Distinguished Alumni Interview Series: Nicholas Bienstock ’96
Nicholas Bienstock ’96 is the Co-Managing Partner of Savanna. In a recent interview with Eric Liang ’17, Mr. Bienstock discussed trends in creative office development in Brooklyn, starting his own business, and gave advice for Columbia Business School students aspiring to have careers in real estate.
Nicholas Bienstock ’96 is the Co-Managing Partner of Savanna. At Savanna, Mr. Bienstock has developed relationships with institutional lenders, third-party capital partners, and fund investors as well as identified acquisitions and structured transactions. Mr. Bienstock has worked on the acquisition, financing, redevelopment, restructuring and sale of over $5 billion of real estate throughout the United States. Mr. Bienstock sits on the Investment Committee and supervises the ongoing marketing and leasing of Savanna’s investments. Prior to joining Savanna in 1999, Mr. Bienstock worked at Capital Trust, Inc. in New York where he worked on a wide variety of real estate principal investment and advisory transactions, including the purchase of equity interests in various properties, the negotiation and structuring of mezzanine loans, single asset and portfolio sales, asset management, debt and equity private placements and REIT IPO advisory work. Prior to Capital Trust, Mr. Bienstock worked for Chemical Bank’s Real Estate Investment Banking Group. Mr. Bienstock received an MBA from the Columbia Business School, an MS in Real Estate Development from the Columbia School of Architecture and a BA from Harvard College where he graduated cum laude. Mr. Bienstock has served as an Assistant Adjunct Professor at Columbia University where he taught case studies in Real Estate Finance to graduate students in the Columbia Architecture School’s Real Estate Master’s Degree Program and at the Columbia Business School. Mr. Bienstock also serves on the Advisory Board of The Paul Milstein Center for Real Estate at The Columbia Business School, and on the Board of Trustees at The Brearley School, where his daughter attends school. In a recent interview with Eric Liang ’17, Mr. Bienstock discussed trends in creative office development in Brooklyn, starting his own business, and gave advice for Columbia Business School students aspiring to have careers in real estate.
Please tell me about Savanna’s business model.
Savanna is a multi-strategy real estate investment company that is focused on investing in office, residential and retail assets in New York City. We have developed a vertically integrated platform that provides leasing, project management, asset management and development/redevelopment services to our portfolio. We also make selective high yield debt investments in the kinds of transitional real estate assets that we invest in on the equity side.
Turning to one deal in particular, you recently took down the former Schlitz Brewery in Brooklyn with plans for a creative office conversion. What’s your thesis and where do you see the East Williamsburg/Bushwick office market headed over the next five years?
Bushwick is today where Williamsburg was 10 years ago. Chic new galleries, coffee bars and restaurants are opening up all over Williamsburg. Residential development is underway on a large scale. In Brooklyn there is a shortage of high-quality office product and a growing demand of tenants that want to be in Brooklyn, not Manhattan. There is a shortage of the kind of cool, loft-like space that many of the creative and TAMI tenants who are being pushed out of Midtown South because of $70 psf rents want to occupy. We are providing state-of-the-art new, loft-style office space in Bushwick at a $40+ per square foot price point—with incentives available to tenants who move from Manhattan that equate to about $15 per square foot. So the net cost to the tenant for amazing new office space in a cool area is in the high $20s per square foot. That is a compelling deal which is hard to find anywhere else.
What was it like raising your first fund? Now in your fourth fund vintage, how have investor preferences or requirements evolved over time? How do you fit within an institutional investor’s real estate allocation?
The main challenge raising our first fund was convincing investors that we could be a client fiduciary. Fortunately, we had an existing track record of working with institutional partners that we could parlay into a successful fundraise. The challenges to new entrants are probably even greater now. Large, very well established funds like Blackstone are raising money. And then smaller funds that have developed expertise in niche strategies are raising money. The middle ground of general allocator funds without any particular expertise are getting crushed. Savanna was one of the earliest funds to develop a highly targeted geographic strategy and vertically integrated platform. So we buy, own and operate our own deals in New York City. Our investors don’t pay the two layers of promotes and fees that they typically pay an allocator fund. And they invest in a platform that has specialized expertise to be among the best at what we do in New York City. Our investors invest with us because they want that concentrated strategy and expertise. But we lose investors who want a broad geographic strategy.
You’ve had an extensive career across acquisitions, asset management, and fundraising. Looking back, what were some professional highlights?
There are always good times and bad times in a career. Most gratifying has been building a substantial business, assembling a team of top-notch talent and creating a culture of excellence within the firm.
What advice would you give to current Columbia Business School students pursuing careers in real estate?
It always seems attractive leaving graduate school to take a job with a bank or another large institution. And you can’t go wrong by working in that environment for a few years. But the people who I know who have been happiest and most successful move on to smaller, more entrepreneurial organizations where their input really matters and makes a difference to the success of the business. There is also the perception of greater stability at a big firm, but this is not always true.
Real estate being a relationship business, what advice would you give current students for creating and nurturing a successful professional network?
The people sitting on either side of you in class will be a fabulous network to grow with in the business. Stay in touch with all of them. The guy who is your counterpart on a deal on the other side of the table while you are an Associate will be the guy calling the shots and running a fund or a lending desk in 15 years. Those relationships with old friends and colleagues help a lot over time. I grew up with Chris Schlank, my partner at Savanna. He had the experience buying and renovating buildings while I brought the institutional side being a lender and banker.
What aspects of your experience as a student at Columbia Business School have been most beneficial to your career?
Columbia was a great launch pad for a career. It helped me both develop a critical skillset and a network of relationships that have served me well over the past 20+ years.
You’ve been an active supporter of the Columbia community by being a member of both the Real Estate Circle and the Real Estate Advisory Board. What do you think are the best ways for alumni to get involved?
Columbia does a good job of inviting Alumni back to events throughout the year. Attend those events and nurture ongoing relationships with the folks who run the real estate program as well as your classmates and colleagues in other classes. Once you are in an organization after school, hire Columbia students as interns and reach out to Columbia during your firm’s hiring and recruiting process.
Eric Liang, CFA '17 is current AVP of Careers and Co-President elect for the Real Estate Association at Columbia Business School where he is a Real Estate Circle Fellowship recipient. He will join Brookfield Property Partners as a Summer Associate in acquisitions. Prior to attending CBS, he was an Investment Associate in the Global Real Estate group of Aviva Investors and an Associate with RREEF Real Estate / Deutsche Bank. Eric is a 2009 graduate of the University of Maryland, College Park, where he majored in finance and accounting.