Full-Service Firm
A pioneering firm continues to evolve into an industry-leading real estate advisory firm.
Randall Shearin

Ivan Friedman jokes that he has been involved in the retail industry since age 5. When he elaborates and explains that the bulk of his early “experience” was obtained helping his Russian immigrant parents operate a family-run clothing store beneath their New York City apartment, it is hard not to wonder how much those early formative experiences helped influence his future in retail.

Because today, as president and CEO of New York-based RCS Real Estate Advisors, Friedman has assembled an experienced team that provides some of the most innovative and effective real estate advisory practices in the industry. RCS Real Estate Advisors is a uniquely positioned advisory firm that provides innovative solutions for the retail industry. Through three, focused, practice areas — growth and development; restructuring and portfolio optimization; and investment advisory and participation — it looks to unlock the potential of retail real estate.

RCS Real Estate Advisors has continued to evolve into one of the nation’s most respected and experienced real estate advisory firms, expanding its comprehensive array of practices to encompass new concepts and address changing realities. Most recently, RCS Real Estate Advisors underwent a 9-month long rebranding effort to better define its role as the preeminent firm partnering with clients in the retail industry to maximize the value of their real estate. As a result, the firm is officially unveiling an updated name (the company was formerly known as Retail Consulting Services), a revitalized company logo and visual system, an advertising campaign, and a new way of communicating its unique abilities to find and maximize the potential value within retail real estate.

Today, RCS Real Estate Advisors works with many of the most prominent names in the industry. National retail chains and independent regional operators in all aspects of the retail industry look to RCS Real Estate Advisors for guidance, and the firm provides additional services to banks, financial sponsors, law firms, accounting firms, turnaround specialists and creditors.

Charting the professional evolution of RCS Real Estate Advisors, and appreciating the full scope of what the company has been able to accomplish, reveals a firm that cultivates an informed and experienced professional culture; a firm that prizes creativity and innovation; and a firm that has been able to successfully translate an intimate familiarity with the inner workings of the industry into a premier slate of real estate offerings.

Early Insights

The story of RCS Real Estate Advisors’ beginnings echoes many of the same themes that still resonate with firm principals today. Like the firm’s continuing growth; RCS Real Estate Advisors’ founding was a logical, almost organic process that began with a fairly basic, intuitive truth: people needed help.

“It all started with phone calls,” explains Friedman.

By the early 1980s, Friedman had been involved in the industry for over 30 years. An experienced retailer with an extensive professional resume, he had owned and operated regional and national retail companies, specialty stores and department stores. Perhaps more importantly, those experiences had instilled in him a profound understanding of how businesses work, how merchandising works, and how real estate relates to the retail business.

When CEOs and other industry professionals started calling Friedman to pick his brain for advice, that experience began to pay dividends. Friedman’s detailed understanding of the sometimes complex dynamics between landlord and tenant, along with some fresh insights into how real estate realities intersect with the needs, priorities and perspectives of retailers, enabled him to provide powerful and effective guidance. And with early success, the demand grew rapidly.

“A light bulb went off,” says Friedman. “We realized that, hey, there is a real need out there for this expertise.” With occupancy costs and rents going up dramatically in the inflationary cycle of the late ‘80s, that nascent restructuring business took off, and RCS became known as a pioneer in helping retailers restructure their real estate holdings.

“It is important to recognize that it is not just the real estate expense that matters, it’s the understanding of how these occupancy costs relate to the rest of the business,” says Friedman. One of our foundational observations is that the concept of market rent actually plays only a partial role, and very few retailers appreciate what a substantial component occupancy costs actually represent in terms of the overall cost of their operation and how those costs can be optimized.”

RCS’s early success established the firm a well-earned reputation as bankruptcy and rent relief experts. But that same knowledge base would also serve as both a resource and a catalyst for much, much more as RCS Real Estate Advisors began to expand its retail real estate practices. Ultimately, that restructuring expertise would prove to be just the first of what has become a diverse range of tools and strategies that RCS Real Estate Advisors is able to deploy on a client’s behalf.

Diverse Business Model

In many important ways, RCS Real Estate Advisors’ extensive early advisory and restructuring experience has served as a foundation for much of the firm’s current success. That “nuts and bolts” familiarity with retail and real estate fundamentals has enabled RCS Real Estate Advisors to diversify and expand its practice areas to include growth and development; restructuring and portfolio optimization; and investment advisory and participation.

Executive Vice President Eileen Mitchell explains, “We have been able to leverage our experience — which has provided us with both a database and a knowledge base of retail company operations and retail real estate experience — into a professional posture that not only helps our clients to survive, but to thrive in a competitive marketplace.”

In addition to Ivan Friedman and Eileen Mitchell, RCS Real Estate Advisors’ principals include Senior Vice President Spence Mehl, Senior Vice President Roger Burghdorf, Senior Vice President Mitchel Friedman and Vice President Warren Kiersh. With diverse executive and professional backgrounds that include experience with, among other things, merchandising, product development, store operations, leasing, commercial real estate litigation, investment banking and strategic planning, RCS Real Estate Advisors is able to service its clients with an unmatched degree of broad retail experience.

The result is a potent combination of expertise, resources and relationships. That combination can pay significant dividends. In 2006, for example, RCS Real Estate Advisors and its partners purchased the designation rights for Tower Records’ leases when they were in bankruptcy. RCS Real Estate Advisors then sold the most desirable leases to the highest bidders for a very significant return — in 90 days. In fact, RCS Real Estate Advisors contributed its own capital to purchase the Tower Records designation rights. “We can apply our knowledge to help people make money, and we are putting our money where our mouth is,” says Mitch Friedman.

As one of the principals responsible for RCS Real Estate Advisors’ rapidly expanding growth and development offerings, Roger Burghdorf has a keen sense of what makes the firm’s offerings unique. He says that the key to the firm’s success in this arena is not just in understanding the right sites, but the right sites within sites; store positioning, retail offerings, sales patterns and landlord relationships all factor into the larger equation. “We work closely with every one of our clients to understand their priorities and maximize their growth potential, using our knowledge and established industry relationships to identify and capitalize on new opportunities,” he says.

“We can not only help our clients get into the right spaces at the right prices to begin with,” says Mitchell, “but we can also help them find and secure the best potential locations for future stores, and negotiate the best possible rent and lease terms as well.”

Mitchell explains, “As an advisor and service partner, we never forget that every company is different, and there is more that goes into assessing a site’s potential than a demographics spreadsheet. What works for one firm might be a poor fit for another. We are committed to providing dedicated personal attention, not just because it helps ensure that we never succumb to a one-size-fits-all attitude, but because by understanding our clients better, we are able to provide a higher level of overall service.”

Those industry relationships include long term executive-level contacts with both landlords and major developers, ensuring that RCS Real Estate Advisors’ clients’ interests are heard. Clients also benefit from the volume of RCS Real Estate Advisors’ transactions; at any given time, RCS Real Estate Advisors controls from 25 million to 30 million square feet of retail space. This volume equates to valuable insights and a breadth of knowledge that is a valuable tool at the negotiating table.

“We know what concessions landlords have granted to other tenants, so we know what to ask for,” says Friedman.

That proactive philosophy carries over into RCS Real Estate Advisors’ investment advisory services, where overcoming challenges and transforming underperforming property into high-performance business assets can unlock untapped potential and realize sometimes dramatic results. Whether in an advisory role, or alongside professional partners as an equity participant, RCS Real Estate Advisors plans to continue to expand its investment advisory services.

The firm’s diverse capabilities also complement each other, creating a synergy of service options that generate added efficiencies and additional value. For example, for its private equity clients, RCS Real Estate Advisors provides pre-acquisition analysis, post-acquisition restructuring of assets, and planning for future expansion initiatives. This allows RCS to work alongside its clients to get the most out of the existing potential and capitalize upon exciting new opportunities.

Bright Future

As RCS Real Estate Advisors has grown and its practice offerings have become more comprehensive, an underlying pattern has become clear — one key theme that has remained a constant throughout.

“It is all about value,” says Friedman. 

That commitment to value — identifying it, maximizing it, and passing it on to clients — has informed every decision that RCS Real Estate Advisors has made over the last two and a half decades.

“Our value-oriented approach has opened the gateway to working with healthy retailers who want to address the bottom 20 percent of their locations because if you can fix that, you can make the rest of the company that much stronger,” says Mehl.

With a responsive, agile and visionary business model, RCS Real Estate Advisors is in the enviable position of being able to adjust rapidly to the industry’s inevitable legal, structural and economic shifts. In many ways, the firm’s experience and connections will enable RCS Real Estate Advisors to remain ahead of the curve, providing clients with new services and perspectives as the retail and real estate industries continue to change and evolve.