Handling the new normal

Not long after he was named vice chairman and head of North America Retail Services for Cushman & Wakefield, Gene Spiegelman was summoned by then-CEO Edward Forst. That was two years ago, and it was when Spiegelman first heard the news: Rival DTZ was buying the global real estate services firm for $2 billion — and he would be overseeing the integration of the two companies’ retail-services operations.

At first, the news wasn’t entirely welcome.

Spiegelman, now 52 years old with an estimated 900 deals under his belt, had been looking forward to using his position to make new inroads in the U.S., as well as Canada and Mexico. Now that would be put on hold as the deal maker spearheaded the retail side of the merger, traveling around the world, visiting retail operations and helping to form a new platform.

With that complex task now behind him, Spiegelman is leaving the position, though not the firm. “There are other people who can take the platform to the next level,” he said. “The size and scope of the company has taken me away from where my heart is.”

Going forward he will focus on his main interest: production. And he is trying to figure out how best to do that in the current unsettled retail environment and within the new Cushman & Wakefield, the name of the merged $6 billion company (the firms decided to drop the DTZ).

While it was a tough transition, Spiegelman said the merger with DTZ created a bigger and more well-rounded platform. “It effectively doubled our business,” he said, adding that the partner companies had complementary strengths. For example, while the former Cushman had a strong retail business in North America, DTZ’s presence was bigger in the West Coast and Midwest. Plus the merger offered Cushman the capabilities of real estate services firm Cassidy Turley, which DTZ bought in 2015 for $550 million — along with, most importantly, its retail portfolio services center, which has a 300-person platform for retail brokerage services.                                                         

Certainly, the merged firm is a behemoth of global commercial real estate, with 300 offices in 70 countries, 45,000 employees and more than 4.3 billion square feet under management worldwide. As of last year, Cushman had leased over 20 million square feet of retail space. The company is majority owned by an investor group led by global private equity firms TPG and PAG, along with the Ontario Teachers’ Pension Plan.

In his new role, Spiegelman will spend his time doing intensive research and analysis, evaluating where he sees the business heading and how the new Cushman fits into that trajectory.

“We have this platform. Now how do I use it?” he said.  “How do I start moving strategically to be effective in the new reality?”

Spiegelman says the key to success now is speed. Thanks to social media and fast fashion, store operators have to react to changes in consumer demand much faster than before. That also calls for smaller footprints.

“It used to be, retailers didn’t know what consumers were going to buy, so they showed everything,” said Spiegelman. “Now, because they’re able to collect much more data, they know what’s selling and what isn’t and can be smarter about how they manage inventory.”          

Spiegelman represented Millennium Partners in the lease of 112,000 square feet to Primark, a leading European fashion retailer, at the Millennium Tower/Burnham Building in Boston. It opened in the fall of 2015.

Despite the recent closings of 470 stores from eight of the biggest retail brands, including Macy’s and JCPenney, the most recent quarterly figures show little change in vacancy rates, according to research firm Reis. In many cases that’s because old spaces are being used in new ways, including such experiential destinations as rope climbing courses and trampoline parks.

Those in retail real estate “have to be more creative and figure out what works and doesn’t work,” said Reis senior economist Barbara Byrne Denham.

When it comes to getting creative, one of the most powerful benefits of the merger, according to Spiegelman, is being able to tap DTZ’s retail portfolio services center, which does consulting work like client-specific white papers, portfolio optimization studies for retailers and demand studies for developers.

The business also has some big clients, such as Edward Jones and H&R Block. There are now about a dozen professionals driving retail consulting, research and analytics, around double the number before the merger.

But it’s his work ramping up Cushman’s urban retail business that Spiegelman points to with the most pride. “I built the retail business from virtually nothing,” he said. “There was a lot of room to grow.” 

He said he expanded leasing revenue from “almost [zero]” in 2000 to $90 million in 2014. During that time, he was named top retail producer for the firm for five separate years and was consistently among the firm’s 100 highest-performing real estate professionals.

Spiegelman joined Cushman in 2000 after it bought his 18-month-old brokerage firm.  At the time, the company had five retail brokers in the U.S. Spiegelman brought eight more with him. His first big deal was with Crate & Barrel, a 48,000-square-foot space at Broadway and Houston in Manhattan. The agreement closed in November 2001. He won a prestigious Retail Deal of the Year award from the Real Estate Board of New York for that transaction.

Eight years later, he won the award again, for representing Gucci in a sublease of 20,000 square feet for the first three floors of the client’s building at 685 Fifth Avenue in Manhattan to the hip fashion retailer Diesel. Another New York coup: all the leasing for the 85,000-square-foot retail space at the ultra-exclusive 15 Central Park West, which was developed by Arthur and William Zeckendorf. And just before Spiegelman was tapped to run North America Retail Services, he took part in another biggie. He represented Millennium Partners in the lease of 112,000 square feet to Primark, a leading European fashion retailer, at the Millennium Tower/Burnham Building in Boston’s Downtown Crossing. It was touted as the most significant retail deal in recent Boston history.

But he didn’t remain focused on New York City or the East Coast. From 2002 to 2008, he helped expand the business in Europe and Asia, going past his broker duties to create and build new relationships and partnerships. In 2005, he pioneered casino retail development in Macau. And he was directly involved in launching the first Equinox in London, a 35,000-square-foot space in West London; the Cushman team also introduced the first Whole Foods and Abercrombie & Fitch in London, and first Apple store in Tokyo.

“Gene was the cornerstone on which we built our retail capability, culminating in the current level and quality we have today,” said Bruce Mosler, Cushman’s chairman of Global Brokerage and former CEO.

Now, as he considers his next act, Spiegelman, like the rest of the industry, is wrestling with what the growth of e-commerce and digital technologies portends. Owners and retailers are still figuring out the best strategies — whether to push further into urban retail, for example, or invest in more-upscale, high-rent areas, according to Spiegelman.

“We’re in a rebalancing period,” he said. “And we’re not near our new normal yet.”

A day in the life of Gene Spiegelman:

7:10 a.m. I leave my house to drive my seventh-grade daughters, who are twin sisters, to Roslyn Middle School.

7:44 a.m. It’s either the LIRR from Manhasset to Manhattan or a workout at Equinox, depending on the day. Time to read WSJ and the latest Real Deal newsletter.

12:30 p.m. Lunchtime! It’s always nonstop to lunch. Mornings are filled with meetings, site visits, deal negotiations. I stopped eating at my desk, as it’s important to clear the mind midday. Lunch ranges from Chipotle to the bar at Nobu 57. On the rare quiet day, I can be found at the Astro Diner Counter reading the New York Post and eating a turkey burger.

3:30 p.m. Time for an iced tea as my afternoon pick-me-up. If there are no scheduled meetings, I begin to work the phones to catch others at their desks until day’s end.

5:00 p.m. I shift my focus to reading and writing, which are essential elements (though oft ignored) in deal making.

7:01 p.m. If I’m not attending an event or having dinner in the city, I’m back on the LIRR heading east and home to my family. 

(To view a selection of Cushman & Wakefield’s retail leases, click here)