Michael Pilevsky on Predicting Future Real Estate Deals

Mortgage and Lending with Olympus Labs

The best you can do, says Michael Pilevsky, Co-President of Philips International, is encourage the conditions most likely to support the outcome you want to occur.

An Extreme Example

Pilevsky was negotiating the sale of a building in Manhattan. Philips International, through an affiliate, was the seller and they had a prestigious buyer from the non-profit sector. Things were moving along very nicely. The relationship was solid.  It was a good deal for everybody. 

“We were happy to sell it and they were happy to buy it,” he said.

The closing was set for Friday, Oct. 26, in 2012. A few days before the closing, Pilevsky gets a message. His attorney has pushed the closing to the following Monday.

“Here’s the first takeaway,” Pilevsky said. “Communication. It’s critical. Everyone on your team should be on the same page. My attorney should have done two things. First, he should have checked with me before changing the date. Second, he should have known I prefer to complete deals as soon as possible.

“However, communication goes both ways. I could have made it clear from the beginning that my preference is never to delay a closing unless it’s absolutely necessary for either side. In this situation, there was room for improvement on both sides of the equation.”

Constant Communication

As soon as Pilevsky received the message, he was on the phone, asking, ‘Why are you pushing the closing?’ The attorney didn’t like Friday closings, saying the distraction of the coming weekend puts undue pressure on the process. The lawyer defended the move by explaining that the weekend would provide an opportunity to double-check everything, allowing for a smooth closing on Monday. 

“I can see the logic,” says Pilevsky, “but everything was ready to go, and I didn’t see the need to tempt fate with a delay.  You never know what could happen.”

Pilevsky was frustrated, but it was too late to walk it back. The attorney had already communicated the intention for a Monday closing and the buyer had readily agreed.

And what happened on the weekend? Nothing, really. Nothing Philips International couldn’t deal with, in terms of the day-to-day operations of their business. 

“Monday rolls around and the closing is at the top of my mind,” Pilevsky said. “October 29, 2012. Check your calendars. Google it. 

“I’ll wait right here.”

Blown Away

“Yep, Hurricane Sandy. A hurricane. In New York.”

Major hurricanes happen every 70-some years in the northeastern part of the country. That’s nearly once in a lifetime. Low-level hurricane winds are encountered every 20 years or so.  This was not just a hurricane.  This was a superstorm.  The city shut down for a few days, which, up until recently, was unheard of. Sure enough, there was no closing on Monday. In fact, there was no closing for months. 

“The lobby of this building looked like a fish tank,” Pilevsky said.  “Fortunately, we had a very upstanding buyer and we had the ability to be flexible.  We worked things out with them and closed three months later.”

A Second Chance

Pilevsky believes his relationship with the buyer was what earned him a second chance on the sale. 

“Relationships are really the foundation for this business, whether it is the relationship between buyer and seller, owner and builder, or builder and supplier,” Pilevsky said. “Being able to be flexible and adapt to the conditions smooths over a lot of issues. That’s the second takeaway. You have to put in the time and the work to make those relationships last.”

Speaking of lasting, he still works with the attorney who pushed the closing.  “He made an honest error in judgment; an error that anyone could have made.  After that experience, he is less likely than any other attorney to make the same call again.”

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