2012 Owners Magazine

By Daniel Geiger 9/19/12 7:45am

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Fuzzy Math: Property Taxes Haven’t Officially Risen in More Than a Decade. So Why Have Collections Doubled?

A few years ago, a city Department of Finance official noticed irregularities in the way certain residential properties had been appraised by the agency, leading to slightly lower-than-normal valuations.

To compensate, the official suggested the department decrease its assessments across the board for the group, which mostly comprised single-family homes and small co-op buildings in an area of one of the boroughs.
Dropping the valuations slightly below usual thresholds would reduce the taxes the city could collect, but only by a few percentage points—a seemingly harmless amount in the face of the billions of dollars the agency assesses—and it would allow the department to restore uniformity and equanimity to its calculations, one of the mandates of its process.

What appeared to be an innocuous adjustment, however, garnered a backlash that was swift and forceful. Top officials at the department were summoned to Mayor Bloomberg’s Upper East Side townhouse. There they were confronted by the mayor and irate senior executives from the city’s budget office, the person said.

Though the theme of the meeting was ostensibly to discuss the irregularities and why the department had chosen lower assessments, the underlying message was clear: don’t trifle with the city’s revenue.

“I feel like we got taken out to the backyard to get whipped,” the source said, requesting anonymity because of the sensitive nature of the meeting. Read More

By Ian Thomas 9/19/12 7:30am

2012 Owners Magazine

Does Size Matter? In an Industry Filled with Goliaths, Davids Abound

On a balmy July afternoon, a few members of SL Green’s management staff pushed their way through the revolving doors of 711 Third Avenue, the company’s 500,000-square-foot, 20-floor tower between 44th and 45th Streets.

They passed through the gallery-style lobby, framed by both Greek Thassos white and De Savoi grey-blue marble, carrying a few boxes. An original Hans Hoffman mosaic mural, designed in 1956, adorned the hallway farther down.

They sliced open the boxes and put on green aprons emblazoned with the firm’s stylized logo—and so the ice cream party for the building’s tenants began.

In a market full of haves and have-nots, there are benefits to being the biggest fish in the pond. Read More

By Carl Gaines 9/19/12 7:15am

2012 Owners Magazine

New York City’s Commercial Real Estate Dynasties: The Next Generation

On a recent late-summer conference call, William Rudin, Michael Rudin and Samantha Rudin Earls—three members of one of New York City’s most venerable commercial real estate families—were engaged in a bit of dactylonomy.

The three weren’t trying to come up with the number of buildings currently in the family’s commercial and residential portfolio, but rather were adding up the number of family members currently working at the company.

“That’s two, four …” Some names were mumbled. After a little back and forth, they settled on nine.
In a city known for the prominence of a handful of families in commercial real estate, single names like Rudin, Durst, Rose, Muss and LeFrak have come to symbolize the industry. These families have survived the worst economic catastrophe since the Great Depression while witnessing, along with the rest of us, the rise of real estate investment trusts, the top three of which now have a combined New York portfolio of roughly 67.6 million square feet.

In a era when the word ‘dynasty’ is often overused and left to trail behind words like—let’s face it—‘sports’ or ‘Kardashian,’ it finds true meaning when one surveys these biggest families in New York commercial real estate. Many of them, after all, are generations old and still control vast portfolios of properties while wielding the type of power that only comes with reputation and recognition. Read More

By Ian Thomas 9/19/12 7:00am

2012 Owners Magazine

Bernard Mendik and Harry Helmsley. (Photo courtesy Real Estate Board of New York.)

As the World Turns: Leasing Activity Impact Markets First, Then Owners

As a pair of 26-foot steel beams were hoisted high above Manhattan on April 30, the crowd below spoke of resilience, hope and remembrance.

One World Trade Center had just hit a height of 1,271 feet, making it the city’s tallest building. Port Authority Executive Director Pat Foye said in a press conference that the building will “anchor Lower Manhattan and its rebirth for many generations to come.”

But tourists and tristate residents aren’t the only ones noticing the change in the city skyline. A number of commercial property owners are looking to the tower and other developments as a hopeful bellwether for the future, despite what most analysts still describe as a stagnant market.

The numbers speak for themselves. Real estate brokers leased 12.9 million square feet through July 31, 2012, a 28 percent drop from the 17.9 million square feet inked during the same period in 2011, according to a CBRE report. Vacancy sat at 7.5 percent, no change from a year earlier. Read More

By The Editors 9/18/12 7:00am

2012 Owners Magazine

41 Photos

The 2012 Owners Inquisition

It all began with a simple premise: If you could ask the city’s biggest, most powerful commercial real estate owners 15 questions, what would they be, and what would that list look like?

Sure, it would include market predictions and boilerplate real estate stuff, like views on Midtown South’s dramatic uptick in popularity and its Read More