Josh Blackman, CEO of Brownstone Property Group

              There’s so much to be learned from practitioners. For today’s edition of The Headline, I’ve invited business leader, founder, and CEO Josh Blackman to share his unique insights from decades of experience operating the full-service real estate company Brownstone Property Group. He’s seen the ups and downs in real estate. In the startup world, there’s a saying going around right now: “stay alive ‘til 25.” I like Josh’s perspective even more: leaders find opportunity in the chaos. - Lindsay  Jan 28

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      Last week’s Academy Award nominations are a reminder that Oppenheimer and other media are reflecting something about our time. Given the perils facing the real estate industry and life in general, the trick is to apply proper perspective, so one can see what’s ahead, and take corrective action. Identify the trends, and look for ideas for survival.

Today’s rich/poor inequity, and the related impact on property values and housing affordability echoes what New Yorker Teddy Roosevelt confronted when he took office in 1901. He believed foolish fat cats were inviting a violent uprising by luxuriating while the masses were roughing it. He also saw that industrial titans believed themselves superior to the elected government. 

It’s disappointing how history repeats and we don’t fundamentally change. We’re still facing system-wide forces that put many at a disadvantage. For example, in an echo of the antitrust actions of the early 1900s, and as Lindsay’s November Headline noted, jurors recently found several major real estate companies and the National Association of Realtors guilty of conspiracy to maintain high-commissions. The court has ordered billions in penalties that could prove an existential threat to real estate agents and agencies.

Meanwhile, the NY State legislature has protected tenants at the expense of landlords and real estate agents by prohibiting application fees, capping background checks at $20, and limiting security deposits to one-months’ rent (Tenant Protection Act of 2019). The NY City Council’s impact on landlords and property managers is significant with the continual expansion of new local laws and compliance rules. Whether it’s Local Law 97 which aims to reduce building emissions, the new Parapet Law which requires annual inspections of virtually every NYC building, or garbage containerization which aims to stop rats, the requirements are persistent—and expensive. 

Meanwhile, AI and PropTech innovations are already disrupting the status quo. These shifts will impact the $2.5 trillion dollar residential housing market, including investors, professionals, and essentially all of us.

How to survive the chaos?

Business leaders ought to listen to the marketplace and use creativity and digital tools to innovate and solve client problems. Recognize that real estate is no different than many other industries that have already been disrupted thanks to computerization and global economic shifts: think retail, travel planning, and most customer service. Those who sit still will get run over by the big changes already here. Next, consider the opportunities to address change using workflow automation, artificial intelligence, and offshoring labor, to name a few. 

When Brownstone Property Group launched in 2004, some Brooklyn property values were doubling every five years. Growing a real estate business was much less competitive than today. But as the business environment has matured, we’ve had to evolve and adapt. Three examples of how we’ve achieved that in our business:

Innovating for customer demand—and new revenue streams

To juice sale/rental prices and property values, some clients demanded we add amenities. Since most Brooklyn townhouses have no indoor storage, garbage cans often clutter the frontage. So, we began building garbage enclosures to hide the cans. But the custom-made enclosures were time- and labor-intensive. We solved that problem by designing and manufacturing standard component, all-aluminum bins we dubbed BrownstoneBin—and voila!—we added a product to our line of services, solved our clients’ need for curb-appeal, created a cross-branding opportunity and even better: a new revenue stream! As it happens, the new garbage containerization requirements are perfect timing for BrownstoneBin’s rat-proof design. 

Creating strategic partnerships

Digital tools are providing dramatic opportunities for business. Whether it’s Indeed for hiring, LinkedIn for networking (find us!), the rapidly evolving landscape of social media, email, and webinars for marketing… the options keep multiplying. While face-to-face contact and personal attention will never go out of style, combining digital and human outreach is even better. When you add cross-brand synergies, the results can be like rocket fuel.

Brownstone recently teamed up with the MLA Compass Team to cross-market our real estate services among our wide mutual networks. MLA is led by Malcolm Louis Adams, a former property manager at Brownstone, who understands our capabilities. For Brownstone, connecting up with a large brand like Compass and a smart marketer like Malcolm boosts our credibility and visibility, while the MLA team gets the unique opportunity to offer Brownstone’s management, renovation, and handyman services that most other brokers simply don’t have.

Seeking solutions to improve customer experience

Creativity is an underrated tool in business. The choice to work in real estate does not mean we leave our ideas and innovations behind. Rather, trying new things opens doors (and can add doors). Another example is our recent merger with real estate appraiser, Neglia Appraisals. Being able to provide sales clients with direct access to licensed appraisers can help ensure the best sales price is achieved. The key is to zig when others zag.

The net/net? Don’t be a dinosaur.

Speaking of learning from history: the mass extinction that wiped out T-Rex and most life on the planet was actually survived by some animals and organisms who continued to evolve in a new, hostile environment.   Crocodiles, small mammals, and even some tenacious plants managed to live on after the asteroid impact. My mantra? Be like the resilient crocodile. Be a survivor.

🎉 You made it to the end! The Headline is brought to you by Lindsay Liu, co-founder & CEO of Super, the productivity suite for property management. Learn more about Super.

© 2024 Lindsay Liu  175 Pearl Street, Floor 1, Brooklyn, NY 11201