MKDA, The Design Firm of the Dealmakers

Moody’s KMV was sharing space with Moody’s Investors Service, its parent, at 99 Church St. The 83 employees of the company, which develops credit-risk analysis tools, had offices scattered throughout the building, two to three people per floor. Needless to say, the arrangement wasn’t working, much less working well.

The quest for new quarters, however, was much more than a search for square feet. “We were going from a formal office environment to an open office, which was a complete corporate culture change,” says Laura Montalvo, operations manager for the company’s professional services group. “And, yes, we had to get 83 heads into a space of only 16,000 square feet.”

To tackle this mission impossible, Montalvo turned to MKDA, the commercial market’s go-to design firm. The 30-person firm, headed by founder Milo Kleinberg and his sons, co-presidents Michael and Jeffrey Kleinberg, designed test fits for four properties Moody’s KMV was considering.

Because of MKDA’s pre-design work, Montalvo says, Moody’s KMV was able to move into 100 Broadway, its first choice. “This was the most cost-efficient space, and we could make it work because of MKDA’s plan,” she says. “They showed us that it was feasible and that we could choose it and be happy with it.”

And the MKDA build-out design suits the IT company to a T: The six conference rooms and seven offices in the center of the space are rounded out by cubicles that rim the windows. There also is a light-filled lunchroom, where employees take breaks to play a game of chess or a round of foosball.

“The design was so good,” Montalvo says, “that we could move out of the old spaces on Friday, and on Monday the staff could plug right in. Everybody loves it. You would think it would be noisy, but it’s not. The design is such so voices don’t carry.”

For nearly a half century, MKDA has been helping clients like Moody’s KMV make the right move, a role that has expanded with the recent opening of its Stamford, Conn. office.

By design, MKDA’s work is not all about design; increasingly, the firm, whose portfolio includes some of the biggest landlords in the business, notably Silverstein Properties, The Durst Organization, Reckson Associates Realty Corp., Swig Equities, Rockrose Development Corp., Jamestown Properties, Paramount Group, Equity Office Properties Trust and Vornado Realty Trust, finds itself playing property powerbroker.

“Because our business is split between landlord and tenant, we can look to bring people together,” Michael says. “That’s a level beyond design. We’re not just drawing up plans, we look to assist in the leasing, to be marriage brokers to bring people – brokers, tenants and landlords — together because we know all the players so well.”

Chi Chu, senior vice president of Silverstein Properties, says that MDKA, which did design work at the old and new 7 WTC, brings the “right chemistry” and the right connections to the table. “They know how to work with the Port Authority; that’s a plus,” he says. “And it’s a pleasure to have them back working on 7 again.”

Silverstein, he says, has used the firm for two decades because “it offers excellent service with reasonable fees.”

In a business built on relationships, MKDA is a key collaborator, says Bill Peters, managing director of The Staubach Co. “I network with them for potential clients.”

So does Barry Lewen, senior managing director of Grubb & Ellis New York Inc. “When I’m searching for a customer or space, and I know Michael is working with the landlord, I try to get him involved. When I see Michael’s name attached, I know it is a quality landlord.”

Palmer “Chip” Sealy III, vice president and director of commercial leasing for Rockrose Development Corp., says that MKDA has “been a great help in Rockrose’s leasing its space. We are 95 percent leased, and MDKA is partly responsible for that because they create the nicest build-outs in Manhattan, which have since been copied by everyone in the industry. It’s not cookie-cutter space, they know what’s hot and they are one of the components in closing the deal.”

It is MKDA’s unique understanding of tenants’ needs that makes the firm so valuable, says Michael Berman, vice president of leasing for Equity Office Properties Trust. “Michael was a contributing factor in getting tenants to lease in our buildings,” he says. “He knows what tenants need and what works.”

What worked for Bill O’Connor, principal of O’Connor Capital Partners, were the site plans that MKDA drew up for two properties the company was considering leasing. The “flexible layout that would shrink or grow as needed,” he says, was a key factor in the decision to move the 40 employees to 535 Madison Ave.

Clyde Reetz, senior vice president of CB Richard Ellis, says that in the O’Connor deal and others, “MKDA makes my job easier because Michael makes my clients feel comfortable. His design convinced O’Connor it was an efficient, workable deal.”

For some clients, like Jeffrey White, senior vice president and CFO of Computer Generated Solutions, which moved to the 27th floor of 3 World Financial Center in 2005, the level of comfort is assured by hiring MKDA before the lease is signed. “This site was 10,000 square feet less than what we were looking for and what the other two finalist site we chose offered,” he says. “We asked MKDA whether we could fit our operations into 40,000 square feet, and they told us we could make it work but that 50,000 would give us more room for future expansion. We took the space and now are in negotiation for another 9,300 square feet in this building.”

John Clements, executive vice president of real estate and acquisitions for CBS Outdoor, which recently called upon MKDA to design office spaces in the Chrysler Building, says that “I use them almost exclusively for architectural and design decisions in the Northeast area. Generally speaking, they are more competent than any other group I deal with across the country.”

MKDA’s clean, classic designs have become synonymous with Manhattan’s commercial real estate aesthetic. “Our intent is to design spaces that look as good in 10 years as they do the day they are designed,” Jeffrey says.

Adds Michael, “Our philosophy is that we design toward clients’ expectations, which involves budget and level of design. We listen to the client, whether it’s a large corporation that wants us to manage projects or a company that is looking to take 50,000 square feet in a building and is looking at several spaces and wants us to do an analysis of the sites. So the design philosophy carries through to what the company is looking for.”

The space MKDA designed for CBS Outdoor at the Chrysler Building, for example, “will stay in style for many years,” says Lewen. “MKDA came up with something the client loved, and it helped ensure continued business for me.”

Tom Jasper, CEO of the 44-employee investment management company Primus Financial Products, hired the MKDA staff for a move to 360 Madison Ave. “because they came up with good ideas. They grasped the concept of open platform with lots of glass – no wood, only metal. One of the key elements was that they understood what I was looking for and didn’t waste my time changing my ideas.”

MKDA’s ability to come up with creative solutions for Primus and other tenants streamlines the leasing process, says John Johnson, the corporate managing director at Studley who has worked with MKDA on four projects this year alone. On another deal, for a financial tenant seeking 30,000 square feet, “MKDA was able to show the client how the floorplate would work and showed that because of the layout, they need 10 percent less space than they needed in another building under consideration.”

For Eze Castle Integration, which provides outsourced technology solutions to the hedge-fund industry, MKDA turned a 17,450-square-foot space at 529 Fifth Ave. into a state-of-the-art technology showcase that includes a floating ceiling and a glassed-in communications room that allows potential clients to see the technology in action. “MKDA was at every meeting and were ahead of the issues,” says Vinod Paul, a managing director of Eze Castle. “Having that personal relationship, that personal touch made the difference.”

The project, notes broker Peters, “was successful to a large degree because of MKDA’s ability to design the space.”

Landlords, tenants and brokers alike give kudos to MKDA for its hands-on approach: Either Milo, Michael or Jeffrey is directly involved in each project.

The brothers, both architects, work together by playing upon their personal preferences. Thus, Michael is the buttoned-down-suit-and-tie business side of the business, while Jeffrey sees himself more as the open-collar creative force. “We really do run our own show,” Jeffrey says. “Michael does take an interest in certain parts of the company that involve business development, while I may take more of the project management side. Our father is still going full steam, and he’s handling big projects. We pretty much do the same thing but put more emphasis on certain areas, and we sometimes overlap. We each can do a project from conception to construction.”

The fact that the principals are on call 24/7 is what really impressed O’Connor. “When you called, you dealt with Michael,” he says. You weren’t shuffled off to someone else.”

It is this accessibility that “promotes deals,” adds Sealy.

Peters agrees, saying, “For brokers, MKDA gives peace of mind from beginning to end. They are successful at getting everything done on time and keeping everyone in the loop.”

Quality and service – and longevity – are repeated themes in the history of the firm, which was founded in 1959 as a one-person shop.

“Their father got the ball rolling,” says Michael Laginestra, vice chairman of CB Richard Ellis, who began working with MKDA two decades ago. “And Michael pushed it up the hill and has taken it to a new level.”

It was the vast experience of MKDA that led Montalvo to choose MKDA for the Moody’s KMV move. “It was my first experience with a build-out,” she says. “I needed one-stop shopping – and that’s what I got. MKDA did the architectural and design work and worked with the general contractor. I would recommend MKDA as a partner.”

As MKDA goes forward, it will continue to build on its rich reputation. The new office in Stamford is only the beginning of Michael and Jeffrey’s plans. “We’re going to have more of a partnership with the real estate owner or broker,” Jeffrey says. “It’s going to be much more of a team effort, where we all go in as a team and have a closer working relationship with the contractor, broker and architectural firm to create a much more fluid way of working. This is something we’ve done from day one, but people now are beginning to realize that expertise and how it can be helpful to them to move tenants into a building much easier and quicker.”

After all, Michael adds, designing for the commercial market is all about flexibility. “In the real estate world, the future has to be planned for in the present, so in every deal we do, we try to plan two to five years down the road.”

(From the Cover of Real Estate New York, Fall 2006)