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A Farewell To Shopping Centers
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A Farewell To Shopping CentersAn open letter from a veteran of the shopping center industry, giving insight to by gone days. Dear friends, I have decided to call it quits. It’s nice to say this voluntarily. Many of my friends have left, never having the chance to say ‘good-bye’ and ‘thank you’ as I am doing with this letter. I grew up in the shopping center industry through a transition from the days when there were only a few hundred members of the ICSC. In the early sixties, the annual ICSC conventions were at the New York Hilton and The Fontainebleau Hotel in Miami Beach. The food and booze was abundant and the lox was delivered each morning from Nova Scotia! Developers like Lenny Farber docked their yachts across the street along the Collins Avenue piers. The deals were done in between the parties. What a time! Most people knew each other. Even up-and-coming developers like Mel and Herb Simon knew my name and gave me a big hug when we passed one another. Back then we had "booths" not the multi-million dollar portable connect-the-dots luxury offices you now see in Las Vegas. Nowadays, the 40,000 participants smile, but their heads are on a swivel while they talk to each other. I miss the days when deals were fun and quick. But life goes on, and although I’m still relatively young, I’ve decided that my health, which is not so great these days, is more important to me than the "battle of the deals" and the volley of insults at the negotiating tables. I started in 1962 as a developer, and in the mid-seventies my employer offered me a one-way coach ticket to their "new corporate office" in Chattanooga, TN. I worked alone for the first six months until, at the age of 34, I was told that I needed a heart by-pass. I then knew it was time for another change, and formed a new shopping center brokerage and management company with my friend Peter Aries. Just before the Spring Convention that year, Peter was about to leave for Las Vegas, and asked me where I would be. I replied that I was going to be at "St. Luke’s." "Is that on the strip?" asked Peter. "No" I replied, "it’s on 116th Street in Manhattan." A few weeks after my operation, we formed Aries Brandenberg Company. For many years we (Peter "A" and Peter "B") enjoyed the respect of our clients for our experience, relationships, hard work and honesty. Peter "A" and I knew most of the reps and managers of the large retail chains we had worked with. The developers were usually reasonable, and they also appreciated our services. But that’s not true anymore. About ten years ago, we became disenchanted with the changes in the way business was being done, and we reluctantly broke up our company, hoping we would be happier for it. Sadly, after years of very hard work, my friend and former partner Peter Aries died of cancer. He made many friends and is missed by all those who had the pleasure of knowing him. Fortunately for me, the past ten years have been extremely successful, financially speaking. I’ve done business from Maine to Argentina, and places in-between including Central America and many Caribbean Islands. I’ve done several deals with Kmart in the New York area as well as the Virgin Islands. I negotiated the first of many multiplex theaters to open in Argentina and Chile. However, during this period I found that collecting fees and commissions had become difficult and painful, often requiring arbitration and litigation. It has been a rare occasion, when I brokered a deal and collected my fee without needing a lawyer. That was unheard of in the past. Since 1977, I have had heart attacks and surgery, and my doctors believe my health problems are more a result of the "stress" I have incurred than the hamburgers and burritos I have eaten. So, the time has come to stop. I sadly say good-bye to those of you that I befriended and worked with over the years. I will always remember the great negotiations and the joys of the business. And certain memories will never die. Once, Peter "A" and I represented a bank that wanted to sell a shopping center it had taken back in foreclosure. Our commission was going to be the largest of our careers at that time. In today’s dollars it would be multiple-million dollars. After managing the property for several months, we had four bona-fide offers to purchase the shopping center. Our client, the bank, had meetings with all the prospective buyers, and chose one that wasn’t offering the most money but which was a very substantial financial institution. After much negotiation, the contract was signed. Twenty-four hours before the last day of due-diligence, I discovered a potentially catastrophic structural problem that the buyer’s engineers had missed. It could have caused the entire second floor of the two-story mall to collapse. We immediately called the bank and discussed the situation. We faced the dilemma of whether or not to tell the buyer - or wait the twenty-four hours. We made the call, and temporarily killed the sale. The sale did close, but only after many months and hundreds of thousands of dollars of repairs. The night before closing, our client suggested that we accept only 25% of the agreed-to commission. At dinner with the bank’s vice president, Peter "A" and I looked the banker in the eye and said "no way!" We told him that we earned every cent of our commission, and asked why he waited months to bring this matter up. The banker told us he was disappointed in us, got up from the table and demanded that we be at the closing early the next morning with the leases, files and keys that would be required. He left us sitting there with his unfinished dinner on the table. When we showed up the next morning, we were informed by the receptionist at the law firm that we were not "welcome" in the conference room and must "wait outside." So we did! We waited and waited and waited - until 2:00 AM! When the conference room doors opened, they announced that the sale had closed. We marched in and presented our bill to the banker - who had already received the original a week earlier. He said, with a great big smile on his face, "Call me next week!" Peter and I told him that we expected our commission then, not a day or week later. He ignored us and left the office building to walk back to his hotel a few blocks away with his attorney. We followed right behind them, and took rooms in the same hotel! We also made reservations on their flight out of town to make sure we were paid! At 6:00 AM we received a call from the banker asking us to have coffee. After a few moments of uncomfortable small talk, they suggested that we go with them to one of their local branches to get our commission. We did, and the large sum of money was then wired into our account. I remember it like it was yesterday. I called my wife from a pay phone (no cell phones back then). She congratulated me and said, "you must be so happy!" I replied that I was not happy, and after the way we were treated I felt depressed and angry. The client that we had worked so hard for to dispose of a non-performing asset with an enormous negative cash flow had humiliated and insulted us. We deserved respect and gratitude. Instead, we were treated like Rodney Dangerfield. I vowed from that time forward to pick and choose my clients, and not to take things to heart. That was impossible. Two years later I had a heart attack, and have been plagued with cardiac problems ever since. I have closed many more large deals. Some much larger than that, and in several cases I was treated with a great deal of respect. In others, once again I was the "bad guy." Ironically one of my largest brokerage deals was the leasing to Kmart of 145,000 sq.ft. on 34th Street, at One Penn Plaza. The landlord was Leona Helmsley, Peter Malkin and a large insurance company et. al. The commission was huge... and the landlord paid me every cent of my commission on the date it was due. And more importantly - they said "Thank you!" I want to leave the industry with that memory. I want to remember my early days as a developer with Arlen Realty & Development Co., when we negotiated land options for $1 and obtained all approvals in months, not years; when major tenant leases were brokered in weeks, not months, and building costs were under $20 a foot - less then what tenants pay these days for one year’s rent. I want to keep my friendships and remember the deals I made as a developer, a broker, a manager, and a principal. And I will let my gray hair serve as a "silver medal" for surviving all those years, and keep what’s left of my sense of humor. To my friends, I say thank you for your friendship and for your fairness. To those I met in passing, I say good luck, and wish you many years of success and hopefully a laugh or two. And to those who caused me great stress and pain, the ones I had to fight, sue, arbitrate, discount agreed-to fees, etc....I wish you the same. Good-bye to shopping centers - except those upon whose benches I plan to sit while my wife, children and grandchildren spend our hard-earned money. Sincerely, Peter Brandenberg
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