Lessons - The Man Who Personally Sold 2,400 Buildings Worth $24 Billion in NYC | Bob Knakal - Most Prolific CRE Broker in U.S. History

In this lessons episode, discover the principles behind building long-term success through expertise, relationships, and discipline. Learn why mastering a niche creates a lasting competitive advantage. Explore how trust and consistency open new opportunities and understand why passion is essential for overcoming challenges and sustaining success. As you sort of progress in your real estate career, in New York specifically, what pushes you down the route of doing commercial? Because that's a behemoth that you're taking on. I'm assuming that it's hyper-competitive, the best of the best take it on. This is where you've built your career. So what was the passion in commercial real estate? Because that sounds a little funny, right? Like passion for commercial real estate. It's something that passion for making money, passion for solving a certain problem. How do you get a passion for commercial real estate? Yeah, it was always fun. That first summer, driving around, looking at the buildings. And don't forget, the security in commercial buildings is very, very different in the 80s. I mean, you basically could walk into any building anywhere. The way leasing brokers used to canvas big office towers, you just got in, took the elevator to the top floor, got out, and walked into every office and said, hey, let me talk to the guy who makes real estate decisions here. I mean, that's how lacking. security was back then. Um, and you know, I just, I, I was driving around looking at these buildings and you know, one building would be an office building and the next one is a retail property and the next one is an industrial building. And he is looking at all these commercial properties and it was so cool to walk inside them, uh, see what was going on right now. Experience it, experience the, the money that just goes into some of these organizations and these buildings. It must be wild. Yeah, so it was just something that I really liked right off the bat. I mean, I always was very statistically and numbers oriented. It all stems from being a baseball card collector as a kid. I was probably one of the few kids that spent more time looking at the backs of the cards than the front of the cards. You know, always liked to look at stats and kept track of my old stats. I was a baseball player, a pitcher as a kid and, you know, always kept track of those. And then when it came to real estate, that first job was very, it was just fully oriented, figuring out the size of the building, the square footage, writing down a lot of data. And it just really resonated with me right off the bat. I never considered getting into residential real estate. It actually is a, there are some fundamentals that are similar, but it's a vastly different business in residential than in commercial. I am very curious about sort of your entrepreneurial route that you took and you built your own brokerage and then obviously you sold it. So like very, very entrepreneurial mindset. I want to go down that road and sort of unpack some of the learnings that you obviously figured out as you were building. But I would love to understand just what, for people that are listening that are not in real estate or not in commercial real estate, what does a commercial real estate transaction look like? What does it look like from... finding the land, selling the land, buying the land all the way through to when they start to build. Can you just walk us through a typical transaction and what that looks like so they understand the scope of work that you would do? Sure. And I'll start with just kind of an example to give folks a sense of what the business is. And I always try to simplify it in a way that you really can very transparently understand what it is. So let's say I was going to leave New York and I'm going to go to Iceland and I'm going to sell rocks for a living. Um, what I would do is I make up a list of everybody that owns rocks. Uh, I then study the rock market, understand what different types of rocks sell for, how many there are of each type, um, look at sales trends and really become an expert on the value of rocks. And then I'd make up a list of everybody that wants to buy rocks. And I would try to develop relationships with the people who own the rocks. And when they want to sell the rocks, I'd ask them to hire me exclusively to be their agent to sell them. And then once I got hired, I'd call all the people that want to buy rocks. And that's the brokerage business in a nutshell. So basically, I have a list of folks that I'm trying to develop relationships with that own real estate in New York. I'm trying to explain to them that, you know, I've done it before. I have the capability. I have expertise in the subject matter. And that if they hire me to sell their building, I'm likely to get them a higher price than if they hire somebody else. So I get hired to sell it and then we send the information out to the thousands of people that have expressed interest in buying properties here, get folks interested, answer questions for them, give them information about the building, who are the tenants, how much are they paying, how long are the leases, what are the expenses, what kind of return will this investment provide. And then you go through the process of getting people to make offers on the building. Um, and then you, you deal with the top two, three, four people at the top of the pack and ultimately, um, you know, sell to the one that's willing to pay the highest price. So it's a fairly simple business. It's just really hard because it takes a lot of, uh, of discipline and doing a lot of very basic fundamental blocking and tackling. every day. A lot of relationship building, I'm assuming. Yeah, without it. The key is to be top of mind with somebody because if you think about the New York market and use Manhattan as a microcosm, south of 96th Street, which is the prime part of Manhattan, there are 27,649 buildings. the average turnover of that stock of buildings has been about 2.6% of the total stock in any one year. So buildings sell only once every 40 years on average. So the idea is to be there when that owner decides, hey, I need to sell. Whatever the reason might be, death, divorce, taxes, partnership disputes, there may be a compelling strategic reason why somebody wants to sell. But you want them the second after they think, hey, I need to sell. You want the next thing for them to think of is, hey, let me call Bob. And the way you do that is by constantly developing and nurturing a relationship with that owner, sending the market information, calling them, speaking to them all the time, answering questions that they have, always staying in front of them so that you remain on top of mind. for them when they decide they need to transact. So, I mean, there's a long tail to building a successful brokerage. Like you said, it's a lot of blocking and tackling, but there's a lot of there's a lot of relationship work that goes into it up front and has to be maintained. I'm just curious because you work with a whole bunch of young people and young realtors and people that come into the intern program. Do you find that even the personality of the individual is a little bit different than when you started and the need for immediate gratification is hurting people's real estate careers? Do you see that? Not so much. that may be a part of the way folks are built today because everything happens so quickly. You know, you get your deliveries same day. I know. You need information. You just, you go Google a topic and within seconds you have the information. Everything happens much quicker today, but I think... You know, we always tell folks in real estate, it's a marathon, not a sprint. You have to build those relationships. You have to take the time to do things properly and not take shortcuts. And I think the folks who do well in our business, the three main things that really stand out and lead to a high probability of success. One is being a true market expert in one niche of the market. The markets are generally so big, so many buildings, so many possible transactions, so many buyers, sellers, tenants, that you want to pick one niche that's a manageable size that you really can become a true expert in and develop that expertise. Second, you have to have passion for it. You have to love it because... No matter how good you are, the market is always cyclical. There are going to be ups and downs. And invariably, somebody is going to run into tough times. And if you have passion for it, it's going to give you that intestinal fortitude to fight through the tough times and stick around and be there for the good times. And then the third part is discipline, the discipline to do these things. You know, I love quoting Abraham Lincoln, who said that discipline is choosing between what you want now and what you want most. And if you keep your eye on the prize, understand what you want most, where you want to get to, what your macro objectives are. and you're not dissuaded from maintaining focus on those things. You're able to do the nuts and bolts things that you have to do day in and day out to make sure that you achieve that long-term objective. Thanks for tuning in. If you found this valuable, don't forget to hit that subscribe button so you never miss an episode. And if you want to dive deeper into this conversation, check out the links in the description to watch the full episode. See you in the next one.