The 30-Minute Interview:
​Steven Greenberg


Q. How does your role in the company differ from that of Louise?

A. She’s on the marketing side and heads up client recruitment. Her team researches leading retailers around the world and approaches them and explains to them what we do. Once we secure clients, then it comes over to my side. We run research, strategic planning and deal making.
So if it falls under marketing, it goes to Louise, and if it falls under client services, it goes to me.

Q. How did The Greenberg Group come about?

A. Louise and I had started a retail chain, built it up, then sold it. It’s not around anymore — it was Olympic Village, a competitor to Footlocker. So we sold the company, and I had been back in business school and decided that I would create a retail service company.
We only represent leading retail brands. Clients have been Gucci, Lacoste, Façonnable, Lalique; Barnes & Noble, Eddie Bauer — almost exclusively public companies who are always expanding.
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Q. Tell me a little more about your services.

A. It’s all about demographics and psychographics.
When someone retains us, we go through a 60-day period of analyzing their business: what works, what doesn’t work; do they perform better in a different climate or a different part of the country. Then we write a strategic plan and present it to them that says: This is how many stores we think you could have; these are the best markets to be in. Once they approve that, then we physically start to look and investigate space within those markets. So it’s really a very analytical process that takes a little bit longer but ensures their success.
We have a very sophisticated software system that is able to slice and dice all this information to the client’s best advantage.

Q. You must travel a lot.

A. Three days a week. That’s why we’re married 45 years — we’ve actually only been together for 21.

Q. How much of your business is in the New York area?

A. New York metro makes up about 25 percent of our total business.
And that’s why we’ve been able to avoid many pitfalls in the economy. Because if the economy is bad in Vegas and Phoenix — as it was in 2009, 2010 — we just didn’t go into those markets. We shifted to Miami or to Houston. And of course New York seems to always bounce back more quickly than any other market.

Q. So business is good?

A. Phenomenal. We had about a 30 percent jump in revenue in ’13 over ’12.

Q. What has been your largest transaction so far this year?

A. The Crocs deal on 34th Street. We net-leased a building, so it’s about 20,000 square feet.

Q. What’s the range in rates for retail leases in Manhattan these days?

A. They start at high and they go to ridiculous.
Frankly, I don’t know how some retailers can make a profit. We have on many occasions suggested and advised clients not to do deals, because we can’t figure out how we’ll make money. Now quite possibly a Tom Ford and somebody who has a big perfume business is using these stores as loss leaders. But with rents now in Madison Avenue anywhere from $1,000 to $2,000 a foot, and Fifth Avenue at $3,000 a foot, it’s questionable how many of those stores are really profitable.
All the big deals I’ve made in New York — the Lacoste deal on Fifth Avenue, the Lalique deal on Madison Avenue — stood on their own merit and always made a handsome contribution for the company. It was never an ego trip.

Q. Are you concerned about the growth in online shopping?

A. Our clients do use both channels. And we use the online sales for our clients, because it tells us where there are pockets of strength. One of our clients is Penguin, the brand, which is owned by Perry Ellis, and so we just opened a store on Broadway in NoHo, and a lot of that came from information that we gained through their online business.

Q. Do you like shopping?

A. I’m a big shopper, yeah. I wear Ralph and Armani.

Q. So I understand that you ran the Boston Marathon last year.

A. I’ve done it 17 times. I ran it last year in 4:04, and I finished four minutes before the bomb went off. I crossed the finish line and jumped in a cab to go to my hotel, and that’s when the bomb actually went off. So in that four minutes I was able to leave. I didn’t know about it until I got to my hotel. I think that God propelled me on that day.

Q. Will you be running it next week?
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A. I pulled a muscle so I gave back my number. I’ll do it next year.

Personal Connections Trump The Virtual World

Credit:  Chester Higgins Jr. / The New York Times

Mr. Greenberg, 67, is a founder and the president of The Greenberg Group, a real estate advisory and brokerage company based in Hewlett, N.Y., that focuses on retailers. Clients include the luxury brands Gucci and Façonnable. Mr. Greenberg started the firm with his wife, Louise, the chief executive, in 1987.

Interview conducted and condensed by
Vivian Marino
In today’s technology-dominated business environment, a focus on relationships often gets lost in translation. Client recruitment and ultimate business success is about creating one-on-one connections. There is no form of technology that can yield this type of success.

Founded in 1987, The Greenberg Group is a real estate advisory firm that specializes in providing market research and analysis, sales forecasting, site selection and deal negotiation for several of the nation’s premier retailers. The firm exclusively represents retail brands nationally, acting as the tenant representative during negotiation with landlords.

There are seven key ingredients in securing new retail clients:
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  1. Live the product – personally visit and shop the retailer’s stores. Understand the brand, as well as the culture of the company. Believe in the brand and the prospect of your firm representing it. Recruit new clients that are aligned with your beliefs and way of doing business.
  2. Quickly highlight why they should hire you in 10 words or less. Speak in the CEO’s language – focusing on increasing sales, profitability and return on investment. Differentiate your firm and its approach from competitors. For The Greenberg Group, we spend considerable resources on a research department that can forecast sales within 6 percent. Once you have his/her attention, demonstrate how you will solve unaddressed needs.
  3. Attend conferences that cater to your target audience. Network creatively. Be “in the know” when it comes to the industry and changes within it. Be educated on trends and what’s ahead next. Where’s your next opportunity for growth? Often, in-person connections are the best way to get this information. For us, we became pioneers in placing our clients in outlet centers, which helped them drive sales through a previously untapped revenue stream. This came ahead of their competitors.
  4. Avoid e-mail – deals happen in real time, face-to-face. We all get thousands of emails each week. This mode of communication clearly is oversaturated, even more so for a top executive. Visit stores in person. Plan trips in connection with important events like fashion week. Read media outlets such as Women’s Wear Daily, or industry blogs, which will discuss upcoming venues that may attract CEO attendance.
  5. Know what is on the CEO’s agenda. Who is in his/her inner circle? Research and comprehend the company’s business strategies – both short- and long-term, as well as domestic versus global. Which new customer segments are they seeking to reach? How can they expand their footprint? What are platforms for growth?
  6. Research the company to better understand management style and changes. Clients expect you to know their business almost as well as they do. How has the retailer’s history and success evolved? What is their mission statement? What challenges have they overcome? Analyze their real estate portfolio to determine both successes and errors.
  7. Keen intuition – be in the right place at the right time. Don’t wait for the phone to ring. Know which clients are a good fit for your business, and go after them. Create opportunities by being proactive and passionate. Identify the decision maker and just do it.

There are certain intangibles that are irreplaceable to the process of landing a meeting with a high-level executive who may have no idea why he or she needs to immediately hire your firm. It does take some luck – but there clearly are ways to make your own luck.
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Louise Greenberg is the CEO of The Greenberg Group, a Hewlett, N.Y.-based real estate advisory firm. Her role is to specfically expand the company’s client base by generating new clients that meet The Greenberg Group’s criteria to represent on the real estate front. For more information, visit www.thegreenberggroup.com.

​A Squeeze on Retailers Leaves Holes At Malls

By Terry Pristin

It was planned when the local real estate market was very hot, and now the Crossroads of Cresthill, a modest-size strip mall of 44,000 square feet in the Chicago suburbs, is almost completed. But the developer, Gierzyck Midwest, has managed to nail down only a couple of small tenants. The 10,000-square-foot anchor it hoped to land, Menards, a hardware retailer, was lost to another shopping center a mile away.

So Gierzyck is offering prospective tenants something that may become more common in future months: free rent. And not just while the store is being fitted out but even after it opens, said Dan Tiberi, a senior associate at Gierzyck. It s our way to get more people to look at our center, he said. With the market taking a turn for the worse, we decided to address the problem.

In larger shopping malls, operators have not yet had to resort to giving away their space to attract tenants, but most landlords are facing mounting challenges these days. Vacancies are up, retail sales have been disappointing, and long established chains like Mervyn s, Linens n Things, Boscov’s and the Sharper Image have filed for bankruptcy protection, raising the specter of more dark spaces with fewer potential tenants to replace them.

Some 6,500 chain stores are expected to close this year, the largest number since 2001, according to the International Council of Shopping Centers, a trade group. When stores close, neighboring stores may be entitled to exit or to have their rent lowered.

Retailers like the Gap are not only curtailing their expansion plans but are also trying to squeeze their stores into smaller spaces to reduce rental costs. The popular Cheesecake Factory restaurant chain is experimenting with a smaller prototype. American Eagle is asking landlords in poorly performing shopping centers for rent reductions.

Retailers are making an enormous effort to focus on the bottom 10 percent of their portfolios, said Michael S. Wiener, the chief executive of Excess Space Retail Services, a company based in Lake Success, N.Y., that helps tenants shed excess space or restructure their leases. He said his business was up by 50 percent this year. About half the vacated spaces are likely to be subleased, but many empty boxes in second-tier markets may not be desirable for years to come, he said.

For strip malls, the vacancy rate is 8.2 percent, the highest since 1995, and the average asking rent declined by 0.4 percent from the first quarter of the year to the second quarter the first drop this decade, said Sam Chandan, the chief economist for Reis Inc., a New York research company that tracks the top 76 metropolitan areas.

The vacancy rate for regional malls is 6.3 percent, the highest since 2002. Though mall rents rose by 0.2 percent from the first quarter to the second, all retail rents are down when inflation is taken into account, Mr. Chandan said. New centers that opened in the first half of this year were just 62.8 percent occupied, on average, compared with 72.1 percent for those that opened last year, he said.

With all the problems in retail real estate, the default rate remains low for loans issued to mall owners that were packaged with other mortgages and sold to investors as commercial mortgage-backed securities.

Realpoint, a credit rating agency in Horsham, Pa., has tracked 127 mall loans that are delinquent or in default, including a $22.2 million mortgage on Midway Mall in the Dallas suburb of Sherman, Tex. Like many older malls, Midway, which is managed by Simon Property Group, the largest operator in the country, was unable to withstand competition from a nearby new open-air center, Sherman Town Center, and is nearly half vacant.

In the face of a prolonged housing crisis, the decline in consumer spending, and the lack of construction financing, developers have been forced to abandon, postpone or scale back projects.

Don Chapman, a managing director at Ariel Preferred Retail Group of Williamsburg, Va., which owns seven outlet centers across the country, began lining up tenants a year ago for a $90 million outlet center he plans to build in Rockford, Ill., but is finding that lenders are insisting on onerous terms, including more equity as well as personal guarantees from the developer. Our thinking was that we would be in the ground by now, said Mr. Chapman, who plans to continue seeking tenants. It s taking longer than we anticipated.

Brian M. Smith, the chief investment officer for Regency Centers, a national strip mall developer and operator based in Jacksonville, Fla., said the company revised its development strategy in the spring of 2007. We saw it coming, Mr. Smith said. We dropped $400 million worth of projects and totally revamped our pipeline.

Regency shelved plans to build shopping centers in areas where new housing developments had stalled. Instead, the company focused on affluent areas where land costs and strict zoning regulations limit competition, he said. A broker who represents national retailers, Walter T. Wahlfeldt, a senior vice president at Jones Lang LaSalle, said tenants had begun exercising their right to back out of their leases when the developer has been unable to secure an anchor tenant. The consequences of the economic downturn vary from region to region. Las Vegas and Orange County, Calif., are suffering from problems related to the subprime debacle, but retail vacancies remain low because these markets were so strong to begin with, said Hessam Nadji, a managing director at Marcus & Millichap, a national real investment brokerage based in Encino, Calif. Mr. Nadji said he expected those markets to deteriorate, while San Francisco, San Jose and San Diego were likely to remain healthy.

But all retail sectors are losing business, including the newer open-air centers that cater to well-heeled shoppers, known in the industry as lifestyle centers. The difference with this downturn is that it s affected all forms of discretionary retail spending, said Malachy Kavanagh, a spokesman for the shopping center trade group.

Paul Morgan, an analyst at Friedman, Billings, Ramsey & Company who specializes in real estate investment trusts, said the lifestyle sector became overheated in recent years as developers rushed to build them. There will be a significant correction, except for the very good ones, he said.

​And shopping centers that are limited to large and medium-size stores a Home Depot, say, with an Office Depot and a Circuit City may have bigger challenges than grocery-anchored strip malls with smaller stores, said Nicholas K. Vedder, an analyst at Green Street Advisors of Newport Beach, Calif. One vacancy has more of an economic impact, he said. It might be difficult to find someone to fill that space.