As the partner at Stroock & Stroock & Lavan credited with essentially designing the law firm’s real estate practice, Leonard Boxer has worked with the city’s largest real estate owners and developers. As REBNY’s general counsel, meanwhile, the 72-year-old attorney has been advising the group in the rent-regulation debate. Last week Mr. Boxer spoke about that, what his clients ask of him postrecession and Tricky Dick’s desk.
The Commercial Observer: As general counsel of the Real Estate Board of New York, you’re intimately involved with crafting the group’s strategy with regard to new rent-regulation legislation currently being debated in Albany. What’s going to happen?
Mr. Boxer: I’m hoping rational heads will prevail. I mean, we need something to be able to help not only the landlords but the tenants to get that through. It’s very hard to speculate about what the legislature will do, but hopefully our new governor, Cuomo, who I think understands the issue, will have some influence in getting something positive done that helps everybody.
It’s not in anybody’s best interest that the legislation concerning the tenancies should not be addressed and extended.
What is the Real Estate Board of New York’s official stance?
I don’t want to go on record with their official stance because it changes all the time. I’d have to speak to [REBNY president Steven] Spinola. So it’s unfair to ask at this point. They’re dealing directly with the issue, and Steven is the best one to answer that.
The current laws end next month. It’s still evolving?
Yeah, that’s because it’s a moving target. There are so many issues today in the politics of the legislature that it changes from day to day.
Is there any single fringe group that would like to dismantle the current laws entirely?
I would think that a tenants’ advocacy group would like to see all of the benefits come their way, without really understanding that the landlords are a big part of this state and this city, and that their viability is dependent on having rational laws concerning tenancies.
From a legal perspective, does the language of such legislation stay the same each time rent regulations return to Albany for a vote?
Well, it starts the same, but then there’s all sorts of suggestions to modify it, which has all of the political issues intertwined with the legislation.
From what I understand, you were offered Richard Nixon’s desk as a gift about a decade ago after negotiating a deal to move into 180 Maiden Lane. What happened?
When [former chief executive of CBS and head of the insurance firm CNA Financial] Larry Tisch and I really shook hands on the lease for Stroock to take over Webster Sheffield’s lease, he thought that I was the catalyst to get it done and that I worked through issues that were involved with our move from 7 Hanover to 180 Maiden Lane.
And he was so appreciative, and when CNA took over the space from Webster Sheffield it included all of the furniture that was left behind, which included this desk that was Richard Nixon’s desk. That was after he had left the presidency and came to Webster Sheffield in New York; and he was of counsel or whatever, but he was involved with the practice. And he had that desk, and Larry thought it would be a nice gesture to offer me the desk-because I was the catalyst.
Did you take it?
No, absolutely not. It was atrocious, it was beat up. It must have been a desk that they had given him when he came here. It certainly wasn’t a desk that he had when he was the president. And I heard a rumor that they even offered the desk to his library in California–and they turned it down, too. I would have been ashamed to say it was my desk, let alone the former president’s.
Have the assignments you’ve been working on for your real estate clients changed dramatically since before the economy collapsed, or have things stayed the same?
Well, there are more refinancings. A lot of the debt is coming due, and many of the people who own significant buildings–who are many of our biggest clients–are looking to refinance their debt. Many people are looking at this marketplace because of the low cap rates of selling viable properties because there are so many people out there trying to acquire real estate assets.
It used to be a client would call and say they have a property up for sale, they think they have a buyer and etc. Now, every deal seems to be an auction and no matter what you ask for your properties–at least in the New York area–we find that you should think twice about the first offer you receive because there’s so much capital looking to invest in New York properties that it doesn’t make sense to just take the first offer that comes your way.
So that’s what I get involved with lately with a lot of our major clients: either the disposing of properties or really reaching for properties that are available for sale.
How long do you expect that to last?
I think interest rates are a function of it. I mean, look at people who have available cash. Look at what the banks are paying in interest. I mean, it’s negligible what you can earn with sitting capital–and therefore people who have capital available are looking for a new viable alternative where they can make more than they could by taking the historic safe haven of putting the money in the bank. They look at the fact that real estate is just coming back but it hasn’t reached its full potential, and they want to invest their capital in real property because that, they feel, is a way to be able to generate income.
You also find players who are playing the debt game. They’re trying to lend to own, which is becoming a new phenomenon in our town because there are default obligations on mortgages. Many of the institutions are looking to clean up their balance sheets and they will sell mortgages very often at a discount, and players who like the real estate will take a shot at buying the debt at a discount in the hopes that the owner will continue the default.