We talk to Karolina Niedenthal, founder of Partners International about the Warsaw premium market from 1994 to 2004.
How did your adventure with the real estate market begin?
I founded the company in 1994 and ran it by myself for some time. I had one of the first mobile phones – a heavy model which I leased. I drove around with this phone, with a calendar on my lap, checking properties and simultaneously scheduling appointments with clients. I managed everything from my car, working very hard and for long hours. Eventually, I decided to get some help and hired assistants. At my peak, I had four or five people and an intern. Initially, I focused mainly on rental properties, and the first sales transactions appeared in the late 90s. At one point, I had so many clients that I didn’t want any more because I couldn’t handle them all.
How was a premium property defined in the years 1994-2004?
Standards and criteria were different then than they are now. At that time, luxury properties were primarily rented by foreigners, representatives of companies and embassies. They were considered premium clients. I found a niche and had private contacts with embassies and foreign friends who came to Poland to represent large international companies. To make it easier for them to find a home, I first asked basic questions: where they worked, where their children would go to school, what their spouse did, whether they liked gardening, and only then would I match properties.
A luxury apartment in those times was one that had more than one bathroom, a well-equipped modern kitchen, was reasonably laid out, and well-located. The most prestigious parts of the city included Mokotów, Wilanów, Sadyba – the southern part of Warsaw, as well as Saska Kępa due to the French school and the German embassy located at Dąbrowiecka Street at that time. For years, I mainly rented properties on Saska Kępa to Germans. Anin was also considered prestigious because it had larger, well-equipped villas. Of course, Konstancin was also highly valued. Foreigners liked Żoliborz, but most rentals were in the southern part of the capital, mainly due to the schools. Houses were mainly rented by families, and apartments by single people or childless couples.
What else characterized the rental market at that time?
Houses were simpler, but in terms of area, I was surprised – they were quite large, sometimes even excessively so. I feel sorry for the owners now, maintaining a 400-square-meter house with 5-6 bedrooms, each with its own bathroom. In the 90s, some of my foreign clients were astonished that such expansive houses were being built in Poland. Currently, the market is normalizing. At that time, rental prices were calculated in dollars with conversion to złotys. Tenants often wanted contracts in dollars. Prices ranged from $10 to $20 per square meter per month plus other fees.
Did clients have specific requests?
Oh, yes. There were many various requests, and I was known for being able to make anything happen. In my opinion, with the right approach, anything is possible. I had a client from a very renowned bank who rented a segment and demanded that everything be changed: the layout, enlarging the rooms. He had specific requests regarding the wallpapering of the living room. At that time, Ikea was a novelty on the Polish market, and most apartments were furnished with Ikea furniture because there wasn’t much choice.
Once, I rented a very nice apartment owned by an architect from Switzerland. The interior was very charming, furnished with old furniture. However, Ikea ruled, and I had clients who wanted everything new – even the cutlery and plates were bought at Ikea. In those days, everything in the interior was matched to the tenant. That was the market. Owners enjoyed investing in real estate. They bought several apartments, which were priced incomparably lower than today. Clients often asked me for advice on tenant requirements, and those properties rented well afterward.
What were the biggest challenges associated with trading premium real estate?
Oh… it’s almost embarrassing to say, but I often upset homeowners by insisting they clean thoroughly, wash the kitchen, and check the cabinets. Cleaning was a problem. It was hard to ensure clients that a rental property was clean. At that time, there were no professional cleaning companies.
Did clients pay in cash back then?
They generally paid in cash. Owners couldn’t imagine waiting for money. These were very simple transactions. Preliminary contracts were rarely prepared; we went straight to the notary. The client came with a suitcase of money, and everyone sat and counted it. Escrow accounts weren’t yet functional in Poland. Very rarely, money was transferred to an account.
Did people buy apartments as investments for renting out?
The Irish went wild in Poland at one point. I’ll never forget when a few Irish engineers came. We entered the building using the construction elevator, wearing helmets, and they bought several apartments there. They asked me what the capital return rate was. I was taken aback. I said 8.5%. They said it was impossible. I calculated it rather uncertainly but confirmed 8.5%. It turned out to be true. When they asked me that question, I had no idea what they were talking about – I was completely green, just learning.
Which transaction particularly stuck in your memory?
I had many pleasant transactions because I befriended these people. Some of these contacts have lasted to this day. He was previously the director of the Austrian Cultural Institute. When he came to Poland, someone advised him to ask me to find him something. He had very little time, literally a few hours, and had to return to Vienna. I took him to Bukowa Street, to a house we couldn’t enter because it was locked, and he didn’t have time to reschedule. We stood outside the house, and he asked me to describe what was inside. I told him about the layout of the rooms, and we saw the garden through the fence. He asked if it was the house for him, given that he had two children and a wife. I confirmed, and he decided to rent it without seeing the interior. We are still friends to this day.
What was the most expensive property you rented?
It was a pavilion with a large hall on Lądowa Street that a German publishing house was interested in. I don’t remember exactly, but I rented it for around 30-40 thousand złotys per month. The pavilion owners were so delighted that everything went smoothly that they invited me to a wonderful dinner in gratitude. I also remember a transaction when I had an office on Krakowskie Przedmieście. It was July, the windows were wide open, and we could hear jazz from the Old Town. A client was with me in the office, we were signing a contract for renting a house for a lot of money, and two other clients were waiting in the corridor to sign other contracts. One of them had champagne, which we drank while listening to jazz. These were very pleasant moments. They all became my regular clients, of course. I think I was very lucky. I love interacting with people and simply like people, which certainly helped me.