Source: Commercial Observer

August 16, 2016

Inheriting a Great Real Estate Empire

Just being born into one of New York City’s family-owned real estate firms does not guarantee you a spot in the C-suite.

Responsibility is one of those watchwords for those who have a kingdom to look after—which they likewise pass on to the next generation.

For many scions of these New York City real estate empires, seeds were planted when they were still in high school around the dinner table.

“My father and grandfather would be arguing at one side of the table, and my grandmother would be trying to avert our attention away from it,” said Eric Gural, a co-CEO of Newmark Holdings and son of the company’s chairman, Jeffrey Gural. “I wanted to know what they were arguing about and who was right.”

In the Gural family’s case, the arguments were usually about Jeffrey acquiring a lot of property, and Jeffrey’s father, Aaron, “generally warning him against the risks,” Eric said. “My dad and Barry [Gosin, his business partner,] were a bit more bullish than my grandfather who was more concerned about the cost of purchasing all these properties, but looking back my dad was right. However, it showed that my grandfather cared a great deal about what was happening to the business.”

Eric, 48, got his entrée to the business working at Newmark Holdings’ portfolio buildings as a porter and freight operator during summers off from high school. (The company portfolio spans about 10 million square feet.) This summer, Eric’s 18-year-old son, Ethan, is working at the company for a month, operating the elevators at Newmark Holdings’ 247 West 37th Street.

Eric’s cousin and co-CEO, Brian Steinwurtzel, started at Newmark Holdings as an intern over the summer at age 16, collecting rent at 318 West 39th Street and 247 West 37th Street.

“Anyone who has an interest, we want them to have an opportunity to see what we do,” Steinwurtzel said.

Content with working at Diesel Construction, Jeffrey Gural had no interest in going into the family business.

“My father and his partners had been bugging me for a couple of years to leave Diesel and come to work there,” Gural said. “I was the only one of the children of the partners who could really do it.”

But when Diesel Construction was sold to ARA Services, Gural didn’t want to work for a public company, so he decided to try out the family business. (In a stroke of irony, Newmark Grubb Knight Frank, where Gural is chairman, was sold to BGC Partners—a public company.)

“I’m a civil engineer. My real love has always been construction,” Gural said. “[But] I don’t regret it at all obviously, especially now. These buildings are worth so much money.”

For many successful real estate families, it has been paramount to have clearly outlined job descriptions.

Lessons about division of labor can sometimes be learned the hard way.

“My father and I used to fight all of the time,” Jeffrey Gural noted. “Finally, we came up with an ideal plan. He would oversee certain buildings, and I would oversee certain buildings. And we never fought again.”

Steinwurtzel and Eric Gural “determine who has the best skill set for each project and the time [to do it],” Steinwertzel said.

For buildings that require a lot of leasing, Eric Gural handles the job. If they are heavy on financing, Steinwurtzel takes them.