In this episode of Broker’s Angle, Hal Coopersmith sits down with Patrick Steffens of Avison Young to discuss his journey in commercial real estate, the importance of building long-term client relationships, and the growing role of charter schools in New York City’s real estate market. Patrick shares insights on structuring successful lease negotiations, leveraging landlord-side experience to better represent tenants, and navigating the unique challenges of educational real estate transactions.

Hal Coopersmith: So we first met in 2018. You’ve been in the business for a while. When did you get started?

Patrick Steffens: Came right out of college, had an opportunity to intern at AY summer of 2014. And, hustled. They liked me. They offered me a full-time position following graduation, started with the same team at AY that I work with today,  2015. So it’s, it’s 11, 11 and a half years with the same group of guys. really enjoy what we do together. We have fun. We work hard, make a little bit of money. We’re rock and rolling. It, it, it’s, it’s, it’s exciting and, you know, there’s power to that when teammates can play together for so long, the team and the cohesion. I mean, look at the Final Four this weekend, right? There’s some upstanding freshman squads that have the s- the superstar players, but the teams like UConn that have been playing together for a long time can show sustained success. It’s pretty great.

Hal Coopersmith: And your team, were talking about this earlier, has focused a little bit more on charter schools.

Patrick Steffens: Yeah, we have had, through a number of good relationships and building a strong community-oriented network, have had some success years ago, in the academic sphere. From daycares to universities, we’ve done a number of school-related transactions. I think that we came together and had the, the, the big, bright idea when everybody was questioning the future of work in the depths of the pandemic to realize, well, kids still need a place to go to school, understanding that this isn’t Manhattan. This is New York City. There’s a ton of office space and it’s going to be a huge chunk of our business because it’s the largest office market in the world. What can we do to differentiate,  diversify the, the portfolio of clients, if you will, and, capitalize on some of the school experience that we’ve built over the years and decided, “You know what?

There’s an opportunity for us here to really make a difference.” our team’s mostly comprised of local, born and bred New Yorkers. Like, we know the nuances and ins and outs of different neighborhoods. and when we go out and help some of these schools, whether it’s charter, whether it’s religious, whether it’s, public, private, all different ages, when we go out and we help some of these schools We really do see how good schools can impact a whole neighborhood and it’s something that we’re going to need and the city’s going to need regardless of how well the market’s going, regardless of how well you like or you don’t like whoever’s in the political seats. Kids need a place to get a good quality education.  there’s a number of, you know, high-performing school leaders out there, and people really give a damn about making the sch- the city and these students better. So, well, how can we help with that? We have this real estate expertise. We’ve, had the fortune of working with schools in all five boroughs. We, we’ve done deals in, you know, even out in Staten Island. We did in Brooklyn, Queens, Manhattan, the Bronx. We’re up active in a couple of different areas right now with a number of different schools, and it, it’s been a benefit for us as local New Yorkers to really impact the communities that we live in. We really feel great about it.

Hal Coopersmith: What’s different doing a charter school lease versus an office lease? I’m sure there’s a lot of differences. Can you let us know some of the differences and how you were able to acquire some of those skills?

Patrick Steffens: Probably putting it in a similar question to is there a difference between a law firm lease and a startup lease, right? What’s important to the decision-makers? What’s important to that business, that entity? Sometimes it’s the speed and flexibility. Sometimes it’s the, let’s make sure we’re getting it right because it’s going to be there for a long time. And with schools, it’s, it falls on that ladder where we’re going to not measure twice, cut once. We’re going to measure three or four times to cut once. We make sure, that everything is done to set up the school for decades of future success. I think one thing that we’ve done well is, you know, with a number of the charter schools, for example, that we do, we do a little bit of work with, is you’re stewards of public money it’s privately managed, but it’s publicly funded. So, we’re conscious of being responsible for public tax dollars to make sure these kids are getting the best education possible in great, high-quality facilities that they’re excited to come in and learn at every day.

Hal Coopersmith: What are some of the things in a lease that are important to charter schools?

Patrick Steffens: Something that’s important in charter school leases is really interesting for their business in the fact that you have to make sure that what landlord’s going to deliver is going to last for a long time. Not many of these schools are going to, you know, take traditional TI dollars and be responsible for their own construction because that’s not their job. Their job is educators. you have to make sure that landlord’s delivery and work letter is sharp, it’s concise, and using high quality materials at a price point that makes sense, ’cause remember we’re stewards of public money, but at the same point, we’re making sure that the materials and what they’re building’s going to last because we’re signing long-term leases. One thing that’s been more common in some of the schools that we’ve worked with is New York City specific, you have the ability as a 501[3] not-for-profit to qualify for,  real estate tax abatement as a not, as a not-for-profit when your lease term is greater than 30 years. Department of Finance views it as, like, a synthetic ownership of the space.

And, you know, similar to the way churches that have owned land forever, don’t pay real estate taxes, these nonprofits that support a community benefit in neighborhoods that truly need it aren’t responsible for additional real estate taxes as well. So probably the two big things that we’re, you know, conscious of is real estate taxes and how to mitigate or avoid them if possible, and then how to make sure landlord’s delivery package is going to last.

Hal Coopersmith: That’s a great point, because one of the things that we think about from the legal side is certainly taxes, and then nonprofits, if they are getting that, long-term lease, if it’s possible to try to get that tax abatement. So you were talking about earlier how you switched your business a little bit more from landlord heavy to tenant heavy. Tell me a little bit about what you learned representing landlords, you know, that’s helpful in terms of tenant negotiations.  

Patrick Steffens: It’s been a key towards our success lately, right? The foundation and the background that we that we’ve built. At the beginning of my career, firm was focused on growing landlord relationships, growing our reputation in the market as a way to solidify our place here in this big city. And we’ve had the good fortune of working with some of the biggest, most well-known, biggest, and brightest landlords in the city who are true real estate professionals. Their business is predicated on managing good buildings and collecting high-quality rents. so what we did on behalf of some of those big landlords and small landlords, what we did on behalf of our landlord clients is structure leases, sound, sharp to the benefit of the landlord. whereas my career has grown and I’ve spent a little more time focusing on growing my, our tenant rep business, we’ve taken a lot of the skills that we built from landlord side, understanding what’s important to landlords, understanding what’s important to tenants, and doing our best to meet in the middle and come home happy. A, a strong, good negotiation is not a zero-sum game. This is not I win, you lose. ‘Cause at the end of the day, we’re signing long-term leases, whether it’s three, five, seven years, 30 years with the schools, it’s a partnership. You know, you want to be a g- have a good relationship with your landlord. It’s, don’t want to feel like, “Oh, they, they got me,” or like, you know, “The landlords are, are, are beating me up.”

Like, no. It’s good landlords don’t believe that, and, and good tenants understand that as well that, you know, I gotta give to get something. And w- we’ve taken that approach to our business as a strong foundation of what’s important to the landlords and how tenants can best push and pull those levers.

Hal Coopersmith: What makes a good LOI?

Patrick Steffens: A lot of people are going to come after me for this one, but a good LOI is g- going to set you up for success in the lease, right? Y- you know, you on the attorney side, us on the broker side, we’re going to work hand in hand. We’re not going to work against each other, and a good LOI is going to be seamless transition from proposal to lease. We don’t want to put the proverbial toothpaste back in the tube and have to go back and redefine terms because the attorney thinks it’s better to do it this way, or because the broker was lazy to do it, not do it right in the first time.  a good LOI is accurate, takes time, and is the foundation in which the lease can go build upon.

Hal Coopersmith: How did you learn how to build a good LOI?

Patrick Steffens: Practice, studying, had some great mentors, some friends in the legal field. One of, one of my good partners, has a background in real estate law and, and, and taught us from the beginning of our careers that the key to our success in this business is going to be structuring our deals to the benefit of our client, whether it be tenant side or landlord side. And what we’re going to do is make sure we’ve exhausted efforts to get the best results.  it’s not always about speed to the finish line. Sometimes it’s, it’s measure twice, cut once and get good results by being sharp, dotting I’s, crossing T’s a- and making sure that ultimately at the end of the day, the term sheet and then secondarily the lease, is something that you’re going to live with for the duration of that lease term.

Hal Coopersmith: What are you seeing in the market right now?

Patrick Steffens: Market’s, market’s in a fun spot. I think there’s a real opportunity right now for brokers who can tr- structure deals versus somebody who’s just there with a good relationship. The, as the market is getting tighter, Avison Young just released our first quarter 26, stats. We are at lowest vacancy we’ve been at since COVID, activity’s a little over 10 million square feet per quarter, which is significant when compared to where we were the last couple years.  and as that market approaches the quote unquote equilibrium of that 10% number where landlords and tenants both have equal push and pull of the, of negotiation levers, it’s going to have an opportunity for the stronger brokers to best get results for their tenants. It’s not a space race, although the market’s getting a little tighter. It’s opportunity for good negotiators to take advantage of what’s going on, on out there in the market.

Hal Coopersmith: So how do you execute a good negotiation? Like, what’s Patrick’s way?

Patrick Steffens: It’s not just Patrick’s way. I do lean on the value of our team and f- understand what’s important to that client, right? Our, our team both internally with AY and,  and the broader extended team involving project managers, contractors, architects, and lawyers is, well, what’s going to, what’s important to that client at that time? is it speed? We need to get into space right away, so you’re going to have to sacrifice a couple of things, to get there. Or it’s like, “No, we have time. We want to make sure it’s done right.” So what we’ll do is take the time Understand nuts and bolts of where are the key figures and the most important things for that client at that time, and emphasize that as the fulcrum for the negotiation. Like, there are some things that are non-negotiable to some people. and success for us is going to understand that. For Patrick personally, you know, we rely on the value of, of different teammates who bring different skill sets to the picture. I like to think I understand the market and understand the, the nuances as to what’s going. Got my finger on the pulse per se.  I have partners that have, you know, substantial construction backgrounds. I have partners with, you know, real estate finance backgrounds. I have partners that, you know, can run analysis,  and use the numbers to tell the story that we need to tell. and together as a team, I want to pass the ball to the guys who got the best opportunity to score. At the same time, when I have the best opportunity to score, I want my teammates to pass the ball back to me. And, you know, it’s why I’ve been working with the same team for so long because we all believe that we can do that for each other.

Hal Coopersmith: You’ve been in the business 11 and a half years. One of the things we like to talk about is advice to younger brokers. What advice would you give to a younger broker?

Patrick Steffens: Starting out in your career in commercial real estate brokerage, the best thing you could do is exposure. It’s not about trying to get the biggest piece of the pie and make the most money the first couple years. First couple years of your brokerage career is focused on build a good foundation that you can take with you as you grow, as your relationships grow, as your network grows, to better service those clients. What I mean by that is at the beginning of your career, you want exposure to different markets, different product types, different, you know, personality types. How do you handle the negotiations with the decision-maker is the executive, versus how do you handle the decision maker is the head of HR who cares about w- well, my people are the most important part. Or the executive who’s the financial guru who’s like, “I care about the, the dollars and the cents and the figures to make it make sense for our business.” So at the beginning of your career is understanding and getting exposure to as much as you can, learn from that experience, figure out what you like to do, where you can add the most value, and use that as the foundation to go build your business.

Hal Coopersmith: What did you do early in your career to, and maybe even now, to help get exposure?

Patrick Steffens: Hustle You know, I grew up playing team sports like, you know, pass the ball to the next guy. But I was never the best shooter, but I played on really good basketball teams because I hustled. I was the guy who was going to play extra defense, dive on loose balls and box out, do the little things that nobody else is really willing to do. You know, part of my success in brokerage was I’m going to work harder than you. You know, I don’t know, especially at the beginning, you don’t know what you don’t know even. It’s like if you’re just given a task, okay, fine, I can go complete that task. But the beginning first couple of years of brokerage, it’s easy to get lost in the sauce. What’s been important to me at the beginning of my career was, well, I don’t know what I want. I don’t know. So I’m going to go out there, work hard, learn as much as I can, get exposure to as much as I can. Landlord side, tenant side, office, retail, industrial, sales, leasing. Get exposure to as much of it as you can. Figure out what you like. Figure out who you like to work with and go out and bring value to your clients every day.

Hal Coopersmith: Well, that is a wonderful note to end things on. Patrick Steffens, thank you for being a part of Broker’s Angle.

Patrick Steffens: Awesome. Thanks, Hal.