By Rayna Katz
Given consolidation across real estate services throughout this past year, many industry players expected to see smaller firms get snapped up. That may explain the widely-believed rumor circulated this summer—which didn’t pan out—that retail specialty firm RKF was set to be acquired by Colliers International.
RKF founder, chairman and CEO Robert K. Futterman worked to put merger talk to rest when he spoke EXCLUSIVELY to GlobeSt.com yesterday on the first full day of ICSC’s national deal making conference, while also discussing the state of affairs for the retail sector and what’s ahead for his firm.
GlobeSt.com: What’s your take on ICSC so far?
Futterman: There’s a lot of buzz and high attendance; our whole team is booked solid. A lot of the new projects are here in New York City: South Street Seaport, Hudson Yards, Westfields and more, so that’s sparking residential development and there’s a great deal going on. We have over 300 listings in the tri- state area.
GlobeSt.com: What trends are you seeing in the marketplace?
Futterman: Right now, there is too much space and not enough tenants. We need a little rent adjustment because in urban markets, investors look for rent growth.
That could happen in the first half of 2016 and I think we’ll see about a 10% increase in the better markets because they are getting flooded with residential development, new hotels, restaurants and tourism.
People get worried about online shopping but it’s a small percentage of sales, and omni-channel marketing creates opportunities for brick-and-mortar retail to promote products. All of the online companies will create stores—like Amazon did in Seattle—because they want to show off future merchandise.
In terms of recent terrorist events, it’s definitely a concern—everyone feels it. But we can’t be afraid.
GlobeSt.com: There’ve been rumors about RKF being acquired, with the latest one having featured Colliers as the likely buyer. Are you looking for a parent company?
Futterman: We’re often contacted but we’re fiercely independent and don’t see the advantages to merging with someone at this time.
We’re bucking the consolidation trend due to how we operate. We’ve always grown organically—both in New York and other cities—through people who want to join us. Our platform is about sharing resources internally; there’s a lot of information traded between our tenant and landlord brokers. Retail divisions sometimes get treated like stepchildren in big companies but we have a boutique culture.
GlobeSt.com: What are some of your current projects?
Futterman: Here in New York, there’s the Seaport, One Wall Street and the Sony building. In Miami there’s the Atlas Plaza in the Design District; 360 North Michigan Ave. in Chicago; the Miracle Mile shops in Las Vegas, at Planet Hollywood and in Los Angeles, 801 South Broadway (a planned mixe-use development known as the Broadway Trade Center).
GlobeSt.com: What types of retail and areas of the world are you focused on?
Futterman: We’re focused on urban retail markets, that’s what differentiates us. Our growth plan is to expand our existing offices, as we’ve recently done in New York and Miami, and are doing in Los Angeles and Chicago. We have one office in New York City now but we’ll probably consider opening an office in Brooklyn because of all the activity there.
We have our eye on other cities too, like Boston and Washington, DC. It’s all driven by finding people who fit into the RKF boutique culture.
GlobeSt.com: Will you be working to grow your services in the future?
Futterman: We’re working to grow our investment sales division because that has a competitive landscape in urban markets. We want to help our existing clients when they’re underwriting acquisitions as well as bring them off market deals. We already have so many eyes, ears and legs in the market and that matches up well with investment sales.
Our other area of opportunity is in consulting, especially to people in the restaurant business who we’re already representing as brokers. For example, there are brands which are mature in Europe that need to come to the US, and we can help them figure out how to open doors, replenish inventory etc.
GlobeSt.com: It’s clear you grow through adding people. What’s the goal on that front?
Futterman: We have about 150 people and we’ll easily get to 200 people by 2020. You can make more money with us than another firm because we’re strictly retail. Commercial leasing is a great business but I’m not sure what the growth opportunities are there for young people.