Inside real estate’s bro culture

In early December, at Madison Realty Capital’s rooftop holiday bash at the Top of the Standard, a pumped-up male executive grabbed a colleague by the shoulders and presented him to his buddies.

“This guy!” he bellowed. “This is the Matt Lauer of real estate. This guy is fucking Matt Lauer!”

The overt reference to the sexual harassment charges lodged against the former “Today” show host prompted cheers all around.

At Fried Frank’s annual extravaganza at Cipriani in Midtown less than two weeks later, a husky commercial broker gave his female colleague a bear hug. “Is this sexual harassment?” he shouted as his colleague and others laughed. “Is it?”

For both men and women in the high-octane, high-testosterone New York City real estate world, this kind of frat-boy behavior is par for the course in an industry that is known for its big egos and fierce competition.

And this holiday season has actually been somewhat G-rated, sources say, as the industry takes stock and companies scale back parties amid the market slowdown and a heightened awareness of sexual inappropriateness in the wake of the Harvey Weinstein scandal.

But parties are parties. And in commercial real estate, especially, these events are often 90 percent male. Some development firms and commercial brokerages have even hired agencies to fill their parties with women, including models, to even out the mix.

More broadly, the industry has a cemented gender imbalance. In 2015 (the most recent study), women working in real estate in the New York metro area made up 27.3 percent of senior-level positions and 40.4 percent of entry- and midlevel roles, according to the U.S. Equal Employment Opportunity Commission. Those ratios have remained virtually unchanged across the business over the last decade — especially at the executive level. 

Residential brokerage veteran Barbara Corcoran, who has worked with many condo builders over the years, said the industry is essentially hard-wired for breeding off-color behavior.

“As long as the developers are 100 percent male and hugely successful and powerful and building tall towers, I don’t think you are going to see that much change,” Corcoran said. “Because to get in that position, they have to have a huge ego with no aversion to risk. So you are setting the stage for a personality type.”

(Illustration by Brian Stauffer)

Last month, one bouncer working the door at Newmark Knight Frank’s holiday event at Marquee New York in the Meatpacking District incredulously asked, “What kind of company is this? Why is it all men?”

These predominately male events, which typically have open bars, have become fertile ground for less-than-professional behavior. One source told The Real Deal that she’s seen men slip off their wedding rings before making the rounds at industry parties.

At a rooftop event in December 2016, TRD witnessed a male commercial broker bombarding a young woman with questions about her personal life. “Where do you live?” he asked, wielding a drink and a smirk.

When the woman answered that she lived in Harlem, he pressed, “West or East?”

“Oh, good,” the male broker said with mock relief when she answered West. “You’ll have less of a chance of being raped there.”

At the same party this year, where tequila shots and cigars are free for the taking, a female journalist recounted heading upstairs to the roof to take a final lap at the end of the night.

“When I got to the top of the staircase, I paused and looked around to see if I recognized anyone,” she said. “These two men made eye contact with me, and we started chatting. I didn’t quite hear where they worked, but I was trying to keep the conversation business-focused and professional, so I asked, ‘What are you seeing in the market?’

“One of the guys replied, ‘Brunettes,’ obviously referring to me,” she said. “He and his colleague laughed. I then said, ‘No really, what are you seeing in the market?’ And again, he said, ‘Brunettes.’ He followed that up with, ‘I have to try, don’t I?’”

Alpha brokers

That frat-boy mentality is obviously not just reserved for the party circuit. For many, it’s just the way deals get done, whether it happens during after-work partying, on the golf course, during a Knicks game, at a strip club or at a trade show.

It should be noted that the culture is starkly different in different sectors of the industry — from the buttoned-up MBA, corporate world of REITs to the boiler-room-style title insurance business.

But examples of bro-ish behavior are everywhere, according to industry sources. They range from minute aggressions like moving women physically aside by the waist at crowded events and sexual braggadocio over drinks to more serious offenses.

For example, the International Council of Shopping Centers’ annual conference in Las Vegas is not only known for the three-day event that takes place on the venue’s floor. It’s also a haven for extravagant parties, many of them poolside, hosted by developers and brokerages. And many of those gatherings feature scantily clad women and include endless amounts of free drinks.

The event, insiders say, is a major target for local prostitutes, and dealmaking at strip clubs is routine. “It happens all the time,” one ICSC conference regular said on the condition of anonymity. “So many hookers and naked women at all the after-parties.”

Sources say that drugs, including cocaine, are also common at the parties that take place during these multiday trade events.

A former employee of Newmark’s Los Angeles office filed a lawsuit under the alias “Jane Doe” against the brokerage last April, alleging that she was repeatedly sexually harassed by her superiors at ICSC’s Vegas conference and other company events.

The lawsuit names Newmark and Michael Arnold, a former managing director who left the firm suddenly in November 2016. He is now vice chairman of corporate services at NAI Global, a commercial real estate brokerage. The suit also named Newmark director of operations John Picard and senior managing director David G. Kutzer. Kutzer was later dismissed as a defendant. Arnold, Picard and a representative for Newmark declined to comment.

“[Doe] learned that illegal drug use by [the firm’s] executives was so rampant at corporate events like ICSC that junior employees who would ordinarily have chosen to drive to such events would often fly instead for fear that if they took their own cars, senior managers would pressure them to transport large amounts of cocaine across state lines,” the complaint reads.

But in Vegas, bouncers have started cracking down on certain narcotics, driving hard-partying real estate players to alternative substances like MDMA, more commonly known as Ecstasy, according to several sources.

“While we can’t comment on past behavior by ICSC leadership and staff, we can say that we are in a new era under the leadership of Tom McGee [who took over as president and CEO in August 2015],” a  spokesperson for the trade organization told TRD in a prepared statement. “He expects his team to act professionally and represent ICSC by providing world-class service to our members and event attendees.”

Drugs aside, industry executives say that bro behavior (among both men and women) is merely a byproduct of an industry built on fierce competition. “To be successful in New York, you have to be competitive — you have to be driven, and there are some who have sharper elbows than others,” said RXR Chairman and CEO Scott Rechler.

“I meet with a lot of brokers, tenants and real estate groups at big banks, and there are women there and they are negotiating with the big egos,” he added. “I’ve gotten Saturday-morning phone calls that I couldn’t repeat here. You know, ‘f— this’ and ‘f— that.’ And that wasn’t coming from a man.”

Bro vs. bravado

Jay Solomon, the creative director of Sugar Hill Capital Partners, a private equity fund with roughly 60 employees, said commercial real estate’s bro culture has largely been a byproduct of the ratio of men to women but some firms have made a concerted effort to change that.

Still, he noted that even he, at times, has “felt uncomfortable” with the behavior of some figures in the industry, though he declined to elaborate or provide specific examples.

“The general culture in commercial real estate is very aggressive,” said Jane Roundell, a managing principal at Cresa New York, part of an international firm with more than 900 employees.

“That is not a reflection of the business being male to me, it is just the nature of the industry. The nature of the industry is very competitive, and it’s a difficult job,” she added. “If you are working on straight commissions, that has its own challenges. You are negotiating all the time. I read things about how it’s a boys’ club, and I guess it is. But it is a club that I attend and I know many other women attend.” 

Roundell, who’s worked in real estate since 1985, said she has had to learn how to “focus on the big picture,” not let people intimidate her and “just keep going.”

“I have had some interesting deals where the broker on the other side was aggressive to the point that he was yelling at me on the phone,” she recalled. “So I hung up on him. I don’t allow people to treat me that way. Twenty years ago, if someone said something off-color I would ignore it. Whereas now I would probably call them out on it, and I wouldn’t be afraid to do that.”

Nicole Liebman, a salesperson at the boutique commercial real estate investment and advisory firm Hudson, rejected the characterization of the industry as “bro-ish.” But she acknowledged that working in a male-dominated sector means meeting a lot of people who don’t carry themselves professionally.

“They do it on purpose” to intimidate people and blur the moral lines, she said.

Roundell said that as with any male-dominated industry, it’s common for women to experience casual chauvinism. She noted, for instance, that she often hears male brokers and developers refer to women as “girls.”

“I think it has sort of just been accepted in the industry,” Roundell said. “I don’t think anyone means anything by it. But it is the way they think.”

In residential real estate, where women have traditionally outnumbered men, Corcoran called “bros” a subcategory of a subcategory.

“I would say [in residential] there are two clubs: ‘bravado’ and ‘I understand, dear.’ You have the guys that are as close to you as your local hairdresser, and the women tell them all the things that their husbands won’t listen to,” the real estate mogul and investor on ABC’s “Shark Tank” explained. “But for the other guys, I think the bravado works to their advantage. They are making a lot of noise in front of other people who like to be noisy.

“There are a lot of ‘I’m bigger than you’ personalities in New York,” Corcoran added. “So there is a need for people who can sell to that.”

Veil of silence

While the fist-bumping boys’ club may seem harmless (albeit inappropriate) in some scenarios, it clearly crosses the line in others.

Since October 2017, when news of the Weinstein scandal broke, hundreds of women across the country have come forward to share their stories about sexual harassment and assault at the hands of powerful men.

Yet real estate — which also involves exorbitant amounts of money and situations ripe for abuses of power — has not yet seen a major tycoon brought down on account of sexual charges. While Donald Trump, for one, has been accused of harassment and assault by several women, he is currently residing in the White House and continues to deny all claims against him.

Among the biggest national cases in recent years were lawsuits naming star designers and hotel executives.

In May 2016, “leather daddy” designer and architect Peter Marino faced a sexual harassment lawsuit from an employee, accusing him of making homophobic slurs and sexually suggestive comments. And this wasn’t the first time. A similar suit against Marino from 2015 alleged that he regularly referred to female employees as “cunts” and made racist statements about black people.

Last October, Alexander Mirza, the former CEO of Cachet Hospitality Group, accused the firm, which is bringing a Playboy Club-anchored hotel to Midtown, of firing him to prevent an investigation into sexual harassment claims against its partner. Mirza alleged he learned in July that three women were pursuing allegations of sexual harassment and gender discrimination against Adam Hochfelder — a onetime star New York real estate investor who served a two-year jail stint for fraud in the early 2010s.

An attorney for Cachet, however, told TRD at the time that Mirza was terminated “for good cause,” and said that Mirza himself was being investigated by the firm for misconduct including sexual harassment and gender discrimination.

And last November, at least four women accused celebrity hotelier André Balazs of groping them, according to the New York Times. In one instance, he allegedly reached under actress Amanda Anka’s skirt at a movie premiere party at London’s Chiltern Firehouse.

“It’s not that there hasn’t been scandal in the business, there just hasn’t been much of any scandal that we know about publicly,” said Leonard Steinberg, president of the tech-focused residential brokerage Compass. “I would suspect that there is a lot of scandal out there that has been quieted with a lot of money.”

To Steinberg’s point, more than half a dozen men and women interviewed for this story revealed that bad behavior in the real estate industry had crossed a line on multiple occasions over the course of their careers.

In addition, TRD has received tips about men in the industry who’ve been fired from brokerages and development companies after being accused of harassment by female colleagues. One female broker alleged that a male superior discriminated against her after she refused his sexual advances. Another tipster said that a male broker hired a female assistant only to demand sex and barrage her with abusive emails and texts. But most of those cases are nearly impossible to pin down through lawsuits and settlements.

In general, there is a veil of silence in place in the industry. Steinberg attributed that silence to self-preservation. 

“I believe that money is the ultimate power, and speaking up is a very scary thing to do,” he said. “It takes intense bravery for these women to step forward. But a lot of these cases are decades old, and you have to remember that for several decades people have been scared to speak out.

“It’s especially difficult in real estate as an independent contractor. This is your livelihood,” Steinberg added.

Corcoran recounted one disturbing example from her early days in real estate — though she declined to name names.

“When I was about 28, I was trying to get my business into the onsite arena, meaning that you have a whole building to sell,” Corcoran recalled. “I pitched a young developer and thought I did a great job. I got a call that afternoon from his secretary — who apologized profusely — and she said, ‘I am embarrassed to ask you, but my boss asked me to call you to see if you would sleep with him in exchange for the building.’ I couldn’t believe my ears.”

Corcoran said she eventually landed the building without needing to “sleep with the bastard.”

A co-ed fraternity?

“In a way, it is like a lion pack and we are on the plains of Africa. You have to hunt for your kill,” said New York developer Alex Bernstein. “It is a fraternity, whether you are male or female, because you know what it takes to make a kill.”

That mentality has the potential to permeate beyond gender — some insiders say it plays into the way business is conducted more broadly.

It’s an issue that permeates commercial real estate, yet is hardly unique to it. The culture of finance isn’t quite what was depicted in “The Wolf of Wall Street,” and advertising is decades beyond its “Mad Men” era, but those industries will likely continue to attract bad actors as well. Real estate, in that sense, is part of a much larger picture and it’s cases of institutionalized sexism are part of a much broader problem.

Tim King, a managing partner at the commercial brokerage CPEX Real Estate who has worked in the business since the 1970s, said some simply believe that lying and fudging the facts are the norm in real estate.

“The same person who acts in a chauvinistic fashion and displays a lack of respect won’t have business ethics,” he said. “How can you have ethics and not respect? It’s all part of a package.”

But King argued that even though there’s a “cowboy mentality” in the industry, the toxic components of the culture are hardly unique to real estate and much of the “silliness” has actually waned.

“I’ve seen the culture shift 180 degrees,” he said. “Men still outnumber the women by a retarded factor. But having said that, those women who stick with the business have an outsized impact. Some of the most successful people in the business are women. Just look at Mary Ann Tighe and MaryAnne Gilmartin. Real estate is a great opportunity. It really is a meritocracy of epic proportions.”

Many of the women TRD interviewed actually echoed that sentiment.

“The value that women bring to the business is now undeniable,” said Marla Siegel, an attorney and the executive director of property administration at Sugar Hill. “I think that companies are looking for the best person for the position rather than the best man.”

Party over, dudes!

With dozens of women accusing Hollywood bigwigs, journalists, politicians and business executives of sexual harassment, sources say commercial real estate’s bro culture is becoming less sustainable and destined to wane.

And many New York City real estate firms seem to be going out of their way to avoid bringing the industry into the same klieg light as Hollywood and media.

Despite the tales of buffoonery at holiday parties in recent years, there’s little doubt that the usual bravado among New York’s real estate bros will remain subdued for the time being.

The fêtes that went off in 2017 were for the most part tame and professional — that is, if they went off at all.

Town Residential called off its annual party, known as one of the biggest and most extravagant in the industry, as did the Moinian Group.

Joseph McMillan’s DDG Development — which hosted an upscale celebration at the Whitney Museum with a live band and private tours of special museum exhibits in 2016 — kept it employees-only in 2017. And while JDS Development Group’s annual bash at Morimoto was always must-attend on the party circuit, the company scaled it back in 2017 to staff and family only.

But industry players insist that the lower-key events are simply more a function of market dynamics than anything else.

“Retail got formally destroyed this year,” Town’s CEO, Andrew Heiberger, told TRD in early December. “The hotel market is in distress. Luxury sales above $4 million are way off, and the high-end rental market is frozen with the exception of some prime, prime pockets. I just didn’t think that throwing a gala-sized party this year was consistent with the market, even though a lot of good brokers had really good years.”

But the awareness surrounding sexual inappropriateness is undoubtedly heightened in real estate and beyond.

That is especially true in the title insurance arena, a more than $10 billion sector of the real estate industry. While title insurance agents have gained a reputation for their hard partying — and for the sometimes-sleazy ways that they entertain clients, sometimes at strip clubs — most are bracing for a sober 2018.

And the days of scantily clad waitresses serving shrimp to rowdy brokers in private boxes at Barclays Center may not just fade away for a season. They may disappear for the long haul, with the schmoozing that the industry so heavily relies on soon to be outlawed.

New state rules, which are set to take effect on Feb. 1, will crack down on how title insurance firms spend their marketing dollars. In an effort to curb excessive inducements and conflicts of interest, the new regulations prohibit title companies from paying for clients’ (or prospective clients’) meals, vacations, parties or other forms of entertainment.

However, the new rules, which have already been delayed once, are expected to be challenged in court.

“Taking a client out to lunch and dinner — those are things that every business in America does,” said real estate attorney Adam Leitman Bailey, who frequently works with title insurance firms. “Why are they taking it away from title companies?”

Still, those changes suggest that the tide in New York real estate may be shifting. Bernstein, for one, said the industry’s bro culture is evaporating, in large part, because more real estate firms are now publicly held or work with clients that are.

“Twenty years ago, the business was less institutional,” he noted. “The SL Greens, Vornados, equity funds and CMBS banks didn’t dominate the scene to the same extent, and those corporate cultures are, usually, more equitable.”

But while real estate is gradually adjusting to new realities, there will always be people who thrive on bad behavior.

“Some people like working for extreme egos,” Bernstein said. “They are like the suckers on the bottom of a shark.”

—Additional reporting by TRD staff