…to go public
Steve Schnall, chairman and president of New York Mortgage Trust
As told to Emma Johnson
I was 24 years old in 1992 when I started my mortgage brokerage company. I was truly a one-man shop, working out of my Manhattan apartment, trying to make a buck and retain as much as I could, even though I never made any capital.
By 1998, the market was really hot and we had grown to about 40 employees when we decided to move up the food chain into lending. Even though we were doing quite well and growing, we had to leave virtually all of our profits in the company to support our lending needs, which kept growing.
After 12 years of this, I found myself married with kids, and I wanted to monetize what we were earning. Becoming a REIT was the answer. Of course, it wasn’t that easy. My investment banker friends warned me of all the frustrations I would encounter, but you’re never really prepared for all the false starts. It was false start after false start after false start.
Finally, on June 23, 2004, we went to the New York Stock Exchange and had our first board meeting in one of the ancient and grand conference rooms. Then we went down to the floor of the exchange, where at 9 a.m., I rang the opening bell, and about 300 million people saw it on all the financial networks. That was really exciting. Getting the check was nice, too. I emancipated my life savings, which had been locked up for 12 years.
While I am running a $1 billion public company, I’m still the chairman of the board and still in charge of business. The tricky parts are now dealing with the public andécorporate governance. Sarbanes-Oxley is just a nightmare, and working with a board of directors is a bigger deal than I thought it would be. There are a lot of personalities and disparate ways of making decisions. It’s not like the old days, when I wanted to do something, and I just did it.
Today we have 800 employees and 15 offices, but it took a dozen years of hard work, and sometimes pain and suffering. Starting something in your bedroom and then moving to the New York Stock Exchange been quite exhilarating.
…to sell out a new development in eight days
Cheryl Nielsen-Saaf, senior vice president at the Corcoran Group
As told to Emma Johnson
The minute we posted the 148-unit SDS/Procida Clinton West development on the Web in August, the phones started ringing off the hook. I was the marketing broker, and it took five agents to field all the calls. Usually we have just a receptionist answering the phones.
For the next eight days we worked early morning to late evening. It was incredibly exciting, but it wasn’t chaos — we had a system in place. We had people coming in and giving us earnest money, we had packages coming in with earnest money, and we were writing all the contracts ourselves — usually overnighting them the same day the money came in. We turned contracts over in 12 hours, controlling the whole situation. We were working our butts off and loving every moment of it. People talk about endorphins after running, but this has it beat.
The team, which includes the developer, had thought of every detail in advance to make the process as smooth as possible: the amenities, rational price points and 95 percent financing. Some of the buyers and brokers were familiar with the developer’s past projects, which also contributed to the interest. In those few days, some people did back away, but typically they had a friend or relative, or, in some cases, the agent that stepped into their place and bought it.
This experience proved to me what I felt for a long time: the more control of the process the broker has, the easier and smoother things run. As they say: too many cooks spoil the broth. Other key elements include keeping the process as streamlined as possible, offering what the buyer wants, and making the buyer feel happy about what they’re getting. And you have to be able to deliver.
I would love to do at least four of these projects a year; one every quarter. There are two more buildings coming on line soon and I can’t wait!