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From left: The Kislak Co. Inc. CEO Jason Pucci, Kislak Commercial Real Estate Services Executive Vice President Peter Wisniewski and Kislak President Rob Holland — Photos by Aaron Houston for Real Estate NJ
By Joshua Burd
With four decades in commercial real estate, Rob Holland has the benefit of perspective — and it certainly helps at a time in which rising interest rates have weighed on deal activity.
Equally, if not more, important: He believes many of his clients have a similar view.
“I think people who are in the real estate business are going to stay in the real estate business,” said Holland, president of The Kislak Co. Inc. “Just because the interest rates went up is not a reason to abandon something that they’ve stayed with for so many years.”
He added that “the interest rates had to come up from 3 percent” and have indeed impacted the market, “but I don’t think the basics of the business have changed at all.”
“That’s why people have been in this business forever … You could pencil out, to a degree, what kind of returns you should make. Putting aside any catastrophes that could possibly occur out there, the predictability of real estate, I think, is really the strength of why people buy it.”
It’s also why the Kislak team sees a resilient market and sustained demand from property investors in 2023, following a banner year for the iconic brokerage firm. Based in Woodbridge, the company in 2022 closed 212 transactions totaling more than $1.2 billion. That includes the sale of some 6,500 multifamily units in New Jersey and four other states, along with 500,000 square feet of commercial property across the Garden State and six others.
That followed a billion-dollar sales year in 2021 for the team of about 35, Kislak said. And while there may be a short-term slowdown amid rising borrowing costs, the firm’s leaders say buyers and sellers will still find value in multifamily and commercial assets.
“The guy who bought last year is going to have a difficult time selling,” Holland said, “but the person who owned the property for 30 years and maybe paid $20,000 (or) $30,000 a unit, he might not get $200,000 a unit on the market today, but he might get 150, 160. So these are the people, the long-term owners that still have the ability to sell and realize big profits.”
Kislak is well-positioned to help clients do exactly that, with its deep ties to the industry and a stable of clients that go back multiple decades and multiple generations. As CEO Jason Pucci notes, “The longevity of Kislak runs parallel with the longevity of a lot of these owner families.”
That’s no surprise for a company that is 117 years old. Founded in Hoboken by Julius I. Kislak, the brokerage has been an anchor in New Jersey’s real estate industry and remained so under his son, the late Jay I. Kislak, even as it grew into other markets and other business lines.
Holland, who joined Kislak in 1984, is among 18 brokers with at least a decade at the firm and among eight whose tenure exceeds 20 years. The business has evolved during that time, at least in some respects, with the addition of technology that “supports the core method,” Pucci said. That includes the everything from social media and email marketing to high-end research platforms, he added, noting that there’s “almost an overwhelming amount of real estate data out there that we use to help us meet people and figure out who’s likely to sell,” from sale, tax and mortgage records to the ability to locate the owner of a single-purpose entity or LLC.
“(In past decades), you would have to go down to a county records office or a town’s tax office to find some of this information,” said Peter Wisniewski, an executive vice president and head of Kislak’s commercial team. “Now, it’s two clicks away.”
But the fundamentals are still largely the same from the days of “when we used to drop a guy off in Hoboken and he’d have to go door to door,” before being picked up at the end of the day, Holland said. Those logistics may have changed, “but we work on a territorial basis and people need to meet the owners in person.”
It also supports the firm’s long-term relationships, which are critical as buyers continue to chase value-add investments where they can raise rents by renovating kitchens, bathrooms and other spaces. That creates a steady stream of opportunity for longtime Kislak clients, as they consider selling after holding onto their properties for decades.
“Our clients want the value-add more than they want the core A properties,” Pucci said. “That’s more of a niche business for us because, if someone’s paying $4,000 or $5,000 a month for rent right now, where are those rents going? Most people want value-add because, especially if they’re doing all this work in-house, they have the ability to renovate the units, to add amenities, add a clubhouse, add a dog park, add a small gym and try to compete on an amenity basis with the newer product — but they’re still charging less.”
Those opportunities are abundant in a state like New Jersey, which is loaded with garden apartment complexes dating to the 1950s and 1960s, along with walkup properties in urban markets that are even older.
On the flip side, Holland said, many long-term clients have opted to sell older properties and reinvest in a newer, lower-maintenance asset as part of a Section 1031 like-kind exchange.
That’s not to say Kislak is unfamiliar with Class A buildings. The firm’s 2022 transactions included the sale of a 63-unit luxury apartment building in Bound Brook for $22 million, or about $349,000 per unit, by Executive Vice President Joni Sweetwood and Senior Vice President Robert Squires. That followed the $87.5 million trade of a 242-unit property under construction in Carteret, which was brokered by Executive Vice President Barry Waisbrod.
The deals came during a two-year stretch, starting in 2021, in which the firm closed 454 transactions comprising $2.25 billion in volume.
“We had people who were never considering selling and we gave them offers,” Holland said. “And when they saw the prices people were willing to pay, they became sellers. So I think the volume in the last three years has been unlike I’ve seen in my 38-year career at Kislak. It’s because the prices that people were paying compelled people to sell.”
Admittedly, the surge in interest rates did begin to drag on transaction volume starting in late 2022 and continuing into the new year, Kislak executives said. But it also creates an opening for the types of entrenched, long-term holders that have lived through past cycles.
“On the multi side, we’re seeing more traditional families that have been in the business for generations coming back in,” Pucci said. “They were sitting on the sidelines the last few years because the prices had gotten so high — and there were syndicators jumping in — and now we’re seeing the more conservative, self-funded buyers coming back.”
Also critical is Kislak’s expansion into commercial property, which began in earnest around eight years ago with the hiring of Wisniewski. As executive vice president of Kislak Commercial Real Estate Services Inc., he leads a team that completed dozens of sale and lease transactions across multiple product types in 2022, from warehouses to strip centers. The group has also successfully repositioned office space in high-vacancy markets such as Morris County, where the zoning at one client’s building allowed it to attract a high-tech user.
Generally speaking, the commercial team also serves as a resource for traditional Kislak clients that own property in multiple asset classes.
“There’s a lot of synergy because, for example, a lot of our apartment owners will own a shopping center or an office building, and Peter’s group will help either sell or fill it up if there are vacancies,” Pucci said. “There’s a lot of cross-referrals.”
Notably, Wisniewski feels the commercial division “gives the original company a lot more visibility” because of the signs and other traditional marketing methods that it uses.
“A lot of the deals that they make are off-market,” he said, referring to the multifamily brokerage team, “but now everybody (sees) you have listings in this town or that town, and the Kislak name is kind of reborn.”
That name undoubtedly carries weight in the industry. It’s also synonymous with Monmouth University’s real estate program, which Jay Kislak and his family helped established with a $2 million gift in 2006, making it the first university in New Jersey to offer undergraduate and graduate degree programs in the field. Today, the Kislak Real Estate Institute is a key source of young talent for real estate firms across the region.
That includes The Kislak Co., which relies on new hires to help grow the business.
“We’re always looking to hire more people to expand this Northeast market organically, and we’re hiring people in South Florida right now,” Pucci said.
While Jay Kislak died in 2018, at age 96, his family recently doubled down on its support of Monmouth with a pledge for $2 million to establish a permanent endowed directorship for the real estate institute. And it’s still but one piece of Jay Kislak’s legacy, the firm’s leaders said, pointing to the trove of rare books, maps, manuscripts, paintings, prints and artifacts that he amassed over decades. In 2004, he donated more than 4,000 items from the collection to the Library of Congress, before going on to establish two permanent Kislak Centers to house the items, at the University of Miami and Miami Dade College, in 2017.
Most recently, The Kislak Family Foundation gifted $10 million to The Smithsonian’s National Air and Space Museum to support the creation of the new “World War II in the Air” exhibition, a nod to Jay Kislak’s service as a naval aviator in World War II.
His legacy is also on display locally, in the halls of Kislak’s Woodbridge office, where the firm’s management and senior brokers have sought to pass down the lessons of the late company patriarch.
“He challenged you for excellence,” Holland said. “He was always pushing us to do better and to try other things. … The Kislak culture that they created, we all embrace today, and it’s made us all successful.”
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