When you ve been at the top of the commercial real estate world in New York for as long as Stephen Siegel has, maybe it s time to take a break from running the whole show.
The legendary Manhattan leasing broker, who got his start in the business at age 17, was chief executive of Insignia/ESG until the recent powerhouse merger with CB Richard Ellis. His position in the new firm, the world s biggest real estate services company, is a step down on the chain of command. But it s a change he appears to welcome.
“After what seemed like a zillion years of building businesses and turning the lights off at night, it s a role I m happy to have,” said Siegel, 57, whose first job as a CEO was two decades ago at Cushman & Wakefield.
Siegel will be chairman of global brokerage for CBRE, which will have 14,000 employees in 48 countries. But don t expect the man who helped build the most important commercial real estate brokerage in New York to spend two weeks of every month schlepping around from Oslo to Osaka. Siegel still has his sights set on his hometown.
“No matter what the [global] title connotes, I m going to be doing a lot of business in the Tri-State area,” he said. “This is where my friends, relationships and clients are. I hope to do even more business in New York, now that I have less management-related responsibilities.”
Siegel seemed relaxed and expansive during a recent interview at his offices in the MetLife Building a few weeks after the merger was finalized, showing off the art on his walls and his collection of elephant figurines a fitting metaphor for CBRE s global dominance.
Siegel s new job was his decision, he said. “I had numerous discussions with Ray Wirta, the CEO, and Brett White, the President [CBRE]. It was put to me, What is it that Steve Siegel wants to do? What can we do to make him happy? ” Part of Siegel s new role on the global end will be making speeches at industry or client-related events, as well as some travel. “I hope to be a spokesman for the company and its platform, because I believe in it,” he said. Insignia brought strong operations in London and Paris to the merger, while CB Richard Ellis had a greater presence in Asia, where Insignia had a money-losing start-up operation, and Germany.
Siegel s reunion with Mary Ann Tighe, who left Insignia/ESG a year ago but returned as chief executive of CBRE s New York office, has been less a homecoming than a return from a long vacation. “We hardly knew they were gone, they came back so quickly,” he said. “Mary Ann Tighe and I resumed working on accounts together even during the interim period. We focused on business development, and continue to do so,” Siegel said.
Tighe heads the New York Tristate Regional office along with two other former Insignia executives: John Powers, who has the title of president of the regional office, and Robert Alexander, who is chairman.
Now that the merger is finalized, communication is key, Siegel said. “The important thing is making players at both entities understand that the change is positive, and that the reality is not as threatening,” as what one might imagine, Siegel said. While there have been a few departures locally, time will tell whether there will be a bigger exodus. Siegel said he thinks after six months, “people won t be thinking about anything other than doing business.”
As far as his own departure, only Charlize Theron could drag him away from CBRE. “I would never leave here for another brokerage company,” he said. “Well, I can never say never. If someone would like me to star with George Clooney and Charlize Theron in the next movie they do, I could be talked into it. I m at the place with the ultimate platform.”
Siegel received a $1.6 million signing bonus to stay at the company, plus a $5.4 million retention bonus the day the merger closed. If he resigns “without good reason” before five years have elapsed, he will be required to return a prorated portion of the $5.4 million, a recent Insignia proxy said.
One of the largest consequences of the merger is a combined company with broader lines of business. Insignia had a reputation for large, complex brokerage deals, while CB Richard Ellis brought expertise in facilities and project management and appraisal to the table. “The gaps we had, CBRE filled beautifully,” Siegel said. “They have a huge appraisal business that s as big as many full-service brokerage firms. I was surprised to learn that their per-broker production is among the highest in the industry.”
The two companies commission structures will come together as well. “They were fairly compatible to begin with,” said Siegel. “Eventually it will end up their [CBRE s] model. We ll try to unite it over a couple of years time.”
Finally, public Insignia becoming part of a private company in joining CBRE is a move in the right direction, Siegel said. “If I were still running the business, I would be dancing in the street not having to do some of the stuff you have to be responsible for as a public entity in a service business.”
Siegel got his start in the business at age 17, working for Cushman & Wakefield in New York. One of his first jobs was as credit and collections manager for rents in buildings the company managed. “There is no better way to cut your teeth than learn rejection. Hello, I ve come for your rent. You re about a month past due. Shut up, get out of here. It was a great training ground to go be a salesman, when you get rejected 90 percent of the time anyway when you cold canvass,” he said. In the following years, Siegel would rise up through the ranks. “I was fortunate in those days, because it was smaller and there were no restrictions on somebody who worked hard. No barriers were put up to success.”
By his 37th birthday, Siegel was president and CEO of the company. He moved to Insignia in 1992, some ten years later, after a stint in the development business in partnership with the Chubb Corporation.
Outside of real estate, Siegel s interests range from the culinary to the charitable. Along with Timothy Hutton, George Steinbrenner, and Arnold Penner, Siegel owns P.J. Clarke s, one of the oldest and most storied bars in the city. A haunt of Frank Sinatra, Jackie Onassis, Nat King Cole, Vince Lombardi and other celebrities, the bar and restaurant at Third Avenue and 55th Street recently reopened its doors after a $3 million restoration. Siegel also owns two other restaurants in New York, the Italian place Baldoria and the Knickerbocker Bar and Grill.
As for the elephants piling up in his office, they have accumulated like the big deals Siegel has done over the years, transactions for some of the nation s most prominent corporate clients including, among others, J.P. Morgan Chase & Co., Metlife, and Sanford C. Bernstein & Co.
Siegel said the first elephant was a housewarming gift during his bachelor days. “Within six months I had 11. Everyone who bought a housewarming gift said he must collect elephants. Now it s totally out of control.”