By Christine Haughney
Published on July 05, 2004
In the harsh and hierarchical world of investment
banking, David Arena worked his way up to a position
at Morgan Stanley that produced respectful smiles
from his Greenwich, Conn., neighbors and made every
construction company executive and real estate broker
laugh obligingly at his jokes.
He was a 41-year-old managing director, responsible
for building or renting offices for 21,000 Morgan
Stanley workers worldwide. He oversaw a $1.5 billion
real estate budget that paid for rent, new office
construction and cleaning contracts in 40 countries.
He also ran projects in his backyard, like the
construction and eventual sale of 745 Seventh Ave.
But 18 months ago, Mr. Arena made a move that left
his parents and friends speculating that he was
suffering from a midlife crisis. He abandoned Wall
Street to join real estate services firm Jones Lang
LaSalle.
To Mr. Arena, the jump made sense. His Wall Street
job inspired respect, but his domain was ultimately
a cost center to the company. At Jones Lang LaSalle,
he can generate business for the company.
"I wanted to be entrepreneurial. I wanted
to be recognized for my contributions," he
says. "That's very difficult on the support
side."
In recent months, several of the city's top real
estate managers for investment banks--executives
who have chosen the offices of some of the city's
largest employers--have left their posts for positions
at smaller organizations like real estate brokerage
and consulting firms, and even corporate cleaning
companies. Recruiting firm Drum Associates says
it has placed eight to 10 Wall Street real estate
managers with such firms in the past 18 months.
These moves have included the departures of the
head of Merrill Lynch's tristate area real estate
portfolio to Jones Lang LaSalle and the head of
Lehman Brothers' real estate to American Building
Maintenance.
"This is not the normal progression,"
says Michael Copperstone, who left his position
running three buildings for Lehman Brothers to work
at ABM. But, he adds, "We'll see more and more
of this as more people take the risk."
The moves are partly based on a simple reality:
Real estate has offered more job opportunities in
recent years. While the stock market suffered some
of its darkest days between 2000 and 2003, commercial
real estate fared better. Bureau of Labor Statistics
data show that while New York City's financial services
sector lost about 11% of its jobs between 2000 and
2003, the city's real estate industry lost fewer
than 2% of its workers.
Payday
At Morgan Stanley alone, the number of employees
worldwide shrunk to 50,979 in 2004, from 62,679
in 2000.
As many Wall Street banks tightened their belts,
service firms offered the prospect of fatter paychecks.
Cleaning company and real estate brokerage firm
positions have salaries ranging from $125,000 to
$250,000. But executive recruiters say that based
on the business that these new executives bring
in, they can earn bonuses that push their incomes
into seven figures.
"There's always more potential if you're generating
revenue for the business you're in," says Brian
Drum, head of Drum Associates.
The chance to switch to the revenue-creation side
is attractive to these executives. At their former
posts, they made decisions on renting blocks of
space large enough to send ripples through the entire
commercial real estate market. But on Wall Street,
they were often viewed as people who swallowed up
company profits. With all the cost-cutting, real
estate budgets were inspected sternly by financial
firms.
Nonetheless, executives who have made the switch
say that it's not easy to leave Wall Street. Mike
Shenot traded his career running Merrill Lynch's
global real estate practice for a job as an executive
vice president at Jones Lang LaSalle, advising clients
on real estate development opportunities.
In his final role at Merrill, he had been responsible
for finding the firm a temporary and a restored
home after the Sept. 11 terrorist attack. While
he calls that time "fairly difficult,"
he says he grew attached to the downtown area.
"The location difference was the biggest shock,"
Mr. Shenot says. "I had built lots of relationships
within the firm and within the lower Manhattan community."
For Scott Salmirs, the shock was even greater.
He left a top position at Lehman Brothers to become
executive vice president at cleaning company ABM.
Instead of making real estate decisions for a white-shoe
Wall Street firm, he's now trying to win cleaning
contracts from such institutions.
New job, new challenges
To the uninitiated, his leap may seem strange.
But he decided to move because he saw an opportunity
to use his skills and contacts to distinguish publicly
traded ABM from its competitors.
When walking through buildings that his company
cleans, Mr. Salmirs makes sure to point out to landlords
the larger repairs, building code violations and
any other problems that he learned to spot while
at Lehman Brothers.
"When I look across from our clients, I know
what they're looking for," says Mr. Salmirs.
Even more surprising, Mr. Salmirs has already recruited
five executives to follow him to ABM, including
Mr. Copperstone, whose work now involves overseeing
ABM's window washing for 15 major Manhattan landlords.
"I said, `Scott, you want me to work for a
janitorial services company?' " recalls Mr.
Copperstone. "Scott sold me on the fact that
it's a whole new opportunity."
While adjusting to the pressures of working for
smaller companies and focusing on profits and losses,
these executive also are gaining respect for the
challenge of selling and pleasing clients--a skill
that some executives say would help them if they
ever returned to the financial sector.
"You will know how hard it really is to earn
revenue for your firm," says Mr. Arena. "That
makes you a wise spender."
