RM Friedland, the commercial real estate brokerage that has offices in Harrison in Westchester and Darien in Connecticut, has expanded by establishing an office brokerage division. At first glance, that might seem like a risky thing to do when Covid-19 has created uncertainties among businesses and the workforce.
“The timing is really advantageous in some ways because now tenants and landlords as well are really going to need the wisdom of brokers more than ever,” Sarah Jones-Maturo, president of RM Friedland, told the Business Journal. “Transactions are not going to be as straightforward in the office world but there are going to be a lot more opportunities to taking a consultative approach to helping tenants figure out what their footprints are going to look like moving forward and helping landlords figure out the best ways to communicate with those tenants.”
She said that the company had considered venturing heavily into office brokerage for some time but it wasn’t until long-time commercial office broker Chris O’Callaghan agreed to join the firm that the pieces fell into place.
“We don’t represent a lot of office buildings now, nor do we represent a lot of office tenants,” Jones-Maturo said. “Roughly 90% to 95% of our business now is investment sales, industrial or retail. We do very little office leasing. We probably control only seven or eight office buildings in the market. Chris has a tremendous track record in the office leasing business.”
O’Callaghan recently served as managing director of Jones Lang LaSalle where he was responsible for the Westchester market. Before that he was a senior director with Cushman & Wakefield. He is credited with negotiating lease and sale transactions totaling $750 million that involved more than 17 million square feet of space so far in his career.
“I did not realize over my 35-year career how much history there was at RM Friedland. We’re a 50-year-old company; we have 50-years of resources,” O’Callaghan said. “We have a lot of institutional knowledge here.” He said that he and Jones-Maturo had been talking for a very long time before he decided to join the company.
“Friedland has always been known as a very powerful industrial/flex brokerage and investment firm, a very strong capital markets firm, a very strong retail firm and this opportunity for me is kind of the chance of a lifetime to build something with people who are very experienced at knowing how to build something because they’ve done it for 50 years,” O’Callaghan said.
Jones-Maturo said that while Covid has taken a toll among some market segments, on the industrial side things have remained fairly active mostly driven by e-commerce tenants.
“The vacancy rate in the industrial market is so incredibly low that if a business does go out it’s often re-leased relatively quickly in comparison to other asset types,” Jones-Maturo said. “The retail market is challenging in Westchester. The demand we’re seeing is for second-generation restaurant space but other spaces with limited infrastructure that are not built-out have not been in high demand so that market continues to be challenging in Westchester and other suburban markets.”
Jones-Maturo said that in the Bronx, which is another big territory for RM Friedland, retail is actually performing very well. She said that generally it seems as if cash buyers and buyers with ready access to funding have been anxious to take advantage of market conditions.
“They say a good broker can make money in any market, but an up market or a down market is a good time for a broker,” Jones-Maturo said. “It’s a flat market that we’re more concerned about.”
O’Callaghan said what has happened with Covid and work-from-home is unprecedented.
“People were somewhat surprised with how effective they could be,” O’Callaghan said about working remotely. “I don’t think anyone was as aware of how this would affect the general office market as it has. So, working remotely, working from home, I think is going to stay. There is going to be a portion of the office environment, the corporate culture, that is going to work more remotely than they did prior to Covid. But, everyone I’ve spoken to, all of my clients, believe that there is a tremendous amount of value in the collaboration that goes on within an office. There really is no substitute for it.”
Jones-Maturo said that in May and June they did see some office tenants from New York City looking for short-term “plug and play” alternative space in Westchester.
“There were a lot of tours of a lot of spaces like that coming on the market, but there really hasn’t been a lot that has landed,” she said. “Not a lot of tenants have signed leases that have come out of the city. Maybe some smaller tenants here and there. I think the thinking is that people now realize that this (Covid) isn’t forever. It’s a time when Westchester tenants and urban tenants are trying to figure out what their footprints look like moving forward because the work-from-home model is not going away but neither is the brick-and-mortar office. People understand the value of collaboration.”
Jones-Maturo suggested that officer users are realizing that in the future they may not need 100% of the space they’re occupying now and occupying 80% might be adequate.
Jones-Maturo has been in commercial real estate since she graduated college and began in New Jersey with real estate services firm CBRE. She worked with CBRE as a transactional broker for about 12 years and in 2016 was approached by the Robert Martin Company to be involved with a company that they were purchasing.
“What had been Friedland Realty was rebranded to RM Friedland to reflect the participation of Robert Martin,” Jones-Maturo said. The brokerage had been founded in 1970 by Robert Friedland. At that time it was located in Yonkers and had a staff of two. It currently relies on about 30 people.
“Our belief is that the office market is going to come back in a very strong way,” O’Callaghan said. “It’s not going anywhere. It’s going to be changed. Companies will do things differently. A lot of our clients need our assistance in figuring out what the post-Covid world is going to look like. I think slowly companies are coming back.”
