The president of the investment sales brokerage talks about breaking up portfolios, broker commissions and the most important influence on the sales market
Aaron Jungreis
Aaron Jungreis is president of investment sales brokerage Rosewood Realty Group, which in 2009 ranked 13th in the city with $62 million in sales, CoStar Group figures show. More recently, Jungreis, 40, brokered a $10 million sale of an apartment building in Gramercy Park that was one of the top five commercial sales as reported this week by The Real Deal. In 2010, according to Jungreis, his seven-broker firm, which represents buyers and sellers, has closed more than $200 million in deals, with a focus on multi-family in the $5 million to $25 million range. He spoke with The Real Deal this week about breaking up portfolios, broker commissions and what impact low interest rates are having on sales.
How is the investment sales market in New York City today?
A lot of people are telling me they are having a rough time selling. I don’t know if I am in the minority on this, but I have never been busier. Maybe part of that is because a lot of people are focused on multi-family.
What do you see as a major trend in the market?
A lot of the institutions I sold to [between 2001 to 2005] are selling [properties] back to the [real estate] families.
Are properties selling in large portfolios, as they were during the boom?
Not as packages anymore, more as one-offs. The packages are much harder to sell, because of financing and because people don’t want to commit that much cash.
How is the final sale price impacted by the smaller packages?
What’s funny is that when I get a package a lot of times if I break it up, I get a few percentage points more. I had a package of $36 million. I had offers in the $33 to $34 [million] range. I split it up and I got the $36 [million]. A few million more. That is a big difference.
You have a legal pad page covered with notes and numbers. How many phone calls do you make per day?
Close to 200 per day. I would say making about 150 and receiving about 50 to 100.
Who are you talking to? Are you calling brokers?
More property owners than brokers. I would say not many brokers. Here and there a co-broker but mostly property owners. Buyers and sellers. Some bankers, some appraisers.
What is the commission rate these days? Brokers say it fell during the recession.
It’s probably 1 to 6 [percent] because if somebody gives you a deal for $60 [million] and says, “Hey, you gotta work for [1 percent],” you’re going to take it.
How has it changed over the past few years?
From 2007 probably to the beginning of this year it definitely went down. Now it is starting to creep back up.
What is the most important influence on the sales market right now?
It is the [interest] rates. There are deals now… where rates are well under 4 percent. That is outrageous. It allows people to stretch more. That is the big story now.
What impact does that have on buyers?
I think it gives people a very comfortable, settling-type feeling that it’s safe, let me go in.