Head of Retail-Leasing Firm RKF Plans $5 Million Expansion
New York retail-leasing firm RKF is ramping up its efforts to do battle in the world’s largest cities.
By Anjali Athavaley
The firm is planning to spend $5 million to add about 20 brokers to its existing 60 in New York. A portion of that money will also go toward creating a presence in Toronto and London, says Robert Futterman, RKF’s founder and chief executive. The firm, founded in 1998, has seven offices in U.S. cities ranging from Los Angeles to Miami.
Its plans don’t come without risks. Breaking into new markets can be especially challenging for small firms like RKF, which generally don’t have the same brand recognition and platform as larger real-estate brokerages such as CBRE Group Inc.and Cushman & Wakefield.
“You want to expand wisely, and you want to take your time,” Mr. Futterman says. “We really go into a market not just because we want to have an office there. We want to find the right people to fit into our culture.”
RKF is taking different approaches domestically and internationally. Mr. Futterman doesn’t see much downside to his plan to add brokers in New York, where RKF has already established a presence. “The New York market is so strong and the retail segment of the real-estate industry has been so insulated against changes in the economy that there is a very strong reason…to have more people on the ground,” Mr. Futterman says.
But in Toronto and London, RKF is taking a more cautious approach. In Toronto, it will hire local brokers and share the cost of office space. RKF plans to enter the London market through a joint venture with a local brokerage firm there. Mr. Futterman declined to name the firm, but says that the firm’s landlord-representation business would benefit from being able to use the RKF brand. In turn, it would help RKF attract European tenants to the U.S.
One competitor questioned RKF’s approach in international markets. “Alliances really don’t work,” says Faith Hope Consolo, chairman of Douglas Elliman’s retail group, who worked with Mr. Futterman as a broker at the retail-leasing firm Garrick-Aug Associates. “Unless it’s your people with your investment, you have nothing,” she said.
Mr. Futterman disagrees. “I’ve seen strategic alliances domestically and internationally,” he says. “I don’t think there’s any proof that they don’t work.” He adds, “it increases our ability to establish that we have a global reach.”
RKF focuses solely on retail leasing in urban areas. Revenues are up 19% in the first six months of the year compared with the same period last year, thanks to Manhattan’s rising retail rents, which translate to higher commissions.
Ultimately, Mr. Futterman hopes to become the dominant player in retail leasing in the U.S. The firm’s recent deals include representing Club Monaco in its 16,000-square-foot lease at 536 Broadway and representing Fairway Market, which signed for 37,000 square feet at West 26th St. and Sixth Avenue.
“When you look at what’s happening in the urban markets, it’s where tenants want to be,” he says.