October 20, 2016
Women in Real Estate: The Power Generation
In the high-risk high-return Manhattan real estate market, women are a powerful—and historic—force.
by Deborah L. Martin interior designer Robin Long Mayer photographer Greg Morris
The New York luxury real estate market is one of the most competitive in the world, and women have long had a hand in shaping it. At a luxury apartment on West End Avenue, New York Spaces sat down with industry leaders Louise Phillips Forbes, Senior Associate Broker, Halstead Property; Nikki Field, Senior Global Real Estate Advisor, Sotheby's International Realty; Suzanne Miller, Founder/President, Empire State Properties; and Anjali Pollack, owner, Anjali Pollack Design.
NYS: Women, who head many of the top brokerage firms and teams, have long dominated real estate. How do you explain this?
Louise Phillips Forbes: I think women are traditionally the nesters and as the definition of family and home has evolved, there is an acute connection to what we bring to the table. Having that awareness, understanding, and intuitive nature has been a great tool for me.
Nikki Field: We're very fortunate as women to be in this career. Residential real estate in particular, has always been a stronghold of talented, articulate, educated women. In fact, 80 percent of the established brokers in our field, nationwide are women, and more than 90 percent in the top ten percent are women as well. So we reign in this industry. Why? Because this is such a unique purchase. People buy all sorts of items throughout their economic life but they look at purchase of a home in a very personal way. We have an innate ability to understand what makes a home and are able to communicate that to buyers. I think there is translated confidence and credibility in our assistance in helping make the decision.
Suzanne Miller: My business is a little different because I own a furnished rental company. So we sell income-producing properties to investors all over the world and rent them out to corporations. Most of the people that we deal with are women, both on executive level making decisions for companies, and as international buyers. Whether it's an executive or perhaps the wife of an executive, the women are making the decisions on investment properties all over the world.
Anjali Pollack: My perspective is different as well because I'm an interior designer and when there's a woman selling or buying an apartment there's a more understanding of necessary things like closet space. Men walk through a space differently than women. For example a woman understands that more and more people really live in their kitchens. Women live around the kitchen, the bathroom, and the closet. Men want to know where the big TV can go, whereas women are thinking about the family's needs.
NYS: Is it still about the "ladies who lunch"?
NF: We are an evolution of those women. All sales, generally, are social. If you are selling something, it almost always starts with a social relationship: Who you know, who you know who knows someone else, and so on. So those ladies who started as part-timers, wearing white gloves, with their little Rolodex cards on who was moving, who was divorcing...
LPF: I've had those Rolodex cards, that just tells you how long I've been doing this.
NF: It's very much a part of how far we've come but again those personal relationships are extremely important to transfer trust. What has happened since those days is real estate has become a very big business. We need efficient and talented people to handle the level of business that our purchasers and sellers demand right now. So the social aspect is transferred into a highly sophisticated business skillset and you have to have both. You deliver by knowing the market and knowing how to deal with that market.
LPF: Real estate is the business of people and we are entrepreneurs by nature. An important piece is how you develop relationships. Ninety percent of my business is driven through personal relationships. Understanding what clients are looking for and what makes them tick is something that women are connected to, that matchmaking process and synergy. I don't really sell my clients, I educate them and it's the same kind of chemistry when you walk into the right home as you experience when you meet the man of your dreams or find the right school for your child. It's about chemistry.
NYS: You all manage teams as well. There are teams of brokers, designers, contractors, and staff. The management skillset is very important.
NF: It takes a village to sell in Manhattan. Particularly when we're talking about our international clients, which are a strong component. In the last seven years in this market our international clients are buying their 2nd, 3rd, 4th, 12th home, and they need all of the services. From the very beginning they need a financial advisor, a tax attorney, an architect, a designer, a mover, a school counselor, and definitely a real estate broker. To do her job effectively, that real estate broker needs a team behind them and you'll find that some of the most successful people in our industry have a very strong team of highly-trained brokers within their group who can take over in specialist fashion.
We don't know everything about everything. We certainly understand our market better than many of our competitors, but when someone calls me and says they want to put their child in a walk up in Hell's Kitchen I need to be able to pull in somebody that can really give the depth of advice that's important, and that certainly affords our name attached to it.
SM: When you're first selling a property the point of contact is so important. I'm selling to clients who haven't seen the property. A lot of my clients are referrals or it's just my reputation and they know that they are going to get a return. I'm selling cash flow. I'm selling investment properties. For example, I have a client in Singapore, she has 12 properties with me and she's just purchased a new one. We told her what the return would be and we provided the furniture, we provided the tenant, we provided online banking, all of her utilities paid. We organize an accountant to do her tax returns and they just get direct deposit. I have to say, it's about the women. Most of the people I deal with are women. The client is a woman, the people in my back office are women, and the designers are women.
NF: But we also choose who we want to work with.
LPF: Yes, I think it's fair to say, we're girl's girls.
NF: Through trial and error we surround ourselves with the best in the business. It doesn't mean that I'll exclude a man, by any means; there are obviously very talented people that support our industry.
SM: A lot of properties we sell at bulk, so I'll sell out a floor of a building or ten or twelve. The bulk buyers, because it's really just about return on investment, those are usually men. The men are buying the bulk. They're buying a floor, but the one-offs are women.
NF: Men buy from spreadsheets, women buy from sight. And there are exceptions, obviously, we are not lumping everyone together, but that's been our experience.
NYS: How much of your business is from women buying property in their own name?
NF: Hallelujah. Women are no longer waiting to get married for financial security.
LPF: I didn't get married until I was 40. When I was younger I was finding people these beautiful homes with their partners and I had this epiphany of "What am I waiting for?" At that moment, I was 26 years old, I began building my business targeted towards individuals like myself and three decades later, my connection with women is strong. For example, I'm now helping the daughter of my first client buy her own home. Another client is a widow who is leaving the suburbs and starting another chapter of her life. I would say probably 10-12% of my business is built around my business with women.
NF: We keep data on that as well on my team and it is a growing number. In the selling year of 2015, 27% of our buyers were single women. That's up from 19% in 2014. Of our sellers in Manhattan, another growing trend, 31% were women and that's one third of our market.
Why? They were doing one of two things, they were getting married so they were selling or they were buying up. Women aren't just buying one apartment and waiting for Mr. Right, they have significant jobs, significant careers, they're making decisions sometimes not to be married but to continue in their careers. They then go to their second or third-tier home.
AP: I have a lot of single women clients and they are very educated in terms of the design market, and real estate, and they are also willing to go to that next level in terms of spending. They want what they want and they're not waiting for anybody to make any decisions. They have significant jobs and powerful positions and their homes reflect that. I have clients who are buying here and in Miami. I have another one that has a second home in London. I'm working on multiple residences with art collections and the whole gamut. It's very interesting.
NYS: What is important to your clients as they move into new homes? Is a staged apartment important to your business?
NF: Staging and design is an interesting evolution. In New York we came to this rodeo a little late. They were staging in other places in the country way before us.
LPF: For decades.
NF: I used to tell my sellers, "No we don't need to spend that money. Absolutely not, I can sell this home without the extra lifting. I started to look around and saw through our developer's example that a staged apartment gets a whole lot more activity. Something that, like this apartment that we are sitting in, really extraordinarily well designed does connect.
LPF: It tells a story. It completes a story visually.
NF: So in New York there were a handful of "stagers" that began in the business. Some of them knew what they were doing, some of them didn't but it would give us enough to cover up some flaws. But since that time we've gone from staging properties to full-tilt designing. Everything is there: the art, the accessories, the cutlery in the drawer, and I have found particularly with our international buyers is that's what they want. They're looking for turnkey. No problem. No fuss. No shopping. Just let me move in and bring my dog or my children.
LPF: For the last 20 years I've worked with this particular developer. We're sitting at 498 West End Avenue and this is probably my 13th conversion of a rental building to a condominium where we have taken a 1910 envelope down to the brick and a lot of it's been replaced. In the late 90s, early 2000s, we started acquiring furniture and we now have eight full apartments of furniture that is inventoried and you can go through a spreadsheet and select what you want, working with a designer and someone from my team, which operates like a well-oiled machine because we do renovate and stage probably 30 apartments a year and we manage and oversee it.
SM: Just on a strict numbers point, you probably get about 20-25% more per month on a furnished rental than you'd get on unfurnished. So I can tell you how important furniture and staging is in apartments. People want turnkey. The way the apartment looks, down to the linens, is key to my business. You have to have consistency.
AP: I've noticed that people don't want to have to come in and redo the kitchen or the bathrooms. So it makes a big difference when you have a developer who has done all of that, and it helps if an apartment is staged because then they have an idea of how it could look. Where I come in is adding the extra layers: wall textures, ceiling textures, light fixtures, really making it personal. But most people don't want to take an apartment on and then have to do a gut renovation. Most people want to walk into a space and say, "It's perfect down the hardware and it's beautifully appointed."
SM: If you take a property that doesn't have a view or it doesn't have a lot of space, there's where you get a higher return. Particularly in the furnished rental business people are not necessarily looking at the view they're looking at the furniture. So that has so much more to do with the way a client sees a rental property. You can cover up a lot of mistakes with staging.
NYS: New York is one of the art capitols of the world so we have a lot of buyers and sellers with big collections. How often does that factor in to the conversation?
LPF: That was one of the things that gave birth to the big loft moves that we experienced in the late 90s and early 2000s where you had an anchor building that did well financially and it became this seed for growth. And then, of course the movement of the Whitney Museum started a massive transition and transformation in the New York art world.
I am a collector of Cuban art and through that journey you make connections. I've been on the advisory committee for the Bronx Museum for over a decade, as well as the Commissioners Circle for Art supporting emerging artists and that's how I elected to educate myself, but it was a benefit to my business as well. I'm listing a townhouse today with one of the most substantial collections of art that I have experienced in my career and it's fun too, because I was with her when she bought a number of those pieces of art.
LPF: Yes, I will repeat, her, but to me, that's just an added layer of connection for my business, my home, and collecting beautiful objects that complete the statement of your home.
AP: I would add that it's very interesting in a new development. In a new development it's easier to transport these large-scale pieces because people are thinking about larger entrances, the elevator space and where you turn in a corridor, because it's hard to get large art collections in and then have them hung properly.
NF: It's actually been a challenge for our architects, particularly as they are building more and more glass-walled buildings. There was an ongoing discussion at our marketing meetings where we said, "We need walls for the art collection!"
At Sotheby's we often find major collectors that'll buy another apartment for the art collection. It's an unusual situation but it's a regular referral that we get. He or she has just finalized a major new collection and they need another home to hang it because their walls are full. Art is drawing a lot of this disposable wealth right now. A good experience that I recently had was representing the club penthouses in SoHo. All of the penthouses that we sold there were to art collectors, and every last one of them was looking at the art space first and foremost and how the art would breathe in the space. So we as real estate brokers, specialists in the industry have to keenly be able to advise what will work for significant pieces. Sculpture as well. We need corners for the sculptures.
NYS: Let's talk about broader trends. In January The New York Times published an article about dropping prices in the market and over the past six to eight months we've been seeing articles about prices dropping in Brooklyn and a luxury housing glut. In addition, The Daily News published a prediction that the inventory of luxury condos $10 million and up will continue to grow as more and more buildings come to the market and the current for sale product will tend to linger. Conversely, the demand for entry-level luxury, condos priced from $1 million to $3 million will increase, driven by low inventory and high demand.
SM: From January to September I've closed 28 properties between $1 million and $3 million. That's the sweet spot. New clients are coming in from China, the Philippines, and Brazil. New York City is still cheap, compared to the rest of the world. If you go to Shanghai, or London, or France, the prices are much higher. I can't get enough product.
LPF: There was a trend that was happening at the end of 2014, where the pre-construction sales drove numbers. The attitude became, well, I'll just list it high. If I can get it, great. There was a tremendous amount of inventory floating on the market throughout '15.
NF: At the wrong price.
LPF: At the wrong price. For example, The Baccarat had a great price-per-square-foot, and sales velocity. When they were pre-construction, there was a person in my office that ended up going to contract and closing the same week for $40 million, and the last ask was $60 million. How much was it really worth? It was not that there was some floor that fell out of the market, it was a properly priced home and a deal was made. The last comparable was around $38 million, so did it really drop?
NF: We are in a market right now, which is overpriced, not overvalued. There's a big difference. As the run of the seven-year bull market and more and more headwinds, every seller, every pushed the price until the bubble burst in June 2015. That was the height of our market. That was the highest average price per square foot sale in the current bull market. Once the press became aware of the declining prices and started reporting it, the advantage was sellers now finally had a dose of reality. We reset our prices to a fair and very healthy return. Here's what I hope your readers take away today. Just like Wall Street, there's a bull market in real estate. We have just entered a very short period of a buyer's market. This is the time to run out and buy something, because we have a flattening. We do not have a depression, we have a flattening. We have the interest rates, mortgage rates, at an all-time low.
SM: New York is cheap.
NF: New York is cheap. Even if it's only a 3% return, they know it's a safety deposit.
LPF: It's a buy and hold opportunity.
NF: Where are we right now? In probably one of our best markets you and I have ever seen.
LPF: We've had a crazy election year that has not given us a lot of confidence. I see the closer we get to it, the more confidence there is, and my activity has been accelerating every day.
NF: Your buyers are responding.
SM: I need product.
NF: The smart consumer understands this is their opportunity. What we're seeing right now is transition, and you'll see third quarter stats coming out. I anticipate that we're not going to be seeing a significant drop in international buyers, but an absolute increase in local buyers. They've been on the sidelines watching these numbers go up. Their in-laws and neighbors have said, "Why didn't you buy?" Any smart ones who waited will now have an opportunity to buy.
SM: The advantage also is that, unlike the '80s, all my buyers, particularly since the price range is $1 to $3 million, are cash buyers. There's not as much leverage. You'd probably even find on the $30 million properties, there's just not as much leverage as there was, so this is going to secure the market. People are not going to walk away. You're not going to get the people that you did in the '80s, when the bust really was, because people walked away from so many properties and the banks ended up owning them. We're not going to see that this time.
NF: Never lose faith in Manhattan market. You're going to be very busy.
NYS: This year we have our first female presidential candidate, and we are witnessing an exciting chapter in American history. Women are growing stronger in every sector: real estate, finance, interior design, media, and politics. What does this mean to you?
LPF: Even in the technology sector we are seeing a change. We've worked on breaking these glass ceilings for many years. The heart and the soul of it has been a journey, and the result is something we've all been waiting for. For my own business, I have really focused on women in the market. I have customers and clients who run their homes the way they run their businesses. It is how we are wired, and we just have come out of the metamorphosis of it. We'll continue to lead and support in this business, I'm certain.
NF: I'm particularly excited for our daughters. Less of their time will be spent pushing on that glass ceiling, and more of their efforts will be used for performance. I think it is already proven that women in most of our industries today have unlimited opportunities, given the fact that these doors have been opened. I really see the difference in my own daughters, who are in their 30s. They're taking it for granted. If they have the talent, if they have the work ethic, they have every opportunity and they are going to succeed. We didn't know if there was any opportunity, we just had to keep pushing down those doors until we were taken seriously. I'm so pleased for the outlook for women in the future.
SM: I think about the number one producer in my company, who is fantastic. She recently had a child who is now two. I helped her get an apartment and I let her bring her son to work when she needs to. The loyalty that we've gotten, and the team effort, just by embracing her and appreciating the job that she does, this has just been fantastic on both sides. I don't think men would do that.
AP: There is a very big trickle down effect. Thanks to women who have forged the path ahead of me, there's a lot of mentorship. There are people who are very open to helping you, or lending you a helping hand, and I think that's a very big change. Your mentor can finally be a woman. I think if Hillary Clinton is to win this election, it's a tangible way to see that a woman can really be anybody she wants to be. The most important thing is really that we are open to helping other women. That's a very different conversation than it used to be, because women are now in positions of power to help and mentor the next generation.
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