Soon after the embattled commercial brokerage Lansco Corporation relocated to the 17th floor of 415 Madison Avenue from 575 Fifth Avenue in early 2016, its brokers spotted a huge red flag.
Unbeknownst to most of the firm’s employees at the time of the move, Lansco had a provision in its lease with Rudin Management at 415 Madison that gave it a one-time opportunity to return the space to the landlord after the first few months.
It didn’t take long for Lansco’s top brass to exercise that option and occupy the space on a month-to-month basis. But instead of learning about the situation from upper management, the company’s roughly 40 brokers found out when they noticed their digs listed on CoStar.
“Lo and behold, all of a sudden the cat’s out of the bag,” said one former Lansco employee, who asked not to be identified. “We were like, ‘What the fuck is going on here?’”
The company, founded in 1965, long served a niche as a mid-sized New York City brokerage with a specialty in retail. Lansco’s agents were responsible for negotiating Ralph Lauren’s lease at the Rhinelander Mansion on Madison Avenue in 1983 — a first of its kind for a major fashion flagship location in the city. Lansco also represented Niketown in its megastore on 57th Street in 1996 and the popular Japanese retailer Uniqlo in its NYC rollout in the last decade.
Lansco stood among the most active brokerages in multiple rankings put together by The Real Deal since 2011. Meanwhile, its brokers held influential positions at the Real Estate Board of New York and won several industry awards for deals that helped shape the city.
But over the past year, the brokerage has increasingly struggled with heightened competition and a rapidly changing market while resting on its laurels, according to former employees and other industry players.
Lansco took the bottom spot in TRD’s most recent tally of Manhattan’s top retail brokerages in December 2016 with just under 90,000 square feet inked among 43 deals, which put it in 15th place. And none of its brokers appeared on the latest ranking of the borough’s top office leasing agents conducted by TRD this spring.
At the same time, Lansco lost nearly half its agents in the past year, going from 40 in July 2016 to 22 last month, a review of real estate licenses with the New York Department of State shows. Among them was star retail broker Robin Abrams, a partner at the firm who left with her team in May to join Eastern Consolidated. Her exit followed a string of other high-profile departures.
Jerome Ginsberg — one of Lansco’s co-founders who was said to be out of commission for years — officially retired in the same quarter. Rumors had surfaced that fellow co-founders Jack Walis and Mike Antkies were also planning to retire, but representatives for the brokerage said they are still with the firm and have no plans to step down.
Now, as the remaining executives who started Lansco more than 50 years ago surpass retirement age, sources say the firm has fallen victim to its own passivity and lacks a clear strategy for the future.
“It looks like a company that really had no succession plan,” said Jim Wacht, the president of rival commercial brokerage Lee & Associates. “They didn’t have a lot of younger talent and the principals got older and, at the end of the day, they’ve kind of got nothing left.”
Lansco’s co-founder and CEO, Stuart Lilien, said the departures are “nothing more than just being in business in a competitive market like New York City” and that the firm is in talks to hire new brokers as it looks to increase its productivity.
But there is growing skepticism that the company can attract the kind of talent needed to do that.
“Shy of someone coming in and promoting fresh blood, bringing in fresh capital and saying, ‘This is our plan to make things happen,’ I don’t see how they could build the place back up,” said one competing brokerage head who asked not to be named.
One of the main problems, Wacht noted, is that Lansco didn’t reinvest and grow as its main line of business became more profitable. “As retail sort of took off [in the past decade], the train left the station, and Lansco was left standing on the platform,” he said.
With fewer resources going into the business, the recent turnover has cost the firm almost all its top producers. Last November, Lansco lost two key brokers when Matt Cohen left to start his own company, L3 Realty, and Peter Weisman left for competitor Sinvin Real Estate. But the biggest shock, perhaps, came when Abrams jumped ship with her team of three and moved over to Eastern Consolidated as a principal and vice chair of retail this spring.
Abrams, who declined to comment, had a distinguished career in her 38 years at Lansco. She had twice served as chair of REBNY’s retail committee, including a stint when she oversaw the committee that launched the organization’s first retail report in 2000.
And along with Lansco vice chair Howard Dolch, Abrams won REBNY’s “Most Creative Retail Deal of the Year” award in 2010 for arranging Syms and Filene’s 35,000-square-foot lease at 530 Fifth Avenue.
Most recently, Abrams headed up leasing at Turnstyle, the 30,000-square-foot underground retail hub at Columbus Circle, where she inked deals with the coffee shop 2beans, stationery store Papyrus and eyewear store Specs New York, among others.
Several former employees told TRD that the senior leadership at Lansco had become increasingly disinterested in running the company in recent years, but it didn’t want to give up control to a new generation of brokers who could potentially take on the task.
Christine Emery, one of the firm’s top producers throughout the early 2000s, said she left for MHP Real Estate Services in 2013 because there was no room to grow into a leadership role at Lansco.
“When you become senior in the business, you want a place at the table,” she said. “There wasn’t really one available, so I had to move on.”
Emery and her partner Yair Staav went on to build MHP’s first retail team — which now has five brokers — after parting ways with Lansco.
The two had previously won REBNY’s retail deal of the year award in 2007 when they represented French luxury retailer Hermes at 15 Broad Street in Lower Manhattan. And they exclusively represented Uniqlo, where they did deals on Broadway in Soho, 34th Street in Herald Square, at 666 Fifth Avenue and in Brooklyn’s Atlantic Terminal between 2006 and 2013.
The good old days
The Uniqlo relationship was a feather in the cap for the company founded by Lilien, Dolch, Walis, Antkies and executive vice president Alan Victor.
The five brokers started out doing office deals, then slowly carved out a niche in retail, beginning in the late 1980s, as landlords started to pay more attention to the sector and retail values started to rise.
Lansco had some top dealmakers in retail in the 2000s, and one of its strengths was said to be a comprehensive internal listings system that kept its brokers on top of the latest properties to hit the market.
But while Lansco benefited from its expertise in retail at the time, the brokerage never grew the way other specialty shops such as RKF and Winick Realty Group did. Unlike those firms, whose signs can be seen plastered all around the city in 2017, Lansco has gradually become a lesser-known entity.
“You had these firms and they were special and they had their role,” said Faith Hope Consolo, chair of the retail leasing team at Douglas Elliman. “Then suddenly the business got bigger and the landscape got bigger.”
“The [other firms] all started to diversify and expand,” Consolo said. “And I’m not sure Lansco did that.”
Lilien acknowledged that Lansco isn’t a “high-pressure operation” where the leaders breathe down the necks of junior brokers to get deals done. But the hands-off strategy may have made it harder to nurture young dealmakers, according to several sources.
Ryan Bergman, a former Lansco broker who left last year to work at Sotheby’s International Realty in New Jersey, said the company had a “top-heavy” culture that invested little time and effort in grooming new talent.
“At the end of the day, it was an old school way of thinking,” Bergman said. “If you were somebody who was very entrepreneurial, it was the ideal place,” he added. “If you needed to learn and you needed hand-holding, it probably wasn’t the right place for you.”
When word about the firm’s month-to-month lease arrangement got around the Lansco office, it forced the company’s leadership to explain that the brokerage was either looking to downsize or merge with another firm.
Sources said that last year Lansco was in talks with several companies about merging or selling the business but didn’t find any takers.
Observers said that selling the brokerage now would be an even greater challenge with so many of its once biggest producers at competing firms in the middle of a retail slump.
Lilien told TRD that Lansco is in talks with a team of four brokers at another firm to come on board and has some people at the company in mind for future leadership positions. But there have not been any formal discussions yet about who will take over.
“We have some younger people who are doing well,” Lilien said. “I haven’t spoken to them and said, ‘Hey, you guys are succession people.’”
But Wacht of Lee & Associates said that without an outside capital infusion, it would be hard for Lansco to retain and recruit hungry brokers.
“If there’s a cautionary tale here, it’s that you have to continually reinvest money into the business and stay current with the competition,” he said. “If you’re not going to attract the best brokers, you’re eventually going to wither away.”