By Sarah Trefethen
Richard Podos’ career in real estate has taken him from sales to corporate services to a stint as a dot-com entrepreneur and, ultimately, to the CEO’s desk at Lance Capital, the investment firm he founded in 2004.
Along the way, Podos has carved out a niche financing tenant improvements for landlords who want to offer turnkey leasing solutions in buildings with multiple tenants.
Last year, the financing model made headlines for its role in the New York City Human Resources Administration’s 20-year, 400,000 s/f lease in what had been a largely vacant Brooklyn warehouse.
The $44 million tenant improvement bond that Lance Capital issued charged less than 5 percent interest, secured only with the city’s high credit rating.
These days, Lance Capital provides about $200 million financing each year, but in the coming years, Podos says, he envisions the eight-person firm growing to a gross volume measured in billions of dollars a year.
Podos, 49, studied business and international economics at New York University, but by the end of his freshman year, he knew he wanted to go into real estate.
“My mother’s second cousin once removed was the chairman of N. Peter Burton and Co, and I just thought real estate in New York sounded like the coolest thing ever,” he said.
After college, he became a broker, and the seeds of Lance Capital’s investment strategy were being planted even then.
His first major deal came at the age of 23, he said, when he sold the Tiffany Building at 757 Fifth Ave. — a rare single-tenant building.
Podos went on to join the Chicago-based firm Equis Corp and began working in corporate services. In the late 1990’s, he was in charge of managing the Chrysler Corporation’s 90 million s/f real estate portfolio.
“The CFO of Chrysler came to us and said, ‘You get to run the portfolio, but when you go out and lease space, you don’t get to keep the capital any more … we don’t want to put any more capital into real estate,’ ” Podos said.
This meant that in lease negotiations, he had to ask landlords to provide the money to renovate the space for Chrysler’s use.
“The landlords would say, ‘The banks won’t give us the money,’“ Podos recalled.
At times, Podos said, this resulted in loans at interest rates as high as eight percent — unheard of for a corporation the size of Chrysler.
Podos is enthusiastic about technology (“I was one of the first guys doing spreadsheets in New York,” he said) and in 1999 he left Equis to work with an early competitor to the real estate database CoStar, called RealityIQ. When that foundered, he started another venture, called NetStruxr.
“I got really sucked into the whole dot-com thing,” he said. When that bubble burst, Podos decided to take his career in yet another direction.
“Instead of being a broker, I wanted to focus on capital, going back to that Chrysler experience,” he said.
Tackling the problem of efficient tenant improvement financing, he thought back to his early experience with the single-tenant Tiffany Building.
“In single-tenant deals, you focus much much more on the credit quality of the tenant,” he said. “We figured out how to take the finance structures resulting from that world and we went to the same debt investors and said, what if we zero out the value of the real estate and just look at the credit of the tenant?” It worked out, he said, because “investors really are focused on credit.”
Podos lives on the Upper East Side and, with the exception of a time serving in the Marine Corps in the 1980s, has been a New Yorker since he was 12 years old. He has been involved as a donor and docent at the Metropolitan Museum of Art. Professionally, he is an active member of CoreNet Global.