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Robert Dankner’s climb to become one of New York’s top buyer’s brokers in the real estate industry was unconventional. Coming from the trading floor on Wall Street where he worked with currencies and interest rates in oil, Dankner put his remarkable skill set of studying the markets to use when he joined forces with his partner and friend, Jonathan Anapol, to found Prime Manhattan Residential. Since its inception, Dankner has continued to broaden his knowledge of the markets, thus making him an expert and one of the go-to brokers in the field.
After doing some research and talking to Dankner, I soon realized that he is a prime candidate for this column. His wealth of knowledge in not only the real estate markets, but in business and everyday life made for a fascinating Q&A that left me wanting to learn more.
CREDIT: Lea Rubin photo
How did you get your start in real estate and with Prime Manhattan?
I have an interesting background. I was a biochemistry major in college, and after college I went to Wall Street where I spent about 10 years as a trader. I traded primarily currencies and interest rates in oil. That’s very relevant because I became a very intense student of the markets, and learned really well how to become a really good trend follower, and that served me well in that business. During my time on Wall Street, in addition to trading and managing money, I became a real estate investor because I liked the asset class. When I retired from Wall Street, I did a variety of things, but one of my oldest friends is my business partner, Jonathan Anapol. We had been investing in real estate and doing things together for many years, and he had started Prime Manhattan about 25 years ago, and while I was still doing a variety of other things, we were still doing some real estate investing together.
To sort of fast forward, I guess 10+ years or so ago, we sort of got more involved collectively in the real estate investment world. We decided it would be a good idea — because Prime Manhattan was primarily before only a commercial brokerage firm — that it would make great sense to start a residential investment hybrid division because of my background. As a result, that’s how Prime Manhattan Residential was born, and my business, our business, is a little different than the conventional brokerage model, if you will. Because the conventional brokerage model is basically to create listing inventory, try to find people to list and sell their properties, etc., which is fine, but because I come from a different place and space, I learned from a very early age how to buy well. So, the buy side was more interesting to me. As a slightly different model, we decided to fashion ourselves as buy side experts, which we clearly are, even though we represent both buyers and sellers, more of our business is on the buy side. What’s very interesting is the people I’m negotiating against are the people who pay me, meaning my clients who I represent on the buy side, for their benefit, we’re doing what we’re doing and applying our expertise, but the people who pay us traditionally are the sellers, as in most cases in the residential world, and it served us very, very well because I’m very data driven, and because there is a tremendous amount of transparent information, what I’m able to do is apply my skills that I learned as a trader to my real estate brokerage business.
My opinion is really not terribly valuable, and when I say that, I say that with a twinkle in my eye, because my opinion is based not on what I think; it’s based on real data points, because a vast majority that I deal with are very high-profile people, many people you know, and one of the things I get paid for is to keep quiet and not talk about who I represent. And I think that they allow me the pleasure of representing them primarily because of the way I approach the business, which is substantially different than most, I think. As a result of this, my business has grown very organically because I never think about money, ever. I think about my business, and the money will follow, and when you don’t have the pressure of having to say, “Well I need to sell this to make X,” you know, then the money follows, and it’s a philosophy that I’ve always subscribed to, and I think that the people that I have the pleasure of serving really appreciate that because I give advice as I would want to get it, like “Would I do that?” And I explain why, again, this is just a slightly different twist from how most people approach the brokerage business, and it served my company and I very, very well because it has given us the ability to grow exponentially, and I would say that I’m probably one of the largest producing brokers in the city on an annual basis.
To just kind of finish the circle here, because we really started primarily on the buy side, most of the properties that we sell, not all, most of them, come from people that we served on the buy side…it’s an interesting twist because when you’re trying to sell something, the first question you should ask to the seller is, “If I was buying my property that I’m trying to sell, how much would I pay for it, knowing what I know?” When you start to look at things from that angle, it serves everybody’s purposes well, because I’m brutally honest, and if people say “I want to sell this, but I think it’s worth X,” I’ll either say it’s worth X and this is why, or it’s not, and this is why, and if they disagree, I’ll let someone else knock their head against the wall and fail, and it ultimately will end up coming back to us because I give good advice that way. It’s been fun, and very profitable, and I get the opportunity to serve some extraordinary people. That’s sort of the short form of what I do, and 60-65 percent of my business is sort of straight residential, for the users, and the balance is what I call it a commercial/residential hybrid in that I do a lot of commercial entries with a lot of residential exits, meaning buying and then selling small buildings that are converted from commercial to residential, or small developments, or just straight investment plays because I’m a principal myself as well, so my skill set is I think unique because I understand how to unlock value better than most.
You understand a lot of the different aspects of the entire business.
Yeah, I mean I look for the things, especially on the investment side, that are not the obvious. I like a lot of things with a lot of hair on them, because if you take the time to understand how to, like I said, unlock value, a lot of people don’t have the DNA to have the time to try and figure out the angle or the mechanism or the path, but there are a lot of things that look difficult because they have a lot of obstacles, whether they’re tenancy issues or zoning challenges, or a combination of both, or other elements, but because I have a very unusual skill set, I am able to navigate through these very unusual kinds of obstacles to find real diamonds in the rough, and it’s fun, frankly. It’s a good way to insulate yourself from the competition, I guess is the best way to say it, and have an enormous job security, because I always perform, so it works well, and we have fun everyday.
Now you said before you have a very unusual skill set, and you’re able to navigate the different areas, have you encountered any real challenges with what you do, regarding transactions and clientele, and how do overcome those challenges?
Yeah, I do, everyday I learn something new. A long time ago, I worked for this guy that said something to me that I really think about everyday, because it was one of the best pieces of advice that I ever got. He sat me down and said, “I want you to pay very careful attention to what I do, so you can learn, but what I want you to pay more attention to is my mistakes. Because by paying attention to my mistakes, I’m going to teach you what not to do. Every time you understand something that didn’t work or think that went wrong, you’re going to get one step closer to perfection and learn one more thing what not to do.” Which was brilliant advice. So every day, there’s a new challenge or circumstance every day; I spend every morning other than reading, thinking about yesterday. So that today, I can be like the smartest guy in the market today. So I go through today and see what challenges I face, but you know everything is always very fluid, whether it’s a property-specific issue or a personality issue, rather than just reacting, I’m careful to take my time to understand what I’m being faced with, and seeing if I can figure out a solution. There’s a solution to every problem, I believe, and if there’s not a solution, then I don’t worry about it (laughs).
What do you think are some of the biggest misconceptions that people have about real estate brokers?
Well, a lot of them are true (laughs). I think one of the misconceptions, it’s a hard question to answer because there are, like in every industry, there are some people that are very good, some that are not so good, and some people that are in the middle. I think a general negative connotation is that real estate brokers are just trying to sell you something, which in many cases, that’s the case…to earn the commission. Clearly, that’s the case not only in real estate, but in any industry where it’s incentive-based. And that’s something that’s born from those brokers that unfortunately operate that way. I don’t, in the world that I deal in, I deal with brokers every day and I see some good ones, and I see some bad ones. I see the same thing. I think that one of the worst things for a broker to be is uninformed. Whether you’re trying to suggest to someone to buy something, or sell something. There are many really good brokers, but there are too many people that are trying to sell something that they don’t understand what it is, or they’re suggesting people to buy something and they don’t understand what it is.
And when I say they don’t understand it, I’ll give you a perfect example. This is very recent. Somebody came to me through an attorney that I deal with, and this was a couple looking to buy a large apartment, a pied-à-terre. They were in contract with another property and it was a co-op, and there was no broker in between. They submitted their board package, and they were turned down before they even got to their board interview. It wasn’t because they were bad people or they’re financials were bad, but this particular co-op was not pied-à-terre friendly. It was a shame for me to, when I was finally introduced to them, it was a shame that they wasted all of this time, but the selling broker should have never taken them down that path, knowing that the building was not pied-à-terre friendly. The only thing I can think of is that the selling broker might have had the motivation saying, “Well, there’s not another broker in between them, I’m going to make double my commission, and let’s see if this works.” It’s a huge waste of everyone’s time. So, very quickly, and before they could even explain to me the circumstance, I looked at the building that they were looking to buy in and said, “This has nothing to do with you, this is just not a pied-à-terre friendly building.” Things like that really bother me because it’s a disservice to the buyer, and a huge waste of everybody’s time. So there are things like that that go on that I think give brokers bad names, but there are more good brokers than there are bad brokers. You know, but information is power, and I deal with the largest purchase or sale that people are ever going to make in their life, and it is my obligation to know more than them about what they’re doing.
Based on your research and collecting data, what kind of real estate trends have we been seeing more frequently in the downtown Manhattan area?
Downtown is probably where I do most of my business, south of 30th Street, not by design, but just because there’s more activity here. But, the market is very fertile, and the demand is very high, and the thing that people are talking about now is the market being frothy, and at some levels it is, you know, but unlike 2008, when the market was very frothy, and there was a tremendous amount of leverage in the market, the thing that is very, very different is the amount of leverage that is being used, meaning mortgaging, is fractional. Not because people can’t borrow money like they used to, but there are more cash purchases than I’ve ever seen, which is very healthy. What people are doing is they’re taking money out of other assets, whether it’s stocks or bonds or other asset classes, and sticking it in the ground in Manhattan because there are two markets on the planet that are somewhat similar, which are NY and London. It’s like the new flight to quality, I guess is the best way to say it, like people used to put money in government debt or sovereign debt, as a flight to quality, but New York real estate or London-based real estate; I don’t know too many people that buy in good geographies, they’re patient, lose money.
You can touch it, you can feel it, you can use it, you can rent it, and because of the lack of leverage, I think that the market is very, very healthy. Simultaneously, I’ll say that the demand is still good, but there are a lot of developers producing some very, very good product, really wonderful buildings and homes. For the first time in a long time, at the high end, there’s actually a lot of choices. And when somebody is spending 4-15 million dollars, these are the people that are smart, and they’re not reactionary, and they’re skilled and do their homework, and they’re pushing back on some pricing, because the price trajectory has been very fierce over the last couple of years, and nothing goes straight up or straight down forever, so I think that buyer in particular is creating some push back because they can, but the market’s been very healthy. But, it’s like any market rate sort of economy when supply and demand are unbalanced, when one side has a huge advantage over the other, so in that world, there’s a little bit more balancing because there’s a little more inventory. But still, the absorption rate is just slowly down a little bit, but the demand is still huge, and it’s more from users than investors, which is always very healthy.
One reason people are borrowing money that don’t need to is because money is so cheap, but that’s a good reason for leverage, not because they have to like it was in 2008. So, in a long winded answer, the downtown market, where there is a tremendous amount of activity because a lot of people are moving from uptown to downtown, it’s still very fertile, but the pace that things are selling is taking longer. I don’t think that’s unhealthy; I think it’s healthy in a way because people are hitting the clutch, and they’re being sure. I think that confirms the market, the buyer and the seller. Even if it takes longer, it’s still confirming that the market is allowing a price pace growth, but it’s just slower.
Do you foresee these sort of trends continuing on in the future, based on what’s going on now?
Yes, like I said when we first started talking, I don’t need to be first, I need to be right, and the trend is your friend. Right now, the trend is still good towards price appreciation and slower rate, absorption rate still good, slower rate, so yeah I think that because of the place where I deal with a lot of buyers/consumers, and I deal with a lot of developers, on the developer side, I get the opportunity to get the forward look on what is being planned. What’s being planned forward is less of a furious pace to buy any piece of dirt or any building for conversion than there was a year ago at this time. Which means the pipeline in 24 months from now, it is going to be a little bit slimmer than it is right now, which is good. You have to expand and contract, and I think the mindful skill developers are being very conscious that they can’t just keep building it. So I think the balancing act will be very well orchestrated, and I don’t see any near term danger. A lot of people are quick to say the market is turning, but it’s not. This is a vertical city, people have to live here, some people want to live here, others have to, and it’s a great place to invest money. It has more elements than most real estate markets in the U.S. and in the world for that matter, so it’s a very unique place.
Why do you think people are so drawn to the downtown area? Obviously there’s a lot going on, but why now?
I’ll tell you why. First of all, I live downtown, and downtown, whether it’s the Village or Tribeca or Soho or Chelsea, it’s the fabric of New York. It’s very non-homogenized, you have all sorts of different people, rich people, poor people, artsy people, business people, versus places like Midtown and the Upper East or the Upper West Side where it’s a lot more homogenized. I think the excitement of Manhattan is, like I said, it’s the fabric of New York, to experience the diversity and all of the unusual, interesting and wonderful things that Manhattan has to offer, and certainly the Upper East and West Side have its elements as well, but it’s more colorful, and I think it’s the real New York experience.
You get it all, I guess the one adjective is non-homogenized, and that’s what’s really cool about downtown, because you can see somebody walking down the street, and wouldn’t know who they are, but they could be one of the wealthiest people on the planet. They walk into a cruddy little door, and behind it is like a 4,000-square-foot oasis that you would never know is there. And it’s super cool, you just don’t see that uptown.
What would you say are some key tips to be successful in this industry as a broker?
Be an expert. Know more than everybody that you’re dealing with. Be very current on inventory, everything that’s moving. Evaluations. Knowing what’s happening, like what I do every morning, I read every blog, I read every real estate publication that I can get my hands on for a couple of hours so that I’m current. If you’re very current, and you know who’s doing what, and why they’re doing it, even if it doesn’t apply to what you’re specifically doing, that back pocket knowledge, you never know when it’s going to come in handy, and you can apply it. Until you as a broker are extraordinarily familiar with why things trade at a certain price in particular locations, because they’re all unique; each neighborhood has its own set of data points, you’re obligated to know that.
Beyond that, again with studying, one book that I read over and over again is The Art of War by Sun Tzu, because I find his anecdotes amazing, one which is, “Many calculations lead to victory, too few calculations lead to defeat.” And it’s so simple, and so right, and there are just simple ways that you can ensure that you’re successful. An underlying element after all of these things is always tell the truth. If you don’t know the answer, say I’ll get it, and get it, and that’s also a way you learn. Always tell the truth, for good, for bad, for whatever, because that is terribly important.
-by Jackie Hart