Weekend Interview: Open Impact's Lindsay Ornstein On Running A Startup Brokerage, The Future Of NYC Office

This series goes deep with some of the most compelling figures in commercial real estate: the deal-makers, the game-changers, the city-shapers and the larger-than-life personalities who keep CRE interesting.

In the summer of 2021, as New York City’s office market was still in the depths of the pandemic, Lindsay Ornstein made a bet.

She stepped down from her role at Transwestern, where she co-founded the Houston-based company’s Northeast office. She started her own boutique brokerage, Open Impact Real Estate, focused on nonprofits and impact-focused companies helmed by women and people of color.

Open Impact has since found success in its niche, playing matchmaker for clients and spaces across the five boroughs. Last month, she represented the Church of Jesus Christ of Latter-day Saints in a 40K SF lease on the Upper West Side and arranged for the West Side Campaign Against Hunger's move to Washington Heights.

But like other office tenants, the nonprofit sector is also in a moment of change, Ornstein said, with a new focus on high-quality space and landlords that are in good financial standing.

This interview has been edited for length and clarity.

Bisnow: You founded Open Impact Real Estate in 2021, amid one of the most volatile leasing markets seen in New York City in years. Why did you choose that moment to strike out on your own?

Ornstein: It was partly in response to that moment in time. We were witnessing the protests happening, and it had been something we had been thinking about for some time before them. I've always been a proponent of letting women and diverse points of view shine on their own and on their own merit. I don't love the notion of classifying something with a women label, because I think it undermines the integrity and the accomplishments of what that person or company or entity is trying to do. I'd rather show it, not say it.

After watching the protests and seeing people really care about our community and the choices people were making, we decided that if we want there to be real change, we have to be part of that change. My partner, Steven Powers, and I saw the opportunity to create a type of brokerage company that didn't exist in New York. We wanted to deliver a firm that had the top-flight excellence of a high-quality firm, but with the values of a boutique, women-owned business, and that leveraged both Stephen’s nonprofit expertise and my nonprofit and corporate expertise. He is right there alongside me making all these decisions, and he's instrumental in our success.

Bisnow: As an office leasing broker, did you anticipate the market would rebound faster than it has when you launched the firm?

Ornstein: When the pandemic first started, I had just my own gut. Using historical context and having been through a couple of cycles of up-and-down markets myself, I put a number out there. I predicted that for every one month that we were sidelined by the pandemic, we would need three months of recovery. It's kind of proven true: We were down for over a year, and it's been over three years now of a really slow comeback. We're still fighting the fight every day in New York City real estate.

We were really fortunate because of the breadth and depth of our nonprofit practice. The nonprofit community at large was operating at its best during the entire pandemic — and still continues to — but then the need was greater than ever. So the work we do never slowed down. So we stayed very busy throughout the pandemic. Now, we're layering back in a lot of the corporate work, that was a little quieter during that time frame, now is coming back in a much stronger way, like it was before the pandemic. 

Bisnow: That wasn’t your first time founding a brokerage office. You also co-founded Transwestern’s Northeast region 10 years earlier. What lessons did you take from that experience for Open Impact?

Ornstein: Building and nourishing the right culture and the right team is the foundational element of the success of any business. We were fortunate and very successful in that at Transwestern, having won Crain’s Best Places to Work three times and got the second spot two times in the last five years. At Open, we continue to work very hard at feeding that culture and creating a sense of camaraderie and community within our organization that we're really proud of.

Bisnow: What have been the most difficult or surprising things about running this business?

Ornstein: It's everything other than the work we do, everything you have to do to support a business on the operational side, that is so time-consuming. It’s just always surprising how much time and effort all the other things take up outside of focusing on your core business.

Bisnow: CRE hasn’t gotten much more stable in the years since you founded Open Impact. Broker confidence in NYC hit an all-time low in May last year, as brokerages laid off staff. Some of the smaller players have even shuttered. How are you approaching the current challenges facing brokerages?  

Ornstein: We just have a different lens and a different focus that we conduct our business through. The type of people we hire are not typical brokers. We are an impact company, so we hire people who care about making an impact on their community and on their city. It's a different approach to brokerage, so fortunately for us, we're not having the same struggles that a lot of the other firms are having.

The days of broad stroke, do-everything is the way of the past. Specialization is the way of the future. We take that to heart. Our focus is nonprofits and impact corporations and people who care about hiring women-owned and minority-owned businesses. We're not trying to be everything to everyone.

Bisnow: How are nonprofits and impact-focused tenants approaching the current market in New York City, where trophy and Class-A office towers can’t sign leases fast enough, while the demand for Class-B and C has really plummeted since the onset of the pandemic?

Ornstein: The reason it's plummeting so precipitously is because everyone — irrespective of the price point that they can afford — is seeking quality. There is a universal flight to quality, including within the nonprofit sector. They, too, have to give their employees a good reason to be in the office. Like every other company out there, nonprofits need quality office space in quality buildings and in good locations. 

Right now, there are moments of really strong spots in the market, particularly at the high end, where we tend to do a lot of business. There are also particularly strong hot spots in the boroughs, like in the Bronx, where we also do a lot of business. But there are other aspects, like downtown Manhattan or in parts of Queens and Brooklyn, where Class-B assets that have not been upgraded or amenitized are really struggling. It's a challenging time, and I think we still have a little bit of a road ahead of us before we're back to headier times.

I feel for the Class-B and C owners and for a lot of landlords who would have, in the past, capitalized on price being their differentiator. There are so many good deals in good-quality buildings now, so those buildings are really in need of a new identity and a new purpose going forward. I remain very hopeful on funding from the government in the next budget for conversions, because that's their best path.

Bisnow: Do you think we’ll ever get to the point where Class-B office space is fully occupied again?

Ornstein: I don't. Candidly, I don't want them to. It's not what's in the best interest of our industry in the long term.

For quite some time, we have needed more new product in the New York City marketplace. We are the oldest major city in the world, and we have the oldest office stock in the world. We need more office products, and we need to take some of that older product offline and repurpose it — either knock it down and rebuild it or repurpose it into resi. 

Particularly at this moment, right now, we need housing more than anything. It's too cost-prohibitive and it's too restrictive with zoning for many of these assets to convert to resi. But with the right changes in zoning and the right funding and tax credits and other opportunities from the government, these properties are ripe for conversion, particularly some of the older ones that are prewar and have the window lines for the natural light and air that's required to convert to resi.

Bisnow: How are groups in this space, which I assume are more focused on maximizing every dollar than a financial services or law firm, viewing the office going forward? Are they much more likely to embrace hybrid work and take far smaller spaces than before?

Ornstein: What we are seeing with the nonprofit users is a need for hybrid and flex work environments. There’s also a much stronger need for what I like to call more “we spaces,” which allow for more collaboration, and less “me spaces.” If I'm coming into the office and I'm not out in the field working, it's because I want to interact or collaborate or learn and be mentored or mentor somebody else. There's a lot of collaboration space in all the new spaces we're designing and working on for our clients, and there's certainly a high degree of flex and shared spaces.

Bisnow: Are these groups still focused on cheaper office buildings than in the past? If so, how do you evaluate landlords' financial health when looking into signing a lease at an older building? How important is that piece of the puzzle these days?

Ornstein: That's a factor for everyone. Everyone needs to understand the financial health of the landlord of the building that they're transacting with, so we always pay close attention to that. Nonprofits have always been price-sensitive, and they will continue to be because they're good stewards of the dollars that they are in charge of. I wouldn't say they're any more sensitive to price now than they were in the past. They're just looking to get more for those dollars now. They were willing to make more compromises in the past. I think now, for those dollars, they want a better-quality product and a better-quality experience for their employees.

Bisnow: Give us a bold prediction for the rest of the year. 

Ornstein: Interest rates are going to come down. The capital markets will continue to thaw. They have been frozen in 2023 — I call 2023 “the year of molasses,” by the way, because everything was so slow. Everything pushed and dragged and took forever. So I think 2024 will be the year where capital markets will start to unfreeze. Transaction volume, on the sale and purchase side, will start to pick up. I'm hopeful that in Albany that we will see the legislative change we need to put long-overdue policy into action for affordable housing and conversion of older office product.

Bisnow: What is your weekend routine or favorite weekend activity?

Ornstein: When I'm not on the sideline of a ballgame at Fieldston, I love going on hikes with my family, exploring new restaurants and hanging out with my friends and family.