Bob Knakal and the JLL offices at 330 Madison Avenue overlaid with money (Credit: iStock and Vornado Realty Trust)
Can Bob Knakal help JLL get its groove back?
The company has been hurting on the investment-sales front since its team of top brokers left in late 2016. But now that the brokerage has landed one of the top brokers in the city, it’s looking to get back to form.
“I think he’s got a pretty big following,” said Peter Riguardi, chairman and president for JLL’s New York tri-state region, who signed the highly coveted broker last week.
“We like Bob, and we know the amount of deals he did as opposed to managing the business,” Riguardi added. “So we expect that Bob’s going to do as many deals consistently with us or better.”
For the first time since launching his eponymous firm Massey Knakal in 1988, Knakal found himself on the open job market this summer following an acrimonious split with his former employers at Cushman & Wakefield, which built its investment sales strategy around former Eastdil Secured brokers Doug Harmon and Adam Spies.
He and former partner Paul Massey sold their firm for $100 million in 2015 to Cushman, where Knakal completed the largest deal of his career: the $685 million sale of a pair of Jehovah’s Witnesses properties in Dumbo to Jared Kushner, CIM Group and LIVWRK in 2016.
Knakal had a dollar volume of more than $2 billion in 2017 and 2018 between closed deals and signed contracts, according to JLL.
Knakal, whose new title at JLL is chairman of investment sales, brought over 14 members of his team, and said he plans to hire more as he focuses on middle-market and institutional sales.
And he said it was JLL’s culture of cooperation among brokers, its technology offerings and broader global platform that helped in his decision.
“I feel that the access that this platform gives me to high net worth investors and capital from all over the world is significantly better than I’ve ever had in my career,” he said.
Sales slide
JLL was never at the very top of the I-sales pecking order, but it had long been in the top five firms in the city.
That changed, though, after the brokerage’s top sales team of Richard Baxter, Yoron Cohen and Scott Latham left in late 2016 for Colliers International and JLL’s market share in the space took a dive. The company went from doing roughly $3 billion in sales in 2015 and 2016 to just slightly more than $700 million in 2017 – a drop of 78 percent.
Left to pick up the pieces were JLL’s existing brokers, including Glenn Tolchin, Yoav Oelsner and Anthony Ledesma.
But 2017 was a tough year for the capital markets group. Most of JLL’s sales deals that year came from its hotels group, which operates independently from the capital markets team.
JLL’s capital markets team worked on either the buy or sell side of just three deals last year totaling $157 million.
But so far this year the group has shown a significant uptick in volume. Anthony Ledesma and Peter Nicoletti in March negotiated the $640 million sale of the Blackstone Group’s 5 Bryant Park to Savanna. (Blackstone originally put the property on the market in 2016 with HFF, which co-marketed the property with JLL in the sale.)
The team also sold Itzhaki Properties and Continental Ventures’ 368 Third Avenue for $64 million in May to Minrav USA and last month recapitalized a pair of Midtown South buildings in a $54 million deal. So far this year, the group is well ahead of where it was in 2017.
Last fall, JLL hired Mo Beler for the newly created position of managing director of investment sales.
Beler had previously held positions at Rockwood Capital – for which Knakal sold some multifamily properties – and Innovo Group. He pointed out that his background comes from the world of private equity doing highly structured deals, and that’s what he intends to work on.
The combination of that work with Knakal’s on the middle-market side of the business, he said, gives JLL a competitive edge.
“With that, we can provide an offering to our clients that nobody else has,” he said.
Friendly competition
As Knakal builds out his new platform, he’ll be in competition with his former partners.
Paul Massey in July launched his new investment-sales and debt brokerage, B6 Real Estate, and has hired a number of Massey Knakal alumnae.
And in January, James Nelson joined Avison Young, where he’s built an i-sales team of nearly three dozen people.
Nelson said that out of all the properties that trade hands in a year, only about a third of them have a broker.
“On one hand, it’s sad, as it’s an end of an era, but there is plenty of business out there for all of us,” he wrote in an email.
Massey, Nelson and Knakal said they’re all implementing some form of the Massey Knakal territory system that made the firm so dominant. Nelson said his is differentiated by the fact that he has built a unified sales team who covers the whole city by asset class.
“I’m sure we will also have different approaches that sellers should consider,” he said.
Massey offered brief words of support for Knakal in a conversation with The Real Deal, saying it was “great for JLL, and I think it was great for Bob.”
Marcus and Millichap’s James Ventura, who has known Knakal for decades, said that Knakal’s move to JLL would not have much of an impact on the amount of competition in the city, although he did say it would be a nice boost for the brokerage.
“There’s plenty of money for everybody to make it in the city,” he said, “and I’m sure it will have a little positive pop for JLL.”
Riguardi echoed this, noting that there is not that much different from a market share perspective as when everyone was working under the same roof, whether it be at Massey Knakal or at Cushman.
“They’re all the same players,” he said. “They’re just under different labels.”