Editor’s Note: This is the sixth installment in the “Industry Warriors” series, a collection of profiles on veteran real estate professionals and lenders who produced high volumes pre-9/11 and pre-2008, weathered those economic downturns and rebounded even stronger.
Amid major economic uncertainty, Eric Benaim has made major moves.
In the aftermath of Sept. 11, Benaim shuttered the party-promotion company he owned and pivoted to real estate.
In 2006, he honed his focus on Long Island City — long before jetBlue’s headquarters, trendy bars and the “it-factor” appeal moved into the neighborhood — and went on to sell 60 to 70 apartments, he estimated.
In 2008, at the height of the Great Recession, he opened his own firm, Modern Spaces, on the main street of Long Island City: Vernon Boulevard. He used his nightly walks home to meet owners of the row houses and worked with them to place tenants.
In 2009, a developer of a waterfront condo building in Long Island City asked him to rent 60 units of the building. Benaim turned one apartment into a leasing office, coordinated with mortgage loan officers to outline rental versus purchases costs and converted renters to buyers. He took over the entire project and parlayed his relationship with the developer into working on another building.
“He showed me the design and the design was a little flashy. 2009, I don’t think people want something flashy,” Benaim said. “I was like, ‘Can I redesign this for you?'”
Benaim went on to work with the developer on the design, tapping one of his friends who had an art collective to furnish three model apartments with re-purposed furniture made from garbage. “We ended up turning it into a whole press opportunity,” he said. “We built up our reputation in the neighborhood.”
Now, Modern Spaces has established itself as a stronghold in western Queens, with 100 agents among five offices, about $1 billion a year in transactions and a 70% market share in the area for the past seven or eight years, Benaim said.
HousingWire spoke to Benaim about his experience weathering past downturns and his advice for navigating today’s real estate market.
This interview has been edited for length and clarity.
HousingWire: What are you doing within your real estate business to adapt to the current market situation?
Eric Benaim: We brought everything virtual. We shut down (our offices) on the 13th of March, so a week prior, we started booking all virtual tours. We haven’t laid off anybody. We haven’t furloughed anybody. We haven’t fired anybody. We still have our meetings. I make calls to all the agents once a week. We have a Zoom meeting with each office once a week now. We have team meetings with our executive team, like twice a week. We stopped all of our print ads and are focusing only on digital, and increasing the amount of social media posts, trying to constantly come up with new content.
We have two different newsletters, and one targeted towards our developer clients and one targeted toward our end-user clients, which we send out every two months or so. We’re sending each out now once a week, just to get out there, create content. We were spending a lot of money on print advertising, and even on outdoor. So we stopped that, as nobody’s outdoors, and I don’t think people feel comfortable now holding a magazine. We haven’t done mailers because I feel like people are going to be reluctant to even hold a postcard. So things like that, we’ve stopped.
We bought virtual tour cameras for each office now, and we’re giving training for our agents on how to do a virtual walk-through of a unit. We bought those like a week ago, only because we’re not sure how long we’re going be doing this.
HW: How are you encouraging your team to stay positive during this time?
EB: My marketing team wanted to do a TikTok video (to stay engaged as a team), so we’re doing everything from TikTok videos to I’m speaking to every single one of my agents, on a weekly basis now. I’m giving them one-on-one advice — everything from going through their inbox, speaking to people who they haven’t spoken to in seven or eight years, to creating their own newsletters and boosting their own social media. One of our agents, our commercial guy, had a client list of 2,000 people. He literally texted all 2,000; he spent a few days going through each person texting them, asking how are they doing.
And then I’m just telling people, ‘We’ve been through this before.’ The difference between now and 12 years ago, is that 12 years ago, we literally had zero listings. We literally had no infrastructure, and we had no brand recognition. Now we have all three. We have a huge market share and we probably have close to $2 billion in listings. So that is going to be our strength going into this new world, but it’s also an opportunity with maybe going into new markets, maybe doing things a little bit differently, maybe exploring other divisions to launch.
HW: What did you do in past economic downturns to successfully navigate that period?
EB: I started my firm in 2008, at the time specifically focused on Long Island City. We opened up some sometime around July, our website didn’t really launch until about Labor Day, and we had zero listings. We had a little 650-square-foot storefront on Vernon Boulevard, which is like the main shopping drag over here. We had listing display frames on the windows. We had one, two agents at the time. We thought we’ll get a lot of buyers from having a storefront walk-in, and we’ll will take them to the luxury rentals. And then Lehman Brothers crashed.
When that happened, we had to think fast and change our business plan, and one thing we started noticing was we were getting a lot of walk-ins; we were getting anywhere from 12 to 15 walk-ins a day. People were like, ‘I want to break my lease,’ ‘I’m not sure if I’m gonna have a job anymore,’ or ‘My lease is up; I want to get something cheaper.’ So I would walk to work, I lived in Long Island City, I still live in Long Island City, actually in the same building. I’d walk to work every day, and on the way to work and on the way to home, I made a point to walk a different street.
I was meeting as many (people) who owned a lot of these row houses and walk-ups …We ended up focusing on those buildings, doing a lot of rentals and starting to get to know a lot of the walk- up landlords, little independent mom-and-pop landlords. That carried us through, definitely the rest of 2008 and then a good portion of the first quarter probably, of 2009.
At that time, Douglas Elliman was marketing all the projects over here in the neighborhood. We were a little independent shop. Nobody knew who we were. At the time, they were focused more on their Manhattan listings. And for us, it was a time for us to seize an opportunity where we knew Long Island City was like scraps to other brokerages. But for us, it was like gold. We started going after these projects, so 2009 not knowing a thing about marketing and new development, we took over every single project in the neighborhood.
We took over about six projects that year, probably totaling about $500 million worth of listings. And we had five agents. And every single developer who came to us, we’re like, ‘Yeah, we could do this.’ That’s what helped us build our company.
HW: Given your history in those past economic downturns, how can we pull through now that the spring buying season has been drastically impacted?
EB: I think it’s gonna just move over, the spring season will go into the summer season. Summer season is usually dead because people are going away; people are going to the Hamptons, or they’re going upstate or the Jersey Shore. I don’t think you’re gonna have that much this year. The people who go to the Hamptons are probably in the Hamptons right now. And people want to be at work. They probably did all their family bonding time during the last few months and they’re like, ‘Alright, let me go out and let me do my work.’ I think it’s just gonna be shifted over to the summer.
HW: So you think, on another side of this, that we’re still going to have demand coming through and people still looking to buy and lease?
EB: Probably the only sector that’s really going to be hurting is the commercial sector, so with retail and office spaces … like WeWork and more of the co-working companies where they’re relying on thousands of tenants, and those leases are month to month. A lot of those tenants probably canceled for April and probably canceled for May. At the same time, WeWork and WeWork-type of companies, they still have a responsibility of paying their landlord … So office and retail are probably what’s going to be hurting. You’re going to see if a landlord is smart, the landlord will do whatever it takes to work with that retail tenant.
My advice to a landlord would be, work a deal out with that restaurant. Why don’t you just work out a deal with this guy, maybe give them an extra three months or four months or take a couple thousand dollars off the rent, so that your guy who was good to you for the last however many years can continue to be good? Now it’d be my personal advice to landlords who call me … Because at the end of the day, whatever neighborhood we focus on, if it’s Long Island City or Tribeca, you’re selling the neighborhood.
If you’re selling there in Tribeca, you’re selling Bubby’s and Tribeca Grill or whatever you’re selling, but if Bubby’s isn’t there, Tribeca Grill isn’t there, and Nobu isn’t there, then what’s really cool about the neighborhood? You’ve got to really sustain and try to keep the fabric of the neighborhood as long as we can. And not everything is about making a commission.
The bigger picture is, I’ll do this for free. And we did this actually, in 2008. In 2008, all of Vernon Boulevard was empty. I was like, ‘Oh, my God, we’re not getting any walk-in traffic.’ I started going to the landlords and said, ‘I’ll market this for free for you. I won’t charge you a commission. Let me just put my sign over here. I’ll try to find you a tenant.’ I need to fill up the boulevard because if there’s nobody walking over here, I don’t get walk-ins. And if nobody’s walking over here, nobody wants to live over here. We did that for at least a half a dozen restaurants; we placed for nothing. At the end of the day, it’s really important to bring life back into the neighborhood.
HW: What piece of advice from your history in downturns would you give to others in your field trying to navigate COVID-19?
EB: I would tell them to be focused, be positive. Try to find one thing and really kill it at that one thing, then grow from there. When I first got into the business, I was focusing everywhere. I was focusing on the Upper East Side, Chelsea, Greenwich Village, Downtown. I was focusing everywhere. I didn’t really do as well. But when you’re focusing on one thing, and you’re doing that one thing really well, that is when you succeed.