How to Preserve Family-Run Real Estate Companies
These third- and fourth-generation-led real estate companies shared the challenges and benefits of working with family members to run successful businesses.
While running a family-owned business can be a challenge, learning how to work together and make the most of each person’s skill set can pay off for the company. Two prime examples shared their experiences at accounting and advisory firm Friedman LLP‘s Real Estate Forum on Nov. 16, explaining the challenges and benefits of working with family members, particularly in the real estate business.
Jeffrey Gural, chairman of Newmark Grubb Knight Frank, who started with predecessor company Newmark in 1978, spoke on a panel about transitioning the business to the next generation. He recalled how his father, Aaron, pushed him to join Newmark, where he himself was chairman for more than 40 years before passing away in 2009. Gural finally decided to join the company after a career in the construction industry, but the transition wasn’t always easy.
“In truth, it was very difficult working for my father. We didn’t get along at all; we didn’t agree on anything,” Gural said. He explained that his father was less willing to take the risks Gural wanted to pursue and often thought his deals were bad, but finally they found a way to work together: They divided up the business, with his father running the buildings he purchased and Gural running his own buildings. “After that, we didn’t fight anymore,” Gural said.
NGKF now has a third-generation leader of the company in the form of Jeff Gural’s son Eric, who serves as executive managing director, and nephew Brian Steinwurtzel, who serves as managing director.
Another panelist and third-generation leader was Joshua Muss, principal of Queens, N.Y.-based Muss Development. Joshua’s grandfather, Isaac, founded the family company in 1906 and had 11 children, five of which went into development, including Joshua’s father, Hyman. As a result, Joshua grew up “seeing real estate at the table,” he said. “It was always the overwhelming intention to become part of the real estate entity.”
When Muss graduated from law school, he decided to join his father, brother and uncle at Muss Development. Muss described his relationship with his father as “terrific,” even though they didn’t always agree. Like Gural, Muss said he was willing to take more risks than his father, who grew up during the Great Depression.
“The first five years, I thought that everything he did was right; the next five years, I figured everything he did was wrong; and then I figured out what was good and what was bad,” he observed. “I learned by example. To be in real estate development, you don’t get a degree from college or law school, you get a degree from experience. That in itself is an important component of being involved in a real estate family.”
His son Jason is now president of Muss Development, making for a fourth-generation leadership in the company, and Muss says as good as his relationship with his father was, his relationship with his son has “even been better.”