The Bisnow Weekender: Bob Knakal And JLL Aren’t Talking, But Social Media Is
Thanks for reading the Bisnow Weekender, my personally curated roundup of the most impactful news, notable quotes, binge-worthy show recommendations and other colorful highlights from the Bisnow world of commercial real estate and beyond.
Bob Knakal knew why I was calling and picked up the phone anyway.
The legendary 40-year real estate pro — arguably the most influential real estate broker in America — was out at JLL. The news exploded on social media and spread like wildfire across the industry on Wednesday. Everyone wanted to know why.
Though Knakal declined to comment to me and anyone else on the reasons behind his ousting, he did have something else on his mind: the upcoming Real Estate X Gala that he has been promoting on social media for months with StripMallGuy aka Don Tepman.
For anyone who knows Knakal, his unyielding optimism, work ethic and flair for marketing are legendary, but his mention of the upcoming social media-fueled bonanza — black tie, red carpet and all — was telling, and it might be a small clue as to why JLL may have had enough.
JLL New York Region Chairman and President Peter Riguardi told The Real Deal that Knakal was a “consummate professional,” but “at JLL the client comes first, JLL comes second and the individuals come third. That’s the true recipe for success.”
JLL hasn’t responded to any of Bisnow’s requests for comment to clarify what caused the split.
Knakal is different. By his count, he attends at least 261 industry events a year, he still cold calls every day — even though his deals total well more than $20B in his career — and Knakal famously walked Manhattan for 220 hours during the pandemic to create a 24-foot-long, 10-foot-wide map of nearly 28,000 buildings under development in the borough.
From that trek, the 61-year-old created the Knakal Map Room, which has become a cornerstone of real estate’s newfound social media celebritization in recent years and was featured in many publications, including Bisnow and The New York Times, which splashed the star broker and his secretive room on its pages last weekend.
Many wondered online why that alone wasn’t a “recipe for success.”
But according to a Commercial Observer source, “JLL has been consciously moving away from the historical model of focusing on individual broker’s star power to instead taking an investment banking approach, putting the client first, the firm second and the individual broker last. JLL’s management saw Knakal’s Times article — which mentioned the brokerage only once — as the antithesis of that.”
Real estate social media went bananas. It pumped out hundreds of posts with tens of thousands of views that, fairly or not, condemned JLL and lifted Knakal up as a people’s champion, the man who taught them that they aren’t in the real estate business, they are in “the information business,” and “it's not about who you know, it's about who knows you.”
Knakal’s departure from JLL shocked many, but it may signify something else, according to The Tenant Advisor aka Coy Davidson: “the defining moment between social media presence/personal brand and corporate brand.”
Pick your hashtag — #ReTwit, #CRE, #CommercialRealEstate — and you will find Knakal, StripMallGuy and countless other real estate pros across the country who have adopted social media in recent years as the latest weapon to thrive, build a brand and make money.
Especially in these times when real estate faces extraordinary headwinds, what is a broker supposed to be if not a self-promoting warrior on behalf of themselves and their listings? Whether some corners of the industry like it or not, social media, the defining look-at-me technology of our lifetimes, is the new way of doing business.
And as Bisnow recently reported, the industry is going through an “I'm the brand” moment. Frustrated by sinking compensation and wobbly bonuses, some quarters of the industry are openly questioning why they shouldn't just strike out on their own and leave the big shops behind.
Real estate social media is central to that conversation.
As Tepman told me a few weeks ago, social media brands like StripMallGuy matter in real estate, and he has been surprised that more people in the industry haven’t taken his path to define themselves and their business in this manner.
“I'm actually blown away by how people don't take the social media thing seriously when it comes to business. It's such a low-hanging fruit. There's so much value here. I think that social media is a big differentiator,” Tepman said. “But I think we're in the first inning, but what I don't understand is this: If you're going out to buy deals, how do you not have a social media plan?”
So, where does that leave us? Knakal and JLL aren’t saying much now, but real estate social media certainly is — and it won’t be going away anytime soon.
— Mark F. Bonner, Bisnow Editor-in-Chief
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The Best Of Bisnow News: Feb. 12-16
In 12 Nondisclosure States, Releasing Real Estate Sale Prices May Be Disastrous For Owners, Tenants — Houston Reporter Maddy McCarty
At issue is the danger of informing appraisal districts that a property sold for much more than its appraised value. Proponents of nondisclosure say revealing that information could lead to far higher taxes for property owners. For tenants, it could potentially double triple-net leases, in which the lessee pays rent plus property expenses, including utilities and taxes, Babcock said.
But the practice has its detractors. Keeping sales data under wraps leads to errors in property tax assessments and could spark considerable under- or overappraisals of properties. In Texas, the nation's most populous nondisclosure state by far, opponents say keeping it secret puts an unfair strain on homeowners, forcing them to shoulder more than their fair share of the tax burden.
“There's already a housing crisis, there's an affordability crisis, and people are getting taxed out of the houses they own,” Texas Rep. Diego Bernal of San Antonio said. “We have to find as many means as possible to relieve that pressure and that strain, and I believe [disclosure] could be one of them.”
Texas, Alaska, Idaho, Kansas, Mississippi, Louisiana, Wyoming, Utah, North Dakota, New Mexico and Montana are also nondisclosure states. Some counties in Missouri also don’t require disclosure.
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Massachusetts Grapples With 'Deeply Concerning' Trend Of More Residents Moving Away — Boston Reporter Taylor Driscoll
Massachusetts continues to lose residents at a higher rate than almost any state in the nation.
This trend, driven by high housing costs and industry competition from other states, has accelerated in recent years, and officials have begun making efforts to retain people and preserve the state's economic future.
Massachusetts was the 49th-ranked state for growth last year, according to a January U-Haul study that tracked move-ins and move-outs. A United Van Lines report put it among the seven states with the most net out-migration in 2023, with 56% of the state's moves being outbound.
As more residents move out of the state, officials and commercial real estate executives worry about its impacts on the workforce and, as a result, on the level of demand for new development.
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Investors See 'Huge Opportunity' To Cash In On Stigma-Prone Manufactured Housing Sector — Dallas-Fort Worth Reporter Olivia Lueckemeyer
One of the most stigmatized segments of commercial real estate is attracting a new caliber of investors as America’s affordability crisis deepens.
Manufactured housing, more commonly known as mobile homes, has quietly become a darling for investors over the last decade. The sector is known for being extremely lucrative, but a complicated history of negative perception is keeping new development at bay.
“When I started in this business in 2007, you could count on one hand the number of institutional players,” said James Cook, national director of brokerage at Miami-based Yale Realty & Capital Advisors. “Today, it’s well north of 100.”
More Big News From The Week …
— Dreams Of Lower Interest Rates Fade As Inflation Comes In Higher Than Expected
— $929B In Commercial Property Loans Set To Mature In 2024
— Construction Unions Face Fork In The Road: Shrink Or Seize The Moment
— 'Enhance And Enrich': The Push To Grow Black Wealth Taking Hold In CRE
— As Ozempic Slims Waistlines, It’s Also Bulking Up Biomanufacturing Space
— U.S. Industrial Sublease Availability Hits Record-High 156M SF
My Slightly On/Off-Topic Media Diet
U.S. Lenders’ Debt To Shadow Banks Passes $1T (FT): “The rapid rise in loans to shadow banks concerns regulators because there is very little information or oversight regarding the risks being taken by those groups.”
From September 2023 — Real Estate Crisis Triggers New Alarms Over China’s Shadow Banks (NYT): “Zhongzhi’s problems … have ignited new fears about China’s shadow banks — financial firms that offer lending and investment services but are not subject to the same regulations as conventional banks. These firms doled out credit to property developers for the country’s construction boom, and now many borrowers are defaulting on loans as new home sales have stagnated.”
Tougher Rent Laws Are Behind Trouble At NYCB (WSJ): “NYCB is the city’s largest lender on rent-stabilized apartments. About $18 billion of its loans are backed by the city’s rent-stabilized units, representing more than 20% of its total loan book. Many of these loans were made when developers had more flexibility to upgrade rent-stabilized units and then boost the rent to market rate, or convert them to condominiums. In 2019, new laws capped the amounts that landlords can raise rents at these properties.”
Cash-Flush Buyers Dip Into Distressed Commercial Real Estate (WSJ): “Turmoil in commercial real estate is sending jitters through regional banks and other lenders. But one group is pleased with the turbulence: investors sitting on piles of cash they raised to scoop up distressed properties. Many of these investors have been stockpiling funds since early in the pandemic. They have been frustrated because most property owners haven’t agreed to sell at big-enough markdowns, in large part because lenders have been willing to offer loan extensions and modifications. Now, that is starting to change.”
Should Wall Street Move To A 4-Day Trading Week? (Seeking Alpha): “The world's largest trial of a four-day workweek has wrapped up, with nearly 3,000 employees in the U.K. taking part in the six-month pilot. Among the findings were better work-life balances, fewer sleep problems, drops in burnout and quitting rates, and even revenues that increased modestly. In fact, of the 61 companies that took part in the trial, 56 are continuing to implement the four-day workweek (18 of which will be permanent), while two firms are extending the trial, and only three are going back to their previous schedules.”
13 Worst Bike Lanes In The World (Discerning Cyclist): “Some of these will make you roll your eyes, and the first two will certainly leave you shaking your head, but our last example shows how good bike lanes can and should be done.” Hi, Wade!
Bisnow Weekend Interview Preview
Kate Jordan, a principal at Lee & Associates Maryland, entered the industry in 2007 and said “she could not have started at a worse time.” But she persevered through the Great Recession, ultimately building up a large roster of clients and becoming one of the top industrial and office brokers in the Baltimore region. She took over as president of NAIOP Maryland last month.
Now, as the industry has faced another downturn caused by rising interest rates, Jordan told Bisnow Baltimore Reporter Adam Bednar that brokers are facing new challenges, but she expects the market to awaken this year.
Bisnow: Make a bold prediction for the rest of the year.
Jordan: There’s this children’s book called Stuck. It’s about this little kid that keeps throwing stuff in this tree: a duck, a cat and a car. All this stuff gets stuck in the tree. We have just been stuck for two years now because of this interest rate stuff on sales.
I used to sell between five and 10 buildings a year. I’ve sold like two buildings a year for the last couple of years. It’s been all leasing. It’s been this crazy situation where the properties are still worth a lot because there’s no place to move. So the rental rates continue to grow, but the interest rates are stuck. So we’re stuck. You can throw whatever you want at it, but we’re stuck.
There’s nothing we can do. I think we’re getting to a point where we’re going to start to see sales shake loose. People are going to kind of come to terms with the fact that the rates are a lot higher than they used to be, and this is just the new reality because people have been kind of Band-Aiding things for the last two years. Eventually, you either need to get stitches or just move on and hope it heals.
The Weekend Interview goes live every Friday evening — head to www.bisnow.com over the weekend to check it out!
Jobs! Jobs! Jobs!
Here are this week’s top jobs over at Bisnow's careers platform, SelectLeaders. Reach out to SelectLeaders Managing Director Ryan Neale to learn more. You can email him at ryan.neale@bisnow.com.
President of Commercial Real Estate — Oversee and manage a geographically diverse commercial real estate portfolio (office, retail, industrial, data centers) for an Alaska Native Corporation.
Vice President/Senior Vice President, Multifamily Asset Management — Lead asset management for a dynamic nationwide multifamily portfolio.
Vice President of Acquisitions and Development — Lead the evaluation and assessment of real estate acquisitions, divestitures and development for a prominent West Coast affordable housing firm.
Director of Asset Management — Oversee a prominent West Coast affordable housing portfolio.
Hey, Ethan, What Are You Going To Binge This Weekend?
My wife and I are working our way through the top Apple TV+ shows before we turn off that subscription. After finishing the excellent comedies Ted Lasso and Shrinking, we're looking at wrapping up The Morning Show and Severance this weekend. I am also an NBA junkie, and this weekend is the league's All-Star festivities. I don't pay much attention to the actual All-Star Game on Sunday night, but I've watched every slam dunk contest for the last 24 years — I have Vince Carter to thank for that — and I'm excited for this year's version. Defending champ Mac McClung has got to be the favorite after his insane display last year, but Jaylen Brown has been one of my favorite in-game dunkers since he came into the league last year, so I'm looking forward to watching what he can deliver as the first All-NBA-caliber dunk contest participant since Dwight Howard in 2009.
— Ethan Rothstein, Bisnow Deputy Managing Editor
Upcoming Bisnow Events And Webinars
Tuesday, Feb. 20 (London): UK's Single-Family Rental Summit
Thursday, Feb. 22 (Leesburg, Virginia): National Data Center Construction, Design & Development - East
Thursday, Feb. 22 (Philadelphia): Philadelphia Healthcare Summit
Thursday, Feb. 22 (New York City): New York Construction & Development
Thursday, Feb. 22 (Atlanta): Atlanta Healthcare & Life Sciences Summit
Thursday, Feb. 22 (Webinar): Artificial Intelligence: Enhancing The Built Environment
Thursday, Feb. 22 (Houston): The Future of Houston’s Master-Planned Communities
Thursday, Feb. 22 (Denver): Denver 2024 Forecast: Economic and CRE Outlook
Thursday, Feb. 22 (Miami): Miami Schmooze
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How did I do? You can send all love letters and dissents directly to me at mark.bonner@bisnow.com.
