His grandfather pioneered real estate syndication in the United States back in 1934. Now, Anthony Malkin is carrying the flag for W & M Properties, a privately held, New York-based real estate firm. Since 1989, Malkin has structured over half a billion dollars worth of acquisitions and completed more than $700 million in financings. Malkin-led entities now have controlling interests in over 2 million sq. ft. of suburban office space and 7.4 million sq. ft. in Manhattan. Malkin sat down with NREI recently to discuss his business strategy in a depressed market.

NREI: What's your business philosophy these days?

Malkin: It's a really simple game. In real estate you make your money on the buy, and everything else is just a lever to manipulate the return. Real estate is a world where things are never as good as they look, or as bad as they look. The way you make money is by knowing when people are wrong.

NREI: Is uncertainty crippling the real estate market right now?

Malkin: The more uncertain things are, the happier I am. Let other people get scared and go away, we're going to be here. And right now, if we have nothing to do, we'll keep busy with our portfolio.

NREI: Have we seen the investment sales market peak yet?

Malkin: What's the tipping point in capital flows into real estate? Who knows? But we haven't seen it yet. We've made a premeditated effort to limit our exposure. We did that back in 1999 and 2000 and a little in 2002 because prices were so high. Could I have made more money selling today? Maybe. Did I sell at the top? Pretty close to, if not at, the top.

NREI: What is a major strength in your portfolio today?

Malkin: All of our properties are multi-tenanted office properties. By having so many tenants, we are insulated from major upheavals in our rent roll. Of the suburban portfolio, only 2% of the space is vacant. The New York City portfolio is a bit stickier to sum up, but the vacancy in this portfolio is roughly 10%.

NREI: This is a tenant's market. How does that change your approach?

Malkin: We were aggressive when times were bad in the late 1980s. Now we are incredibly aggressive. We've always paid commissions 100% on lease signings — we did that when times were bad, and we did it when times were good. Neither a broker nor a tenant will want to do repeat business or refer people to a building where they've had a bad experience.

NREI: Has the sublease glut affected your business?

Malkin: Our sublease percentage is very low — only 0.5% of the suburban portfolio is on the sublease market. The sublease is harder to gauge in the New York City portfolio. We don't like vacant space in our buildings. We work hard to free the tenants of the burden of going through a subletting process. We also go through a process of seeking referrals from our existing tenants.