Crain's Cleveland Business

'Little guy' trying harder in investment broker biz


Ken Ippolito, the brash, 29-year-old president of Ideal Realty Co., apologizes for wearing a suit because he prefers to wear jeans and tennis shoes and believes appearance does not matter in the investment brokerage business he's building from a Beachwood office.

"We're a hard sell," he said without mincing words. This kind of sale takes this kind of aggressiveness and arrogance."

Mr. Ippolito's 2-year-old firm specializes in brokering shopping centers and apartment buildings in the $500,000 to $2-million range. It takes high-pressure tactics to sell such properties, he said, because investors are not motivated by business needs, such as space requirements, or by the emotions which motivate a home buyer.

He also doesn't like to be called a broker; he prefers to be called a closer. He said he doesn't show prospects properties. Rather, he gives them the address and tells them to get the custodian to show them. "That way, you don't waste time making excuses," he said.

His daily newspaper ads peddling exclusives are peppered with things such as "SOLD!!!" or "HEART ATTACK!" (which promoted the offering of an apartment building) as they attempt to appeal to aspiring Donald Trumps. But Mr. Ippolito, whose family owns the Ideal Macaroni Co. here, claims his tactics produce results. In the last 15 months, he said, he has closed 15 sales of apart-ment buildings and shopping centers, with a total dollar volume of $12 million. Other brokers such as Gordon Priemer, senior vice president of the Ostendorf-Morris Co. brokerage firm, describe that as a large number of transactions, though not a significant dollar volume.

In any case, Mr. Ippolito is preparing to grow. By late summer he plans to relocate from his 100-square-foot office in the Office Place in Beachwood to a 3,600-square-foot office in the same building. He also intends to add three employees in the process; currently he has one.

Mr. Ippolito said he thinks there's opportunity for a firm specializing in smaller investment sales (he does no leasing) because larger brokerage firms want to focus on larger transactions. He said most of the market in his price range is served by residential brokers who want to break into commercial sales.

Although a handful of small brokerage firms cater to the niche, it's one the larger firms do not necessarily ig-nore, although most tend to focus on sales of $2 million and more. At O-M, for example, Mr. Priemer said the firm generally does not handle properties below $500,000 in value because most professional real estate investors won't look at a property worth less than $200,000.

But Mr. Priemer agrees it's a desirable niche because of the volume of small buildings available, and his firm deployed two brokers to cover it in the past year. Richard Ferris, a principal at IPC Cos., an investment brokerage, syndication and management firm, said a handful of small firms cater to that end of the market. He said his own firm started out focusing on apartment brokerage in that price range but has found it more profitable to work on its own investments and syndications.

Some brokers would view activity of other brokers as a means of effectively marketing property, since there would be more bodies to push it. But Mr. Ippolito isn't among them. He said he doesn't like to co-broker be-cause he does not like to split commissions.