As February came to a close, Todd Korren, principal and chief operating officer of EVO, met with Real Estate Weekly at the firm’s 40th & Broadway offices.
During a thorough discussion of Manhattan’s office climate, Korren paused to point out the NAI Global member’s surroundings.
“Manhattan is known as the city that knows how to transform itself and evolve,” he said while pointing out that the real estate HQ in which he was currently sitting was once smack-dab in the middle of the now fabled Garment District.
“It was something and now it’s shifting towards something else. The corridor over here, for a couple years was very quiet. You started having this shift in office tenancies, yet the retail demographics hadn’t yet changed,” he continued.
“You had a lot of these retailers that (were still) here that really would appeal to those garment and textile tenants.”
Those types of businesses tended to employ workers who lacked the buying power of the incoming wave of TAMI employees. Higher wages meant higher taste in retail.
It goes without saying that Midtown blocks that were once dedicated to textiles eventually became sought after bastions for tech and marketing.
“It took some time for there to be an evolution,” explained Korren. He would know.
Korren wore several hats before arriving at EVO, the spot where he intends to spend the rest of his career.
After earning both a B.S. and a B.A. from New York University, he built his reputation in commercial real estate at Savanna, Swig Equities, The Witkoff Group, Insignia / ESG (now part of CB Richard Ellis) and StructureTone.
“If you look at my background, I started as a broker,” said Korren who would eventually gain experience in several roles.
“I really learned the different disciplines of real estate and construction, I learned the vantage points. I tell people that I’m not as much a real estate broker as I am a real estate professional because I understand how the pieces come together; the financial, operational, and technical aspects.
“My expertise really is in leasing and asset management, but I really understand how those other pieces affect how to lease space.”
Korren said that his diverse background has molded him for what he considers his specialty, “working with really talented people that have started to develop, that have a great idea, a great concept and want to develop that company and take it to the next level. Make it scalable.”
His impressive resume led to the role of executive managing director at Massey Knakal where he was responsible for the management of the Manhattan, Bronx and Westchester 80-person sales force as well as the tri-state area retail leasing division.
The firm would go on to join Cushman & Wakefield at the close of 2014, a move that both validated and concluded Korren’s time with the company.
“I was recruited to come to Massey to run the brokerage operations, to help to standardize how we operated, to create discipline, to create structure, to create a process to recruit. And then, obviously, to bring in business, but also to help make the company scalable so we could take it to the next level.ˮ
It’s acquisition signaled that Massey Knakal had clearly expanded under his watch. It was time for yet another stage in Korren’s career
and he adapted by joining EVO. “I like to get in on the ground floor with companies,” said Korren, “and help develop the company. I really enjoy evaluating the situation, developing a business plan, and then being involved in the implementation of it. If you look at my career history, that’s what I’ve done.
“The plan for me really was, ‘Okay, I’ve executed the plan for Massey. What’s my next step?ʼ The next step was speaking with my current partner, Ira Fishman, whom I’ve known for over a decade.”
But what of Manhattan itself? It seems that the very sector in which Koren’s office is located is adapting to the changes in the market just as well as he has evolved and honed his real estate knowledge over the years.
When asked if the traditional Midtown hubs should fear new developments such as Hudson Yards, the growth of Midtown South, or the re imagined FiDi, Korren said that there will be plenty of tenants to go around.
“It’s important that buildings have a certain infrastructure to accommodate these tenants, but it’s not just the building, it’s the neighborhood,” said Korren, while discussing Midtown’s ability to satisfy tenants who are looking for a trendy, modern office space.
“Real estate works in cycles and to have a healthy market, you need to have a variety of inventory,” he said.
“You’re going to have new inventory, you’re going to have sort of the 6th Avenue corridor, where you’ve got bigger floor plates,” he added. “They become less the flavor of the month as new product is brought into the market, like Hudson Yards or the World Trade Center projects. Then you’ve got your midblock buildings in Midtown South (to compete with as well).”
Korren pointed out that the new, high-end space at Hudson Yards will come at a “premium” price. While there may very well be a bounty of tenants willing to pay those rents, there will also always be plenty of quality ones who won’t be quite at that stage.
“It doesn’t mean that the rest of the market is antiquated, or technologically obsolete inventory,” said Korren while commenting on the impressive new developments dotting Manhattan’s skyline. “There’s some great, great large buildings there that have significant availabilities.
“These smaller companies, they are very budget oriented and many of them are going through in terms of their financing cycles, they’re not public,” adden Korren who said that while they may be thriving in the crowded Midtown South neighborhood, they likely don’t have the means to make a leap to top-tier space when it’s time for the next chapter of growth.
“If you can go to 3rd Avenue, or go to the 6th avenue corridor for $50 to 60 s/f rents instead of going to Hudson Yards for $90 to 100 per s/f, why would you go anywhere else? I think the marketplace, landlords and the brokerage community, we’re very good at communicating and exchanging ideas and talking about what’s needed in the market place.”
Korren said that the borough’s retail health has also kept tenants attracted to Midtown.
“Just north of us is the Sixth Avenue Corridor, going from really 42nd Street up to 54th-55th Street where you have a lot of these larger office buildings,” he said.
“It used to be that they didn’t really have the retail character that these TAMI type tenants would want. But now look at what’s happened from 37th Street all the way up to now the 40’s and into the lower 50’s, you have a change in the retail. So what’s happened is those TAMI tenants are more comfortable moving into these larger, A, B-plus, type buildings provided that there are things in the neighborhood for the tenants to do, and that the space can be configured to give employees the space and feel that they want.
“The interesting thing about retail is, you really have to look at retail on a submarket-by-submarket basis. There are some markets that are still under-priced,” said Korren, before adding that there are markets such as SoHo and parts of Fifth Avenue that have gotten “ahead of themselves,” as well.
“Those are really small pockets and often times you hear of the outliers, if you will. It’s sort of like a bell curve. There’s a lot of activity within 80 percent of the market, but the outliers sell newspapers.”
With strength in both the office and retail sides of his business, Korren said that EVO also houses strength right in its HQ.
“It’s much harder for newer brokers to grow in big companies,” said Korren. “We’re providing the same level of resources, such as training programs.”
Korren said that part of his plan to help grow EVO and its bottom line involves nurturing a controlled group of talent. He stressed the importance of mentoring brokers so that they can unlock their full potential.
“I meet with our brokers every other week to talk about how they are doing personally, how they are doing in terms of their business development and how are they doing in terms of their active listings.
“They’re getting not just the same amount of support, they’re probably getting more support in this environment because we are intentionally managing the size of our platform.”