Back in the days when brokerage was a meet-and-greet business, broker Edward S. Gordon had a more white-shirt, corporate vision: He led a generational transformation within the business of office leasing and sales in New York City, modernizing the “space chucker” mentality into a sophisticated industry based on Wall Street–style management and consulting.
After opening in Manhattan in 1972 as a traditional sales and leasing shop that focused on problem properties, the Edward S. Gordon Company (ESG) began developing a new system that relied on a shared database of information. The system — called managed brokerage — relied on salaried consultants to analyze increasingly complex real estate transactions.
The idea of employing salaried analysts and brokers was unorthodox. Before the company zeroed in on its approach, which was developed over two decades, brokers, who were sometimes called “space chuckers” or “space throwers,” were known to draft deals on the back of napkins with a limited amount of information gleaned through associates, shoe leather and luck.
“He took real estate brokerage out of the shoot-from-the-hip mentality and made it into a corporate atmosphere,” said Louis Brause, chairman of Brause Realty, and a friend of Gordon’s for more than 40 years.
Gordon, who died in 2000 from colon cancer at the age of 65, sold his company for $74 million in 1996 to the Insignia Financial Group. By the time Gordon’s company was sold it had become one of the largest brokers of office space in the city, challenging longtime leader Cushman & Wakefield. CB Richard Ellis bought Insignia in 2003.
Building a business
Gordon was a native of Flatbush, Brooklyn, and the older of two sons. His father owned a novelty gifts business.
The charismatic Gordon loved to fly his own plane, and was known for a bawdy sense of humor and strong will.
In a short film made for his 60th birthday, he explained how he decided on a career in real estate. In his early 20s, he was stationed in Virginia for the U.S. Army Reserve, where he met Brause, a fellow New Yorker.
“Lou went home on a weekend pass in an old Oldsmobile and came back in a brand new El Dorado convertible; I think it was white,” Gordon said in the film, which The Real Deal viewed. “I said, ‘What business are you in?’ And he said, ‘Real estate.’ I said, ‘I think I am going to go into that business.'”
Gordon began at 27 with the brokerage and management firm Huberth & Huberth. About 10 years later, in 1972, he opened his own shop.
The operation grew from a couple of brokers working out of a small office on West 39th Street. But eventually it moved into the Chrysler Building and then finally ended up at 200 Park Avenue, the former Pan Am Building.
By 1996, when Gordon sold, there were more than 100 brokers and several dozen consultants, producing annual revenue of about $93 million.
Pigs don’t sing
ESG was the first large company to centralize data and broker management.
Gordon, a salesman lacking the technical skills he believed were required, aggressively courted skilled executives.
“While most people spend the majority of their time focusing on what they are, I pay attention to what I’m not, and I try to fill in the pieces with talented people,” he told National Real Estate Investor in 1996.
“He had hanging in his office a pig with a sign on the bottom that said, ‘You can’t teach a pig to sing,'” said Stephen Siegel, chairman of global brokerage at CBRE, who worked for 27 years at Gordon’s main competitor, Cushman & Wakefield, before starting his own development company.
“When I left Cushman & Wakefield to be a developer he would call … once a month. ‘What is your favorite color?’ he’d say. ‘I want to paint your office.’ He was relentless. I was getting married — ‘I will pay for the wedding,’ he told my wife-to-be, ‘if you convince him to come over and join me.’
“He was the best at it. And eventually in the early ’90s, developing buildings got soft, and one of the calls he made I said yes to,” Siegel said.
Gordon’s hunt for a wider talent base began early.
In 1973 he hired Henry Gallin, a broker who honed punch-card computer programming skills at the New York Times. Within a few years, the shop began to create a database of tenant leases and floor space gathered by young associates canvassing buildings.
“When you know who are the companies in what space in what building and can figure out when the leases are up, they are an excellent target to become a client,” Gallin said.
In 1984, Gordon brought on attorney Anthony Saytanides, who became a top advisor and, later, a trustee of his estate.
One of Gordon’s assets, Saytanides said, was his critical eye.
“As soon as you walked out [of a meeting] … he wanted to talk about it. If anyone talked about how well they did, he said, ‘I don’t want to hear what we did right, I want to know what we did wrong,’” Saytanides said.
“He always strove for perfection. I would say it was his biggest strength. People thought he was an egomaniac, but an egomaniac would not surround himself with people who disagreed with him,” Saytanides added.
In 1985, Gordon poached Martin Turchin (who became the city’s biggest dealmaker with ESG), from the boutique firm Kenneth E. Laub & Company.
Gordon also realized the market was becoming increasingly complex. The relative cost of leasing or owning was rising, and tax law was becoming more complicated. He sought out business school graduates and developed a consulting division.
“Ed started to recruit people into the business in a way that was not done before,” Turchin said. “This was a very significant cultural change in the business.”
The changes were not easy on some old-timers.
“It wasn’t enough that he had these ideas. He had to take it and drive it through the sales force that was not used to being analytic, relying on data and working collaboratively,” said Mary Ann Tighe, who joined ESG in 1984 and is now CEO of CBRE’s New York Tri-State Region.
Reaping recognition
The REBNY award for most ingenious deal first came in 1978 for the sale of 1166 Avenue of the Americas, a building that had been vacant since it was constructed in 1974. The buyers were the New York Telephone Company and Teacher’s Insurance & Annuity Association, who purchased it using a two-part condo deal, the largest of its kind at the time.
Gordon won the award again the following year, for a lease in the same building to International Paper.
In 1978 he devised an award-winning campaign (which famously came to him while lying in bed one morning) that introduced a repositioned Chrysler Building to the market.
The full-page ads ran for three days: On the first, just the needle spire was seen at the bottom of an otherwise blank page. On the second day, only the distinctive crown of the building was visible from the bottom of the page. On the third day, the entire tower was visible.
“No one had ever done a campaign like the one for the Chrysler Building before. Building ads would say, ‘This is available’ and include a picture of the building. There was no building campaign like launching a toothpaste or a new car. He had a very sophisticated sensibility,” said Roxanne Donovan, president of the media relations firm Great Ink Communications, who worked as director of communications at ESG until 1992.
Big ego, big legacy
After Gordon sold the company, he stayed on as an officer and advisor. He kept working up until he died.
The merged company, known as Insignia/ESG, was bought by California-based CBRE in 2003, which dropped the Gordon name. Donald Trump, whose company was a client of Gordon’s, said that was a mistake.
“It is a shame that the name is no longer with us. The name had great value,” Trump told The Real Deal, adding, “I am sure he would be very upset.”
As an executive, Gordon required his brokers to wear white shirts, dark suits and lace-up shoes, in the mode of corporations such as IBM and Xerox.
During a meeting, Gordon wanted his employees to have their backs to the window and always sit across, not between, those they were negotiating with.
“When you were with him, you were in a zone of immediate constructive criticism,” said Mitch Rudin, who started with ESG in 1989 and is now president of CBRE’s New York Tri-State Region.
Gordon’s strong personality and rigid rules were difficult at times to deal with.
“Eddie had a huge ego. I found it to be out of control … I found it to be totally overpowering — but if I look back in retrospect and dispassionately, it helped to create a vision,” Gallin said.
In addition to the transactions he completed at his firm, Gordon built up substantial personal real estate holdings of his own. He purchased a chain of parking lots, a golf course on Long Island and several Manhattan office properties.
He was also a leading booster for the city. During the recession in the early 1990s, he ran ads in the Times listing 25 “good things to remember” about New York City.
Joseph Harbert, COO of Cushman & Wakefield’s New York City brokerage operations, who worked at ESG from 1987 to 2004, said it was partly a branding message, and partly a show of affection for his hometown.
His final farewell to the city was a full-page ad that ran the Sunday after his death in the New York Times with his photograph, the city’s skyline and the text: “Thank you, New York, for a wonderful life. Edward S. Gordon.”