David Richman is approaching two decades in the commercial real estate business, so it should come as no surprise when he uses an industry term to describe his acquisition and leadership of Rakow Commercial Realty Group from founder Rick Rakow.
“It’s like the perfect sale-leaseback,” Richman said from the firm’s office near Westchester County Airport in Harrison. “We structured this so we can work together, collaborate and support the growth of the firm.”
Richman described the deal as “early” succession planning. “We’ll be working together for the next years,” he said, placing an emphasis on the plural. “Rick is not going anywhere. We’re together making Rakow Commercial Realty Group as great as it can be.”
The daily operations of the firm will be led by Richman, the company’s new CEO, while Rakow will serve as chairman, still working with clients and helping support the company.
“If I need something and I need to bounce something off of him, I mean, it’s Rick Rakow,” Richman said. “He is the legacy here and it’s an honor to be able to continue that legacy that he has built.”
Rakow founded the firm in 1985, focusing since then on the office, medical, retail and industrial markets in Westchester and Fairfield counties. The tenant-focused real estate firm has worked with clients such as IBM, White Plains Hospital, Citrin Cooperman and the nonprofit Feeding Westchester.
Richman joined the firm 16 years ago, his first and only place of employment in the commercial real estate industry. In that time, Richman has negotiated more than 500 transactions. Rakow Group has grown from four brokers to nearly a dozen. Richman called Rakow a “phenomenal mentor,” guiding him through an industry that marked a shift in careers.
Before joining Rakow, Richman was working in sales of telephone security systems. But he took an interest in commercial real estate, and Rakow’s firm in particular, because he knew people who had worked with him and spoke positively.
“I was drawn to Rick really because of who I am, why we are here and what we’re all about: his reputation and his legacy of really affecting a positive change for people in their real estate decisions,” Richman said. “The way he was able to represent people that I knew, who spoke the world of him, and how incredible his service was in guiding them and protecting their interests.”
The business was built by Rakow around representing tenants, which appealed to Richman. Business owners may sign just one office lease in their life, or just once every decade, Richman said, and Rakow Group was founded on the principle that tenants should have someone on their side in that process.
Rakow Group does represent landlords and sellers as well, though Richman said never in the same transaction without full disclosure. Working with both sides provided insight that helps the firm give better representation, according to Richman.
“It’s great to play chess when you know both sides of the board and can anticipate the moves,” Richman said. “You get to see it from both people’s perspective and it’s very important when you negotiate to have that empathy.”
Richman said his focus for the company is maintaining its reputation as the “go-to” source for real estate expertise in Westchester while also gradually expanding its presence in Fairfield County.
The company competes in each market with national and international firms. But Richman said there are advantages to being small and locally focused. Most often, the firm’s greatest competition isn’t from other real estate groups, he said. It’s companies deciding to go it alone in their real estate choices.
“The average size firm for Westchester County is not Amazon or Pepsico,” Richman said. “It’s the smaller firm. There’s a value that we can have as someone here that is focused more on service and who covers all the aspects we do.”
As for the future of the Westchester commercial real estate market, Richman said he and the firm are very optimistic. The repurposing trend shaking up Westchester’s office sector has shrunk inventory and created a healthier market, he said.
“Between the growing residential development, as well as biotech and health and medical, I only see that there will be more of a demand for office space,” Richman said. “As more people are coming into the area there will be demand for office space as well.”
Richman said his office clients are often looking for efficiency and the chance for creativity in their office space. They want to be near train stations and in spaces that are open and designed for collaboration.
“Instead of having a half dozen windowed offices and then the bullpen, they may bring the offices to the interior and have the bullpen along the window line,” Richman said, “because they want their salespeople to have a nice, open, airy, well-lit and productive environment.”
At the time he was speaking with the Business Journal, Richman was three weeks into his new leadership role with the company.
“My two biggest goals in this transition is to keep the level of service as exceptional as possible, which is a no-brainer but still always on my mind,” Richman said. “And the second is to make sure that our people here internally are supported as much as possible.”