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PODCAST: Broker Talks Retail Trends and Why Big-Boxes Aren't So Bad

By Emily Frost | July 21, 2015 8:51am | Updated on July 21, 2015 9:24pm
 Doug Kleiman has worked in real estate for 15 years. He's lived in the neighborhood for 49 years.
Doug Kleiman has worked in real estate for 15 years. He's lived in the neighborhood for 49 years.
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DNAinfo/Emily Frost

UPPER WEST SIDE — If you want to know the story of a particular building in the neighborhood — what it was before, who owns it — chances are Doug Kleiman has the answers.

The real estate broker, 49, grew up in the neighborhood and never left. As a commercial broker for Ripco with a large client base on the Upper West Side, Kleiman has perspective as both a longtime resident and as someone who monitors the local business landscape. 

By representing both tenants and landlords equally, Kleiman believes building owners don't always deserve a bad rap for booting mom-and-pop stores.

He spoke with DNAinfo about helping small businesses, why "big box" isn't a dirty word to him, and what trends have succeeded and failed on the Upper West Side. Kleiman also let us in on his predictions for the next big thing to hit the streets.

Emily: Doug, tell me about your lifelong history on the Upper West Side.

Doug: I was born on the Upper West Side. My mom and dad still live here. I grew up on 74th Street between West End and Broadway. I grew up in a time when the Upper West Side wasn't as distinguished and affluent as it is now. Although, it was always beautiful, it's gone through some changes. When I grew up here I was a little too young to remember the '60s, but in the '70s and '80s and '90s, there was a huge transformation. It was a dangerous place, particularly Amsterdam and Columbus.

I went to public school on the Upper West. I went to P.S. 87 and I.S. 44. My parents told me very specifically that I should walk up Broadway and make a hard right and do not walk up Amsterdam and Columbus because it was dangerous at the time. Now, of course, it's bustling and amazing.

Yeah, I spent my life here. I'm still here. I'd like to say if it's not broken, don't fix it. I've had opportunities to move in other places and there are some great neighborhoods in New York and around the country, but I love the Upper West Side. People come from all over the country and all over the world to live here. I'm already here, so I've stayed.

Emily: Do you live right near where you grew up? Or do you live in a different section?

Doug:  I live a little further north in the low '90s. I basically am in the same neighborhood. Yeah, I'm still here and I'm very happy. I like to joke that on the Upper West Side, I have a front yard and a back yard, which is Riverside Park and Central Park. It's a really true neighborhood because of all the businesses and the people that live here, families, restaurants and stores and the culture. It's really a great neighborhood.

Emily: Do you mean true neighborhood also in a sense of belonging?

Doug:  When I say neighborhood, there's people who really live here. There are other neighborhoods in the city that are more transient, that are more commercial and there are more hotels and so on. The Upper West Side, people really raise families here. They live here. They thrive here. It has a real feeling and a vibe. There's a warmth about the Upper West Side. Like I said, this is not to diss any other neighborhood. The Upper East Side is really cool, but I do have a lot of pride and love for the Upper West Side because I'm from here. Yeah, I know it's got character.

Emily: And you have had an interesting route to becoming a real estate agent.

Doug:  Yeah.

Emily: Tell us about that.

Doug:  I did a lot of different things in my life. I was in sales, different kinds, but I was for the longest period of time, I was a stand-up comedian and an actor. Still very much in my heart and soul, and I still occasionally perform for the fundraisers and things like that. I did start off in the arts. I went to the High School of Music and Art, which when I went there, it was up in Harlem. Now, of course, LaGuardia is in Lincoln Center. I expected to be in show business for the rest of my life, and it's still in my heart and my soul. I also worked in food and beverage to supplement my income as an actor, so I was a waiter. I worked just about every job in the restaurant business. All those things helped me to what I'm doing today. It's kind of funny in life how that works, right? All the things that you did before then prepare you for what you're doing today.

I thought that real estate would be a very boring, stale kind of business, commercial real estate, in particular, because that's what I do. I'm not a residential broker, I'm a commercial broker. When I got to learn more about it, I realized that the more things that I know about more things, the more helpful it was for what I do. Learning and being curious was very helpful in this business. In comedy, you think of how do you make the transition from stand-up comedy to real estate. I always joked and said, "People still laugh at me when I quote prices."

It was an accidental thing. I was working as a waiter and I hurt my foot. I had a minor little break in my foot and a childhood friend, who was a successful real estate broker and still is, said "You know what? While you're rehabilitating and healing your foot," he wanted me to come work for him. He said, "Why don't you go take a real estate class? I'll pay for it. If you like it, you could stick; and if you don't, then you don't owe me anything." I did that 15 years ago and I haven't left.

Emily: That's funny about the connection between stand-up comedy and real estate because I spoke with another Upper West Side real estate broker, Mike Mishkin, and he also was a stand-up comedian, and then became a real estate broker.

Doug:  Yeah. I worked in stand-up. I have a pretty decent career doing it. I started with the likes of a lot of people who are now household names, Dave Attell and Chris Rock and Ray Romano, Louie Anderson, many others, Elayne Boosler, so many comics.

I think, look, humor is one of the things that's so important in life. I wish more people had a sense of humor. It's definitely a skill and a tool that you can use not manipulatively, but we have to lighten up a little bit. In commercial real estate, it's very serious business to both landlords and tenants. It is their livelihood. It's very serious commerce. At the end of the day, we're not necessarily saving lives. We should lighten up about it. Occasionally, if you crack a joke at the right time, not inappropriately, but when it is appropriate, it really can dissolve a lot of tension. In the end, it helps make the medicine go down a little bit. Laughter is part of life and should be celebrated.

Emily: Absolutely.

Doug:  Yeah.

Emily: You became a real estate agent 15 years ago. Did knowing the neighborhood, the Upper West Side, very well help you?

Doug:  Yes. Knowledge of growing up, I mean, I can think back on not only the last incarnation of a particular store, but maybe two, three, four, five back of what it was before it was the Duane Reade or before it was the bank or before it was whatever restaurant it is because I grew up there. Yes, that knowledge is very helpful. It's obviously also very important to know what's going on today. It's very helpful to know everything from the transportation, the schools, the businesses, your neighboring tenants, your co-tenancy, so when you're representing a tenant or a landlord to think about where and in what proximity to their competition or if there is no competition, that they would be some vacuum that's needed in the neighborhood. All these things are really important to know and think about.

Emily: Are there any trends in the kind of businesses that you've set up leases for?

Doug:  The trends happen on a macro and a micro market. It's not too difficult to see what happens on a national level, on a local level with national big box banks that move in, national tenants, coffee, frozen yogurt, the proliferation and then the...

Emily: Demise?

Doug:  Some of the demise. It comes in waves. There's lots of reasons for that. I think it's always been that way where a certain business becomes popular, becomes trendy. A lot of people want to get in on the bandwagon. Some do it better than others. Sometimes there's a shakeout in terms of the survival of the fittest. It also just happens to do with the consumers and what they're looking for and what they enjoy. It's a reflection of what the consumer is thinking about and doing. Of course, the economic conditions. In 2008, when we had a very serious economic downturn in the United States and in New York and everywhere, if you noticed, there was a flight to comfort. Burgers came out and lots of other more affordable type of food that really, I think, made people feel happy, but didn't break the bank.

Emily: Yeah. I observed that yogurt stores seem to be closing and salad chains, fast salad bar-type places are coming in.

Doug:  Yeah.

Emily: Have you observed that as well?

Doug:  Absolutely, I have. I mean, froyo, as they call it, frozen yogurt, again everybody gets on the bandwagon. I think there's a challenge with frozen yogurt, a, because of competition and also the seasonality of it. I know that some of the chains, and I speak with them, some of the franchisers and franchisees, and then the chains are retooling. They have some different ideas about possibly including other products that are less seasonal. It's a good idea. In terms of salad, I'd like to think that the proliferation of salads and healthier food...

Emily: Like juice bars and stuff.

Doug:  Juice bars and fitness. They all go together. Actually they're terrific co-tenants when you think of a juice bar or salad next to fitness. We have some great new salad chains that are opening on Amsterdam Avenue and I don't think it's a coincidence that it happens to be next to Equinox and Soul Cycle and Pure Yoga and the JCC. Those are fitness-minded businesses. Those are fitness businesses. It makes a lot of sense that someone who's working out is going to go get a salad and a juice. They work really nicely. I'd like to think that we're leaning toward a healthier society. Maybe that's a good thing. We'll see what happens with all the salad chains, and I wish them all success. Just like anything else, they all have to be ahead of the 8-ball and know what their competition is. It's like any other field of business.

Emily: Do you have a prediction for the next “it” business on the Upper West Side?

Doug:  If I did, I'd probably be a very, very wealthy man. Of course, it is our job in real estate and commercial real estate to think about what the trends are, to study them, to follow them, everything from reading the industry papers and attending ... We attend large real estate conventions and franchise expos to understand what the next trends are. We hear them. They're an incubator. They come in from other countries sometimes and from other states.

Specifically for the Upper West Side, I'm not sure. I know that the Upper West Side has a great love for mom and pops, as I do. Recently, there's a lot of news where the Gap is closing some stores and A&P may be filing. Super markets and food, these are interesting things to think about how that's all going to shake out.

The Upper West Side, when I grew up here, there were really a lot of small businesses. I remember, and just in thinking about it, that there were a lot of mostly Korean-owned markets that were all along Broadway and Amsterdam. There's still quite a number of them that remain, but many of them are closed. They've succumbed to the rent. They have succumbed to the competition of supermarkets like Trader Joe's and Whole Foods and Food Emporium and everybody else that's opening. There's a sadness, but that's a reality that happens. There used to be a lot of flower stores. I think people love flower stores. I do. They have competition because the supermarkets sell flowers, too.

Again, I can't make the market, but I observe it and I think about it. When I represent a landlord and I do represent landlords and tenants pretty equally, I'm happy to say. Landlords are often in the position to ask me, "What do you think about this business?" I have to say to proceed with caution depending on the industry trend what's happening and if some like businesses have recently closed, you may want to be a little bit cautious about opening a new one.

Emily: Right.

Doug:  Unless they have the secret sauce that no one else does.

Emily: It seems like there are a number of vacancies, but you have the wonderful perspective of having lived here for a long time. What do you think about the ebb and flow of vacancies? Do you think that high rents are keeping landlords from just grabbing a tenant and there are more? Or is that just an illusion?

Doug:  Some of it is an illusion. It's not a surprise that you see vacancy signs, and some of my signs are up in the neighborhood from my other colleagues and other companies. My friends and family ask me the same question, and I think the answer is that you have to look at the individual property that you're talking about. Each store and building has its own story. Why is that particular store vacant? It could be because of a failed business. It could be the non-failed business. It could be that the business owner has decided to retire and move on and through no fault of anyone. It could be that a particular landlord has an exaggerated sense of what something's worth. Maybe not. Maybe they're also waiting for the good ... For a right tenant.

Keep in mind that commercial leases, unlike residential leases, are long-term leases. They're usually a minimum of 10 years. When a landlord is thinking about what tenant to place in their building, they have to think about all the factors. Obviously, the rent of course is a huge factor, but the credibility of the tenant, the use. Sometimes it's better to wait for a tenant, a better tenant to come by and lease it up for the next 10 or 15 years than sign on someone real quickly that may ultimately fail again and they have to re-rent it in the next six months to a year or two years.

There's no really one answer as to why there's some vacancies. It doesn't necessarily mean that it's blighted or that there's a problem. It actually could be that there was a trend 10 or 15 years ago to lease up, and some of these leases have come to expire and either the landlord tenant can't agree on a rent or again they voluntarily moved out. It's case by case is really the answer to that.

Emily: Manhattan Borough President Gale Brewer has introduced some ideas to try and save mom and pops. She's introduced some ideas around lease negotiations between landlord and tenant, some protections. What do you think about those efforts? Do you have ideas for ways that we can keep mom and pops around?

Doug:  Sure. First of all, one easy way to keep mom and pops around is just to support them. To go in and patronize them,  there's sort of an old joke, although, it's not so funny, I have friends who say, "Oh, I can't believe that business went out of business. I hadn't been there for so long." "That's why they went out of business because you haven't been there for so long and everyone else hasn't been there for so long."

I love Gale Brewer. I think she's an incredible person, an incredible leader, an incredible humanitarian. We agree on a lot of things. We don't agree on everything, but I love her to death. I think her heart is absolutely in the right place. I love the idea of creating incentives for small businesses. I know that there's some things in the works about occupancy tax and lowering them for some tenants that have lower rent or a certain threshold.

In terms of negotiating with a landlord, making it mandatory, that's what I do for a living; we negotiate. I negotiate with landlords and tenants all day long so I don't think that we need another layer to mandate that.

Emily: It sounds like sometimes people assume that there's always a big, bad landlord that's greedy and forcing the tenant out, but that might not be the case in every situation?

Doug:  Oh, it's definitely not the case in every situation. Landlords and tenants are all people. Companies are people, right? There are good people and there are bad people. There are people that are good and do bad things and all of the above. I think it is definitely a sweeping generalization to assume that all landlords are greedy and bad. That's absolutely not the case. I worked for some landlords who are actually really terrific people. They care. They are family. They have families. They want to see their tenants survive. It's a symbiotic relationship after all, right? Tenant's success means that they can pay their rent, and that's a landlord's success. People do tend to get polarized over the issue. Again, my job as a broker is to really achieve balance and harmony where you can. Yes, there are exceptions. There are some bad tenants and bad landlords. I would say most are pretty good. Most people really have the intention to do well.

The interesting thing about my business as compared to residential real estate is that in commercial real estate, for the most part, I'm not dealing with any layman. In other words, a landlord is a professional and business owner is a professional. Now, they're small businesses and they're new businesses, and there may be a learning curve, but really there really are no layman there. When you negotiate a lease, you have to do it with your eyes wide open. It's caveat emptor, but you also ... I mean I always advise a tenant to have proper legal representation and review. These are documents that they're going to be married to probably for 10 or 15 years, and both the landlord and the tenant have to agree on that.

It's really hard to say at the end of a lease if there's any bad or good individual. It's just a business deal at the end of the day. People aren't living there. Now, they may be making their living there, of course, but it isn't someone's residence. If someone entered into a lease 10 years ago when the market wasn't as strong and maybe the market picked up pretty early on in the lease, and for the latter term of their lease actually, the tenant was at a below market rent and the landlord is obligated to accept the rent that they agreed to. The landlord may have been actually getting a below market rent for the last seven years or five years or whatever it is.

At the end of a lease term, again if you're going to set it to a market value, that has to be thought about, it has to be decided. I'm sure this is an old adage, I didn't write it, but a good business deal is when both parties are equally happy or equally unhappy. That's my job is to achieve a balance where both parties will move forward and it makes sense to consummate the deal.

Emily: Yeah. What are some of your favorite businesses that you've brought or favorite arrangements?

Doug:  I'm proud of mom and pops because they're fun and they're very celebrated and welcomed on the Upper West Side. I helped with the leasing of original move of the Town Shop, which is a business, a 100-year old business and a very, very wonderful family and a great customer base. I helped them to move into a space that was north of their space, which is now Claire's. Then they moved to north about 10 years ago. Recently, they moved and expanded to the east side of Broadway, to a lovely store. I didn't procure the most recent transaction, but I was amortized and helped them with some advice, and of course their blessings. They've moved into a property that is actually owned by Zabar's. They're a amazing business on the Upper West Side. They're pretty substantial landlords, too. That was a little ... A banner of pride. Town Shop is a very beloved business. I know their family. They're really terrific people.

Stoopher & Boots, which is a great kid's store on 78th and Amsterdam. I highly recommend it. It's such a fun store. Stephanie, who owns it, she had an idea. It was challenging for her to get into the business originally because she was a start-up and she got rejected from a couple of landlords, but one landlord, in particular, where she is now, saw that she really had a promising idea, and she's amazing. I actually just saw her the other day, and she knows the parents and the kids. She really gets to know everybody. She sells them all sorts of fun things and she'd go in there and visit her with her little dog, Scout, who's most adorable.

Emack & Bolio's, I helped them to renew their lease there. I didn't put them there originally, but they're in the same building and another great ice cream place. They're actually right up the block from Sugar and Plumm, but they're still doing very well. I'm very, very gratified by that.

Jacob's Pickles — I represented both the landlord and the tenant there. That's a real badge of success there because Jacob and his dad do such an amazing job. I know you've interviewed him. That particular store that they're in was the lighting form store for 17 years, and they were also a beloved business. The landlord and the tenant got along very well.  That was not ... No one was to be vilified there. Both tenant and landlord were very happy with each other. When I was hired, the agency to represent the space, we really wanted to make sure that we put in a tenant that's going to be successful and complementary. It took a while to find Jacob and George, his dad. When we found them, we really knew. We have a lot of other proposals from tenants that were less desirable, didn't seem to have the proper business plan or finance or whatever it was and...

Emily: Did you just have a gut feeling that they were the right one? You said you looked at a lot of different offers.

Doug:  Yeah, definitely you go with your gut. Ultimately, of course, it was the landlord's decision, but I think that when we met with them as individuals, they were properly capitalized, they were properly experienced, they had a great vision and a great plan. That plan is obviously manifesting. He's very involved with the community. He gives back. It's always been his thought. That's very heartwarming. I think, ultimately, it's really the way any business model should conduct themselves to think about the community to be symbiotic, to give back.

Emily: You're an Upper West Sider, so when you're reviewing possible tenants, do you ever get personally invested or excited about something and kind of push that?

Doug:  Yes. I do get excited about some businesses because I'm a fan of theirs or I love the product, and that enthusiasm can carry over. I can't steer anyone. That's a legal term in real estate. You're not allowed to do. Mostly it pertains to residential. Yes, as a job, I am a sales person after all. My job is to present anyone in their best possible light and to be objective, and sometimes to scrutinize whether that be their financials, their track record, their character history, things like that.

I'm particularly proud of a new tenant that's coming in to the Upper West Side. Orwasher's Bakery is probably the oldest bakery in New York, about 100 years old. We signed a lease recently. They'll be on 81st and Amsterdam. I'm very proud of this particular transaction because I attend a lot of the community board meetings and the Business Improvement meetings. I'd like to think that I have somewhat of a pulse on the neighborhood and what people love and embrace. I believe that Orwasher's is going to be warmly embraced because, first of all, it’s the best bread anywhere, right? Again, you can hear my enthusiasm. I'm not on his payroll, but I'm very excited about it because I think people are going to love the bread. He was recently voted like number 1 of the top 10 bakers in North America. Orwasher's is going to be, I think, a terrific addition to the Amsterdam Avenue corridor there.

Emily: And speaking of that Amsterdam Avenue corridor, Brother Jimmy's closed and now Crave Fishbar, kind of an upscale, sustainable fish restaurant is coming. What do you think that signals about the changes on the Amsterdam Avenue?

Doug:  It could be reflection of a number of things. People are more into seafood than they are into barbecue today? I don't know. I don't know. People love all of it. The Mermaid Inn is expanding, too, so obviously, they wouldn't be expanding if their business wasn't good. People love seafood. I love the idea of sustainable seafood. I think that's very responsible.

I think that they are aware that Amsterdam Avenue is getting to be a nice, little food corridor among other things. It's not just food, but I'm excited to see them come. I mean, Brother Jimmy's had a really good long run. I have a feeling that Crave is going to be a little quieter of the business. Maybe that's welcome to some folks, but it's great food. Seafood is in right now.

Emily: Yeah. There are other corridors on the Upper West Side that don't seem to be doing as well. There are a lot of vacancies along Columbus Avenue between 86th Street sort of before Columbus Square. What do you think is happening there? How can the area get revived as well?

Doug:  In full disclosure, I'm representing a few spaces up there, so there's going to be some movement, some things I can't talk about yet, but that will be revealed shortly.

Emily: I'm sure that's good news for people to hear.

Doug:  Yeah. No, there's good news. I think that it's true for a while that was a little sleepy. I mean Momofuku was a really nice shot because, obviously, that's a great business and very successful reputation. I think they saw the vision of coming there.

Columbus Square, obviously, some terrific businesses up there. Many of which my company actually represented as tenants. I think it's also going to fill in from north to south and south to north, very similar to what happened on Broadway in the lower hundreds below Columbia University. For a lot of time, when I grew up, north of 86th was sleepy that it moved up towards 96th and north of 106th. Now, there's a really incredibly straight run up and down Broadway where I can say for the most part is safe and it's thriving. New businesses are coming there all the time. I do believe that corridor from 86th up to 96th, 97th is going to be improved. There's some part of the city opened. There's some new development. It's just a matter of time we're going to see it fill in.

Emily: 10 years from now, what do you think the Upper West Side will look like?

Doug:  I hope that it still continues to have as much character as it does. I think that it's hard to know. Again, I don't have a crystal ball. If I did, I'd be a very, very wealthy person. I'd be  investing everything that I was certain about, right? I hope that within the next 10 years that it's still going to be a great neighborhood. People are going to be able to enjoy living here. I hope that there's going to be a balance of market rate affordable and affordable housing both. That's a challenge. When a neighborhood gets hot, you don't want to punish the people that have stayed here for so many years. I hope that there's a balance.

In terms of retail, I hope it's still going to be very creative. Obviously, there's storefront limitations — that is a law that Gale Brewer did enact. That's going to probably curtail some of the proliferation of some of the banks and things that, although, they certainly can just take smaller spaces.

I hope it continues to be a great place to live. I think ultimately, there's a balance between mom and pops and big box. I don't think big box is a dirty word. It's always important to strive for balance. Just like in retail, I think, food and shopping go together very nicely. People like to eat. They like to shop. They like to eat and drink again. In that respect, balance is good when you have a lot of ... When you have a corridor of all dry use, tenants with no food and beverage. Those stores tend to close up early. Then you have really dark, quiet spaces. I think it's nice to have that balance of both dry and what they called wetter food.

Emily: Yeah.

Doug:  It's like the movie "You've Got Mail," about the big bookstore chain versus the small... so as we said, balance. Obviously, a huge thing that everyone is thinking about — we'll see how this plays out — is the online shopping. What's interesting in some of the conferences that I've attended and listening to few speeches by some of the largest retailers in America, what they have discovered is that actually it works very well. People look at things online. They may go into the brick and mortar store. They may be more inclined to go into the store. Some people need to touch and feel things. Interestingly, I don't believe that Internet commerce is going to put out the brick and mortar. It's just a question of adapting. In some ways, it's actually driven more business in retail. It's very interesting. I don't have all the answers, but I'm very interested to see how it shakes out.

Emily: No plans in moving?

Doug:  I don't have any plans of moving. I love this neighborhood. There are some other great cities and places around this country, but the Upper West Side, New York City is my home. I have to say I won't travel. I have some vacations, but I always love to come back to it.

Emily: Yeah.

Doug:  It's a lot of fun.

Emily: Yeah. Me, too.

Doug:  Yeah.

Emily: Thank you for talking with me.

Doug:  It's my pleasure.

Emily: I really appreciate it.

Doug:  Thanks a lot.

Emily: Yeah.

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