There are No Bagels

“I’m the everything bagel of real estate” he said with a clipped Brooklyn accent. He was short and talked fast and was the smartest real estate guy I’d ever met. “I’ve never seen a piece of land that I didn’t like. Maybe I didn’t like the price so much, but I love land”. In fact, he liked it so much he’d stockpiled $2 billion of it over the past 40 years.

In a world of niche operators, he was a generalist. Better said, he had broad specific real estate knowledge. Show him any piece of property and he would, in a few minutes, reverse engineer what could be built there - whether office, residential, hospitality, storage, whatever, and subtract from that the cost to create it, discounting the outcome for time and probability, arriving at a valuation.

I’ve never met someone who could do it with such speed, but that was just the beginning. After establishing the value he’d then layer on how to finance it and then a strategy for chiseling the price or finding value through some operational sleight of hand.

His family’s roots were in the garment business - “schmatta” - and another thing I learned from my interactions with the everything bagel man was if you’re ever presented with a real estate opportunity where you’ll be competing with someone whose family made their money in the apparel industry, find something else to do.

We just renewed a lease with a bagel shop that has been a tenant for 20 years. I first showed them the space on a Friday evening, that was the only time the busy restaurateur could meet. I took my then six year old son with me and before we got out of the car I told him to “look poor”.

He did a serviceable job and we ended up making a deal. It was an important one for me and helped launch a small project that led to other opportunities. The restaurateur went on to epic success and this particular store has done fine.

When we started discussing the renewal, after some opening pleasantries, he started with a “you know we like being here but with inflation and interest rates…”. I let him run and smiled as he listed the new competition, labor challenges, an old HVAC system, and all the predictable salvos for why he wanted a sweetheart deal to renew the lease.

I thought about the circuitous route both our lives and businesses had taken since that first lease signing and how my now 26 year old had grown into my best pal, and in that moment of quiet reflection, I chiseled him as hard as I could and told him offer was a joke and I had plenty of other people that wanted the space.

Then we laughed and made a deal.

Bagels, Part III

It’s unusual to see corporate real estate folks have success as entrepreneurial real estate operators - the two require different skills and mindset. Corporate life is just as cutthroat, but it’s more about cutting throats within the organization. Entrepreneurs have to find an external throat to cut and lack the comfy infrastructure of a large organization.

Years ago we hired a young guy from the corporate world. He had a fat salary but we lured him away because he wanted to be more connected to the action. We couldn’t offer much more than experience but for him it was a worthwhile trade.

On his first day I noticed him wandering around our small office and I asked him what he needed.

“Oh I was just wondering where the bagels are?”

It took me a few minutes to stop cracking up.

We were able to salvage him because it was early enough in his career. Entrepreneurs know there are no bagels, as he soon came to realize.

He’s since gone on to kick ass, outgrowing our company and able to afford all the bagels he wants.