Africa Israel’s Laurie Golub on How to Time Times Square
Jotham Sederstrom April 19, 2011, 9:51 a.m.
As general counsel and managing director of business affairs for Africa Israel USA, Laurie Golub has led a successful restructuring of the company’s real estate portfolio, turning around assets like the Times Square Building, the Apthorp and 20 Pine. Ms. Golub, a former top executive at Forest City Ratner who describes herself as “in her 40s,” spoke to The Commercial Observer about the strategy.
The Commercial Observer: You were part of a team that spearheaded an initiative two years ago to restructure Africa Israel USA’s portfolio. Why was that necessary?
Ms. Golub: This company, like many other real estate development companies, bought assets at the height of the market and had real challenges when the market fell away. Our team came in and had, obviously, significant issues and challenges we faced in trying to restructure debt and figure out ways to maximize the value that we could get out of the assets.
Besides restructuring the debt, did you and your team also explore ways to reposition assets such as the Times Square Building, to throw out just one example?
Yes, yes. The great example is what we’re doing at the Times Square Building right now. We conceived, and are in the process of executing, a creative plan to achieve the greatest value for the Times Square Building. Because we had a building that was largely empty, we were able to come in, look at Times Square, understand the trends that we were seeing in terms of retail and hotels and residential and figure out a way to leverage the power of Times Square and repurpose this building in a way that made the most sense for the neighborhood and allow us to pull the most value out of it.
It was an office space before. About 40 percent of the building now is retail leasing. We’ve had tremendous success in capturing excellent retailers who want to be in Times Square and harness its power. We’re 80 percent leased with retail now.
And what about the hotel condominium aspect of the building?
About half of the building was put out on the market to be sold as a hotel. We have tremendous interest in the hotel condominium, and we’re also looking forward to, hopefully, having great news to share in the future on that. And the last 10 percent of the building—the top of the building—will be converted into residential condos and sold as luxury condos.
So we were able to look at a building that was bought at the height of the market in April 2007 and say, ‘What is the best and highest use for this building, in this neighborhood, at this time?’ And we came up with a really creative plan to achieve it. We had a very cooperative and patient lender in Banco Inbursa, and a very supportive partner with Five Mile Capital, and together we have been executing this purposing plan for the building.
You’re juggling quite a few other responsibilities at Africa Israel as well as a number of other assets, but would you identify the Times Square Building as one of the top priorities?
Yes, though I would tell you that we have lots of projects that we have been working to extrapolate the most value from. And some are in New York, like the Clock Tower project, the Apthorp, 20 Pine Street and, down in Miami, at the Marquee.
We’ve been having tremendous success—not only restructuring the debt on all of those but reworking all of those assets. We’ve sold more than 90 percent at 20 Pine, and on the Clock Tower we’re working on getting our structuring financing together to redevelop that project. That was an office building before and it will be repurposed into about 95 high-end luxury condominiums.
Speaking generally of the entire portfolio, when did leasing begin to pick up?
Gosh, sometime during the middle and end of last year, we started to see significant velocity in the retail leasing market, both strengthening rent and the pace of deals. We’ve signed two very important leases at the Times Square Building—one is with Daffy’s, and another is with Adventures Entertainment, which is a theme restaurant. And there’s significant interest in the remaining portions of the retail space there.
There’s growing strength and optimism in the market right now, and I see it in all different asset classes, both in the pricing that we’re commanding and the velocity.
You left Forest City Ratner two years ago at a time when the company was in the throes of a lot of development activity, including its well-publicized efforts to build the Atlantic Yards project in Brooklyn, which you played a role in helming. Why did you decide to leave the company and move to Africa Israel USA when you did?
I had spent a really exciting five and a half years at Forest City Ratner, but I felt that Africa Israel, because of the challenges that it faced, was a place that I could come in and really move the needle. I was able to put my legal background together with all of my hands-on real estate development and leasing experience and come in here and really make a difference in the company and help be a part of the team that has experienced tremendous success and also revitalize the city.
So, for me, it’s been a tremendous experience and a tremendous decision coming here. This company has trophy assets. They were all high-profile, and I knew that for me personally, it was a huge opportunity to combine my background and experiences and make an impact.