New York City
INSIDE THE LIFE OF ADAM HOCHFELDER
Adam Hochfelder has made quite the name for himself and has achieved success at an early age more than most people do in their lifetime. Known as the ‘Wharton Whiz Kid’ for his fast rise to fame, Hochfelder’s ability to leverage exclusive deals, fearlessness towards risk and endless ambition, helped him generate multimillion dollar deals as well as an impressive portfolio.
As the Managing Director of Real Estate Acquisitions & Development at Merchants Hospitality, Hochfelder is an investor, owner & developer of real estate and hospitality properties, including luxury residential and hotel properties, commercial buildings and the owner of some of NYC’s top-rated restaurants.
We were very fortunate to catch up with Hochfelder to discuss his career from early on, running his own business at Max Capital, the distinct value proposition Merchants Hospitality brings to their clients, as well as his philanthropic endeavors that has touched the lives of individuals and communities in need.
What attracted you to take on a career in business and real estate?
Deal making process always requires a sense of urgency behind it with a balance of patience and precision. As they say, if you build it, they will come. I like to be able to look at a building and touch it, feel it and make a deal with somebody. I love to be the successful bidder on a project because I think the Merchants Hospitality team and I can add something that’s impactful for the neighborhood and add prosperity to the community.
What is the first thing you do at work when you arrive in the office? Favorite business publication to read?
When I get into the office, I love to walk around and speak to people to get a sense of what everyone is working on and make sure that we’re all working towards the same goals. Discussing goals in the morning sets the tone for day. If you start to talk to people at the end of the day, it can be too late to execute a great game plan.
Similarly, I also love to read publications that are not of the business norm. Typically, everyone reads the same Wall Street Journal articles and stories in the NY Times Business section. However, I like to look at pop culture items so I can see what the trends are of the consumers that are living in our buildings or staying in our hotels. Therefore, we can make sure that our properties are geared toward ‘what’s hot’ in the market. Specifically, checking in on what the “in-crowd” is doing on Instagram is actually more helpful to our portfolio than simply reading about the Consumer Price Index in the WSJ. Our hotels and residential properties are successful because we have our pulse on the right market segments.
After your internship, you decided to start your own business venture, Max Capital. What promoted you to be your own boss? Did you have any reservations on being on your own?
Driven by ambition, I got my first job at an internship at Newmark & Co. before graduating from Wharton’s Real Estate Program at the University of Pennsylvania. I was one of the first employees in the office at 7:00am so Newmark’s President, Barry Gosin would take notice of my work ethic and I was regarded more than just an intern.
It may have been a lofty idea at the time to start my own real estate firm, Max Capital, only three years after graduating. However, I was eager to build the foundation for my professional career and embark on the business world. It was by far the best summer of my life and fueled my love for Real Estate. At Newmark & Co., I was fully entrenched in all areas of business which combined finance, brick and mortar and human capital.
Who are some of your mentors within the real estate industry and/or market?
Barry Gosin at Newmark taught me the importance of work ethic. Steve Kantor at Credit Suisse taught me how to understand and manage the capital markets and Dan Doctoroff, one of my former partners and former President of Bloomberg, taught me the importance of building a great community. By way of example, I worked very closely with Dan on bringing the Summer Olympics to NYC in 2012. NYC didn’t win the bid unfortunately, but because of our efforts, many projects in NYC were rezoned and launched like Hudson Yards and the residential developments near Citi Field. I will never forget how much Dan cared more about the people in the city of New York rather than about his own personal bank account. That experience is the reason that I have gotten so involved in community building and helping others through programs such as The THRIVE Network and the creation of the Hochfelder Family Parenting Center, which helps first time mothers in need.
Abraham Merchant, CEO, Merchants Hospitality, is another mentor to which I owe a great deal of gratitude bringing me onboard an exemplary team, entrusting me not only as a Principal of Merchants and being a dear friend, but more importantly, as family. Merchant’s namesake has been in business for the past 30 years granting him favorable returns and recognized as an industry expert in the field. He is a true visionary and has the foresight and capabilities in finding the best locale for our vast properties. In fact, he has produced unparalleled venues, while curating lifestyle experiences that are reflective of our patrons, neighborhoods and community.
Richard Cohn, Founding Partner and General Counsel, Merchants Hospitality, is another colleague and mentor that I cherish greatly. His rationale and comprehensive understanding in business from negotiating highly competitive leases, loan documents, partnerships and joint venture documents, to franchise agreements and supervising all of our financial deals, has been the backbone to our success. Through his operational and legal knowhow, the Merchants Hospitality team has been able to scale our business nationwide and operate both efficiently and effectively. Most importantly, Richard has taught me a great deal about the importance of compliance and maintaining a unified team.
Last but not certainly least, I’m motivated by my own family, my two wonderful sons, Preston and Henry and my beautiful wife, Lisa. My boys are everything to me and inspire me to take on each challenge head on, teaching me to have fun and find the inner balance of work and play and above all, the importance of loyalty. I’d do anything for them and hope they truly know how important they are to me. As a matter of fact, they were my two best men at my wedding and I couldn’t be more proud to have them by my side and my wife Lisa who has a heart of gold, a voice of an angel and loves me and my boys unconditionally. I have learned so much from Lisa who inspires me through her intelligence and accomplishments in her life and shows me the meaning of what true love really is and inspires me to be my best self, each and every day. And for that, I’m truly grateful and cherish the valuable time that we spend together.
Despite your young age and experience, you’ve been able to out-maneuver some of NYC’s biggest landlords in commercial real estate, like Donald Trump and Bernard H. Mendik to acquire valuable properties. As this occurred, did you find yourself in another echelon of the business world and perceived with higher reverence by your peers?
Unlike most young people in real estate, my Dad was not in the real estate business. I had many successes and failures along the way, which helped me learn many facets of business. Despite my success, I’ve refrained from being complacent, which is key to any business’s longevity. I strive to be better than I am the day before and not only learn from my mistakes, but support myself with a strong network of market specialists, while observing the behaviors of those around me.
Being profiled amongst these high profile entrepreneurs was a challenge that I welcomed, especially being the underdog when I first started out. I enjoy the competition, but don’t necessarily put myself on a pedestal. Ultimately, my biggest competitor is myself and I strive to improve and work harder each and every day.
Credibility is imperative in this business and once we acquired 230 Park Avenue, more and more of my colleagues had started to take notice. And this wasn’t just any building, it belonged to New York real-estate moguls, Harry and Leona Helmsley. The deal and ownership of this 1,300,000 sq. ft. building was purchased for $253 million and was sold in 2006 to Istithmar, an investment firm owned by the royal family of Dubai for $705 million.
We were also able to purchase 1440 Broadway for $250 million from Helmsley partners and turn it into a showcase. The iconic building had plenty of suitors, but we were able to figure out how to structure the deal and then transform it from a C-level Garment Center office building into a class A-credit enhanced property.
In regards to 350 Madison, we were able to acquire that property as a private firm. At the time, we could do things that would make people want to do business with us—whether it’s a fast closing or not having certain requirements in a purchase and sale agreement. In addition, Conde Nast was selling the building, but wanted to lease it for two years. They weren’t just looking for top dollar, they also wanted to know who their landlord would be. I met with Si Newhouse and Chuck Townsend, the top people at Conde Nast, who are still close friends of mine, which gave them a certain level of comfort. Not only would we close faster than anyone, we’d give them a good lease and be a good landlord. There were a lot of traders—the hot money—after that deal, but they couldn’t figure out because Conde Nast wasn’t leaving the building. We were patient, acquired the property and leased it to credit tenants. At the time, our main focus was to keep something for the long term, to continue building a portfolio.
What criterion do you look for in terms of property selection for a restaurant and hotel vs. residential?
If something is perfect, it’s not for Merchants Hospitality. At Merchants, we like to push boundaries to create exciting things and make building improvements that are unconventional, breathtaking as well as innovative. Our investment philosophy is to take something that is commonplace, add creativity and flair, improve and stabilize its assets, and transform it into an iconic property that will be the most desired in the marketplace.
In 1998, you became one of the youngest people ever chosen to serve on the Real Estate Board of New York, which is quite the accomplishment. What was it like to be amongst the industry elite at such a young age?
I was humbled and overwhelmed. I was the only person under 30 on the Real Estate Board of New York. In fact, there was nobody under 40 (except for those whose father was already in the real estate business and put them on the Board directly as their predecessor). I soon realized that I was in a special place and wanted to learn and absorb as much as I could from those more seasoned than myself.
You were appointed to serve on NYC’s Economic Development Committee by Mayor Michael Bloomberg. In fact, you were also appointed by the Mayor to bring the 2012 Olympic Games to New York City. How did this role come to fruition? What came to mind when you initially got the call from him?
This invitation to be on Mayor Bloomberg’s Economic Development Committee for the City of New York came as a direct result of the work I did with Dan Doctoroff on the NYC 2012 Olympic Committee.
You’re also involved in various philanthropic initiatives. What inspires you to give back and help those in need? Was this instilled on you as a child by your parents?
As I’ve gotten older, I learned that your community is bigger than your business. And being successful isn’t measured necessarily by how much your worth, but more importantly, how much you give to those who really need it. It’s also about setting a precedent built on helping others, sustainability and ensuring that the community you’re surrounded in is taken care of so that future generations, including my own children, learn from example.
I’ve funded the development of the NYC Parenting Center which aids first time mothers in need. I also worked with Home Depot and Habitat for Humanity, an initiative supporting low-income housing in New York and Philadelphia, as well as being a proponent for The THRIVE Network, which supports individuals and families with disabilities. Another passion project of mine is working with various youth sports organizations and empowering children on the importance of play and staying healthy.
But at the end of the day, I’m not involved with various philanthropic efforts, causes and organizations for the need of notoriety or recognition. I’m involved because I’m inspired and having come from nothing, although having achieved success, it’s my time to give back.
Images: Brett Matthews Photography