Following last week’s CRE horror stories, we’re bringing you more spooky tales to start your Halloween off right.
Kick back, relax, and enjoy a good scare!
The Presence in the Reception Area
My horror story is quite simple. In hindsight I am more horrified at how relentless I was to get a deal. I used to sit in offices until people saw me. I did bring cookies, bagels, or anything with me to give to the office, and would sit there until I got the deal or opportunity to bring a deal together. I look back at how ragged I looked and how relentless I was to make it in investment sales brokerage, and I’m now horrified for how I was unwilling to leave the reception area till seen by the principal. At the same time, I find it absolutely hysterical as not much has changed: I just love hustling and being pleasantly persistent!
The Tale of the Vanishing Commission
When I was an associate broker at a top boutique CRE investment sales firm in NYC, I represented the seller and buyer in an off-market transaction of two multifamily walkups in Hell’s Kitchen.
The sellers were the widow and son of a recently deceased top commercial real estate attorney, and they were quietly shopping the deal themselves at $4.2M. The seller could not list or give me an exclusive due to his late father’s many relationships in the industry but agreed to let me represent both sides and pay me if I brought a buyer who'd pay above asking price.
I offered the property to a handful of buyers, negotiated a great deal for both parties, and even got the seller $4.4M. I was charging a 4% fee for both sides of the transaction, which netted him $4,156,000.
After his attorney issued a contract to my buyer, the seller told me that his mother had received an offer of $4.2M from a direct buyer, netting him almost $50,000 more than our deal. He offered to continue the transaction with my buyer if I'd cut $50,000 from my commission.
I was so afraid of losing the deal and absolutely freaking out because I had no exclusive and the seller had not signed a commission agreement with me. Fortunately, the seller’s attorney had issued a contract defining my fee, and I was happy to learn that NY real estate law was in my favor. I told the seller that he could accept the other offer, but he still owed my firm $176,000 so he’d be left with only $4,024,000 and it would be a greater loss for him. He was not happy, but he went through with the transaction.
AND THEN! Would you believe that he had the nerve to show up to the closing 45 days later with a commission check for only $126,000 and that he thought I would just accept it and walk away?
I let the transaction close without making a big stink and I walked out of his attorney’s office without signing for or accepting the commission check. I walked out into Times Square and shed a tear for that money.
Then I contacted our firm’s attorney, who sent a letter to the seller’s attorney that day. The check for $176,000 came by messenger two days later. That horrifying experience was a great lesson to me and encouraged me to commit to learning more real estate and contract law.
Sucked Into the QuicksandScary story? Quicksand. When you have what you think to be two or three deals in a row and no matter what you do, something happens to kill the deal. It is like trying to run in quicksand…that is scary!
“Witch” Way to the Showing?
It was late in the day and I was evaluating a medical office building listing in a pretty well established space for dentists. In this part of town there are many C class buildings that really look like haunted houses, especially in areas with higher vacancy. This time I was not setting Halloween decorations, but I was checking measurements for the spaces and putting collateral materials on the windows of the building.
Suddenly, a woman came into one of the available suits and told me she was interested in leasing the space. I gave her the benefit of the doubt and proceeded to show her the space. She looked very interested and mentioned that she liked it.
Her appearance was sort of the look of a witch, but it was not Halloween night, and everything got worse when she asked me if there was the possibility of sleeping in the suite.
I escorted her out of the space and found the property owner standing at the door. He politely told me that he knew her and that she was a regular who liked to “haunt” the building once in awhile, but was not so well regarding her mental faculties.
At the end of the day, all went well and we showed the space to other potential tenants who actually made appointments to see the building.