The Closing: Jay Luchs

Jan.January 19, 2018 09:00 AM
Jay Luchs (Photo by Corey Nickols)

Jay Luchs is a powerhouse vice chairman at Newmark Knight Frank known around the Los Angeles Westside and well beyond for his signature marketing efforts (notably, his eponymous signs) and luxury clientele. In addition to leading a team of six at the brokerage, he’s helping to spearhead the new Newmark Residential division. Over the past 15 years, Luchs has become a major force in the retail market, closing deals with Louis Vuitton, Fred Segal, Sean “Puff Daddy” Combs’ Bad Boy Entertainment and the Italian haven Eataly. Luchs was born into a real estate family in Potomac, Maryland, but it wasn’t until he let go of the “acting bug” he caught in L.A. that he dove into the industry. That was in 2003, the year he “got excited about something” — his first big retail listing. Prior to joining NKF, Luchs was at CBRE for 12 years, where he was awarded the New York Tri-State Deal of the Year award for his work securing Gucci as a tenant for his clients, now the first family, in Trump Tower. Luchs has been the top producing agent at NKF twice since joining in 2013. It’s been a big couple of months for Newmark Group, parent company of NKF. The company launched an IPO at the tail end of December, which by all accounts has been disappointing, and news broke in early January that the firm is in discussions to buy RKF, a top player in the New York City retail scene. But for Luchs, it’s “business as usual.”

Hometown: Potomac, Maryland
Lives in: Hollywood Hills
Family: Single; no kids;  “maturity level is 25”

As you were growing up, what was your family like? Growing up, my father had a company called Shannon & Luchs. It was actually started in 1906 by his grandfather, Morton Luchs, and Herbert Shannon. In the ‘20s and ‘30s, they built the first “L-shaped” shopping center, which articles now refer to as the first mall. That’s really incredible for me to read about. In the ‘90s, my father sold that business, and any thoughts of me going into it went away. In a way, it was the best thing, because it allowed me to do anything without letting anyone down.

What did you want to be growing up? I always wanted to control programming on a TV network. That was a kid dream. Then I graduated college in 1995 and moved out to L.A. for what was supposed to be a summer, but I never left.

What was your first real estate gig? The year 2003 was where it begins for me. I had joined Insignia/Edward S. Gordon in the investment sales group two years prior. There was a huge building on Rodeo Drive with a 20,000-square-foot corner that had paper in the windows for three years. It had been leased to Tommy Hilfiger. I kept driving by wondering what the deal was. Someone at my company told me they were friendly with Tommy — I happen to be friendly with Tommy now and he’s incredibly nice — and he introduced me to his lawyer. We pitched the listing and we got it. That gave me a lot of fire and it started my career. At that point, I started building a brand off fashion retailers.

What’s your take on Downtown and its retail scene? There are pros and cons to DTLA. When you’re showing a retail brand around there, you have to explain to them what you’re seeing as the broker in the area, what you’re hearing and what they’ll see when the company comes to town. DTLA is very popular, but in terms of walking traffic, there isn’t a ton of it. The Arts District is so cool and I do think you will see it branching out, but it’s not what I would call the Melrose, Abbot Kinney, Robertson or Rodeo. There’s these chunks of buildings and you’re not going to see a line of stores pop up.

There’s been a lot of talk about the death of brick-and-mortar retail. Is that why you recently decided to go into residential real estate? I’m not scared of what’s happening to brick and mortar. I’m actually feeding off the fire of it all. Brick and mortar is going through an evolution, but it’s not dead by any means. The landlords and the tenants need to come closer together on rent. If you’re the landlord, you’ll still get cool brands, but there will be a lot fewer deals done.

How did your new residential partnership begin? I was getting a lot of people coming up to me and asking me if I did residential too. I would say, “I don’t, but I have a great guy, here’s his name.” And then it would get lost. I happened to be at dinner with a group of people and among them was Steven Schaefer — he’s from Potomac as well. I told him I’ve always wanted to have one residential person to be able to refer my clients to, but not to refer my clients to outside firms. Two years ago, we were allowed to create Newmark Residential, which is really just me and him. We started with one of my commercial clients who had an 8,500-square-foot house in the Palisades and we sold it for $10.5 million, and that was the beginning of our residential business.

You and Steven recently sold a $26 million dollar home to Simon Cowell. How does selling to high-net-worth individuals and celebrities differ from selling to fashion brands? We showed that house to a bunch of different celebrities, and they were as nice as can be. They’re looking for a home for themselves and this is their sensitive moment. The way I handle those meetings with celebrities is just to let them be. I don’t walk around and say, “Here’s the kitchen, here’s the laundry room.” I laugh when I see people do that too much. I think if you let people walk around and feel it — that’s the sell. In commercial, it’s similar. There’s a way to handle it and usually it’s to let the person feel it out.

How do you split your time between commercial and residential? It’s 99 percent commercial. All I do in residential is get the name of someone and give it to my residential partner, who does 100 percent residential.

Newmark’s recent IPO got a pretty tepid reception. What are your thoughts on that? Will it impact your business? If it started off incredibly strong, that would’ve been too easy….In my opinion, it’s going to keep growing and it’s going to be incredibly competitive to CBRE and Cushman.

When you joined NKF, you mentioned in the press release at the time that you knew former managing director Michael Arnold personally. He’s since been hit with a major sexual harassment suit. Were you aware of any inappropriate behavior occurring at the company? When I was recruited, he was a “rah-rah”guy. He seemed like a cool guy, with a lot of energy and different than a lot of managers of an office. Whatever his reputation is, I wasn’t really around to know, and I still don’t know the details.

While we’re on the topic, what’s your take on the #MeToo movement? Do you think sexual harassment is prevalent in your industry? I thought about this a lot during everything I’ve been seeing. When it comes to work, there’s a major line drawn. I’d like to think that I’m a different person around work than I am in my private life. I think it could be prevalent in any business though. 

—This interview has been edited and condensed for clarity.

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