'Tis Not The Season: CRE Laments Loss Of Holiday Party Circuit
For the last 25 years, the holiday bash thrown by the real estate group at law firm Fried Frank Harris, Shriver & Jacobson has been a mainstay of New York City real estate's social scene, known for attracting the who’s who of industry identities.
But this year there will be no gathering at the Cipriani on 42nd Street for the extravagant celebration — just as there will be no packed-out International Council of Shopping Centers conference after-parties, boozy developer holiday celebrations or broker events.
The winter real estate party calendar, which is usually awash with events to toast the year’s wins and losses, form and solidify relationships and push deals forward, is officially canceled.
“Our whole business is relationships and information,” Compass retail broker Robin Abrams said. “It is in keeping with everything being more challenging. … It’s harder to stay in touch because you are not going to these events, not seeing 10 people at once.”
With all gatherings of more than 10 people currently banned under state law, even the fate of the Real Estate Board of New York’s annual banquet in January is uncertain, though a spokesperson for REBNY said no decision has been made and options are still being discussed.
For many in the industry, the loss of the season is both an emotional and financial blow, and it means they will have to think more inventively than ever to find something to replace the annual hobnobbing. CRE players will resort to virtual events, cold calling clients and finding creative ways to stay in touch to fill the gap.
But many are mourning what the parties provide, and say it is particularly hard on junior members of the industry who have not yet formed crucial alliances.
“I have people tell me that they have it on the calendar a year ahead of time,” said Fried Frank Real Estate Department Chairman Jonathan Mechanic, who hosts his department’s party each year.
“There are thousands of major deals that come out of that party, the number of people that say they ran into someone and that turned into a joint venture, sale or financing," he said. "Everybody comes, the whole industry shows up.”
Twenty-five years ago, the party was held in one room at storied Manhattan speakeasy the 21 Club, Mechanic said. Soon the guest list had grown so much it was moved to the St. Regis.
More than 1,000 people now gather every year in the swanky event space at Cipriani across from Grand Central, "through good times and bad times." But 2020 is the first time since its inception Fried Frank won't be throwing its party.
“This one we just couldn’t do,” said Mechanic, adding 2008 was his favorite party year because people were happy to be out amid the Great Financial Crisis. “We think this is a one-year hiatus.”
Like many in the industry, Mechanic has been trying to find new ways to keep relationships burning. He has been taking socially distanced walks with clients, played tennis and golf, and lunched outside. Most industry players admit, however, that the dearth of parties this year is a wrench in the gears of deal-making.
“It may not be a deal, but as important is seeing someone who says ‘David, great seeing you, let’s connect next week, I have an idea for you,’” Newmark New York Tri-State President David Falk said. “Over the last nine months, we’ve done broker functions virtually. It’s certainly better than nothing, but it’s not the same thing.”
Falk said he has managed to show properties and get hired onto jobs virtually, but there is nothing to truly replace the first two weeks of December, when Manhattan's social calendar and event venues are packed.
“This year, nothing will be in its place," he said.
It comes as brokers face a fiercely competitive landscape in which deals are increasingly hard to come by. In the third quarter, there were fewer than two dozen commercial real estate properties sold in New York City, which is the lowest level since the third quarter of 2009, according to Avison Young.
The projected overall office leasing volume for Manhattan in 2020, based on activity thus far, is expected to be roughly half what it was in 2019, per Colliers International. Many have predicted this year will see an exodus from the industry as a result of the tough conditions.
Abrams said she and her peers are working twice as hard to stay connected without the normal events and functions to keep things going. She noted she hasn’t heard of any online celebrations planned around the ICSC RECon virtual conference, which she finds surprising.
“You would think that you would see some people would do a remote Zoom or be sending a bottle of wine and a basket to clients' houses and have a [virtual] get-together,” she said.
JKS Events President Janeen Saltman, whose events company has organized multiple real estate events and holiday parties in the past, said she has pivoted to virtual events — but has not seen significant appetite for those offerings from the real estate industry.
“There may be some visual fatigue inside real estate,” she said. “They may be doing smaller events, like virtual poker games, they might be virtual wine tasting, Scotch tastings, things like that.”
Avison Young principal James Nelson said the screen fatigue is real, and he said the biggest impact is on the youngest members of the industry who are now missing out on the all-important time to mingle at events, meet people and find mentors.
“I’ve been really big on the webinars," Nelson said. "But people get Zoomed out, so we are trying to mix those up."
He has been to the online poker events, virtual wine tastings and other types of socially distanced events from isolation, but admits there is nothing like in-person interaction.
“It’s definitely challenging, we want to be able to see everybody and unfortunately we can’t,” he said. “Really, I feel the worst for the juniors in the business … but we are all trying to get by the best we can.”