Toby Moskovits:
I've thought a lot about the Jewish experience in America, and certainly in New York a lot of very successful entrepreneurs' are Holocaust survivors and I think that there's sort of an old survival of the fittest, call it the personal evolution. I'm the daughter of an immigrant, my grandfather was born in Poland. My father was born in a German displaced persons camp. My grandfather came to America. Grandma used to always say he never made any money because by the time he was successful they were in their sixties. He started one business after another and I think that as an immigrant and being in an immigrant city, you're an outsider. You know, there's a great study I saw recently from the Wall Street Journal just about this. How many businesses started in this city are, are done by immigrants. I think that when you're part of the old boys network, which women are never. You don't have that luxury and that's why I call it surviving as a man in a woman's world. You know, the things that I did. I don't think I would have been in the place to get them done had I been going into an office every day with people that were just sort of spitting back to me what the general consensus was, you know, everybody was running into residential and I shifted to commercial, everybody was running to commercial so I shifted to residential. You can't make money when you're following the herd. You have to have a vision, but then you also have to have the fortitude to be able to execute on it.
Ofer Cohen:
That's Toby Moskovits. Toby got into development business only a few years ago when we met at the conference, one of our first Brooklyn Real Estate Summits in 2011. Toby is a firm believer that an outsider status is giving her an edge. You haven't done a real estate deal in your life before. You never raised money, you never built a building. Where did you get the drive, tenacity, conviction that you actually going to do this?
Toby Moskovits:
So yeah, I was lucky. My first boss in business was a guy by the name of Michael Eisenberg, who people in real estate might know today. Um, at the time he was a young venture capitalist and I was a younger venture capitalist analyst. Today, of course, Michael was the original investor in WeWork, and I spent the form of my formative years after business school working for Michael and another gentleman named Jonathan Medved. And I think that when you come into the world of business in that environment, you think about transformation and the entirety of the Israeli tech industry. And that's where I was sitting in Bocca in this little office. Now they have these fancy digs and we were meeting these companies and it was pretty early in the Israeli tech industry there. They had an idea and our job as investors was to help them crack the US market. So as a venture capitalist coming in where I was forced to take bets on companies where it was binary, it was something or nothing, there was nothing material, there was nothing substantive. I'm looking in real estate. The risks were of very measured, with regard to the things I had done as a venture capitalist. So for example, in the first deal that I did where I came in with a little bit of my money in a residential building on the corner of Grand and Driggs, the numbers were just, you didn't need a financial calculator to do the math, you know, sub $200 a square foot purchase price. All you needed was cash. And I went ahead and mind my network, found myself a couple of very wealthy real estate owners who were stepping into that hole in lending. It was obvious that the value was there coming in as an outsider, and I give a lot of talks now. Ofer now that you opened up by public speaking career to young professionals how to break in. You know, you see that even in the model of WeWork, which people have said is not sustainable and that certainly they're going out now and they're starting to buy their real estate. But there's a moment in time the employee base, and there was this great conference I was at about a week ago on the future of work. The retail's changing. The office uses changing the expectation of a consumer and the expectation of an employee is different. As a consumer, we want to be able to get everything immediately. Amazon prime, send it to my house. There's an impact on real estate and I think on the, on the office side, you're seeing the same. So I had that luxury of being an outsider.
Ofer Cohen:
I understand the idea of, you felt in their bones that there was a structive moment in the history of Brooklyn and you want it to take advantage of it, but let's be honest, right? So being a woman in our business is being a minority to begin with. How do you get people to take you seriously? Unfortunately, that's true. Coming from a religious orthodox background and a woman going into the driving sort of shoes of this sort of business is completely unusual. Tell me about this. Like how again, where did you get that, that the ability to power through, but how hard was that journey?
Toby Moskovits:
I remember one of the first deals I bought, one in the ownership group, there was this nasty guy who couldn't deal with the fact that I was a buyer and every time we would come, Michael and I would go meet with him. He would say like, where's the, where's the buyer, where's the buyer? And even to the end, like two years later, I moderated a panel he was on. He was like still looking at me like he couldn't wrap his head around. So I think that you know, it's difficult in the beginning, people underestimate you as a novice, certainly as a woman having really no experience in real estate. I remember early on sitting next to a professional at a large brokerage firm who asked me about my hotel and I'm explaining to him how I'm doing the non branded hotel. That point the Wythe hadn't opened. He asked me how I was going to finance. I said, well, you know, I'm getting a land loan. And then eventually I'll figure out how to finance the rest. He looked at me, he goes, are you, are you serious? Like, you're going to go ahead now, you know, in 2009, 10, 11 if I waited till I had all my money. So a lot of people with a lot more experience than I express things that questioned the approaches that I took and as a venture capitalist thinking, thinking and really having learned to trust my gut, I just went with it. But I think ultimately I proved myself and everything from vision I came to city planning with for rezoning they were beyond skeptical, you know, the council and the said to me, they've never seen something move that quickly from certification to funding to approval. So I think that women have to work a little harder.
Ofer Cohen:
I remember there's another moment that I want to take you back to, I believe it was 2012. I texted you, are you the crazy person that's paying a 30 to $32,000,000? 25 Kent. Okay. Here's what 25 Kent is and why i thought she was crazy. 25 Kent is now known as the first spec office, new construction spec office building in Brooklyn since probably over 50 years. It's located in Williamsburg and the value that she was willing to pay the price that she was willing to pay for the property back then looked ridiculous. She went through a rezoning process that made the property much more valuable. And now the project is under construction.
Toby Moskovits:
So far I've repeated this story to many people. I even remember where I was standing. I was, I had just moved into a new house and I was standing in the bathroom and I remember this, you texted me and I laughed. And I think that that's sort of a great moment because part of what I was able to do as an outsider was. I basically looked at what was happening outside of the construct that had been created. So yes, there were no comps. You couldn't get bank financing. A lot of people after the fact came and said, wow, it was obvious, you know, Kent Avenue, people were living right nearby, but I was in a position through sheer force of energy, you know, willpower. And then having come into it as a Newbie to say, wow, the people paying $55 or $60 a square foot at this building we owned were the former American Apparel.
Ofer Cohen:
But again, this was a moment where you saw, you know, the best moments in the entrepreneur's life is when you see something that nobody else sees. And everybody else laughing at you. And thinking you're crazy.
Toby Moskovits:
I get that pretty often.
Ofer Cohen:
You get that pretty often. But I mean, okay, so now how, so you have those moments. So obviously in the third or fourth time that that happens, you're already kind of like, okay, you watch and see. Right? But the first time that happened, which I think the biggest one was that moment you sign a contract for 25 Kent, I believe there was a story behind how you put together the money to actually sign that contract. And it wasn't like, you know, Toby is a billionaire. And like, okay, I need to sign this contract.
Toby Moskovits:
I actually went to my dad who believed enough in me that he didn't put the time into, you know, to analyze. And I told him, I said, dad, you know, I have this opportunity. And like, you know, it may, it sound crazy now. It happens to have been that my family had a business literally across the street or two blocks away, during the 80s. So my father knew the area. I came and I said, dad, this other investor who I knew who had lent me money on deposits in the past, he's given me half a million. Could you give me another? Could you lend me another half? Which I ultimately paid them back. So I borrowed that first billion dollars and having no idea where the balance would come from. Ultimately we managed to finagle myself, Michael and Joel another million for the deposit. But people thought we were crazy. They thought the price was not justified. Nothing had traded there for quite some time.
Ofer Cohen:
So that must have been very, very stressful?
Toby Moskovits:
It was very stressful. There was a moment where I might've lost $2,000,000, which is money I didn't have to lose or the three of us. But I had a plan that made sense. I managed to juggle three lenders because we had an issue with our inability in a timely fashion to terminate the lease on the site. I put a lot of time and I went in myself through third parties to try to buy that lease to be certain that I wouldn't get screwed, that someone else would buy it. Um, and ultimately closed with a private family who even till today I'm sort of still flabbergasted that I managed to convince them to come into the deal, right? It made sense, but a lot of our, friends and investors and lenders in this industry look backwards because that's where the money flows and they don't have the ability to have an insight really commit to it and then pursue it. So I think it was four to two and then a lot of luck sprinkled in.
Ofer Cohen:
You know, you part through it, you establish yourself, people take you very seriously right now and people know who you are and what you can accomplish. What do you do with that ability to kinda make sure that, that the next generation of women entrepreneurs and women in the real estate industry actually have, I want to say an easier time just because for the sake of easy, just like, a level playing field with men, you know, I know personally that it's so hard to hire women in our industry because it's being perceived as a very male-centric, you know, filled.
Toby Moskovits:
So I've given a great talk which I wrote first for a commercial real estate accrue event and titled how to survive as a man in a woman's world. And then I was invited to give it to a group of Sullivan, Cromwell lawyers. Basically, the idea is I think that we're in the moment of female entrepreneurs, you know, they talk about the side hustle and the need to keep reinventing yourself and women have that talent more naturally. Um, and I think so, you know, I got it was asked this question by the real deal. They're doing a big event feature on women. You know how to get more women in real estate. I think that there are a lot of hostile environments. You know, somebody texted me last night, there was an unnamed holiday party with strippers. She's like, I can't believe it in 2017 with this environment. But it, it is what it is. You know, you got to create an environment where women feel comfortable. I think I've been in your office Ofer, I know you have a lot of women working for you. Women need flexibility. I became an entrepreneur because when I used to walk into an office sometimes at 10:00 because my kid had a holiday party or a birthday, they'd give me the steer and you know, in the environment that I've created, I have, my CFO comes in from long island. He rolls in at 10:00, he works till nine, 10:00 at night. So I think that there's a shift happening in the work environment that helps women, that helps women break in and we have to work together to create a healthy environment.
Ofer Cohen:
What do you tell a 22-year-old woman straight out of college and wanting to get into the real estate industry?
Toby Moskovits:
So after I tell them to go come work for me or Ofer. First find a female-friendly environment is my first piece of advice. The second is find a mentor. I think it's critical to learn the industry from somebody. I cobbled, you know, I have a mentor, a woman in business by the name of Amy Millman. She runs a very successful nonprofit that has helped female businesses raise over 5 billion in capital in the real estate business. I sort of cobbled together, you know, a network and I think the third thing is find something where no one else's is chasing it.
Toby Moskovits:
So what's next for Toby Moskovits?
Toby Moskovits:
I'm a huge fan of New York City, and the growth that comes next, I think that we're really only in the first or second inning of commercial opportunity in commercial development and I do believe that there will continue to be amazing opportunities in New York. I'm a single mom. I like to stay close to home. My kids hate it when I travel, so we're going to continue focusing on the greatest city in New York.
Ofer Cohen:
So we're not gonna lose your focus to another market?
Toby Moskovits:
Maybe not even to Queens, I'm looking a little bit in Queens, you know, I think Brooklyn is, is still only 50 percent of the way there and coming as the city that it can be.
Ofer Cohen:
How do you see the next sort of decade in terms of growing your operation with everything you've learned in the last five, seven years?
Toby Moskovits:
Sure. So, you know, there are other players in the market with the size of business that I have, it fluctuates between 40 and 50 employees that have triple the number of projects that I do. Um, I've always been focused on using my own money, so putting, you know, doubling down and trying to keep as much of the projects as I can. So we're going to continue to grow. I don't know necessarily if I grow my operation but pursue very specific projects. They're not that many developers in my position who can take down a half a million to a million square foot project. Thankfully with the credibility I built, I can, so it's going to continue to be about one to two projects a year in large projects that really help move forward the path of evolution of neighborhood and very, very central. So as you, you know, we've gone in neighborhood specific, you know, almost too focused in single neighborhoods, really helping move the pace of how a neighborhood evolves. Transformation took place for the people who live there in the past and then while continuing to be respectful to the past and helping new entrance come in to move in, whether it be into the residential buildings or the commercial spaces that we're bringing on board. And Bushwick is a great example of it. It's a great history of economic transformation, and working with other owners, the community board and the counseling and to really bring the neighborhood forward.
Ofer Cohen:
You think now that Toby is established, may start playing by different playbook or looking at our locations, but there's the big opportunity for Toby still in that 50 percent of Brooklyn because she keeps holding onto her outside her standing and plans to keep disrupting
Toby Moskovits:
My competitors in the market still look for one plus one equals two when they do deals. You know, looking at situations where maybe there's a rezoning play looking at situations where there's some sort of a less than clear path to move forward. I had a lot of success working with the city, going into areas and using approaches that others haven't tried before and I think I have a lot of credibility with owners in the marketplace. You know, I don't think I've ever held a contract that I haven't closed on and this is still a relationship based business. So I think that money's going to. The flow of money is going to be affected by changes coming out of Washington. It's still a challenging market to finance ground-up construction and that what separates between the boys and the men or the women and the girls will continue to keep building those great buildings all over Brooklyn and into Queens. I'm going to stay away from Staten Island for now.
Ofer Cohen:
Great. So tell us, just to finish up, tell something nobody knows about you or at least nobody in our industry and knows about.
Toby Moskovits:
Okay. So, I'm a poet. I actually write a lot of, not every day, but I write a lot of poetry. I love reading poetry and I wanted to be a journalist, but I might've shared that in the past and I actually think that to be a great developer, you're constantly telling stories. That's, you know, to answer your earlier question, I think that the residential commercial and the retail experience is changing and that's part of where I'm focusing to conceptualize what does it mean to rent the rental unit? What does it mean to live in a building? There's been a lot of focus on the physical space and not enough focus on the experience of whether it be hotel or office or such, and I think that as a, as a writer and as a poet, that's a big part of my how I communicate with my clientele, how I communicate with the marketplace that wants to be in my building.
Ofer Cohen:
Toby Moskovitz to be continued. Thank you so much.
Toby Moskovits:
Thank you.
Ofer Cohen:
This concludes another episode of Hey BK. Thanks so much for listening. For more information, you can visit heybk.nyc. You can also email me at ocohen@terracrg.com