what tends to keep them away?
One way or another, people are looking for value added. People are looking for buildings where there’s a good story to tell. There has to be a good story around the neighborhood. People also love proximity to subway lines. That’s always a big one.
There are a lot of reasons why people would stay away. If it’s not in a good location, that makes it much tougher. If it doesn’t have good access to good public transportation, that’s tougher. If the deal has stuff like Section 8 or a regulatory agreement, that stuff is tougher to sell. If there are a lot of HPD violations on the property and the tenants are calling 311, people think that it’s a troubled property and don’t want to go near it.
How did you end up focusing on these Brooklyn neighborhoods?
I moved to Brooklyn in 2006 just based on a roommate situation, and I ended up loving it. I was just always drawn to the “B” neighborhoods. The “A” neighborhoods like Park Slope and Brooklyn Heights never really excited me, but I was always really excited by Bushwick and Bed-Stuy and Crown Heights and Prospect-Lefferts Gardens. Then those neighborhoods started to transform, and I was just there to ride that all the way up. Now, a lot of that has blended together. In Crown Heights and Park Slope, you can have the same buyer that wants to buy in both markets. A developer for Williamsburg, he can be a developer for Lefferts Gardens as well. People don’t discriminate among the neighborhoods the way they did in the past.
What are the most effective ways you’ve found to drive interest in your neighborhoods?
I think it’s all deal specific and deal focused. It’s a function of knowing what type of properties I’m selling and trying to match them with the right profile buyer. You want to obviously tell the story of the neighborhood, but so many of these neighborhoods you could even tell the same story. In upper Manhattan, Queens, the Bronx, similar stories are going on in all these neighborhoods. They’re improving. New York City is continuing to improve as a whole. It’s becoming safer. It’s becoming more desirable.
What would you be doing if you weren’t in real estate?
If I was not in real estate I, unfortunately, would have found some other probably more corporate line of work, probably like sales or origination related. I probably would have been working in insurance because that I think is a direction that I was pushed. But if I was working in a more corporate setting, I don’t think I’d enjoy it as much.