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April 2008

Peter Mesos and Len Zangas

The health of the commercial real estate market is very good, say Peter Mesos and Len Zangas

Peter Mesos and Lenny Zangas have been in the commercial real estate business together practically since they became in-laws and they complement their skills: Mesos, 67, calls Zangas a “hands-on guy” while Mesos, an old marketing exec at XEROX before he got into real estate, is the advance scout on property and what he calls the “rainmaker.”: “I’m going to go and buy the property and put the deal together. Len will get out in the field and work with the managing agents. He’s extremely good at that.” They got started in Astoria, but have expanded their holdings everywhere (Mesos diplomatically calls himself “a city boy”) and their Vision Enterprises office on Northern Boulevard is now a fixture of the Miracle Mile. NEO spoke with Peter Mesos.

How good is the current health of the commercial real estate market?

Good. Very good. The better markets in Long Island are very strong. The commercial side in these areas is very strong. And the retail is strong, also: you don’t see many vacant stores. As landlords, you want your tenants to survive, because if they survive, you survive, too. And in Queens the commercial market is even stronger. In Manhattan it’s outrageous, of course. We deal in Manhattan, Queens and Nassau, basically.

Is Long Island still considered the suburbs?

You tell me. I don’t think so. But for a number of reasons companies like the Long Island climate. In our case, we moved to Long Island for the sake of our commuter tax. Our business generates out of Nassau, as opposed to Queens, which helps us tax-wise. Manhasset has the big buildings on Northern Boulevard and they’re booked. You can rent space there for half the price of Manhattan: between $25 and $35 a square foot as opposed to double that in the city and here they have both parking and tax advantages.

You were originally where?

We were originally in Astoria, and then we went to Bayside, but now Lenny and I live here, him in Manhasset, me in King Point. For me, over thirty years altogether in Long Island.

When did Vision Enterprises get started?

In the ‘70s, though me and Len were doing this prior to that. I remember I was on the Long Island Railroad one day when I read that Gov. Nelson Rockefeller had just passed the decontrol law. And I told Len the following day, We have to buy ourselves a rent-controlled building. So we went out and got a couple of guys from XEROX to chip in and we bought our first building in Astoria. Thirtieth-Avenue and 29th Street. It had stores and 66 apartments. And there were ten of us involved in that deal, with Len and me the managing agents.

What made you decide to leave marketing and get into real estate full time?

I liked it. I realized I had to get into this full-time. I went full-time in ’76. We opened our first office on the third of the Crystal Palace on Broadway. We were above the lawyer on the second floor.

What do you like about the business?

Everything. Love it. I really do. I think it’s exciting, it has great leverage—the leverage is what I like: to be able to buy a building that will give you income is great leverage. It’s like going to a bank and saying I want to put in $100,000 dollars but I want you to give me a six percent return on a million. They’re not gonna like that. But in the commercial real estate market, the industry has a normal growth of 5 or 6 percent per year. It sounds simple, it’s the best of both worlds: you’ve got your investment and you got your leverage increasing 5 or 6 percent a year.

What’s it like working with your brother-in-law?

Oh, terrible…Actually, he’s best. We get along. The two of us are perfect. We have different personalities and it works.

How would you describe your personalities?

Oh, don’t do that to me.

You seem to be a people person.

Well, yeah, whatever that means. I like people. And Lenny is very good hands-on. He’s a hands-on guy. He likes to touch, feel, be there. I’m kind of the rainmaker. And we knew our strengths at the time and we both followed them. I’m going to go and buy the property and put it together. For instance, the building that we bought yesterday, Lenny is going to handle it. He’s good at that. He’s got managing agents and he’s a hands-on guy, so basically we’ve learned how to work off each other and not do the same thing. In the beginning we started doing the same thing: we started handling a building together—worst thing we ever did. He was doing that and I was doing that and we decided, okay, you take your buildings and I’ll take mine and I was kind of going out there and finding the properties which is what I do today too. Lenny knows what the managers are doing. I don’t. I have no clue what they’re doing out there and he does.

What do you see as the future as your business?

I hope good. I have found in our market the price has always gone up and down. And gone up again, but each time it’s gone up, it’s met a new plateau. It went up in the 70s, then dropped in the 80s, late 80s it made new highs, then in early 90s we were dying—just dropped terrible—and came 92, 93 we turned around. And you buy buildings in rent rolls. Today in Manhattan we’re talking 20 times, 22 times the rent roll, and in Queens were talking 12 times the rent easily. You meet new plateaus. But it takes patience and deep pockets. It will eventually hit new plateaus. It will happen every time. It’s just a matter of being around for it.

Besides doing business here, what made you decide to live in Long Island?

My wife and I came out here and saw a very pretty house that a fellow Greek had and I liked it and I bought his house and that’s how it came about. I was 30-something at the time. I bought my first house before I got married: it was a two-family and I was 22 years old. With no money. I had no money at all and I never rented in my life, by the way, though I made my money on rentals. Yet I never rented in my life. I went from my mom’s house right to a two-family that I bought. I took out a home loan, a personal loan for $2000, I was getting engaged and my young bride took out the loan, but she was too young and I forged her birth certificate. She went to the bank where she was working and she got a $2000 loan and I put another $1000 together on my own—never borrowed from my dad--and with $5000 I got a mortgage for 20 and I bought my first two-family house in Jackson heights in ‘77. I lived in the small apartment below the three-bedroom, and I rented the five apartments above. Best thing since sliced bread. I had $200 dollars coming from upstairs and my mortgage was $160. It was great.

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