With the wide range of career paths available to real estate professionals, each agent has a different story to tell. In this series, we bring you the stories of successful individuals who’ve taken their real estate careers in various directions. We sat down with each of them to talk about how they got started in the industry and the twists and turns they’ve taken along the way. Keep reading to learn how Jonathan Wasserstrum got into the commercial leasing/tenant rep business and find out what insights and advice he has to offer new agents.
Jonathan Wasserstrum, co-founder and CEO of TheSquareFoot (New York City), runs a dedicated tenant rep business specializing in commercial real estate. He hopes to revolutionize the commercial leasing/tenant rep business by making the system more efficient from start to finish, and letting his brokers focus on the spaces most relevant to the individual client.
Wasserstrum is aware that commercial real estate renters are more likely to want to do their own pre-shopping, nowadays, so he makes it easy for them to do that. He ensures, through his company’s compensation plan, that TheSquareFoot’s brokers will find the best available space for the client, instead of the space that’s easiest to sign off on. While his listings are currently comprehensive in only a few markets, he continues to reach out to building owners nationwide, constructing a network that should eventually allow him to offer TheSquareFoot’s services to almost anyone seeking commercial space.
TheSquareFoot caters mainly to smaller, independent tenants, providing them with the technology to browse commercial space all over the country, and experienced brokers to walk them through the process of leasing space. By relieving brokers of the duty of prospecting for clients and eliminating guesswork from the search process, TheSquareFoot can focus on what it does best: service and advocacy through the entire leasing process.
Wasserstrum, 32, graduated from Columbia Business School (New York City) in May 2012. Prior to business school, he worked in the International Capital Group at Jones Lang LaSalle, where he advised foreign and domestic clients on more than $3 billion worth of transactions globally. He has a bachelor’s degree in Economics from Emory University (Atlanta). Outside of work, he’s interested in the three B’s: bourbon, buffalo wings, and brass bands.
Q: How did you decide to get into real estate services, and how did you determine to launch your own business?
A: When I got out of college I consulted for a couple of years, then got a job I loved, at the international capital group of JLL in Washington, D.C. There, I had exposure to an amazing variety of service lines and got to see real estate deals all over the world. I was able to analyze how deals worked differently in different places. Then I went back to business school, in 2010, and while I was there I got a call from a friend who asked if I could help him find some space in the Houston area, which is where I’m from.
He had gone online, thinking he’d do the search himself, and was frustrated at the difficulty of finding key information that was scattered all over the place rather than in a central database, not to mention the problem of connecting with a quality broker. To scratch his itch, we got the idea of putting together a company that would offer all this information, easily and efficiently.
Q: What was your process for putting your tenant rep services together?
A: We started with the search and discovery process. We started aggregating listings in Houston by going to about 20 of the biggest landlords in town, and offering to list their properties on our website, for a fee. Before long, landlords started asking us questions about prospective tenants, and vice versa, and after a few months we took a step back and took stock of our situation. We said to ourselves, “We’re starting to look more like brokers, so why not hire some brokers?” Pretty soon, we were helping with the transactions, which made us not just an information company, but a tenant rep firm.
Q: Do you still monetize your operation by charging landlords to list their properties?
A: We don’t do that anymore. We now make our money the way most tenant rep firms do: the landlord pays our fee at closing. Our fee schedule changes depending on what the market will bear: it ranges from 3 to 4.5 percent.
Q: Very briefly, how does TheSquareFoot’s system work?
A: If you or one of your clients are looking for office space, you can start by going to our website, thesquarefoot.com, and using our search tool to see what’s available in your market. Our system allows you to browse spaces and filter out the irrelevant product, depending on what’s important to you and your clients. You can save your favorites, and when you’re ready to tour the properties, just let us know. We’ll connect you to a broker who knows your market and can show you the offices that have exactly what you need, or what your client needs. We’ll tour the spaces with you, answer your questions, and represent you throughout the leasing process.
Q: Do you provide “after-care” services, once the lease is signed?
A: We can hook you up with movers, interior designers, and any other services you might need.
Q: Does your process apply to all types of commercial space, or just certain categories? And what regions do you cover?
A: We work with all types of leased commercial space, and services related to commercial leasing. As a real estate professional, or a direct user of space, you can go to our website, look for listings in your market area, and when you’ve narrowed your search down, you can interface with one of our brokers, who will see you all the way through the process. You’ll work with professionals who cover your region, and if you have specialized needs, we can often provide you with a broker who works with that specialty.
Q: So you’re a dedicated tenant rep firm, similar to a company like Studley?
A: That’s correct. We represent the tenant; we usually negotiate with the landlord’s representative. Our brokers are salaried, not commissioned, because that system of compensation leads to a more pleasant process for the tenant. Commercial tenants often believe that brokers who are commission-driven will push them into any kind of space, just for the sake of getting the deal done. Our brokers are compensated depending on how well they satisfy the customer.
We’re similar to Studly in that we’re both dedicated tenant rep firms, but we focus on the smaller spaces—200 to 20,000 sq. ft.—while Studley doesn’t do a lot of deals smaller than 10,000 sq. ft. We work with firms like Studley and Jones Lang LaSalle, and they’re great companies, very sophisticated. We bring high-tech processes to the smaller tenant. It’s not just a matter of our looking for possible spaces and handing you a report. When you’re touring the spaces, you can make notes and take pictures that can be uploaded to the folder that contains all of your search materials. It’s an easy and convenient experience.
Q: How do you intend to grow your tenant rep business? What other services might you offer, and/or how do you propose to improve your processes?
A: Our system is currently strongest in New York City and in several Texas markets, and we’ll keep adding markets. We hope to have a presence in all NFL cities, eventually. We also hope to offer a brokerless service so that landlords and tenants who are dealing with very small spaces, where brokers aren’t needed, can have more of a self-serve product through our platform.
Q: What do you consider some of the biggest challenges facing the real estate services industry today? Do you have any ideas for meeting them?
A: Four and a half years ago, when we started, the main challenge was a dearth of relevant technology. The real estate industry, at that time, was behind the curve technologically and not much interested in the latest advances. When we started, and showed landlords what we could do, they were looking at us like we had a third eye. That problem has largely been overcome, and now more real estate services companies are relying on technological capabilities to grow their offerings. The industry used to be reluctant to embrace new technologies, but not so much so, nowadays.
One of the most important advances to come about through the use of computer technology is the growth of crowdfunding to help finance real estate development. Just a handful of companies are working with crowdfunding at present, but it’s a tool that’s growing in importance: it’s providing access to new capital. Crowdfunding was partly responsible for the financing of 4 World Trade Center.
Q: Where do you see the biggest opportunities for growth in real estate services, both near-term and long-term?
A: Landlords will be increasingly able to reach tenants through us, to offer them turnkey spaces for which a broker isn’t necessary: situations where search and discovery is the missing piece. We’ll offer other products, in time, such as retail and industrial space. We already offer a little retail but not as much as we’d like to.
Q: Do you intend to get into sales brokerage, as well as rental, or to grow your business interests in other ways?
A: We won’t get into brokering the buying and selling of assets anytime soon, although it’s something to consider at some point. We might end up owning commercial property, but that would be separate from TheSquareFoot. We don’t plan to bring ownership into our business; it’s outside our core competency.
Q: What advice would you give to someone who is just entering (or considering a career in) real estate services?
A: There aren’t many secrets to getting ahead in real estate. Work hard; be patient; understand that you won’t succeed with everything on the first try; be nice to people.
One great advantage of a real estate career is that it gives you the freedom to choose your own path and take your career in the direction that’s right for you—at your own pace and on your own terms. Stay tuned for more blog posts featuring successful real estate professionals, including info on how they got started, where they are now, and where they’re headed.
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