By Lucia Mijares Garza ’17 and Erin Williams ’16

This dynamic panel, moderated by alumna Nancy Lashine ’81, brought together three visionaries whose companies are cultivating change within the commercial and residential real estate markets. Members of the panel included Joshua Abram, founder and co-CEO of NeueHouse, Robert Reffkin, founder and CEO of Compass, and William Rudin, Vice Chairman and CEO of Rudin Management Co. The discussion focused on how their companies and many others, have strategically adapted to market trends, both disrupting and invigorating the real estate space.

NeueHouse was described by co-founder Joshua Abram as an “experience business,” meaning that NeueHouse goes beyond providing small, innovative companies with office space, but rather creates the ideal space for companies in which to thrive. Through its four pillars of hospitality, design, programming, and community, NeueHouse curates an experience that specifically meets the needs of its members. One of Newhouse’s goals, is to transform the tenant-landlord relationship into that of a guest-host relationship. For example, members at NeueHouse are free to use as much of the facilities as they require to meet their needs. Mr. Abram mentioned that “the conversation with our guests rarely revolves around square feet.” In addition, NeueHouse strives to create a diverse community, where no single industry represents more than 10% of members and approximately half of all member companies present are led by women. The company also offers a highly personal touch and creates a sense of community by facilitating introductions between guests at NeueHouse and with people in the community at large. Mr. Abram points out that this is what “a good host should do.”

Compass, founded by Robert Reffkin, has used technology to advance the residential brokerage business, attracting many of New York City’s top agents during this process. While Mr. Reffkin acknowledges culture, brand, and early incentives are partial short-term drivers to Compass’ recent success in attracting top agents, he believes that the true value lies in Compass’ ability to use software to build the perfect environment for its brokers. Providing agents with in-house technology allows Compass to make residential brokerage more efficient, allowing agents to take on more listings and ultimately increase their commission potential. Mr. Reffkin describes Compass as “a relationship business, using cutting edge technology to power it.”

Rudin Management has been one of the leading firms in recognizing and implementing a connection between technology and real estate as exemplified and described by William Rudin, in projects such as 55 Broad Street, 3 Times Square, 32 Avenue of the Americas, and most recently in its The Greenwich Lane mixed-use development project and at Dock 72 in the Brooklyn Navy Yard. These projects have redefined the term “broadband connectivity” in order to appeal to the ever changing needs of tenants, while simultaneously enhancing community and protecting the environment. Mr. Rudin pointed out that “people often underestimate the limitations of the infrastructure available,” and Rudin Management serves a great need in the industry by providing top-notch infrastructure. Mr. Rudin also cited 110 Wall Street as an example of how real estate can create community, as the property was chosen as the first site to house both WeWork and WeLive, an experimental communal living concept.

With thoughtful guidance from Nancy Lashine, the discussion transitioned towards broader trends in the real estate market. Mr. Rudin noted that there are no longer any industry boundaries within New York. As a result, landlords now need to cater to a broad range of tenant types and sizes. This has resulted in many new office innovations such as shared communal space for meetings, food service options, and health and wellness spaces. Mr. Abram added that tenants are now demanding an experience in addition to their office space. Not surprisingly, Mr. Abram agreed with Mr. Rudin, as NeueHouse is at the forefront of “making experiences” in the office environment

Unavoidably, the conversation touched on the challenges of being a disruptor in such a traditionally regimented industry. Nancy Lashine noted that NeueHouse and Rudin Management seem to be refuting the historically upheld preference for credit quality tenants in favor of less established startups. Mr. Abram responded by making a comparison of his membership base (consisting of no greater than 10% of members in any given industry) to a well-diversified investment portfolio, both mitigating “riskier” investments/tenants in a given field through a balanced mix of tenants from other industries. Conversely, Mr. Rudin took a different viewpoint by acknowledging the risks innovative real estate companies undertake when catering to venture capitalists looking to invest in early-stage companies. Mr. Reffkin addressed the challenge of raising venture capital funding by using Compass as an example. He attributed Compass’ success in raising funds to creating a reputable team and to generating real cash flow. In addition, he recognized the overall lack of start-ups in the real estate industry as an advantage to disrupting companies in the industry.

The session concluded by asking the panelists about their long-term value to the real estate industry and beyond. Mr. Abram and Mr. Rudin agreed that communal office space is attractive to tenants as it removes many of the responsibilities such as hiring a broker and negotiating leases or build-outs, that many smaller sized tenants may be uninterested or unable to handle in a cost efficient manner. Furthermore, shared space provides amenities that these smaller tenants need, to attract top talent, yet are unable to fund on a standalone basis. Most notably, the flexibility provided by shared office space allows tenants to grow without restrictions and commit to leases in 30-day increments all within a collaborative and supportive community. Mr. Rudin also shared his insight that large landlords were grateful to have an intermediary take over some of the added responsibilities and risks associated with smaller tenants. Mr. Reffkin noted that while agents are replacing brokerage firms as the dominant force in the residential real estate industry, Compass is proving with its specially designed, in-house software, that agents can save time and take on more listings. 

Lucia Mijares Garza ’17 is VP of Finance and Operations for the Hospitality and Travel Association as well as a member of the Real Estate Association. She is focusing her career in real estate and hotels.

Erin Williams ’16 is the VP of Finance for the Real Estate Association at Columbia Business School and is also helping plan the club’s Chazen trip to Singapore and China. Recently, she spent her summer interning at Eastdil Secured in their New York Investment Sales group. Prior to Columbia Business School, Erin worked at Deloitte & Touche as an auditor serving primarily real estate and private equity clients out of their Washington, DC and New York offices.

The 8th annual Real Estate Symposium, an exclusive alumni-only educational forum, took place on Tuesday, December 15, 2015 at the Columbia University Club of New York. Barry S. Sternlicht, Chairman and CEO of Starwood Capital Group, delivered the opening keynote and Thomas J. Barrack, Jr., Founder and Executive Chairman of Colony Capital, delivered the closing address.

Please visit the event page for more details and reports on other speakers. Hosted by the Paul Milstein Center for Real Estate and the Real Estate Circle of Columbia Business School, the Real Estate Symposium is an annual educational forum that brings together accomplished Columbia Business School alumni and top industry leaders for a broad-based discussion of topical issues, high-profile transactions, trends, and challenges facing the real estate industry.