Punching Above His Weight
-April 20, 2010
Heritage head George Constantin on the good and the bad of boutique life
Since coming to America from Greece in 1971, Heritage Realty Services president George Constantin has risen from being a broker at Helmsley-Spear to running his own bustling boutique realty firm. With only eight full-time employees, he has managed to turn the five-year old firm into a competitive one, with more than $400 million in assets under management. Mr. Constantin, 49, spoke with the Commercial Observer about achieving the American dream, Greece’s struggling economy, and its impact on his investment group.
By Jotham Sederstrom
The Commercial Observer: Congratulations on the five-year anniversary of Heritage Realty Services.
Mr. Constantin: For Heritage Realty Services, it's been five years and, before that, I was 20 years with Helmsley-Spear. It's been exciting. I've never worked so hard in my entire life, I'll be quite honest with you. There are a lot of opportunities – and the pleasure of having your own company. You can give it direction, any direction you want. Wherever you see a void, you can fill it quickly and not have to go through the regular corporate bureaucracies that you have in the bigger firms. At the end of the day, I approve everything. I don't have to go to anybody higher up. We can make instant decisions. At the end of the day, when all is said and done, that's important.
How does that benefit Heritage or, in general, any small, nimble boutique like yours?
When deals are far and few, it helps us make an instant decision. So if we liked something, we go after it – whether it's a tenant or a building to buy. We're looking at a property now in mid-town, another one to buy, on one of the major avenues. That's going to be about $100 million. There isn't a committee or anything like that. It simply meets our criteria so we're going ahead with it. We try to buy two a year.
Did you acquire any properties in 2009?
In 2009, we didn't buy anything.
Are there drawbacks to having such a small firm?
There are drawbacks. Some of the new businesses we're entering into, especially on the load side-personal loans and investing in loans-we actually have to outsource that experience. We just don't have it, so it requires us to go out and outsource it in order take advantage of the transaction. At some point, we'll hire out own team to manage it in house. So when it comes to taking on new projects like that, or major businesses, there are draw-backs. If you're in some kind of vertically integrated organization with a thousand employees, it's a little bit easier to do.
As a boutique firm, do you spend more time with tenants?
Yeah, I get involved with them. I want to meet new tenants because that's just the way I am. That's how I was raised working at Helmsley all those years as well. I visit my tenants periodically, some more often than others, and we do that for many reasons. One is that it gives the tenant a face they can connect with, because we also have building mangers and designers and lead APS within the firm; and the tenants mostly deal with them on a day-to-day basis. But it's good that tenants know they can pick up the phones and say, 'Hey, George, there's a problem.'
Within New York City, does Heritage invest solely in Manhattan real estate?
When all is said and done, when some of these people visit and see the buildings we own, they rarely venture into the boroughs. They venture into other areas, like D.C. or other capital market areas, and D.C. is playing a larger role in the U.S. Even in these very turbulent times, D.C. has a nice momentum, and it will keep going.
How is Heritage Investment Management faring right now?
The capital investment, which is Heritage Investment Management, will for the first time bring in fresh money outside our group. So our group will invest together with that fresh money. We put our own money into everything. And that's how we'll grow, and growing like that is challenging. It's going to require new staff members coming in, and I think initially we may need to hire and outsource some of that business to others.
Are your investors also Greek?
They're Greek and Cypriot and European.
How did you get involved with them?
I think just de facto; just the fact that I myself am Greek.
How closely have you been following Greece's own financial collapse?
I mean, I follow it because I'm Greek, but the reality is the people who are with us in our investments have dollar-based businesses, so it doesn't really affect them.
So they haven't been impacted?
I think they've been impacted from a social point of view, an inconvenience with the strikes and everything. But the reality is, their businesses are global businesses and they're all dollar-based. Almost all of them are non-Euro-based businesses.
As for yourself, when did you come to America and how did you discover real estate?
I came to America in 1971. I was 11 years old. I worked myself through college through a place called Fenway Golf Club in Scarsdale; I was a caddy there. And then I had more time on my hands so I worked in the dining room, as a waiter and matre'd, and it just so happened that some of the top real estate people were members of this club. So when I got out of school, I pretty much knew that I wanted to go into the real estate business. It's an enjoyable business; I like it. You meet interesting people. You see things happen.
So these guys were giving you information out on the golf course? They weren't shoving their golf bags in your face?
No, there weren't the nicest, the friendliest, the most talkative and the most generous people, and I was very impressed by that.