The Deal (5 page)

I used to love the spotlight.

I used to think it mattered.

“What’s going on here, Tommy, is a mountain of cash dropped in our laps.”

“Let’s skip the drama, Curtis. Let’s talk real estate. Let’s talk facts.”

Tommy liked to call me Curtis, referring to Curtis Martin, the workhorse, star running back of the New York Jets.

“I have been offered the opportunity—we have—to put together a deal that will be one of the most lucrative and interesting we ever get to close as a team.”

Tommy’s cash sensors kicked in.

“Who?”

“Andreu Zhamovsky. Prevkos.”

“The natural gas character from Russia.”

“That’s right. He called me yesterday morning and told me he was in town. And that he wanted to meet for dinner.”

“Refresh my memory.”

“Our parents were friends. We met as kids and were sort of close, you know, like pen pal close, as we grew up. When we got older it got harder to keep in touch. Different worlds, literally. But we were a lot alike. In certain ways he was like the Russian version of me.”

“You mean there are two of you?” Perry quipped.

“By the time I was in college, we spoke once every couple of years. But I would see him when I went on vacation with my father.”

“What’s their interest in us?”

“Today, Prevkos is one of the largest companies in the world. And apparently they are looking to expand into the commercial real estate arena. Here, in New York City.”

“Why not in Russia? Or in Europe?” asked Tommy.

“Because for the long term they believe New York will give them the most value for their money—even more than London or Beijing. They see Manhattan’s continuing recovery as something that works in their favor. Besides, it’s perfect for Andreu.”

“What is?” asked Jake.

“New York City. It’s Andreu’s kind of game. That alone adds value in his mind. He loves excitement. He loves everything about being here. He has since he was a kid.”

“He wants to buy property here because he likes excitement?” Perry asked, doing the devil’s advocate thing she does so well.

“Prevkos wants to buy property here because overseas real estate is part of their future diversification and risk-aversion strategy. They want to enter new industries and they’ve been doing their homework. They feel there are deals to be made, here and now, in New York City. Think about it. The economy worldwide is in a complete state of flux. Who is actually thriving? Those who have strategically placed themselves within their respective marketplace. Prevkos has never been as strong as they are today. They are prime for small, tactful diversification.”

“How much do you actually know about them as a firm as opposed to as a family?” asked Tommy.

“My guess is that he probably stayed up all night doing his research online to all corners of the earth,” remarked Perry.

She knew me so well.

“Greedy fuck,” joked Jake.

Tommy just stared at me. He knew Perry was right.

“Prevkos is at its highest level, financially and influentially, in the history of the company. They have the money. And Andreu, who’s been helping run the show since his dad died in ninety-nine, has complete control of the board.”

All four were silent in thought. Then, I said, “If you were in their position, can you tell me you wouldn’t look at the idea of purchasing property in Manhattan as an intriguing opportunity? Today—right now?”

No one said a word. Case closed.

“A foreign property investor can be tricky, Jonah.” Tommy said.

“We discussed this. My understanding is that not only are their financials representative of their reputation, the banks associated with them are all for broadening their practices. They have an endless list of references, both the firm and Andreu personally. I already explained to him exactly what documentation we would need, to which he responded we would have everything we requested from the moment we accepted the assignment.”

“Let’s talk brokerage,” Tommy continued.

“I pointed out we only work with signed brokerage agreements drawn up by our attorneys, which is non-negotiable. Andreu was fine with this.”

“How about commissions?”

“I explained to him how our commission structure works, and that we start at six percent on the first five million of the purchase price.”

The way the commission on a sale works is quite elementary. For the first five million dollars of the purchase price, the commission is 6 percent. On the portion between five and ten million, the commission is 4 percent. On the portion between ten and fifty
million, 3 percent. If the price is higher still, on the portion between fifty and one hundred million the commission is two percent. Any portion that goes over a hundred million is calculated at 1 percent. The aggregate number, keeping in mind that this
structure is subject to negotiation, is the price tag for the service.

“Now, like I said, they’ve been doing their homework. Andreu asked why I should automatically expect to start at six points when the average in a good market is usually somewhere between four and five and a half.”

“And?” asked Jake.

“I told him because we were the best, which is why he came to us in the first place. So we took another shot, laughed a little more, and shook hands on my terms. A flat commission to be paid up front, in one lump sum, by Prevkos to us upon the completion of the transaction. I told him we would only accept the assignment if Prevkos would pay our commission and chase the seller down for the money themselves. Andreu asked why, and I said because this would allow us to focus on the deal. Andreu said no problem, they’d cover our cash.”

A look of displeasure, one I had anticipated, glazed Tommy’s face.

“Why would you negotiate the percentage without discussing it with me first?”

“Because I wanted him to know that our team’s mutual trust and willingness to work together is of the utmost importance. That we’re not nitpickers and we’re all equally empowered. Which I thought was probably a good idea since they’re looking to spend approximately half a billion dollars.”

Silence. Their chins were dimpling the carpet.

“You heard me right. One half of a billion dollars, give or take. Which, when multiplied by our simple pricing scheme, comes out to a commission of roughly six point seven million dollars. Four million just for us.”

Even Perry was able to loosen up for a split second.

“Holy shit!” she exclaimed through laughter.

“And that’s just to get rolling,” I added. “This goes well and, according to Andreu, their plan will likely be to keep acquiring.”

“Jonah, if you’re fucking with us—seriously—it would be sick to fuck with people to this degree.” Jake continued.

Now you have to understand something. It’s not like we were foreign to big money. We’re all young to have amassed the seven-, in Tommy’s position, eight-figure portfolios we have. But this was different. Historically it has taken us a number of solid, industry-leading deals a year to each clear a couple million. For Tommy and me, this three-week deal alone would be over $1.2 million each.

“This is all for real. I have laid it out to you guys exactly as it has been presented to me.”

Tommy smiled.

“You look like you have something to say,” I said.

“I’m thinking that this one time I’ll let you slide on the commission negotiation.”

We all let out subdued chuckles.

“And I’m also thinking that this all sounds too easy. I mean I understand that this fell into our lap because of the relationship here. But still, something sounds off. There must be a catch.”

Tommy has never been one to miss anything about anything when it comes to real estate.

“There is, Captain. There is absolutely a catch.”

Jake was disappointed.

“I knew this was horseshit. I knew—”

“Just shut the fuck up for another minute,” I barked. “The catch is as good for us as it is bad. We have three weeks to close whatever deal it is we find for them, assuming it is acceptable. No questions asked.”

“Why?” asked Perry.

“Because Prevkos has been promising their shareholders diversification in the wake of the ever-changing natural gas industry climate for too long. Andreu very clearly explained that his board feels they need to be able to show shareholders movement on this front by the end of the third quarter. This is the major motivation for doing any of this.”

“Why the urgency for such a quick transition?” continued Tommy.

“Because they are thinking aggressively that the world’s economic markets are going to turn around, coupled with the fact they want to show investors that they are being proactive offsetting some of the growing risk that comes with the natural gas industry. They want to show their shareholders they are looking to act responsibly. They want all their ducks in a row and this is the timeframe they have set for themselves, as overly ambitious as it may seem. Their goal is to capitalize on today’s interest rates, which we all know are going to go up after this fall’s presidential election, if not sooner, and have time to get their arms around their new venture before November. They don’t just want ample time to learn about whatever buildings they buy. They want time to watch and understand the Manhattan real estate market and how their buildings function within that market so they can, should it matter, if need be react to whoever ends up as president.”

Tommy ran his hands through his hair, pausing for a split second halfway through.

“Do they realize what they’re asking?”

Perry jumped in.

“Let me guess. Yes, because they have done their homework.”

I have always found Perry’s dry attitude and simple, angry sexiness endearing. But she was being a bit more sarcastic and ungrateful than I felt was necessary. I looked her squarely in the face.

“Is there any particular reason you’re being such a complete bitch this morning? Have I done something to offend you?”

“Did I say that you did? Trust me, Jonah, you’ll know when you have offended me.”

Tommy jumped in.

“Take it easy, guys.”

“Perhaps it’s the fact that I just dropped a fucking multimillion dollar pay day in your lap.”

“Seriously guys, enough!”

Perry took a deep breath, looked at the ground for a second, than again at me.

“I am not being offensive on purpose, Jonah. And I apologize if it appears that I am. I just know that you sometimes love to forge ahead without stopping—

“— to look at all the puppies in the litter.”

I knew her so well I was able to finish her sentences.

“Exactly.” She conceded.

I addressed them once again as a group.

“I asked Andreu if he understood how difficult this could be, and he said he did. He told me he got it from a due diligence standpoint as well as the fact that such circumstances would ultimately affect his purchase price. When I explained that moving at the speed he needed would require Prevkos keeping the applicable funds for the transaction in escrow on this side of the ocean, with our financial institution of choice, again he said it was no problem. Then he proceeded to tell me that it was fine if we can’t handle it. He has a few backups he feels are extremely qualified and will be more than willing to step up to the challenge.”

“And what did you say?”

“That I needed to discuss it with you guys, but that we would probably be ready to accept the opportunity.”

“Didn’t you say the catch was also a plus for us?” asked Jake.

“Most definitely. Because they understand just how difficult it may be to do what they have asked of us, they have offered us a bonus for getting them what they want. They have offered us, assuming we close, a million American dollars worth of Prevkos stock, each, at the day’s closing price, simply for the trouble of working under such trying time constraints. That’s one million each, on top of our commission, in case you missed it the first time.”

I stood up and walked over to the window. I was staring into midtown Manhattan as the sun’s rays sliced their way through the morning clouds. Tommy and I were silent. We were both thinking. Perry and Jake were having a conversation. After a few seconds, I turned back around. I looked at Tommy, as did Perry and Jake.

“I must tell you guys straight up that I absolutely plan on accepting this assignment.”

“We probably don’t have much time to decide,” added Tommy.

I looked at my watch, which, on this morning, was a steel Rolex Daytona with a mother-of-pearl face. The sunlight hitting it accented the swirls of pink and hazel weaving in and out of the number slots, which were each marked simply with a diamond. I’m a bit of a watch freak.

“They need to know by eleven o’clock
a.m.
, our time.”

Perry was still prodding.

“I’m just concerned about the rest of our clients, along with our pending deals. How do we just take three weeks away from all of our other obligations?”

“Perry, we’re the best team in this fucking city. Would you actually even consider walking away from this because of the possibility of multitasking even more than we already do every day?”

Of course not. Finally, she had no further arguments. Tommy was in, I could see it in his eyes. As for Jake I didn’t even need to see his eyes. The thought of this much money had him sold from the beginning.

“Can anyone at this point see a single negative in trying to put this together?” he asked.

“We don’t make the deal, we don’t get paid, which is no different than any other deal we’ve ever had to close. It’s that simple,” I added.

“What do you say, guys?” asked Tommy. “Has Jonah ever led us astray?”

We unanimously voted to take on the project, and immediately we were in broker mode. Which meant moving at lightning speed.

“I’ll let Andreu know and have Carolyn get the commission agreement specifics over to Waterman’s office.”

Ely Waterman is one of our attorneys.

“Once Ely has it, I already have the information for the attorney they’ll be using. He’ll be sending it directly to their counsel once he has our approval. Andreu will get me everything that we need from their end via e-mail and fax.”