For Richard Guarino of ERG Property Advisors, brokerage is a family affair.
In 2009, he founded the company with his older brother, Jim, along with Matthew Sparks and James Kinsey. Guarino’s younger brother, Michael, and father are also experienced brokers in the business.
Guarino, a managing director who works in investment sales, is seeing an uptick in activity, particularly in multifamily sales. He recently sold a 17-unit and retail building in Chelsea, a retail condo on 4th Street in Manhattan, a defaulted loan on a mall in Flushing Queens for $13 million, a 16-unit building at 2000 Grand Concourse in the Bronx, a 20-unit building in Minford Place.
Access to financing has driven deals. “It’s available and cheap,” said Guarino.
Meanwhile, low vacancy rate and rising residential rents have made multifamily properties an attractive buy. Roughly 75% of the firm’s sales business is multifamily, and the rest is development sites and retail.
“I think we’re going to see the rental market boom in the next few years,” he said.
Guarino grew up on Long Island. In an early job, he managed 122 payphones, traveling along a route, repairing the devices and learning the streets. He also served in the U.S. military before his brother, Jim, recruited him for his own brokerage, Extreme Realty.
One of his first deals was 66 Nelson Street in Brooklyn, a four-story building which traded for $150,000 in 1999.
“I was always drawn to sales, because I like to work with people,” said Guarino.
A boom drove pricing up, but the downturn, and subsequent lack of business, gave the partners an opportunity to launch the new firm. They hired a tech company to build an emailing marketing system to promote listings to a large number of buyers, along with a property database for brokers to use.
ERG’s investment sales and office leasing divisions total around 20 brokers. It is now looking to hire around six more brokers in the remainder of the year.
“As confidence in real estate and the economy come back, people will want to take these jobs again,” said James Kinsey, ERG’s CEO. The company’s gross revenue for the first quarter of 2011 exceeded all of last year, said Kinsey. ERG is active in all five boroughs, and loosely organizes brokers by areas, although it doesn’t strictly limit them to neighborhoods.
ERG also works with the partners’ other companies, which include financing, property management, and residential rentals and sales, giving prospective buyers more options.
“We will identify the untapped upside,” said Guarino, who makes a point to see each property in person. The strategy includes focusing on properties with below-market rates.
ERG also sells triple net-leased properties – typically retail properties anchored by a major national tenant that pays for most of the property’s expenses – in the outer boroughs and around the country.
Guarino continues to live in Long Island – now closer to the city – and is married. He has four pets, cats and dogs, and is active in supporting animal shelters, an effort than he describes as giving voice to the voiceless. He is also an avid Italian cook, specializing in pasta and meatballs, learning the craft from his mother, grandmother and uncle.
He is a vice president of Bronx-Manhattan North Association of Realtors, a trade group, and will assume the position of president in September 2013.
Guarino sees the Bronx, where price per s/f is around $75 to $85, as the next untapped area in the city. Years ago, buyers were paying one and a half times the gross rent roll, and now prices are closer to six times the rent roll. Recently, ERG achieved a 16-unit elevator property sale of over $70,000 per unit, among the largest in the area.
“I think uptown is the frontier,” he said.