Woody Heller says he has always been “change-averse.”
The investment sales power broker, best known for his sale of the Chrysler Building and Citigroup Center, spent nearly 20 years at Jones Lang LaSalle before joining Insignia/ESG in 2002. He would have likely stayed there for a long time, too, were it not for the company s massive merger with CB Richard Ellis, and a situation in which two CB brokers had the exclusive right to handle the firms property sales in New York.
Heller, who joined Studley in late September, is learning to live with change. There is plenty more ahead in the commercial real estate world in New York, he said. Not the least of which are his plans to turn Studley, a tenant rep firm, into a powerful investment sales “boutique.”
Heller, one of only a handful of brokers who handle the sale of most major assets in the city, joins a firm that has also seen some major changes. This past December, Studley s 45 managers and brokers pooled equity to take over the firm from Julien J. Studley, who had founded the company nearly five decades earlier.
Now, the new ownership, led by chairman Mitchell S. Steir and president Michael D. Colacino, is looking to expand business beyond tenant representation. The new business lines Studley is likely to pursue include refinancing, joint ventures, and Heller s domain, investment sales. Grabbing Heller, who has closed more than $4 billion in deals and was widely expected to go to Cushman & Wakefield, was a major coup.
Among Heller s biggest deals was the April 2001 sale of the 1.6 million square foot pitched-roof CitiGroup Center in Manhattan for $725 million, and the 1997 net lease of New York s Rhinelander Mansion to Polo Ralph Lauren for a then record $1,300 per square foot.
As head of the company s Capital Transactions Group, Heller is hoping to step up Studley s presence where it has other offices in Washington, Chicago and Los Angeles. Heller said some work is being done in at least two of those markets now, but “it s in a different end of the market” than what he d like to see. He s hoping to find top investment sales professionals for those locations, but acknowledges that “it s going to be enormously difficult” to lure star brokers away from established companies. So far, the New York capital transactions group is just Heller and two of his associates, Carly Borg and Will Silverman, who came with him from CB Richard Ellis.
In growing its investment sales business, Heller said Studley will be able to use its leverage on the tenant rep side, a different model than many other firms. “There are three types of leverage,” said Heller. “There is investment bank leverage, then there is we lease and manage the building leverage, and there is the general relationship leverage the Steve Siegel approach,” he said, “where we know everybody well and we re likely to identify opportunities early. ” The fourth type of leverage, which applies to Studley, is leasing leverage. “Where there is limited tenant demand, owners are very sensitive,” he said, adding that tenants “create value in buildings.”
Heller s departure from CB Richard Ellis came after he found there was little room at the company for a top sales broker like himself, since brokers Darcy Stacom and Bill Shanahan, who came from the CB side of the deal, have exclusive rights to handle all office property sales at the firm in the New York Tri-state area. Only a few days after Heller s departure, investment sales brokers Richard Baxter and Ron Cohen, who were also affected by the CB duo s exclusive rights, left for Cushman & Wakefield in what Cushman U.S. president Bruce Mosler called “a big coup for us.”
Some observers think that might be it as far as major changes among top investment sales brokers for the immediate future. “It looks like the game of musical chairs has stopped and everybody has their seats for the time being,” said Drew O Malley, principal and director of Brokerage Services for Trammell Crow in New York.
While Heller didn t comment on other investment sales brokers moving, he said it would be “naive” to think that there won t be big changes afoot among commercial companies in general. With the CB Richard Ellis merger, he said, “once you put those forces into play, they are very hard to stop.” The merger raises big questions for Cushman & Wakefield and Jones Lang LaSalle, the next biggest companies, which have now been relegated smaller by the merger. “Does Cushman & Wakefield sit tight, or do they try and react and do something else?” said Heller. “I wouldn t be surprised if they do something else.”