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Lunch at The Four Seasons with: Richard Bernstein

Published by The New York Sun on 2005-11-23

When Richard Bernstein talks, companies listen.

That's not because he's offering advice on how they should be run. He's not offering counsel about cost control. Neither is he offering suggestions about regulatory compliance. Nothing from him about mergers and acquisitions. He's not offering guidance about strengthening the bottom line.

Companies listen to him because Mr. Bernstein assesses their space needs and comes up with solutions concerning leasing and other real-estate related issues. Last year, he was responsible for arranging leasing of more than 1 million square feet; the equity transactions he generated approached $1 billion.

"In my book, client service is paramount," Mr. Bernstein, tri-state president of Trammell Crow Company, said. "I'm interested in developing long-term relationships, not just transactional or event oriented encounters."

Nurturing those relationships and developing new ones is a particular priority because Trammell Crow is a Dallas-based company - founded in 1948 - that expanded its presence in the New York area only last year.
In hiring Mr. Bernstein, Trammell Crow knew that he would bring a large list of contacts from his earlier avatars at other real-estate companies.

Equally important, he came with a stellar reputation of 15 years in the commercial real-estate business.

He focused on tenant and owner representation during those years, displaying a knack not only for negotiations. Mr. Bernstein was also known for his acuity in understanding market issues and trends. Perhaps most importantly, he displayed the ability to devise creative solutions to complex real-estate problems.

"Those problems could range from leasing components of a deal to determining market dynamics that would influence market rates," Mr. Bernstein said. "We develop and provide project management that comes up with construction costs, placing equity and debt, spotting strategic trends - we could advise you on all aspects of decision making when it comes to commercial properties."

He paused, and then said:

"The buck stops with us."

He paused again, and added: "One of my major responsibilities is to raise levels of transparency and accountability in every project."

Mr. Bernstein said that his emphasis on ethics sprang from observing his father, Monte, who was a pioneer of importing sports wear from the Far East, and his mother Rose, who worked as an accountant with her husband.

"My father had a very strong sense of right and wrong," Mr. Bernstein said. "He always walked a straight line. He could be held at his word under any conditions."

Monte Bernstein held hopes that his only son would join his business after the Queens-born Richard graduated from Hofstra University with an economics major.

"What always struck me most vividly was my father's entrepreneurial quality," Mr. Bernstein said. "He inculcated in me the desire to think out of the box."

And so it was that the son entered the apparel business. His father put him to work in the shipping department because he wanted Richard to learn the trade from bottom up.

"But I was also introduced to the New York banking community at an early age," Mr. Bernstein said. "At 23 or 24, I was negotiating lines of credit with banks."

He wasn't the only one approaching banks for money. The company faced greater competition. More and more apparel businesses began following Monte Bernstein's strategy of importing knitwear and other clothing items from places such as Hong Kong and Taiwan, where labor costs were comparatively low. The Bernsteins' company found its margins being squeezed.

"The retail industry was also consolidating," Mr. Bernstein recalled. "All of a sudden it was a numbers game. That took away the entrepreneurial fun. I became convinced that the fashion business was no longer for me."

He decided to sell the company and establish himself in real estate. He set himself up in a small office suite and began networking furiously.

"I was my own apprentice," Mr. Bernstein said.

His efforts attracted the attention of two entrepreneurs in Stockbridge, Mass. They invited him to become a partner in a company that engaged in modular construction.

"They saw me as a young guy with cash in his pocket," Mr. Bernstein said.

The cash, of course, came from the proceeds of the sale of his apparel business.

But then came October 1987, when the stock market crashed, and Mr. Bernstein decided to opt out of the fledgling company.

He had meanwhile rekindled his childhood friendship with Stephen Green of the eponymous SL Green Company. In early 1987, Mr. Bernstein partnered with him on a 600-acre site in Putnam County to create a residential development there.

Mr. Green introduced Mr. Bernstein to the real-estate brokerage community in New York.

"That was a big break for me," Mr. Bernstein said. "That was very gracious on Steve's part - even though we were rivals on the tennis court."

The introductions led to a 14-year stint with Edward S. Gordon, a titan of the New York real-estate industry. It was Gordon who mentored Mr. Bernstein and gave him valuable insights into the tricky and rough ways of the industry.

Working with Gordon also helped Mr. Bernstein hone the concept of an integrated delivery system for clients.

"Transactions management, leasing, project management, facilities administration - I figured out a way of developing a team that would handle all these issues for every project," Mr. Bernstein said. "The idea was that all the interrelated pieces of the project would have the same motivation - to ensure timely and economically effective completion of the project."

He has applied the technique of team creation to several major projects, including the new headquarters on Eighth Avenue of the New York Times Company. At the same time, Mr. Bernstein has accentuated diversification of Trammell Crow into brokerage and other property-related endeavors.

But the project he's most proud of is something he's developing in his Westchester home along with his wife Janice, who's studying at New York University for a master's degree in archival management.

"My oldest daughter, Mallory, and I play the piano," Mr. Bernstein, who has two other daughters, Alyssa and Lauren, said. "So I decided to build an auditorium. That way we'll get to share our music with friends and neighbors. You're invited."

Pranay Gupte,
Senior Writer and Global-Affairs Columnist

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