MannReport, April 2004
 

New Larger Quarters, Heightened Recruitment Drive And More Business Mark Boutique Brokerage Firm's Growth

Many relocations are relatively uneventful affairs. But on March 1 st of this year, when Georgia Malone & Company moved to new expanded offices at the Crystal Pavilion, a beautiful Class A building on Third Avenue between 49th and 50th Streets, it was a very different scenario.

"I was pleasantly surprised by the welcome we received," remarked Georgia Malone, president of the six-year-old firm, on the day she inspected the new larger corner offices for her growing consulting and commercial brokerage company. Georgia Malone & Company provides sales services, and office, retail and leasing for institutional, commercial and investment property clients.

"People get excited when they see a woman-owned company move into a major building," said Malone. "It's a new and different experience for many real estate people. Everyone — from the management to the construction crew here - is going out of their way to be helpful."

From the color of the furnishings and walls to placement of the company sign and plants, the esthetics of the new Georgia Malone & Co. offices have been carefully fashioned. They exhibit an energy not usually found in a typical office setting.

In deference to the ancient art of feng shui, certain kinds of plants and water fountains have been strategically placed throughout the office suite. The company sign and furniture have been positioned to evoke success and positive energy flow.

"As Mrs. Jacob Riis told Forbes in 1919 when she opened an uptown office in one of New York's biggest investment and banking offices, 'an esthetic setting does not militate against business efficiency'," said Malone.

This focus on doing things differently and taking risks to achieve success is as evident in Malone's business philosophy and staff recruitment as it is to the design of the company's workspace. The firm's novel entrepreneurial approach to doing business has been instrumental in building Malone's impressive track record for deal-making in New York.

"We have never made one property sale or deal that was being marketed to the real estate community. I believe it is easier to make a deal when the seller isn't being bombarded with many frivolous offers, which can be the case when a property is widely marketed. I don't feel comfortable in a bidding war." Malone said.

For example, this past January, Malone closed on the purchase of six Upper East Side mixed-use buildings for Apartment Investment and Management Co. (AIMCO), the nations largest apartment REIT. The high-occupancy buildings purchased by AIMCO encompass 75 rent-stabilized apartment units and five retail stores at 1691-1693 Second Avenue, 1695 Second Avenue (aka 236 East 88th Street), 238 East 88th Street, 510 East 88th Street and 452 East 78th Street. AIMCO bought the property off-the-market for $17.15 million from the Manocherian Bros., a long-time leading real estate investment family.

In less than a year, through Georgia Malone, AIMCO has acquired a total of 18 buildings on Manhattan's Upper West Side and Upper East Side, including 311-313 East 73rd Street, a 34-unit residential property, and 181-199 Columbus Avenue, a mixed-use block-front of five buildings with 58 residential units and 12 commercial spaces between 68th and 69th Streets. AIMCO's purchase of an 84l-unit apartment complex in Duchess County, New York, was also brokered by Malone. In addition, Malone has been assisting AIMCO in their expansion to new markets in Long Island and Westchester.

As further evidence of her firm's prominence in the apartment building, hotel, and retail/office leasing arenas, Malone has developed or brokered such outstanding New York City properties as the 42nd Street Hilton Hotel, the Embassy Suites Hotel in Battery Park City and 9 West 20th Street, a condo conversion development project in which Malone was a co-developer.

Georgia Malone & Co.'s competitive edge in deal-making is reflected in a staff of top senior people who possess a wealth of knowledge, expertise, creativity and an extensive rolodex of contacts.

"Because of the skill, perseverance, enthusiasm and commitment of our executives, coupled with the degree of professional service we deliver, we've been able to attract top quality clients," said Malone. "I have found that many brokers are trained strictly in the rules, regulations and procedures of the real estate industry, but could use more training to successfully negotiate a deal to conclusion."

"Our firm is different in that none of my staff initially had a broker's background," said Malone. "Most of us are entrepreneurs, business executives and lawyers, who think creatively and look for out-of-the-box solutions. That's how we can get the best sales and deals for our clients that are not yet on the market."

To continue the company's growth, Malone is actively seeking qualified brokers who can expand her firm's capability of locating exclusive deals not yet on the market for her clients.

While Malone is quick to credit the contributions of her associates, much of the firm's success is the result of her own 16-year experience as a senior partner in a private law practice, where she specialized in landlord/tenant issues, acted as a landlord lobbyist and served as an adjunct professor in commercial tenant and landlord law at NYU. She also co-authored two books on landlord/tenant law.

Malone's ability to understand the complexities of New York real estate law and her knack for negotiation have enabled her to cultivate a vast database of contacts and relationships with developers, REITs and owners who retain her company to find them properties that fit their parameters.

"Our reservoir of in-depth experience and knowledge of rent control, J-51s, MCI's, the upside and market value of regulated apartment buildings and other issues is instrumental in helping us negotiate the best possible prices for our clients," said Malone.

"Oftentimes we serve as the buyer's representative and therefore get paid by the buyer, so the seller does not pay us a fee," said Malone. "And that can be an added incentive for the seller."

Cognizant of the current escalating property sales prices, Malone performs an extremely important function on all deals by coming up with options that will bring added value to the property and bridge the price gap between the buyer and seller. This includes such pre-due diligence services as zoning and property analyses, scrutiny of building expenses, tax reduction guidance, lease review and contract administration, all designed to generate additional income for their clients' investment.

"These services are very comprehensive and may often require hiring consultants, architects, lawyers and other experts to get the best result for our clients," said Malone. "In most deals, we'll bring in an architect to do a zoning analysis of a property to see if there are any air rights that may affect future development of the properly. Other times, we'll call in an appraisal firm to do a market study of the rents over the next five years to determine the building's revenue-producing potential. We also employ certiorari lawyers to help reduce the property taxes for our buyer."

Aware that some of these pre-due diligence services have costs associated with them, Malone hires property consultants who are paid a percentage of any reduction of expenses. If there are no reductions, no costs will be incurred.

"Additionally, we study all the tenant leases and carefully analyze the building to see if it qualifies for improvements under the Rent Stabilization law which could add to the rent roll," said Malone. "During the negotiations of contracts and after they are signed, we'll act as liaison and troubleshoot any problems that may arise between the lawyers representing the buyers and sellers." It's a complex process which, as an attorney, Malone can help implement.

Malone is proud of what her firm has accomplished in only six years, but feels that the true measure of success goes beyond financial gain.

"I believe that success is based on how well you get along with your clients, the environment you work in and the freedom to pick and choose with whom you do business," she said.