When David Schlamm gets fed up, he thinks of the blind people he meets on his office block at 23rd and Sixth.
“There’s a home for the blind further up the block and I often find people trying to cross the street,” said Schlamm. “If I’m having a bad day, I just need to remember the blind people I help cross the street. They are always very thankful as they head on their way with a positive attitude. In all the years I’ve been doing it, I’ve never heard one person complain about being blind. It really puts things in perspective.”
Celebrating 30 years at the helm of his City Connection Realty, Schlamm has had plenty to be fed up about. Over the years, he’s opened and then closed two storefront locations, he’s attempted to launch the first brokerage EB5 division, he’s funded a start-up that stopped and he’s watched his star agents being poached by other firms.
“What do you say when it’s a young dad working to support his family? You tell him to take the big sign-on bonus and wish him the best,” said Schlamm. “Maybe he’ll come back when the bonus runs out and the splits get lowered, maybe he won’t, but you can’t stand in the way of someone who is trying to do their best for themselves and their family.”
It’s that kind of laissez-faire attitude that has made Schlamm something of an enigma in the merciless Manhattan real estate scene. Despite being on the outside of the in crowd, he was elected to the Real Estate Board of New York’s board of directors in 2016 and named to the arbitration panel on 2018. He has cultivated one of the most esteemed boutique firms in the city and he’s done it, he said, by following a few simple rules:
“The secret to success is hard work, it’s the number one thing. My first couple of years on my own, I worked seven days a week and lived very frugally,” he said. “Honesty is the other key to success. I became friendly with many landlords in the city and got whole portfolios on an exclusive basis because the owners trusted me. In 30 years, not one person has ever said I haven’t kept my word. I think my reputation is my strongest asset. It’s also difficult to work with a lot of individual clients when you are a one-man operation, as I was in the beginning.”
The beginning started for real in 1990 when Schlamm, who has made no secret of the drug, alcohol and gambling demons that haunted his early life, got sober.
He’d been working as a rental agent at the Greenwich Village firm Leonard Martin after becoming disillusioned with his role in the family apparel business. With his new broker’s license in hand, he set up shop in a 300 s/f office with a window facing a brick wall at 80 Fifth Avenue. “I learned pretty quickly that it was both important and more practical to be a listing broker as well as to secure exclusive rental portfolios and I worked around the clock to do that,” he recalled.
By the end of the year, he had four agents working for him and a chance call from a client led to the next big change in his life. “I picked up the phone and spoke to a woman who was looking for an apartment. We chatted for a while and after she went out to see apartments with one of my agents and rented a unit – and she did pay a fee – I asked her out on a date.
That woman was Jill and she’s now been my wife for 27 years and we have two amazing daughters, Emma and Maggie.”
The two got married in 1992, the same year Schlamm opened a new 1,500 s/f loft office at 18 East 16th Street.
“We were still only doing rentals and had grown to about a dozen agents. And that’s around the time I met my second wife, Kathy Dourigan. She’s what’s known around here as my office wife. Kathy joined the firm as a listing agent in 1995 and today she’s second in command, having put up with me for 24 years.”
With his real estate business going well and Jill at home all day with two toddlers, Schlamm put his money into a venture his wife dreamed up. “Jill invented Tip Me Not,” explained the CEO. “It’s a weight that wraps around the front wheels of a stroller with Velcro and acts as a counterbalance for all the baggage moms always have on their stroller. The Tip Me Not stops the stroller tipping over from that extra baggage weight.”
The New York Times voted the contraption a hit when it test-stollered it in 1999 and the product was a success in Manhattan, but it failed to capture any market share outside of the city. Recalled Schlamm, “The retail price was $16 and that was fine for New Yorker’s who bought expensive strollers. Outside of New York City, though, umbrella strollers were more common and they could be bought for under $30.”
When it became apparent that Tip Me Not wasn’t the golden goose they’d imagined, Schlamm took what he considers to be the biggest risk of his professional career. With their $225,000 life savings, he launched City Connections Realty from his current 6,400 s/f office at 71 West 23rd Street and introduced the first high split brokerage model to Manhattan.
“Here I am introducing Manhattan’s first high split firm. I had only seven agents and six people on staff, a wife and two young daughters. I look back and think, that’s kinda scary what I did. No-one gave me a dime and I had to take out a few home equity loans the first two or three years to keep the business afloat, but I wasn’t scared. I believed in myself. I knew I had a win-win system that would let producing brokers keep more of their commissions.
“We have tweaked the business model over the years and I still think we are the gold standard of a high split firm in Manhattan. Even though we don’t have 500 agents, we have 100 who are all doing business. There aren’t too many of us successful boutiques around, so I know we’re doing something right.”
What makes it right is something he has given plenty of thought to.
“When I look back over the 30 years CCR has been in business, I realize that everything that I tried to do outside of my core business failed and I think it failed because I did it for the wrong reason. I was chasing the shiny penny and it ended up costing me a lot of money.”
With his 23rd Street office bulging at the seams with 130 agents – including a new commercial division led by Herb Goldberg, Barry Fields and Israel Jungreis and a retail division run by former New Spectrum powerhouse Steve Asch – Schlamm joined the storefront rush around 2011 and opened to new street-level outposts. Each office – at 311 East 76th Street near Second Avenue and 510 Amsterdam Avenue between 84th and 85th Street – was to be used primarily by the firm’s “virtual agents” and housed a “concierge” to assist agents and clients.
While he had all the buzz words of the time, the endeavor turned into a dud and both offices were shuttered within two years. “It just wasn’t profitable,” said Schlamm. “I’d hired a design firm to create high-end, modern spaces. We had window monitors with live postings and even a cappuccino bar, but the expense of creating the storefronts didn’t add up to good business and I shut them down.”
In 2015, he opened a short-lived EB5 Regional Center with a team that would specialize in working with smaller developers, international clients and affordable housing programs. He launched a new website in China that would allow clients there to communicate directly with his brokers and a call center in Beijing to drive business.
“It didn’t turn out as I hoped and it cost me more money,” said Schlamm of the enterprise. “But when you look at really successful people, most have had some failures. I believe that the difference between failure and success is the entrepreneurial thinking that gets you back up and back out there ready to try something else. Sometimes when people fail, they stay down permanently.”
After licking his wounds from the EB5 debacle, Schlamm was back on his horse and, in 2015, hit pay dirt by focusing, once again, on his core business.
“In 2016, I merged with Arik Lifshitz and it is one of the best things that I’ve done with the business in my 30 years,” said Schlamm, noting that the veteran investor brought 35 agents from his DSA Realty to the firm along with over 128 exclusive rental buildings, adding to the over 130 buildings already under the CCR umbrella.
“I had worked with Arik often over the years and his values are very much aligned with mine,” said Schlamm, who added that the move not only expanded CCR’s core portfolio but gave agents a doorway into new opportunities to expand their business.
“Residential rentals are still our biggest revenue driver, but we have a nice balance of commercial, retail and sales ,” he said. “In today’s market, a lot of firms are selling sizzle. They have a big brand name and fancy marketing materials but, the truth of the matter is that it is usually for the seller. Why do people buy $200 jeans when they can buy the same quality jeans, probably made in the same factory even, for $50? It’s branding, branding, marketing, marketing and the public buys into it more than the brokerage community. If 90 percent of all resales of co-op and condos are done with two brokers, it doesn’t make that much of a difference. It’s not the company, it’s the agent – we all pretty much do the same thing.
“I look at the rapid rise of venture capital backed companies that are getting billions – I don’t know what’s going to happen with them because you can’t have high splits, huge marketing budgets, gigantic overheads, signing bonuses and still make a profit. At the end of the day, the company needs to make money to survive and, after some time, these VC-backed companied won’t be offering agents what they initially offered and we will see agents possibly going back to their old firms or staying for lower splits and fewer perks.
“These guys are buying the competition with the idea of growing market share. When they go public and investors and trophy agents their have stock options, let’s see what happens then. I am amazed by what they have done and it will be interesting to see what happens, but I am going to stay in my sandbox, stay profitable. My brokers are happy, they are making money and we have a nice collaborative atmosphere. It’s still really a mom and pop feel and a totally different model from the big brands.
“Just like getting involved with getting an EB5 Regional Center and opening up and closing additional offices, I have learned not to chase the shiny new penny. I have no regrets, but as I have gotten older, I have become more risk averse.”
Indeed, his outlook on maintaining the right balance in life has never been more focused. Every Friday, he and Jill pack up the car and take their Golden Doodle Oliver to their house in upstate Olivebridge. It’s near Woodstock and keeps him connected to two of his favorite things – the great outdoors and the Grateful Dead.
“I still love going to see my favorite band, Dark Star Orchestra. They recreate Grateful Dead concerts and I have seen them all over the country about 50 times. But I also enjoy the quiet life in Olivebridge, riding my bike on the rail trails, cruising on my boat
I’m not religious, but I’ve found a temple where I go on Saturday mornings, and we go listen to live music at some of the festivals they have up there.
“During the week I have a trainer that comes to my building’s gym and lately I have been trying to meditate and learn more about Buddhism, which I find interesting. My nights would not be complete without taking Oliver for a walk and I text and Facetime with my two daughters all the time.”
Every weekday morning as he arrives at the office, Schlamm contemplates his goals for both his life and his business. On one of two plaques perched on his desk, his personal chart reminds him “Do a Paulie.”
Doing a Paulie is a movement Schlamm started in 2012 following the sudden death of his longtime friend Paul Badome Jr. in a boating accident.
“Paulie was the nicest, kindest person I ever knew and he would always go out of his way to help people, never expecting anything in return. I launched www.doingapaulie.net in his honor to encourage people to do random acts of kindness, to contribute something positive to the world. The world can be pretty shitty – we should be nice to one another. When you are nice and help people, it feels good.
“Maybe I am an unusual CEO, but I put my heart into this business and I care about the people here and the people we work with. My advice to anyone looking to grow their business is to do the same. Be prepared for setbacks and mentally manage them in your head, but always believe in yourself and know that there is light at the end of the tunnel.
“Of course, there is an element of luck involved, but it is always good to have the wind at your back and that comes with being honest and true to yourself.