Owners Magazine 2018: Talking Shop With NYC’s Top Landlords and Developers

Nicholas Bienstock
Managing Director, Savanna

Is the great trophy asset sale a thing of the past? The marginal offshore buyer of 2015 that was accumulating trophy assets at uneconomic prices is gone. Trophy assets will be sought after, but they will trade at prices that are more in line with fundamental value.

 Which trophy would you buy if money were no object? 111 Eighth Avenue.

Has retail hit bottom? (If not, what has to happen first?) Small-scale neighborhood retail in New York City is doing just fine. But the larger retail boxes are still in trouble and the market has not yet found a floor. In my neighborhood, on Third Avenue on the Upper East Side, entire blocks are vacant and have been for several years. The good news is that given the population density, spending power and foot traffic, every square foot in Manhattan will be leased. But before that happens many larger boxes will need to be subdivided and rents will need to come down. But if you own a B- or C+ mall in a secondary or tertiary market, the lights are going out and they may never be turned back on.

Have the tax changes been good, bad or neutral? How come? The jury is out on how they will impact New York City.

What’s your take on what’s happening to middle-market real estate firms like Eastern Consolidated, RKF and MHP? Investment sales transaction volume in New York City peaked in 2015 at over $60 billion and then fell off a cliff in 2016 and 2017. In an environment with less business, the largest firms with diversified revenue streams survive and small firms with light overhead survive, but the middle-market players, which still have to support a large infrastructure, are under the most pressure. It is not surprising that after two tough years, many of those firms are closing or being bought by larger players.

How does the investment sales market get itself out of its rut? The market peaked in New York City in 2015. The frothiest transactions (The Waldorf, 237 Park Avenue, etc.) were being driven by offshore buyers who were paying uneconomic prices for assets. Those players left the market in 2015 and we are three years into a healthy correction which has brought prices back in line with fundamental economics. That correction has now reached a point where buyers and sellers are able to transact. As a result, we have been able to buy $1 billion of real estate in the past 18 months.

Which tertiary market do you like best? None of them. We decided about 10 years ago to focus our business solely on New York City (the deepest and most liquid market in the world) and to build a team with the deepest possible expertise here. We lose some investors who want broad diversification, but we gain others that want that focus and expertise. In New York City, you can execute your business plan through good times and bad. In a tertiary market, when things turn down, there is no tenant and there is no buyer.

Our current bull market can’t last forever… When’s the next recession and how do you plan to protect yourself from it? Stick to your knitting. Keep leverage at moderate levels. Expect a correction and make sure you are capitalized to weather it.

What action could the city take to improve transportation for New Yorkers? Fund the Gateway Tunnel. Keep renovating the airports. Build the new Penn Station. I travel to second- and third-world countries that have better transportation infrastructure than we do in New York.

Will Donald Trump be on the ballot in 2020? If so, who will be facing him? Who will win? Yes, he will be on the ballot. Michael Bloomberg will be facing him! He did a spectacular job for New York City and he would definitely get my vote. I hope he runs.

LIGHTNING ROUND:

Netflix or Hulu? Netflix.

Kombucha or cold brew? Street coffee.

Simpsons or South Park? Neither.

Robert Mueller or Rudy Giuliani? Mueller.

Peloton or SoulCycle? SoulCycle with my teenage daughters.

Gold or Bitcoin? Real estate, baby!

Amazon or Barnes & Noble? Amazon.

Plaza or Waldorf? St. Regis.

Sweetgreen or Dig Inn? Sweetgreen.

Beto or Cruz? Cruz.

Marty Burger
CEO, Silverstein Properties

Is the great trophy asset sale a thing of the past? Absolutely not. People are going to sell their assets when they need to, by necessity or by desire. Anbang is going to sell the Strategic Hotels & Resorts portfolio because they have to. There will be buyers and there will be financing as long as there are trophies.

Which trophy would you buy if money were no object? I would buy the entire World Trade Center complex from Larry Silverstein! It’s the trophy asset of all trophy assets.

Has retail hit bottom? (If not, what has to happen first?) It really depends on what it was bought at. There is a lot of vacant space and you can lease those spaces, just not at terms that owners want—that’s why those spaces are empty now.

Have the tax changes been good, bad or neutral? How come? It’s too early to tell.

What’s your take on what’s happening to middle-market real estate firms like Eastern Consolidated, RKF and MHP? Middle-market firms have great talent and they have been approached by bigger firms that want talent. Talent is everything today and that’s why many of them have disbanded after the talent went out, or they got purchased.

How does the investment sales market get itself out of its rut? You need sellers to sell things that make sense at sensible prices. Otherwise there is nothing for sale. There is financing out there so it’s just a matter of having actual product to sell. Many people don’t want to sell because they don’t know where they want to put their money.

Our current bull market can’t last forever… When’s the next recession and how do you plan to protect yourself from it? I think different sectors of our industry will have legs, and I think interest rates will play into this. I wouldn’t buy things with crazy projections in order to protect myself and I would put more equity in deals than I would a few years ago because you never know what’s going to happen.

What action could the city take to improve transportation for New Yorkers? Continue to improve the subways. Train to plane. Put a subway station at 41st Street and 10th Avenue.

Will Donald Trump be on the ballot in 2020? If so, will be facing him? Who will win? Yes. Don’t know.

LIGHTNING ROUND:

Netflix or Hulu? Netflix.

Kombucha or cold brew? Cold brew.

Simpsons or South Park? South Park.

Robert Mueller or Rudy Giuliani? Robert Mueller.

Peloton or SoulCycle? SoulCycle.

Gold or Bitcoin? Gold.

Amazon or Barnes & Noble? Amazon.

Plaza or Waldorf? Plaza.

Sweetgreen or Dig Inn? Sweetgreen.

Beto or Cruz? Beto.

John Catsimatidis
Chairman, United Refining Company / Red Apple Group

Is the great trophy asset sale a thing of the past? It is never a thing of the past. People make mistakes. They get themselves jammed up. There will always be a “great deal” around somewhere. We just have to take a careful look.

Which trophy would you buy if money were no object? The MetLife Building—the “old Pan Am Building”—by Park Avenue in Midtown Manhattan. This is somewhat the heart of New York City by Grand Central Terminal with advantageous transportation and strategic access. I would try to bring back the helicopters and heliport! (When I had my office at a nearby building and owned an airline, I used their heliport, being able to come into Manhattan or leave it without any traffic.) 

Has retail hit bottom? (If not, what has to happen first?) Retail still has a way to go to hit bottom. However, retail is indeed in trouble. The impact of internet sales will make it even more difficult for brick-and-mortar retail to compete. Retail will have a hard time turning around unless this sector provides unique, dynamic experiences which nobody else has. (The recent “case study” about the decline of Sears, once America’s leading retailer, relates to what happened in history with horseshoe manufacturers.)

Have the tax changes been good, bad or neutral? How come? Overall, they’ve been good, especially national tax cut policies. However, inner-city government officials, with New York City included, continue to raise taxes and fees. These increases adversely affect many businesses (and their employees), which have to compete with the internet. Government officials imposing major increases to the minimum wage are severely damaging many retailers. New York City must acknowledge the growing number of vacant storefronts. The economy is strong; however, consumers are shopping in different ways to escape paying taxes and overhead costs. Today, many people do as much as 90 percent of their shopping online. As an example, when the taxes, fees and costs associated with owning a car today are evaluated, this becomes why an increasing number of people are using Uber or Lyft rather than owning a car. Also, vendors making New York City deliveries are surcharging when they take their costs into account.

How does the investment sales market get itself out of its rut? With interest rates now rising, buying for investment is becoming precarious and tricky, when evaluating the rate of return. Banks will become more demanding on terms. It is taking longer to sell now than it normally would. The rut continues!

Which tertiary market do you like best? I have been making investments in Brooklyn. Queens has ripe potential. Then, investments and developments need to be done in communities which offer effective transportation access. Staten Island has potential; however, I do not feel it has fully developed its transportation.

Our current bull market can’t last forever… When’s the next recession and how do you plan to protect yourself from it? The stock market earnings and prices are at an all-time historic high—and they keep going up! As my friend [White House economic adviser] Larry Kudlow describes, strong earnings drive up markets. If Wall Street does well, if the dollar continues to be strong, foreigners will continue to invest in U.S. real estate because they believe it is the safest. My company is widely diversified between real estate, energy and investments. Within the past 30-plus years, one of those sectors is always strong to compensate for others.

What action could the city take to improve transportation for New Yorkers? New York City needs to restrict the bike lanes, and not close nor limit as many streets for bikes. These bike lanes have caused gross inconvenience to many. They have altered residential and business relationships in neighborhoods where retail and commerce (which provides tax revenue and employment) have become distressed. After a number of years now, proportionately, relatively few people are using bikes. (I do not ever recall seeing any elected official using a bike! Perhaps, they should lead by example, giving up their vehicles to become bikers!)

Will Donald Trump be on the ballot in 2020? If so, will be facing him? Who will win? Nobody really knows. The political climate changes week to week! There appears to be enormous satisfaction and confidence throughout the business and corporate community with what President Trump has accomplished in the past two years. Democratic candidates could be: Andrew Cuomo, Joe Biden, Terry McAuliffe and Hillary Clinton. Who can raise the most money and be the most qualified? Since our nation is “capitalist” and not “socialist,” I doubt whether Elizabeth Warren or Bernie Sanders would actually become the Democratic nominee.

LIGHTNING ROUND:

Netflix or Hulu? Netflix, it appears they have stronger acceptance than Hulu.

Kombucha or cold brew? I have tried cold brew coffee and I enjoy it!

Simpsons or South Park? Simpsons.

Robert Mueller or Rudy Giuliani? Rudy!

Peloton or SoulCycle? SoulCycle.

Gold or Bitcoin? Gold. I do not believe in Bitcoin. It strikes me as a blackjack deal.

Amazon or Barnes & Noble? Amazon.

Plaza or Waldorf? Waldorf depending on what the outcome is when it gets remodeled.

Sweetgreen or Dig Inn? Dig Inn!

Beto or Cruz? Ted Cruz!

Isaac Chera
Principal, Crown Acquisitions

Is the great trophy asset sale a thing of the past? Since when can owning the best be a thing of the past?

Which trophy would you buy if money were no object? The one that I can buy at the right price.

Has retail hit bottom? (If not, what has to happen first?) I can’t predict where the bottom is, but it feels like retailers and landlords are focused on making it work.

Have the tax changes been good, bad or neutral? How come? Haven’t seen the effects.

What’s your take on what’s happening to middle-market real estate firms like Eastern Consolidated, RKF and MHP? Normal course of life. Small stay small and nimble, big get bigger and middle get lost.

Which tertiary market do you like best? I won’t even buy in secondary markets.

LIGHTNING ROUND:

Netflix or Hulu? Netflix.

Kombucha or cold brew? Cold brew.

Simpsons or South Park? Simpsons.

Peloton or SoulCycle? Peloton.

Amazon or Barnes & Noble? Amazon.

Sweetgreen or Dig Inn? Sweetgreen.

Ric Clark
Senior Managing Partner and Chairman, Brookfield Property Partners

Is the great trophy asset sale a thing of the past? I don’t think so. Brookfield continues to be on both sides of trophy transactions. In New York alone, we recently sold 245 Park Avenue, sold an interest in One Liberty Plaza, bought the leasehold interests of 666 Fifth Avenue and 1100 Avenue of the Americas, and announced an agreement to acquire the Forest City portfolio.

Which trophy would you buy if money were no object? Money is always an object, so that’s a tough one. With the next generation of iconic properties (1 and 2 Manhattan West, 425 Park Avenue and One Vanderbilt, to name a few) coming to Manhattan though, investors should be even more excited about New York City.

Has retail hit bottom? (If not, what has to happen first?) Probably. Negative headlines aside, the future of retail is promising. If you are in a good location and are willing and capable of investing in your property to reshape the retail experience, there is tremendous opportunity. In addition to acquiring General Growth Properties and their more than 160 U.S. malls, we just picked up seven Bleecker Street storefronts. Check out “Love, Bleecker,” [a Brookfield revitalization initiative on the Greenwich Village street] when you have a minute.

Have the tax changes been good, bad or neutral? How come? Some good, some bad. Losing the deductibility of state and local taxes has caused some to rethink living or working in higher-tax states. At the same time, tax rates cuts have helped the economy, and we are looking closely at Opportunity Zones, such as Greenpoint [in Brooklyn] and Mott Haven [in the Bronx], that should prove to be a catalyst for property investment in areas that need it.

How does the investment sales market get itself out of its rut? A little patience. The market is still digesting after a strong couple of years.

Which tertiary market do you like best? We are building in Greenpoint [Brooklyn] and Mott Haven [in the Bronx]. Over the next four years, in these markets we will deliver 3,340 new apartments, including hundreds of affordable units. The acquisition of Forest City adds commercial properties in Downtown Brooklyn to our portfolio, as well as the ability to build 6 million square feet of additional apartments in Jersey City [N.J.] over time.

Our current bull market can’t last forever… When’s the next recession and how do you plan to protect yourself from it? Economic fundamentals remain strong, so we may be in a longer cycle than normal. We’ve always respected the cyclical nature of real estate and financial markets, so we tend to invest with a long-term horizon and look for opportunities where we can immediately add value through redevelopment initiatives (e.g. 5 Manhattan West, 1100 Avenue of the Americas and 666 Fifth Avenue).

What action could the city take to improve transportation for New Yorkers? I would start by enacting congestion pricing to alleviate traffic issues and raise funds for mass transit, and by building the [Brooklyn-Queens Connector] BQX from Red Hook [Brooklyn] to Astoria [Queens] to open connections between neighborhoods historically underserved by public options and the rest of the city’s transportation network, making it easier for local residents to access job and educational opportunities throughout the city.

LIGHTNING ROUND:

Netflix or Hulu? Hulu.

Kombucha or cold brew? Cold brew.

Simpsons or South Park? South Park.

Peloton or SoulCycle? Come check out the Peloton studio at 5 Manhattan West when it opens next year.

Gold or Bitcoin? Gold, for now.

Charles S. Cohen
President and CEO, Cohen Brothers Realty Corporation

Is the great trophy asset sale a thing of the past? Absolutely not. This is a dynamic marketplace where there are always trophy assets that will trade hands, especially given the profile of the current group of owners, funds, REITs, foreign nationals—they’re in the business for appreciation.

Which trophy would you buy if money were no object? I wouldn’t tell you because I may be working on one.

Has retail hit bottom? (If not, what has to happen first?) It’s all supply and demand and rental rates; if rates reached a certain level you’d see more rapid absorption. In the vacant retail we have, we know vacancies are perceived as too high. Landlords should look for someone whose business works well in your space and then you should work it out. It’s all about your costs.

Have the tax changes been good, bad or neutral? How come? I don’t think we’ve seen the results because nobody paid taxes. Let’s discuss it next spring—but there’s a lot of consumer confidence and positive movement, which is long overdue.

How does the investment sales market get itself out of its rut? I think what you need to realize is that as interest rates rise, cap rates are affected, and expectations of returns are different. Right now, there’s rising interest and there’s a disconnect in some places between what things are being sold for and rents that can be achieved.

Which tertiary market do you like best? I really don’t operate in tertiary markets—the cost of building is the same everywhere.

Our current bull market can’t last forever… When’s the next recession and how do you plan to protect yourself from it? I don’t think anyone knows, but I would say: don’t put all your eggs in one basket; worry about your down side; be conservative and defensive.

What action could the city take to improve transportation for New Yorkers? I really don’t know how to manage it; you should seek an equilibrium point [between cars and pedestrians], but I don’t know. I walk to work.

Will Donald Trump be on the ballot in 2020? If so, who will be facing him? Who will win? No idea.

LIGHTNING ROUND:

Netflix or Hulu? Netflix.

Kombucha or cold brew? Don’t know.

Simpsons or South Park? South Park.

Robert Mueller or Rudy Giuliani? Neither.

Peloton or SoulCycle? Peloton.

Gold or Bitcoin? Gold.

Amazon or Barnes & Noble? Amazon over the long term, but I’m a Barnes & Noble customer.

Plaza or Waldorf? That’s not much of a choice.

Sweetgreen or Dig Inn? I don’t know.

Beto or Cruz? Not a Cruz fan.

Christopher Conlon
Executive Vice President and COO, Acadia Realty Trust

Is the great trophy asset sale a thing of the past? Not at all. New York has more than any other city. What’s gone is the market that will pay anything for these trophies regardless of core fundamentals like rent relative to market.

Which trophy would you buy if money were no object? Any trophy where rent-to-sales are healthy and where retailers perform robustly and enthusiastically.

Has retail hit bottom? (If not, what has to happen first?) Bottom is never an exact science, but rent has corrected in most New York City submarkets. Retailers are out and about testing concepts and expanding others. We are very excited to see new brands showing up and validating submarkets as relevant and important to omnichannel execution.

Have the tax changes been good, bad or neutral? How come? All of the above. The stimulus provided by the tax changes has benefited the securities markets, but the loss of certain deductions has put pressure on residential sales. This has been compounded recently by rising rates.

What’s your take on what’s happening to middle-market real estate firms like Eastern Consolidated, RKF and MHP? There’s room for everyone so long as they can differentiate themselves. Smaller firms without clear and well-articulated individual strategies may suffer.

How does the investment sales market get itself out of its rut? Unrealistic sellers need to become self-aware. Expecting new retail rent commitments last seen in 2015 will get us nowhere.

Which tertiary market do you like best? We are investing fund dollars into Sacramento [Calif.], Santa Fe [N.M.], Dearborn, Mich., North Carolina, etc. Each of these markets hold tremendous stability, retail performance and other healthy metrics not often appreciated by the investment sales market.

Our current bull market can’t last forever… When’s the next recession and how do you plan to protect yourself from it? Above my pay grade. We look at the future with appropriate caution, structuring and sober awareness. We do not think that our current low-growth, low-inflation and low-interest rate environment can last forever.

What action could the city take to improve transportation for New Yorkers? Address the substance abuse, addiction and homelessness realities, which are advancing at alarming rates. Look at San Francisco, Seattle, Portland [Ore.] and other cities, which are under siege at the moment. Let’s not wait any longer for that day to arrive.

Will Donald Trump be on the ballot in 2020? If so, will be facing him? Who will win? I am hoping we get to see Michael Bloomberg again. We could sure use his calm statesmanship right now. But I doubt we’ll see this. I have no idea what 2020 will bring.

LIGHTNING ROUND:

Netflix or Hulu? Netflix.

Kombucha or cold brew? Earl Grey Tea.

Simpsons or South Park? Archer.

Robert Mueller or Rudy Giuliani? Mueller.

Peloton or SoulCycle? SoulCycle… got to get out of the house.

Gold or Bitcoin? Gold.

Amazon or Barnes & Noble? Both. Barnes needs to shrink the fleet and the footprint ASAP.

Plaza or Waldorf? Miss the Waldorf.

Sweetgreen or Dig Inn? Dig Inn… like a home-cooked meal.

Beto or Cruz? Neither.

Tommy Craig
Senior Managing Director of NY Tri-State Region, Hines

Is the great trophy asset sale a thing of the past? Not at all. In the 40 years I have been active in real estate in New York, high-asset valuations for permanent real estate have been a constant, punctuated occasionally by moments (sometimes violent) when there is a correction. Mostly, the class of buyers has simply changed from offshore entities in the Middle East, to REITs, to offshore buyers in Europe and more recently in Asia. Real estate returns on a risk-adjusted basis in gateway cities like New York City have outperformed all other alternative asset classes over the last several decades.

Which trophy would you buy if money were no object? The Statue of Liberty. 

Has retail hit bottom? No. However, the “surviving” retailers are now well-advanced into reformatting street-front retail to support their e-commerce programs with omnichannel strategies.

Have the tax changes been good, bad or neutral? How come? Only when we complete our tax returns for 2018 in April of 2019, will we appreciate the cynical politics behind limiting deductions. But the silver lining is that these tax changes may force better controls on spending at the local level in New York City and New York State.

What’s your take on what’s happening to middle-market real estate firms like Eastern Consolidated, RKF and MHP? The combination of high valuations and generational change has certainly encouraged the sale of these high-quality boutique businesses. These middle-market real estate firms were founded and led by great leaders who will continue to make a positive difference in New York City within the real estate community and beyond.

How does the investment sales market get itself out of its rut? Continued local employment growth, realistic underwriting and reasonable pricing that take into account that we are relatively late in the cycle.

Which tertiary market do you like best? The best tertiary markets connect culture with nature across the age spectrum and mix different generational groups. These markets fit the quality Hines likes to call “surban.” They typically offer a combination of senior living, multifamily housing for those entering the workforce, shared academic facilities and a walkable environment with easy access to mass transportation. There are plenty of these places in the New York area. Certainly, medical spending will also be at the leading edge of opportunity given our local demographics. And there will be a tradeoff between price and proximity to Manhattan as the region’s urban core.

Our current bull market can’t last forever… When’s the next recession and how do you plan to protect yourself from it? The next recession is in the future. We have protected ourselves through three cyclical changes in New York City in the last three decades. We plan to protect ourselves by continuing a business model that has more diverse product sectors and a better balance between stabilized recurring fees and episodic new projects. And, above all, by continuing to treat people inside and outside the firm fairly, because no market condition lasts forever.

What action could the city take to improve transportation for New Yorkers? We should shift responsibility for the New York City subway system from elected officials to an elite and dedicated board of experts so that we can undo the compromises made in the mid-1970s, when the city was bankrupt and ceded power to the New York State government. We cannot leave something this important to a political class that has mismanaged this irreplaceable resource in such a monumental way. The model in my mind for this structure is the way the LMDC [Lower Manhattan Development Corporation] entity was created with civic leaders and experts such as John Whitehead, Alex Garvin and others to help plan the reconstruction of Downtown Manhattan after 9/11.

Will Donald Trump be on the ballot in 2020? If so, will be facing him? Who will win? Very likely. The Democratic Party will have to sort out if fully one half of the country is really “deplorable.” If that is the case, the Democrats will need to select a candidate whose strategy will be to activate the so-called “progressive” base. Our country would benefit from someone who remembers that the United States was established out of 13 colonies with a political architecture founded on the rule of law, the U.S. Constitution and the protection of the Bill of Rights, checks and balances and a federal system based on compromise and the distribution of power—and not merely through government entities. As David Brooks and Yuval Levin constantly say, we need a “thick society” involving families, local schools, churches, community groups, baseball teams and the like, from the bottom up. We need to recover our pluralistic traditions and support the idea that we are all Americans, so we can dismiss the pernicious effects of identity politics and tribalism.

LIGHTNING ROUND:

Netflix or Hulu? Netflix.

Kombucha or cold brew? Not qualified to answer.

Simpsons or South Park? Simpsons.

Robert Mueller or Rudy Giuliani? Rudy, though he is a bit out of balance these days.

Peloton or SoulCycle? Peloton.

Gold or Bitcoin? Gold.

Amazon or Barnes & Noble? Amazon.

Plaza or Waldorf? Plaza.

Sweetgreen or Dig Inn? Dig Inn.

Beto or Cruz? Cruz.

Ronald Dickerman
Founder and President, Madison International Realty

Is the great trophy asset sale a thing of the past? Definitively not. Trophy means quality and location. Great locations with dense demographics and demand drivers will always be sought after by investors worldwide.

Which trophy would you buy if money were no object? Many, such as those we already own—Madame Tussauds 42nd Street complex, Sony Center in Berlin, etc.

Has retail hit bottom? (If not, what has to happen first?) Yes, but retail will be constantly evolving just as it has for the last 50 years.

Have the tax changes been good, bad or neutral? How come? Good in that they have bolstered corporate earnings, capital spending and macro-economic growth. Bad in that they have stifled individuals’ motivation to buy residential property in high-tax states, such as California, New York, Connecticut and New Jersey.

What’s your take on what’s happening to middle-market real estate firms like Eastern Consolidated, RKF and MHP? Fee compression and commoditization are impacting all businesses. It is imperative that firms differentiate and innovate to stay competitive as they grow.

How does the investment sales market get itself out of its rut? The current market is a function of the late-stage business cycle, interest rates and prospective rental growth.

Which tertiary market do you like best? None. We only target gateway markets.

Our current bull market can’t last forever… When’s the next recession and how do you plan to protect yourself from it? No one has the perfect crystal ball. We see a recession in 18 to 30 months and are buying quality assets with long duration and indexed leases with strong dividend yields. The idea is to be paid generously to wait.

What action could the city take to improve transportation for New Yorkers? Allow autonomous vehicles.

Will Donald Trump be on the ballot in 2020? If so, will be facing him? Who will win? Donald Trump will definitely be on the ballot and will win if Democrats don’t identify a pragmatic, centrist candidate. The Democratic Party has moved left, creating challenges for its own viability.

LIGHTNING ROUND:

Netflix or Hulu? Netflix.

Kombucha or cold brew? Kombucha.

Simpsons or South Park? South Park.

Robert Mueller or Rudy Giuliani? Robert Mueller.

Peloton or SoulCycle? SoulCycle.

Gold or Bitcoin? Gold.

Amazon or Barnes & Noble? Amazon.

Plaza or Waldorf? Plaza.

Sweetgreen or Dig Inn? Sweetgreen.

Beto or Cruz? Beto.

Douglas Durst
Chairman, The Durst Organization

Is the great trophy asset sale a thing of the past? We build trophies, we do not sell them.

Which trophy would you buy if money were no object? Central Park.

Has retail hit bottom? (If not, what has to happen first?) There is a lot going on in the retail market. Amazon is crushing some retailers, wage mandates hurt restaurants and some retail corridors are doing great while others falter. One myth that needs to be busted is that landlords make money when their space is not rented.

Have the tax changes been good, bad or neutral? How come? They have been bad for the deficit, bad for New Yorkers, but good for corporate profits.

How does the investment sales market get itself out of its rut? I like a good downturn; bargains abound.

Which tertiary market do you like best? Astoria [Queens]—anywhere Cynthia Nixon won is a good place to invest.

Our current bull market can’t last forever… When’s the next recession and how do you plan to protect yourself from it? We diversify our tenants and their lease rollovers.

What action could the city take to improve transportation for New Yorkers? Congestion pricing is a good start. I’m not sure we can scoot our way out of the transportation crisis, but at least there are new ideas.

Will Donald Trump be on the ballot in 2020? If so, will be facing him? Who will win? God help us.

LIGHTNING ROUND:

Netflix or Hulu? Netflix.

Kombucha or cold brew? Kombucha.

Simpsons or South Park? Simpsons.

Robert Mueller or Rudy Giuliani? Mueller.

Peloton or SoulCycle? I like bikes that move.

Gold or Bitcoin? Real estate.

Amazon or Barnes & Noble? Barnes & Noble.

Plaza or Waldorf? Hotels are too expensive in New York City; that’s why I own.

Sweetgreen or Dig Inn? Dig Inn.

Beto or Cruz? Beto.

Jake Elghanayan
Principal and Senior Vice President, TF Cornerstone

Is the great trophy asset sale a thing of the past? No, there will always be a premium to own iconic properties—similar to a great piece of art. More importantly, a trophy should have enduring value to space users over time as well; you can see this in classic New York City office buildings like 9W57 [the Solow Building], the GM Building, and even our Carnegie Hall Tower, which have remained in demand for decades, and deservedly so.

Which trophy would you buy if money were no object? Well, I love history so owning Grand Central has been very fun. I also love the original modernist office buildings on Park, like 500 Park Avenue, the former Pepsi-Cola building. Most satisfying of all would be to develop a ground-up building that stands the test of time as a trophy.

Has retail hit bottom? (If not, what has to happen first?) I’m not sure. I think the apparel industry has yet to fully adapt to the online channel. Right now, a shopper can go to a department store, browse a selection, try things on, but then order online from a completely different company. The department store bears a lot of the customer acquisition costs in that example and yet doesn’t see any of the revenue. There’s a value to the in-store experience, but right now common industry practice does not protect the in-store value creation.

Have the tax changes been good, bad or neutral? How come? It hasn’t had a meaningful impact on our investment decisions yet.

What’s your take on what’s happening to middle-market real estate firms like Eastern Consolidated, RKF and MHP? The brokerage business can be lucrative but it’s tough and human capital is mobile. I don’t think it’s exceptional for firms to go out of business and new ones to rise.

How does the investment sales market get itself out of its rut? Sellers have to recognize that cap rates have risen and there is as much likelihood that rates are going to continue to rise as that they’re going to return to the historic lows of the past decade.

Which tertiary market do you like best? We’d like to expand into transit-oriented developments in the Greater Metropolitan Area, as well as maybe one or two other cities in the U.S.

Our current bull market can’t last forever… When’s the next recession and how do you plan to protect yourself from it? On the development side, we are our own general contractor, so our business model is to maintain a steady pipeline of projects, meaning we gravitate to longer projects that are not cycle-dependent. On the non-development side, we’re opportunistic and we never believed that rates would remain low for as long as they have, so I think our opportunity set should expand.

What action could the city take to improve transportation for New Yorkers? Andy Byford [the president of New York City Transit Authority] seems to have put forward a thoughtful plan, Fast Forward, and congestion pricing could help pay for it. With the capital commitment required in that plan, the [Metropolitan Transportation Authority] MTA also owes it to straphangers to confront reforming its labor practices and rationalizing construction costs. Lastly, I want to make a plug for the Regional Plan Association’s “Triboro” plan to repurpose surface freight rail lines from the Bronx to Brooklyn and Queens for mass transit, which seems like one of the most cost-effective ways of expanding the system.

Will Donald Trump be on the ballot in 2020? If so, will be facing him? Who will win? [Michael] Bloomberg was a great mayor. I was recently at breakfast with two veterans of the industry, a well-known developer and a land use attorney, who both said Bloomberg was the best mayor in their lifetimes—and would probably be an exceptional president. But I think Joe Biden better reflects the mood of the country and is a safer bet against Trump.

LIGHTNING ROUND:

Netflix or Hulu? Netflix.

Kombucha or cold brew? Cold brew.

Simpsons or South Park? Simpsons.

Robert Mueller or Rudy Giuliani? Mueller.

Peloton or SoulCycle? Mirror!

Gold or Bitcoin? Gold.

Amazon or Barnes & Noble? Amazon.

Plaza or Waldorf? Plaza.

Sweetgreen or Dig Inn? Sweetgreen.

Beto or Cruz? Beto.

Justin Elghanayan
President, Rockrose Development

Is the great trophy asset sale a thing of the past? No, I think there will always be a market for them. For investors throughout the world, there is an extra excitement and enthusiasm for owning an irreplaceable piece of New York City.

Which trophy would you buy if money were no object? The Rockrose offices are on Madison Square Park, so I have a soft spot for the Flatiron Building. It’s so iconic, and people from around the world recognize it as quintessential New York City.

Has retail hit bottom? (If not, what has to happen first?) Certain retail corridors were oversaturated with the same types of generic retail, but now there are new opportunities. We’re seeing great new concepts in casual dining and health and fitness, and opportunities for independent local retailers. Areas that are not heavily trafficked will have problems, but for busy areas, retail will continue to evolve and will be fine.

Have the tax changes been good, bad or neutral? How come? Tax changes may negatively impact sales in the condo and homeownership markets, but with the rental and commercial markets, we haven’t seen much impact.

What’s your take on what’s happening to middle-market real estate firms like Eastern Consolidated, RKF and MHP? When markets slow, firms get gobbled up and some can’t compete with larger competitors. Institutional real estate investors may also feel more comfortable with the bigger names in the business during these times.

How does the investment sales market get itself out of its rut? Run-ups in valuations may create a disconnect between buyers and sellers, but we remain bullish on the New York market. Buyers need to work harder to find opportunities, but assets will continue to trade.

Which tertiary market do you like best? As a long-term holder, I’m interested in any dense, growing market with great public transportation options.

Our current bull market can’t last forever… When’s the next recession and how do you plan to protect yourself for it? People in this business long-term know and accept that it’s cyclical and always need to protect themselves. We focus our residential development on rentals, which are more adaptable to changing markets, and we never get too highly leveraged.

What action could the city take to improve transportation for New Yorkers? We need much greater investment in public transportation, and a steady, long-term funding source that keeps our system safe, efficient and affordable. Congestion pricing to support public transit investment could be an important part of the solution.

Will Donald Trump be on the ballot in 2020? If so, will be facing him? Who will win? Hopefully not.

LIGHTNING ROUND:

Netflix or Hulu? Netflix.

Kombucha or cold brew? Cold brew.

Simpsons or South Park? Simpsons

Robert Mueller or Rudy Giuliani? Robert Mueller.

Peloton or SoulCycle? Peloton.

Gold or Bitcoin? Gold.

Amazon or Barnes & Noble? Barnes & Noble.

Plaza or Waldorf? Plaza.

Sweetgreen or Dig Inn? Sweetgreen.

Beto or Cruz? Beto.

Ziel Feldman
Chairman and Founder, HFZ Capital Group

Is the great trophy asset sale a thing of the past? No, but pricing cap rates move with interest rates.

Has retail hit bottom? (If not, what has to happen first?) Always a function of pricing.

Have the tax changes been good, bad or neutral? How come? Generally net positive for pass-through taxpayers.

What’s your take on what’s happening to middle-market real estate firms like Eastern Consolidated, RKF and MHP? General consolidation in all service-provider businesses.

How does the investment sales market get itself out of its rut? Need to close the bid-ask gap.

Which tertiary market do you like best? North Philadelphia.

Our current bull market can’t last forever… When’s the next recession and how do you plan to protect yourself for it? Diversifying investments by investing in different asset classes.

Will Donald Trump be on the ballot in 2020? If so, will be facing him? Who will win? As of today, yes. Best guess, a current woman governor, senator or congressperson. Too close to call if job creation and wage growth continues.

LIGHTNING ROUND:

Netflix or Hulu? Netflix.

Kombucha or cold brew? Cold brew.

Simpsons or South Park? South Park.

Robert Mueller or Rudy Giuliani? Rudy Giuliani.

Peloton or SoulCycle? Peloton.

Gold or Bitcoin? Gold.

Amazon or Barnes & Noble? Amazon.

Plaza or Waldorf? Six Senses.

Sweetgreen or Dig Inn? Springbone.

Beto or Cruz? Cruz.

Ken Fisher
Partner, Fisher Brothers

Is the great trophy asset sale a thing of the past? Not at all. As long as the funds, both foreign and domestic, are available and as long as the U.S. is viewed as a safe place to keep money, then there will be a market for trophy assets.

Which trophy would you buy if money were no object? My personal favorite is the Chrysler Building. The floor sizes might not be that great, but I love the Chrysler Building. I also love the Seagram Building, with its bronze curtainwall, and of course, Rockefeller Center would be great to own.

Has retail hit bottom? (If not, what has to happen first?) I don’t know if the retail market has hit rock bottom, but there’s no doubt that the traditional brick-and-mortar stores have been challenged by Amazon and other online shopping options. At the same time, we are seeing a shift toward experiential [retail], especially in locations with tons of foot traffic. We’re currently developing a project in Las Vegas called Area15, which weaves together immersive experiences, events, art, restaurants and bars.

Have the tax changes been good, bad or neutral? How come? Initially, I think the changes have had a positive effect. The economy has continued to add jobs, and you have to credit the tax cuts for some of that. The lower corporate tax rates have also lowered the cost of doing business in the United States, which is a good thing. That said, it’s too early to say what impact, if any, these changes will have on the deficit, on inflation and on long-term corporate investment.

What’s your take on what’s happening to middle-market real estate firms like Eastern Consolidated, RKF and MHP? In the natural order of things, middle-market firms are usually the first targets for companies who want to expand, so I don’t think it’s anything that hasn’t happened before in many industries. The ones that are strong are still around—as are the ones that have been able to reinvent themselves. 

How does the investment sales market get itself out of its rut? I’m not an expert in investment sales, but I’m hearing a lot about assets being overvalued, so perhaps it’s time for a correction. Of course, you have to consider that getting out of a rut isn’t always your doing. It’s often dependent on outside conditions that you really can’t control.

Which tertiary market do you like best? There seems to be some increasing momentum in the tertiary markets of late. Many of the gateway cities have reached an impasse in terms of valuations and available development opportunities, which has left an opening for business-friendly markets like Nashville [Tenn.], Austin [Texas], and cities in the Midwest. If I have to pick one, I’ll go with Nashville…because I love the music.

Our current bull market can’t last forever… When’s the next recession and how do you plan to protect yourself from it? I agree that the bull market can’t last forever, but no one invented the crystal ball that can tell you exactly when the next recession will come. At Fisher Brothers, we are insulating ourselves by proactively investing in our buildings and leasing space as quickly as possible. Our best insurance is making sure our assets are up-to-date, well-positioned and fully leased to credit-worthy tenants.

What action could the city take to improve transportation for New Yorkers? Well, I’m filling out this questionnaire during U.N. week, so my gut reaction is that we need a lot less cars on our streets! Of course, we need to invest heavily in our subways to create faster and more reliable commutes. That’s first and foremost. As for less expensive options, let’s keep adding Citi Bikes and encouraging people to walk a little more.

Will Donald Trump be on the ballot in 2020? If so, who will be facing him? Who will win? As of now, yes, he will be on the ballot. Beyond that, I have no idea.

LIGHTNING ROUND:

Netflix or Hulu? I love Hulu because of the old TV shows, but I have to go with Netflix.

Kombucha or cold brew? Black coffee.

Simpsons or South Park? South Park is funnier.

Peloton or SoulCycle? SoulCycle.

Gold or Bitcoin? Gold.

Amazon or Barnes & Noble? Barnes & Noble—I’m old fashioned and enjoy books.

Plaza or Waldorf? Plaza.

Sweetgreen or Dig Inn? Dig Inn.

Scott Galin
President and CEO, Handro Properties

Is the great trophy asset sale a thing of the past? No. There will always be institutions and high-net-worth individuals who want to own an iconic New York City property, both for income generation and the gravitas that comes with including an asset of this caliber in your portfolio.

Which trophy would you buy if money were no object? I’ve always been smitten by the Seagram Building!

Has retail hit bottom? (If not, what has to happen first?) Possibly for the multi-channel retail companies. But brick-and-mortar stores with no material e-commerce component may continue to see further regression. It is extremely difficult in today’s retail market to succeed without at least some level of e-commerce.

Have the tax changes been good, bad or neutral? How come? The impact of the new tax changes is very difficult to determine at this early date. Numerous issues need to be vetted, tested and opined on by the IRS before a definite determination can be reached. I’m still receiving at least one webinar invitation a week, hosted by major accounting firms or law firms, covering various aspects of the new tax laws because the details have yet to be finalized.

What’s your take on what’s happening to middle-market real estate firms like Eastern Consolidated, RKF and MHP? As in many mature sectors, scale has become even more significant in real estate brokerage. A boutique brokerage with a specific niche has an opportunity to carve out a legitimate, competitive corner of the market for itself. But the mid-level brokerages, because they lack the competitive size and scale of the global firms, are going to struggle. The same thing has happened with law firms, accounting firms and other service sectors.

How does the investment sales market get itself out of its rut? I am not expert enough to opine in any thoughtful manner.

Which tertiary market do you like best? We have made several investments outside of the New York metropolitan area. In general, acquisition prices in New York are still not attractive to us. Markets outside of New York continue to provide interesting opportunities.

Our current bull market can’t last forever… When’s the next recession and how do you plan to protect yourself from it? The timing of a slowdown is difficult to predict, but we have attractive debt in place for the mid- or long-term. We are also staying aggressive in the pursuit of maintaining very high renewal rates with tenants across our portfolio.

What action could the city take to improve transportation for New Yorkers? Seriously reconsider congestion pricing for tolls and bridges into New York City. London and several other cities in Europe have implemented congestion pricing quite successfully. We know that it works. The question is whether there’s enough political will to put this program into action. Governor [Andrew] Cuomo announced earlier this month that he’s now leaning in this direction.

Will Donald Trump be on the ballot in 2020? If so, will be facing him? Who will win? Probably. Biden and Biden.

LIGHTNING ROUND:

Netflix or Hulu? Hulu.

Kombucha or cold brew? Espresso.

Simpsons or South Park? Flintstones.

Robert Mueller or Rudy Giuliani? Mueller.

Peloton or SoulCycle? Peleton.

Gold or Bitcoin? Gold!

Amazon or Barnes & Noble? Amazon.

Plaza or Waldorf? As of today, I take the one that’s open…Plaza.

Sweetgreen or Dig Inn? Sweetgreen.

Beto or Cruz? Beto.

MaryAnne Gilmartin
Founder and CEO, L&L MAG

Is the great trophy asset sale a thing of the past? Absolutely not, this is New York.

Which trophy would you buy if money were no object? I’d love to control the New York by Gehry Building at 8 Spruce Street again.

Has retail hit bottom? (If not, what has to happen first?) Not at all. I still believe in retail—only bad retail is struggling. The “clicks-to-bricks” trend shows us that people still want to buy goods they love in person. We are all in the hospitality business.

Have the tax changes been good, bad or neutral? How come? The jury is still out on the long-term implications. The Opportunity Zones are quite intriguing. One hundred billion dollars of new investments in 8,000 new locations around the country will have a real impact on capital gains and promises to be catalytic to places like Newark [N.J.].

What’s your take on what’s happening to middle-market real estate firms like Eastern, RKF and MHP? Consolidation is the way of the world. And talent trumps everything—the corporate mindset that minimizes this does so at its peril.

How does the investment sales market get itself out of its rut? Deal flow has slowed because of uncertainty about where we are in the cycle. Course correction on land pricing will goose activity but the fundamentals are still solid in New York.

Which tertiary market do you like best? West of the Hudson River and the Bronx.

Our current bull market can’t last forever… When’s the next recession and how do you plan to protect yourself from it? I think we are slow and steady for the near term. Corrections and recessions present good strategic opportunities. Change favors the prepared mind.

What action could the city take to improve transportation for New Yorkers? Build the BQX [the Brooklyn-Queens Connector] and continue to invest in our airports.

Will Donald Trump be on the ballot in 2020? If so, will be facing him? Who will win? Let me check my Magic 8 Ball.

LIGHTNING ROUND:

Netflix or Hulu? Netflix.

Kombucha or cold brew? Cold brew.

Simpsons or South Park? Simpsons!

Robert Mueller or Rudy Giuliani? Robert Mueller.

Peloton or SoulCycle? SoulCycle.

Gold or Bitcoin? Gold.

Amazon or Barnes & Noble? Amazon.

Plaza or Waldorf? Waldorf.

Sweetgreen or Dig Inn? Sweetgreen.

Beto or Cruz? Beto.

Larry Gluck
Co-Founder, Chairman and Chief Executive, Stellar Management

Is the great trophy asset sale a thing of the past? No, just look at recent transactions over the past year. The trophy asset sale is alive and well.

Which trophy would you buy if money were no object? I’d buy Yankee Stadium. I grew up in the Bronx and have always been a huge Yankees fan. I now own a number of properties in the area and adding Yankee Stadium to my portfolio would not only be an accomplishment business-wise but would be meaningful to me personally.

Has retail hit bottom? (If not, what has to happen first?) There will always be retail tenants out there and we are still seeing retail spaces lease up successfully—you just need to be able to lease them at a market rent. Rents need to adjust to today’s market and be at a level that allows retailers to compete with the Amazons of the world.

Retailers are also getting more creative with interactive and unique experiences that can’t be recreated online. Look at Glossier—they started out online but saw the value in having brick-and-mortar locations where customers could come in and truly experience the brand. Same with Warby Parker—their showroom at One Soho Square gives customers something they can’t get online, and the brand is rapidly opening up new locations across the country.

Have the tax changes been good, bad or neutral? How come? I’ve always been a fan of less government intervention, where the market is free to do what it will. Generally speaking, reducing taxes is good for the economy overall, and sparks economic growth. In terms of real estate, specifically, Opportunity Zones are interesting.

What’s your take on what’s happening to middle-market real estate firms like Eastern Consolidated, RKF and MHP? I think issues in the middle-markets are driven by larger companies—the Newmarks and the Cushmans of the world—needing to provide growth and scale to support their public offerings. As these larger national and global firms pursue growth, they extend their reach into the middle-market spaces.

How does the investment sales market get itself out of its rut? At Stellar Management we are long-term owners and operators of New York City real estate. We buy real estate throughout cycles because we believe in the long-term growth of New York. We do not try to time markets and cycles, we look for deals with good intrinsic value.

Which tertiary market do you like best? I am partial to any tertiary market that has good access to public transportation.

Our current bull market can’t last forever… When’s the next recession and how do you plan to protect yourself from it? Having a long-term investment horizon, being well-capitalized and having a diverse pool of assets within a great market—like New York City—allows us to protect ourselves whenever the next recession may come.

What action could the city take to improve transportation for New Yorkers? I think the Metropolitan Transportation Authority has done a fantastic job in taking on challenging infrastructure upgrades—such as the L train repairs—that are difficult in the short term but allow the system to run better in the long term. The renewed commitment to bike lanes, initiatives like Citi Bike and expanding ferry services have reduced vehicular congestion and helped improve public health. Our extensive and ever-improving mass transit is the one of the most important qualities that separates a city like New York from its competitors.

Will Donald Trump be on the ballot in 2020? If so, will be facing him? Who will win? Either way, it will be interesting.

LIGHTNING ROUND:

Netflix or Hulu? Netflix.

Kombucha or cold brew? A cappuccino.

Simpsons or South Park? Family Guy.

Robert Mueller or Rudy Giuliani?
Giuliani pre-2016.

Peloton or SoulCycle? Peloton.

Gold or Bitcoin? Real estate.

Amazon or Barnes & Noble? Amazon.

Plaza or Waldorf? The Bowery Hotel.

Sweetgreen or Dig Inn? Dig Inn.

Beto or Cruz? I don’t vote in Texas.

Francis Greenburger
Chairman and CEO, Time Equities

Is the great trophy asset sale a thing of the past? I think real estate assets trade over time because investors’ goals, needs, perspective and circumstances change.

Which trophy would you buy if money were no object? I like beautiful historic buildings like one we own in Montreal, the former Royal Bank building at 360 St. Jacques or the Delmonico’s restaurant building we own at 56 Beaver Street in New York City.

Has retail hit bottom? (If not, what has to happen first?) Retail will continue to go through changes and adaptive reuse. The city is repricing, but many other markets are quite stable. We continue to add to our retail portfolio.

Have the tax changes been good, bad or neutral? How come? The tax changes are not good. They have already distorted the economy and will continue to do so by over-incentivizing the movement of high-earning people from high-tax states to low-tax states and making the economic imbalance between rich and poor greater. This will lead to social instability in all parts of the country. The high-tax states, which created a social net for the poor, will have to cut back on services and these poor people will move to low-tax states which will then have to deal with these social needs. Inflating the corporate earnings that were already high serves no useful purpose.

What’s your take on what’s happening to middle-market real estate firms like Eastern Consolidated, RKF and MHP? Brokers’ share of earnings became too large and these companies could not afford their overhead.

How does the investment sales market get itself out of its rut? Repricing and time.

Which tertiary market do you like best? Ones with sustainable returns. We own properties in 30 states and five countries.

Our current bull market can’t last forever… When’s the next recession and how do you plan to protect yourself from it? Cash reserves, strong cash flow from all properties, moderate leverage, careful balance between stabilized properties and added-value or development deals.

What action could the city take to improve transportation for New Yorkers? Subways, subways, subways.

Will Donald Trump be on the ballot in 2020? If so, will be facing him? Who will win? I hope not. A candidate with integrity, above-average intelligence and experience. We have a lot of damage to recover from. The road back will be hard and expensive.

LIGHTNING ROUND:

Netflix or Hulu? Netflix.

Kombucha or cold brew? Neither.

Simpsons or South Park? Simpsons.

Robert Mueller or Rudy Giuliani? Robert Mueller.

Peloton or SoulCycle? SoulCycle.

Gold or Bitcoin? Gold.

Amazon or Barnes & Noble? Barnes & Noble.

Plaza or Waldorf? Plaza.

Sweetgreen or Dig Inn? Neither.

Beto or Cruz? Beto.

Jeffrey Gural
Chairman, GFP Real Estate

Is the great trophy asset sale a thing of the past? No, people will always pay a premium for a trophy building.

Which trophy would you buy if money were no object? We already own the Flatiron Building, which I consider a trophy. But I would probably love to own the Seagram Building.

Has retail hit bottom? (If not, what has to happen first?) I don’t think so. I don’t think anyone knows where bottom is.

Have the tax changes been good, bad or neutral? How come? I think elimination in the deduction of state and local taxes will hurt New York real estate in the long run. The tax changes will also drive up the deficit—which my grandchildren will inherit and have no way to pay back.

What’s your take on what’s happening to middle-market real estate firms like Eastern Consolidated, RKF and MHP? I was surprised about Eastern because they’ve been around for so long. Middle-market firms have to deal with challenges associated with the high costs of departments like research and marketing, and they have to compete with companies that have a global reach, which some clients really want.

How does the investment sales market get itself out of its rut?  Right now, I think the market is normal and that low interest rates from 2015 to 2016 created a bubble.

Which tertiary market do you like best?  I still like Long Island City [Queens]. I think that market will achieve real growth.

Our current bull market can’t last forever… When’s the next recession and how do you plan to protect yourself from it?  I have no idea when the next recession is coming. The only way to protect yourself is not to have too much debt. As long as you don’t have too much debt, you can survive any recession.

What action could the city take to improve transportation for New Yorkers? Limiting Uber would make sense, and congestion pricing is also a good idea.

Will Donald Trump be on the ballot in 2020? If so, will be facing him? Who will win? I think it depends on what happens in the midterms. If there is a blue wave—and I hope there is—my guess is that Donald Trump won’t be on the ballot. He will exit stage left because I know that he would never want to run for re-election unless he was sure he would win.

LIGHTNING ROUND:

Netflix or Hulu? Netflix.

Kombucha or cold brew? Cold brew.

Simpsons or South Park? South Park.

Robert Mueller or Rudy Giuliani? Mueller.

Peloton or SoulCycle? SoulCycle.

Gold or Bitcoin? Gold.

Amazon or Barnes & Noble? Amazon.

Plaza or Waldorf? Waldorf.

Sweetgreen or Dig Inn? Sweetgreen.

Beto or Cruz? Beto, hopefully.

Mitch Hochberg
President, Lightstone Group

Is the great trophy asset sale a thing of the past? Of course not! Given rising interest rates and general geopolitical uncertainty, buyers will always step off the sidelines to buy a trophy asset as a safety net. We are seeing this with sales like the Plaza Hotel. [They’re] typically being made by foreign investment funds or institutional funds.

Which trophy would you buy if money were no object? I would buy an iconic Class-A office building in a spectacular location like the General Motors Building. Time and time again they prove to be outperformers and seem to continually set price records every time they change hands.

Has retail hit bottom? (If not, what has to happen first?) Quality retail real estate may not have hit bottom yet. However, looking at high-street retail in core cities, the bid-ask spreads between tenants and landlords are tightening. In terms of secondary and tertiary retail markets, the bottom can be close to land value, or zero, in some instances, thanks in part to Amazon and the like. But despite the dominance of e-retailers, I do believe that main-and-main sticky retail centers will continue to have a place in the real estate ecosystem.

 Have the tax changes been good, bad or neutral? How come? They’ve been neutral so far, primarily because their true effects have not yet been realized. However, long term, they will be good nationally. In New York, the limitations on deductibility of interest and real estate taxes have not helped an already soft residential market. Opportunity Zones should certainly be a catalyst, but it’s hypothetical at this point. The legislation is still too ambiguous.

What’s your take on what’s happening to middle-market real estate firms like Eastern Consolidated, RKF and MHP? It is difficult for all the various brokerages and real estate service companies to differentiate their products. And their talent pools aren’t remaining loyal to one company. What we are seeing play out now is a divide where only the strongest firms that can attract top talent are surviving, and market share is consolidating among a few behemoths.

How does the investment sales market get itself out of its rut? Sellers need to adjust their pricing expectations and realize that buyers and developers are showing much more scrutiny in their underwriting, especially with rising interest rates and trade costs. The only piece that can be used to ameliorate underwriting is a lower going-in purchase price.

Which tertiary market do you like best? Tertiary markets are incredibly difficult to assess these days. City living remains extremely popular with young people and the growth of tech companies has compounded the demand in these areas. Considered against urban opportunities, tertiary markets don’t warrant the riskier investment and barriers to entry.

Our current bull market can’t last forever… When’s the next recession and how do you plan to protect yourself from it? Barring any geopolitical black swan events, the U.S. economy seems to be akin to a large cruise ship—it won’t make a 180-degree  turn on a dime. We can’t peg when the next recession will occur, but it will most likely come at a time when euphoria and verticality reach their peak. The best way to protect against a recession is to stay active and constantly refine market intelligence. Make prudent bets at safer levels within the capital stack and diversify an equity portfolio with downside-protected debt investments.

What action could the city take to improve transportation for New Yorkers? Aside from a massive infrastructure overhaul, the city can continue its push for high-tech solutions that eliminate congestion. Cashless tolls were a great start, but ultimately the city will need to put restrictions on vehicular traffic and endorse ridesharing.

Will Donald Trump be on the ballot in 2020? If so, who will be facing him? Who will win? Trump will be on the ballot in 2020, and Andrew Cuomo and Michael Bloomberg seem like solid bets as opponents. If the stock market and GDP continue their recent growth patterns, it seems like it may be very difficult to unseat our current president.

LIGHTNING ROUND:

Netflix or Hulu? Netflix. Still waiting for a
Netflix original series about the New York City real estate industry.

Kombucha or cold brew? What the heck is kombucha? Is there caffeine in it?

Simpsons or South Park? South Park. It goes where The Simpsons are too afraid to go.

Robert Mueller or Rudy Giuliani? Is Kate McKinnon as Rudy Giuliani an option?

Peloton or SoulCycle? Peloton. Who wants to ride a bike in the dark with a bunch of sweaty, smelly strangers?

Gold or Bitcoin? Gold. I lost a USB drive with a couple million in bitcoin on it. Let me know if you find it.

Amazon or Barnes & Noble? Barnes & Noble. Nothing beats holding an actual book in your hand.

Plaza or Waldorf? Plaza. Waldorf salads are delicious, though. Love the combination of walnuts and grapes.

Sweetgreen or Dig Inn? Sweetgreen. Still trying to figure out exactly what quinoa is…

Beto or Cruz? Neither.

Marc Holliday
CEO, SL Green Realty Corp.

Is the great trophy asset sale a thing of the past? No. Owning a prime piece of Manhattan real estate never goes out of style. Trophy assets have proven time and again that they are desirable in good markets and bad, with foreign and domestic buyers, and carry a value that is a premium to commodity-type assets.

Which trophy would you buy if money were no object? That’s easy—One Vanderbilt!

Has retail hit bottom? I never like to call the bottom on anything, but in most submarkets, we believe it has bottomed out and we are starting to see a decline in availability, especially for landlords like us who were proactive in meeting the market on rents. As a result, we signed some big leases this year, like Puma and Coty. The market-leading retail leasing we did in 2017 and 2018 demonstrates that the best high-street submarkets will continue to be attractive and lease first, provided landlords’ capital structures allow them to be flexible.

Have the tax changes been good, bad or neutral? Why? Changes have been neutral for the office sector, with the positives of tax benefits for large corporations balancing out negative impacts of loss of SALT [state and local tax] deductions on this region. Of course, the residential sector has been harder hit.

How does investment sales market get itself out of its rut? What rut? Since 2015 we’ve sold $8 billion of assets, generating over $2 billion of net proceeds to the company. If that’s a rut…

Which tertiary market do you like best? We are very focused on our core business and, if anything, have become more laser-focused, shedding much of our suburban portfolio.

Our current bull market can’t last forever… When’s the next recession and how do you plan to protect yourself from it? It’s impossible to predict and that’s why we pursue a market-neutral strategy, making new investments harvested from gains in other value-add investments, so regardless of market movement we’re hedged. We think that’s the best approach.

What action could the city take to improve transportation for New Yorkers? It’s clear that we need more investment, and with limited public funds we need to be creative. The success of the public-private partnership at One Vanderbilt, which yielded more than $200 million for public improvements, is a good model for how developers can invest in local improvement of transportation infrastructure and the public realm in exchange for density bonuses or other incentives.

Jonathan Iger
CEO, William Kaufman Organization / Sage Realty Corporation

Is the great trophy asset sale a thing of the past? No, it’s definitely not a thing of the past. In fact, I believe we’ve redefined what we call a trophy asset. It’s no longer limited to buildings on Sixth and Park Avenues anymore. In 2018 alone, we’ve seen Google purchase Chelsea Market and St. John’s Terminal change hands on the West Side. Both are terrific examples of what defines the “new” trophy asset here in the city. New York has a number of trophy assets that are unbelievably well-maintained by their current owners, and I believe we’ll see more of these types of properties hitting the market in the coming years.

Which trophy would you buy if money were no object? Lever House. Architecturally, it is one of my favorite buildings in the city.

Has retail hit bottom? I wouldn’t say New York City retail has hit bottom; it has been more of a market correction. As an example, there’s been amazing growth of interesting fast-casual restaurants throughout Manhattan, and we’re actually seeing closures of certain chains due to market saturation. When you start to see certain brands get oversaturated, there are going to be closures. Where there are good operators selling a good product at the right price, you’ll see retail flourish.

Speaking as chairman of Meatpacking Business Improvement District, where we are at the center of art, culture, food, technology and experiential retail for the city, we are seeing really exciting times for retail. Most recently, we’ve brought in Italian clothing company Loro Piana; Restoration Hardware’s spectacular five-story flagship; Hermes; the new Pastis; Tesla; Hyundai’s luxury car division, Genesis Motors; and Lexus’ new lifestyle concept, Intersect, to name a few.

Have the tax changes been good, bad or neutral? Specific to our industry, the tax changes have been very positive. Financial firms are expanding again and technology, advertising, media and information companies are growing, which has created a very vibrant and robust leasing market. In addition to that, a number of firms are raising significant dollars to invest in Opportunity Zones, which is also very positive for commercial real estate. Long-term, however, it’s way too early to say.

What’s your take on what’s happening to middle-market real estate firms like Eastern Consolidated, RKF and MHP? This is a prime example of consolidation of the commercial brokerage industry effectively around the big four as the upper-tier market players. I think it is unfortunate because I believe it is important to have a middle-market, particularly for companies that provide a specific service. As a result, there’s a new middle-market emerging. We’re seeing a rise of tech-enabled real estate service companies, which are very product specific for now, but there’s amazing potential for growth over time. We are closely following firms like Bowery, a tech-enabled appraisal company; Zoner, which streamlines zoning, tax and feasibility for owners; UpCodes, a database of U.S. construction and building code; and StakSource, an online platform for commercial real estate loans.

How does the investment sales market get itself out of its rut? Sellers need to readjust their expectations. The investment sales market was on a bull run, which was initially spurred by huge upsides coming out of the recession, like the low-interest-rate environment and significant cap rate compression—but all of these things no longer exist. Today, we have rising interest rates and a reduction in foreign capital, but overall, the investment sales market is still pretty healthy. Whether it’s core, core-plus or value-add, I believe we need to revert to traditional underwriting.

Our current bull market can’t last forever… When’s the next recession and how do you plan to protect yourself from it? I don’t think there’s a significant correction coming. That being said, from the perspective of Sage Realty and the William Kaufman Organization, we act the same way, whether in a bull market or a recession. We provide the exact same level of services. There is no pullback or austerity measures. We are low leveraged, so we never have risk there. We are service-oriented. As long as you continue to provide a superior office experience within our four walls, what’s occurring outward doesn’t have much effect on our portfolio.

What action could the city take to improve transportation for New Yorkers? My number one recommendation is that the city needs to enforce and heavily penalize motorists that block the box, as well as double park.

Secondly, I believe maintaining our subway infrastructure is paramount, but offsetting it with new transportation nodes is just as important. Our waterways are a perfect place to do so. Over the years, we’re seeing greater expansion of ferries and water taxis, but the West Side has been largely ignored, though it has great structural piers in place that could be augmented. It is cost effective, and we should be expanding.

Will Donald Trump be on the ballot in 2020? If so, will be facing him? Who will win? I follow the old adage not to talk about religion or politics.

LIGHTNING ROUND:

Netflix or Hulu? Netflix.

Kombucha or cold brew? Cold brew.

Simpsons or South Park? Simpsons.

Peloton or SoulCycle? Peloton.

Gold or Bitcoin? Gold.

Amazon or Barnes & Noble? Amazon.

Plaza or Waldorf? Waldorf.

Sweetgreen or Dig Inn? Sweetgreen.

Steve Kaufman
President, The Kaufman Organization

Is the great trophy asset sale a thing of the past? Yes, because, one, they are not coming onto the market as much and, two, secondary assets that were once considered lesser buildings are becoming much more valuable.

Which trophy would you buy if money were no object? The Empire State Building.

Has retail hit bottom? (If not, what has to happen first?) It may have. Many traditional retail tenants will not be coming back to the market, so owners need to adjust their expectations on the level of rents that they can achieve.

Have the tax changes been good, bad or neutral? How come? In terms of the real estate industry, it has been neutral. We have not felt any effect from it as far as I can see.

What’s your take on what’s happening to middle-market real estate firms like Eastern Consolidated, RKF and MHP? Eastern was primarily doing investment sales and RKF dealt in retail brokerage. Both the investment sales and retail brokerage markets are way off in terms of volume and that is why those firms suffered. MHP is in acquisitions and it is very difficult to make acquisitions these days.

Our current bull market can’t last forever… When’s the next recession and how do you plan to protect yourself from it? Yes, it is coming. We will protect ourselves by staying underleveraged as we always have been.

What action could the city take to improve transportation for New Yorkers? Congestion pricing for cars coming into Manhattan is a good idea and they should use that money for improving mass transit.

Will Donald Trump be on the ballot in 2020? If so, will be facing him? Who will win? He’ll probably get impeached between now and then and not be on the ballot. I have no idea who will be on the ballot then, either Republican or Democrat. It will be a wide-open race without Trump.

LIGHTNING ROUND:

Netflix or Hulu? Netflix.

Kombucha or cold brew? Cold brew.

Simpsons or South Park? Neither.

Robert Mueller or Rudy Giuliani? Robert Mueller.

Peloton or SoulCycle? Peloton.

Gold or Bitcoin? Neither.

Amazon or Barnes & Noble? Both.

Plaza or Waldorf? Plaza.

Sweetgreen or Dig Inn? Neither.

Beto or Cruz? Beto.

David Kramer
President, Hudson Companies

Has retail hit bottom? (If not, what has to happen first?)  I don’t think so. I’m not sure what will be the dramatic Lehman ’08-type moment when everyone says WTF, but it would be something like Barnes & Noble emptying their stores.

Have the tax changes been good, bad or neutral? How come? From my vantage point, it’s too soon to say. I have yet to see it impact purchasing or leasing behavior.

Our current bull market can’t last forever… When’s the next recession and how do you plan to protect yourself from it? To steal someone else’s joke, we’ve been well prepared for seven of the last two recessions. As developers, we’re always assuming the growth curve extends along nicely while also privately fighting quiet demons about what happens when things get soft. In our world of residential development, the best way to protect yourself is to have a healthy focus on rentals, low-leverage capital stacks and affordable housing.

What action could the city take to improve transportation for New Yorkers? Since there’s not too much to do about traffic and the state’s MTA, focus on the big three: congestion pricing, more bike lanes and electric scooters. My kids’ favorite part of a recent vacation in France was using Bird and [competitor] Lime in Paris. If scooters can be used in Paris without mass chaos, give it a try, New York City.

Will Donald Trump be on the ballot in 2020? If so, will be facing him? Who will win? Of course he has to be on the ballot, since the only validation for him that he’s a great president will be to get re-elected, even if he’ll have lost interest in the job. He’s going to lose whether it’s to Michael Bloomberg, Joe Biden or Kamala Harris.

LIGHTNING ROUND:

Netflix or Hulu? Netflix, big fan of The Crown.

Kombucha or cold brew? Tall Soy Misto from Starbucks.

Robert Mueller or Rudy Giuliani? The guy who doesn’t seem insane on the Sunday talk shows. What the heck happened?

Amazon or Barnes & Noble? Or, alternatively, Greenlight Books or Strand Book Store or possibly the Brooklyn Public Library, particularly its new branch in Brooklyn Heights!

Sweetgreen or Dig Inn? My daughter wouldn’t forgive me if I diss Sweetgreens.

Beto or Cruz? C’mon, after Cruz’s assholic “New York values” comment, no one in CO is allowed to pick Cruz.

Jeffrey Levine
Chairman, Douglaston Development

Is the great trophy asset sale a thing of the past? New York is the center of the real estate world. Capital is always willing to pay a significant premium to own assets here for the international recognition and long-term capital appreciation.

Which trophy would you buy if money were no object? The Woolworth building, designed by Cass Gilbert, is my favorite building in Manhattan. Its blend of old-world charm and new-world technology continues to withstand the test of time.

Has retail hit bottom? (If not, what has to happen first?) While certain types of retail have unquestionably struggled over the past few years, retailers have been quick to adapt and change their strategies in a constantly evolving market. However, landlords, investors, owners and lenders have not yet accepted the new reality that many of these users who still need physical retail space can’t afford to pay the astronomical asking rents around the city.

Have the tax changes been good, bad or neutral? How come? We haven’t really felt the impact yet of income tax changes, although our general sense is that it isn’t good to raise effective tax rates in New York City. That said, the elimination of the [state and local tax, or] SALT deduction has already had a chilling effect on residential housing values.

What’s your take on what’s happening to middle-market real estate firms like Eastern Consolidated, RKF and MHP? Consolidation in the market is nothing new. These things are cyclical. Global firms have scale and the capacity to overtake middle-market competitors, but it remains to be seen if the clients respond to this model. It would not surprise me to see new, small firms emerge to focus on niche elements of the business with more customized service to select clientele.

How does the investment sales market get itself out of its rut? By lowering unreasonable sales price expectations and being more apt to make deals at true-market levels.

Which tertiary market do you like best? Communities on the Brooklyn and Queens side of the East River that are near transportation will continue to experience growth.

Our current bull market can’t last forever… When’s the next recession and how do you plan to protect yourself from it? In my opinion, we are already in extra innings of this cycle. We protect ourselves from future economic uncertainty by remaining disciplined in our investments.

What action could the city take to improve transportation for New Yorkers? The expanded ferry service is doing wonders for waterfront development in the city. Additionally, the proposed BQX [Brooklyn Queens Connector] on the Brooklyn/Queens waterfront has great potential for the connection of these boroughs. Most importantly, our city needs a well-thought-out congestion pricing plan which would eliminate the logjam of traffic in the city center, as well as provide a source of funding for the improvement of our public transportation system.

Will Donald Trump be on the ballot in 2020? If so, will be facing him? Who will win? The prospects of the 2020 race will be dictated by the economic events that transpire over the next 18 months. If a major economic correction occurs, it is very likely that we will have a change of residents in the White House.

LIGHTNING ROUND:

Netflix or Hulu? Netflix.

Kombucha or cold brew? Black coffee from the corner cart.

Simpsons or South Park? The Flintstones.

Robert Mueller or Rudy Giuliani? Mueller.

Peloton or SoulCycle? I prefer my Schwinn.

Gold or Bitcoin? Is this a joke? I like bricks and mortar.

Amazon or Barnes & Noble? Amazon.

Plaza or Waldorf? The Plaza.

Sweetgreen or Dig Inn? Shake Shack.

Beto or Cruz? Can I have Bush back?

David Levinson
Chairman and CEO, L&L Holding Company

Is the great trophy asset sale a thing of the past? No. Every week I get a call from someone who wants to buy 425 Park Avenue.

Which trophy would you buy if money were no object? We build trophy assets. We don’t buy them.

Has retail hit bottom? (If not, what has to happen first?) Commodity retail remains uncertain, but retail is an increasingly broad and increasingly diverse sector. We are building TSX Broadway, a 21st century experiential retail and hospitality platform located on the busiest corner in the western hemisphere. The demand for that type of interactive, brand-centric experience is growing exponentially.

Have the tax changes been good, bad or neutral? How come? Opportunity Zones are an excellent idea to induce development in areas that otherwise would not see meaningful development in the near future.

What’s your take on what’s happening to middle-market real estate firms like Eastern Consolidated, RKF and MHP? Musical chairs has been going on for a long time in our industry. It’s a good payday for the seller.

How does the investment sales market get itself out of its rut? The investment sales market is a victim of economic cycles. Patience and strategic vision are required continuously.

Which tertiary market do you like best? I don’t look at tertiary markets.

Our current bull market can’t last forever… When’s the next recession and how do you plan to protect yourself from it? I have no idea when the next recession is coming. To mitigate risk, we always build great buildings and rely on less leverage.

Will Donald Trump be on the ballot in 2020? If so, will be facing him? Who will win? I have no idea what Trump will be doing, and I doubt I will like any of the candidates.

LIGHTNING ROUND:

Netflix or Hulu? Both.

Kombucha or cold brew? Cold brew.

Simpsons or South Park? Simpsons.

Peloton or SoulCycle? Peloton.

Gold or Bitcoin? Gold.

Amazon or Barnes & Noble? Amazon.

Plaza or Waldorf? Plaza.

Beto or Cruz? Neither.

David L. Levy
Principal, Adams & Co.

Is the great trophy asset sale a thing of the past?  Frankly, that is not something we focus on and I truly have no experience with “trophy assets.” We look at all of our properties as legacy assets to be owned for generations to come.

Which trophy would you buy if money were no object? I guess this question refers to properties that even people not in the real estate community would know. If I had to pick my favorite building in Manhattan I would choose the Flatiron Building.

Has retail hit bottom? (If not, what has to happen first?) Retail is changing and probably, in the end, changing for the better. We needed a shakeout of older, underperforming retailers and more creative, more interesting retail is starting to fill in the blanks.

Have the tax changes been good, bad or neutral? How come? To be determined once the guidelines are better defined.

What’s your take on what’s happening to middle-market real estate firms like Eastern Consolidated, RKF and MHP? It’s sad but it’s typical of the world we live in. Most mom-and-pop shops just can’t compete unless they are truly willing to.

How does the investment sales market get itself out of its rut? We are not in a rut, we are in the norm. The investment sales boom that we have experienced was spurred on by insanely low interest rates and creative financing opportunities. Leasing could never have kept up with expectations.

Which tertiary market do you like best? I really like areas like Bushwick [in Brooklyn].

Our current bull market can’t last forever… When’s the next recession and how do you plan to protect yourself from it?  No real telling when the next recession is, but clearly low or no debt is the key to survival. Planning to own for the short is a very risky bet.

What action could the city take to improve transportation for New Yorkers? Time restrictions on deliveries, increased costs to bring a private car into Manhattan and better incentives to use public transportation.

Will Donald Trump be on the ballot in 2020? If so, will be facing him? Who will win? Yes, versus Michael Bloomberg.

LIGHTNING ROUND:

Netflix or Hulu? Netflix.

Kombucha or cold brew? Water only.

Simpsons or South Park? Family Guy.

Robert Mueller or Rudy Giuliani? Ugh!

Peloton or SoulCycle? Love my Peloton.

Gold or Bitcoin? Gold.

Amazon or Barnes & Noble? Barnes & Who?

Plaza or Waldorf? Both classics.

Sweetgreen or Dig Inn? Dig Inn for sure (they are also a tenant of ours).

Beto or Cruz? Ugh, again!!

Anthony E. Malkin
Chairman and CEO, Empire State Realty Trust

Is the great trophy asset sale a thing of the past? No. There just is not any trophy for sale. When there is, the demand will be bigger than ever.

Which trophy would you buy if money were no object? Rockefeller Center.

Has retail hit bottom? (If not, what has to happen first?) In some locations, absolutely. In others not. More leases have to roll and retailers have to school the market as to what properties matter.

How does the investment sales market get itself out of its rut? Properties have to be put up for sale by willing sellers.

Our current bull market can’t last forever… When’s the next recession and how do you plan to protect yourself from it? Whenever it happens, we plan to protect ourselves with a great balance sheet, a lot of liquidity, and improved properties filled with great tenants.

What action could the city take to improve transportation for New Yorkers? Stop talking and reinvest in the subways. Start congestion pricing. Start to limit daytime deliveries in congested areas.

Will Donald Trump be on the ballot in 2020? If so, will be facing him? Who will win? Probably and who knows.

LIGHTNING ROUND:

Netflix or Hulu? Amazon Prime.

Kombucha or cold brew? Have not had caffeine since 1990.

Simpsons or South Park? Simpsons.

Robert Mueller or Rudy Giuliani? Mueller.

Peloton or SoulCycle? Peloton.

Meredith Marshall
Co-Founder and Managing Partner, BRP Companies

Is the great trophy asset sale a thing of the past? Trophy assets will always play a role, but those sales are based on economic cycles. Those types of buyers will come back. Institutions with capital to burn, for instance, will continue to have an appetite for trophy assets from time to time.

Which trophy would you buy if money were no object? If money were no object, I’d buy the Seagram Building.

Has retail hit bottom? (If not, what has to happen first?) Yes, retail has hit bottom. There is a perception about uncertainty in retail, which may be slightly in advance of reality. As such, the pricing has been built in. We’re currently seeing a fairly conservative outlook with leases and renters, as well as a tremendous repositioning in retail.

Have the tax changes been good, bad or neutral? How come? The tax changes have been positive for the real estate industry as there is more favorable tax treatment for people in business. BRP Companies operates in Opportunity Zones and the tax changes have helped accelerate business and lead to more opportunities.

How does the investment sales market get itself out of its rut? It’s all about supply and demand. We also need greater certainty regarding interest rates to break out of the rut.

Which tertiary market do you like best? The tertiary markets we focus on are transportation hubs within an hour of New York City. Specifically, the New Jersey suburbs and Westchester. Transportation linkages are a key part of our business model.

Our current bull market can’t last forever… When’s the next recession and how do you plan to protect yourself from it? I don’t know when there will be another recession, but we’ll certainly have one eventually. At BRP Companies, we’ve worked hard to have very realistic underwriting. Even in the great recession, we were looking at multifamily rentals and we weren’t far off from our projections. We have always seen major value in multifamily rentals, with an understanding that you might make less money in a recession, but at least you still have viable transactions.

What action could the city take to improve transportation for New Yorkers? The city has to get serious about infrastructure. The city must get the state and the feds to work together to embark upon a major infrastructure plan. The city alone cannot bring together the capital to get the job done.

Will Donald Trump be on the ballot in 2020? If so, who will be facing him? Who will win? I predict Donald Trump will be on the ballot in 2020. As for who will face him…my guess is as good as anyone’s.

LIGHTNING ROUND:

Netflix or Hulu? Netflix.

Kombucha or cold brew? Kombucha.

Simpsons or South Park? South Park.

Robert Mueller or Rudy Giuliani? Robert Mueller.

Peloton or SoulCycle? SoulCycle.

Gold or Bitcoin? Gold.

Amazon or Barnes & Noble? Amazon.

Plaza or Waldorf? Plaza.

Sweetgreen or Dig Inn? Dig Inn.

Beto or Cruz? Beto.

Stephen Meringoff
Managing Partner, Himmel + Meringoff Properties

Is the great trophy asset sale a thing of the past? No. There will always be trophy assets and trophy asset buyers.

Which trophy would you buy if money were no object? The Seagram Building. It is where Leslie [Himmel] and I [had an office and we] got our start 35 years ago.

Has retail hit bottom? (If not, what has to happen first?) Yes. Last year was its low. We have seen significant recovery already.

Have the tax changes been good, bad or neutral? How come? Good for the economy, but I have never done a great deal just because of taxes.

What’s your take on what’s happening to middle-market real estate firms like Eastern Consolidated, RKF and MHP? Those firms are (or were) owned by individuals who funded deficits in lean times from their own pockets and who could choose, given their many years of outstanding experience, to retire or team up with a larger money partner. There will always be a place for new young entrepreneurs in our middle-market.

How does the investment sales market get itself out of its rut? A return to fundamentals.

Which tertiary market do you like best? We only invest in New York where there are no tertiary markets. We are currently building in Long Island City [Queens] and the Bronx.

Our current bull market can’t last forever… When’s the next recession and how do you plan to protect yourself from it? Early 2021. We keep our portfolio full, have refinanced long term and maintain a significant cash reserve.

What could the city do to improve transportation for New Yorkers? Better leadership.

Will Donald Trump be on the ballot in 2020? If so, will be facing him? Who will win? Yes, he started running the week after the 2016 election. [The year] 2020 will be the Democrats’ race to lose and if history is any indication, they will probably find some way to do just that.

LIGHTNING ROUND:

Netflix or Hulu? Hulu.

Kombucha or cold brew? Cold brew.

Simpsons or South Park? Neither.

Robert Mueller or Rudy Giuliani? You’re kidding!

Peloton or SoulCycle? Peloton.

Gold or Bitcoin? Gold.

Amazon or Barnes & Noble? Amazon.

Plaza or Waldorf? Plaza.

Sweetgreen or Dig Inn? Sweetgreen.

Beto or Cruz? Beto.

Nelson Mills
President and CEO, Columbia Property Trust

Is the great trophy asset sale a thing of the past? Big trophy building sales are rare, simply because most are tied up in long-term hands and the pool of capable buyers is small. But no one owns anything forever.

Which trophy would you buy if money were no object? The GM Building is one of the top trophies in the country. Its location and park views are incredible.

Has retail hit bottom? (If not, what has to happen first?) Like a lot of sectors, retail is in the midst of a significant period of disruption. I think we’re near the end of it. Retail owners are figuring it out and starting to turn things around.

Have the tax changes been good, bad or neutral? How come? They’ve been generally good for employers, which fuels job growth and office demand. The new law favors [real estate investment trusts] in particular.

How does the investment sales market get itself out of its rut? There’s a substantial bid-ask gap between sellers and buyers right now, fueled by interest rate concerns and other factors. As that gap narrows, as it always does, sales volumes will return.

Which tertiary market do you like best? Five years ago we operated a portfolio spread across 30 markets, but since 2013, we have successfully transitioned to a gateway strategy, with more than 80 percent of our properties now concentrated in New York, San Francisco and Washington, DC. But to answer your question, several secondary markets including Nashville and Austin continue to be strong performers. Tertiary markets like Tucson and Milwaukee have also experienced nice growth of late.

Our current bull market can’t last forever… When’s the next recession and how do you plan to protect yourself from it? We’ve enjoyed an extended run of economic growth, and while it’s true that markets invariably cycle, we’re not currently seeing evidence of a significant downturn looming in the near term. To mitigate cycle risk, we maintain very low leverage and focus on well-located properties in top-tier, supply-constrained cities.

What action could the city take to improve transportation for New Yorkers? We support the city’s balanced approach to investing in mass transit, roads, bridges and airports, while also adopting policies that encourage alternate modes like ferries and bikes.

LIGHTNING ROUND:

Netflix or Hulu? Hulu.

Kombucha or cold brew? Cold brew.

Simpsons or South Park? Simpsons.

Peloton or SoulCycle? Peloton. I’m a member.

Gold or Bitcoin? Bitcoin. It’s the future.

Amazon or Barnes & Noble? Amazon.

Plaza or Waldorf? Plaza.

Dig Inn or Sweetgreen? Dig Inn.

Joseph Moinian
President and CEO, The Moinian Group

Is the great trophy asset sale a thing of the past? Gorgeous, well-positioned trophy assets will always be in demand, especially those along the Far West Side.

Which trophy would you buy if money were no object? 3 Hudson Boulevard is our crown jewel.

Has retail hit bottom? (If not, what has to happen first?) The retail market is undergoing a fascinating evolution. We continue to see intense demand for quality retail space, particularly along high-traffic corridors, such as Fifth Avenue. We’re seeing a lot of demand for new forms of brick-and-mortar as well, specifically e-commerce startups that are now looking for conventional retail space that will offer consumers full experiences when testing out products and services.

Have the tax changes been good, bad or neutral? How come? Changes to the tax structure still need to be ironed out, but certainly I am in favor of a system that permits businesses to thrive while also ensuring that we collectively take care of our city and our country.

What’s your take on what’s happening to middle-market real estate firms like Eastern Consolidated, RKF and MHP? This is just part of a larger cycle. There are many very good firms in the market and plenty of opportunities to go around.

How does the investment sales market get itself out of its rut? There is more capital flowing through the market than ever before. Demand is incredibly high. If you are a seller, you are not lacking for opportunities. It is more difficult to buy right now. Being patient is the wisest strategy, but when opportunities arise, be prepared to act quickly.

Which tertiary market do you like best? We focus on New York City, but also have interests in Miami, Dallas, Los Angeles and other markets throughout the U.S.

Our current bull market can’t last forever… When’s the next recession and how do you plan to protect yourself for it? We are extremely well capitalized and prepared for any potential downturns in the market.

What action could the city take to improve transportation for New Yorkers? Continued investment into infrastructure, including extending the 7 train up to 42nd Street. Additionally, improve ferry and water transportation options along the Hudson and East Rivers, making it more accessible for upcoming neighborhoods, like the Hudson Yards District, to develop.

Will Donald Trump be on the ballot in 2020? If so, will be facing him? Who will win? It is too far out to make these predictions.

LIGHTNING ROUND:

Netflix or Hulu. Netflix.

Kombucha or cold brew. Kombucha.

Simpsons or South Park? Simpsons.

Robert Mueller or Rudy Giuliani? Rudy Giuliani.

Peloton or SoulCycle? Peloton.

Gold or Bitcoin? Gold.

Amazon or Barnes & Noble? Amazon.

Plaza or Waldorf? Waldorf.

Sweetgreen or Dig Inn? Sweetgreen.

Beto or Cruz? Beto.

Daniel Moore
President and CEO, Rockefeller Group

Is the great trophy asset sale a thing of the past? The lack of recent blockbuster deals shouldn’t be confused with a secular change in the market. The demand for real estate is still there; the amount of capital raised is at an all-time high across the spectrum from institutional investors and sovereign wealth funds to private investors. Given the length of the recovery and the compression of core yields, value-add and opportunistic strategies are more popular in these five minutes. But as the cycle matures and investors again focus on certainty of cash flow, value preservation and long-term appreciation, expect to see the return of trophy sales.

Which trophy would you buy if money were no object? You know the saying, “if you’re not selling it, you’re buying it”? We recently “bought” one of our existing trophy assets, 1271 Avenue of the Americas, by investing $600 million to renovate the building top-to-bottom, inside and out, to meet the needs of today’s office market. We’re good with that.

Has retail hit bottom? (If not, what has to happen first?) As I’m thinking about this, Sears has just filed for Chapter 11 bankruptcy—a big moment for traditional retail in the U.S. At the same time, online retail accounts for only about one-tenth of sales, online retailers are opening physical stores and experiential retail—the “food, fitness and fun” space continues to grow. There’s clearly a transformation underway with significant implications for real estate, but it will also create new opportunities.

Have the tax changes been good, bad or neutral? How come? The commercial property sector clearly benefited from the changes in tax law, preserving some positive provisions unique to real estate. And the reduction in the corporate rate to 21 percent appears to have had a net positive macro impact. Of course, the SALT [state and local tax] deduction cap has real consequences for markets like New York City and I don’t know that we’ve seen the full impact yet, particularly on residential pricing.

What’s your take on what’s happening to middle-market real estate firms like Eastern Consolidated, RKF and MHP? Niche firms have historically excelled in New York City because of the depth and breadth of the market. But as transaction volumes in investment sales and retail leasing have declined, it’s become more challenging for some of these firms to compete given that they lack the scale and diversified income streams of the national firms.  

How does the investment sales market get itself out of its rut? Price discovery and the resolution of divergent buyer and seller expectations. A lot of sellers have been disappointed in market pricing this year, so they may have to adjust more so than buyers.

Which tertiary market do you like best? We’ve invested in the Charlotte [N.C.] market via our industrial business and in the rental residential sector in the Phoenix MSA [metropolitan statistical area]. We’re also spending some time this year thinking about the western half of the U.S. and what the next five to 15 years look like from the macroeconomic, demographic and real estate market perspectives. Denver and Seattle are of particular interest.

Our current bull market can’t last forever… When’s the next recession and how do you plan to protect yourself from it? I don’t know when the next recession will come and don’t know that anyone else really does either. The best we can do is carefully evaluate each development we pursue with a particular focus on downside risks and viable risk mitigation strategies. Being good at “Plan B” can be the key to effectively managing a downturn.

Will Donald Trump be on the ballot in 2020? If so, will be facing him? Who will win? Between the Brexit vote, the Cubs winning the World Series and the 2016 election, we’ve all learned to better respect low-probability events, especially in politics.

LIGHTNING ROUND:

Netflix or Hulu? Netflix.

Kombucha or cold brew? I recently discovered we have Kombucha at our house, so Kombucha, though I’m still not 100 percent sure what it is.

Simpsons or South Park? Having grown up in Colorado—South Park.

Peloton or SoulCycle? Peloton.

Gold or Bitcoin? Neither, but blockchain technology is interesting.

Amazon or Barnes & Noble? Amazon.

Plaza or Waldorf? Any hotel with a Peloton bike in the gym (see above).

Sweetgreen or Dig Inn? Sweetgreen.

Beto or Cruz? I think the slogan, “Don’t mess with Texas,” applies here.

Toby Moskovits
Founder and CEO, Heritage Equity Partners

Is the great trophy asset sale a thing of the past? I think asset values have gotten more complicated and a lot of key trophy assets—especially in Class-A Manhattan office [stock]—need repositioning. So the answer is yes. Have you looked at 25 Kent?!

Which trophy would you buy if money were no object? The GM Building.

Has retail hit bottom? (If not, what has to happen first?) Yes. I think retail is misunderstood. I recently got back from Berlin and what I think you’re going to see is a lot of what we’re seeing at the BMW A/D/O space in Greenpoint [Brooklyn, at 29 Norman Avenue]. It’s what I would describe as the Apple-ization of retail, turning retail into a marketing space. But [as for retail] it can only go up from here.

Have the tax changes been good, bad or neutral? How come? Like many of my compatriots I was excited by Opportunity Zones—I bought a site on Fourth Avenue in Brooklyn that, unbeknownst to us at the time, is on the Opportunity Zone map, and I think it will drive economic activity in low-income areas.

What’s your take on what’s happening to middle-market real estate firms like Eastern Consolidated, RKF and MHP? I think there’s consolidation that is inevitable. The larger firms are creating a hyper-competitive market because there’s synergies across their verticals, so it’s harder [for the midsized firms] to compete when everyone has the same information.

How does the investment sales market get itself out of its rut? I think there are a lot of challenges now, starting with increasing interest rates and difficulty in securing construction financing, specifically on the residential development side, and there’s a lot of uncertainty in tax abatement programs. Companies don’t respond on a dime, so the city has to continue to think about [how it incentivizes sales]. There’s talk about commercial rent control—and I think that would have a destructive impact on money flowing in, especially with so many vacancies. There needs to be more certainty, not just for large-development firms but small-development firms.

Which tertiary market do you like best? If we’re calling Brooklyn a prime market, I say Queens is my favorite tertiary market—I’m a local kind of girl.

Our current bull market can’t last forever… When’s the next recession and how do you plan to protect yourself for it? We can’t know exactly what’s going to affect things, but I’m very optimistic about the economy overall. I’ve spent a lot of time traveling to Europe [and looking at that market as opposed to this one, and] the American economy continues to refresh itself. I can’t tell you if and when the market will correct itself, but in the overall economy there’s significant startups and venture capital dollars. Things are settling down in Brooklyn in terms of land prices. There will certainly be a correction—but I believe in the overall U.S. economy.

What action could the city take to improve transportation for New Yorkers? The subways need a complete overhaul. I read with some trepidation the recent New York Times article about how old the cars are. This is very basic: get the subways up to the 21st century standards, improve arrival times, etc. Start with Transportation 101—this is a subway-driven city.

Will Donald Trump be on the ballot in 2020? If so, who will be facing him? Who will win? Probably. I’m optimistic the Democrats will put out another female candidate. Maybe Ruth Bader Ginsburg. Hey, I’d vote for her. But putting aside my own political opinions, if the economy continues to grow it will be very difficult for someone to oppose Donald Trump.

LIGHTNING ROUND:

Netflix or Hulu? Netflix.

Kombucha or cold brew? Kombucha.

Simpsons or South Park? Simpsons.

Robert Mueller or Rudy Giuliani? Neither.

Peloton or SoulCycle? SoulCycle.

Gold or Bitcoin? Gold.

Amazon or Barnes & Noble? Barnes & Noble.

Plaza or Waldorf? Plaza.

Sweetgreen or Dig Inn? Sweetgreen.

Beto or Cruz? Neither.

Jason Muss
Principal, Muss Development

Is the great trophy asset sale a thing of the past? No it is not. There will always be a demand for trophy assets, especially those that will give the buyer additional name recognition and presence in the New York market. Anyone who has read The Liar’s Ball [by Vicky Ward] will attest to the fact that trophy assets are not only the subject of all kinds of maneuvering, but also tend to make a lot of money for all parties (buyers, sellers, brokers, attorneys) in the process.

Which trophy would you buy if money were no object? Given its unique status in New York City history and its continued relevance I’d have to say the Empire State Building. The MetLife Building would also be pretty cool to own.

Has retail hit bottom? Large-scale suburban retail with big boxes attached has probably not hit bottom. When The Wall Street Journal reports that Bed Bath & Beyond has an average price difference for a basket of goods with Amazon of 15 percent (more expensive, of course) that doesn’t bode well for that chain and can lead to more vacancies. On the other hand, even Amazon has recently spelled out big plans for thousands of physical stores because the need for most to have the convenience of a physical store isn’t going away. And we have found in our retail portfolio that we have fewer actual vacancies and a lower vacancy rate as a percentage of square footage than at any time in the last 25 years. The problem going forward will not be the internet but self-inflicted wounds from local governments forcing regulations on local retailers—whether it be minimum wages for entry-level employees that stunt retail growth, regulations on what landlords can do with their privately owned commercial properties (which has been a miserable failure on the Upper West Side) or absurd [Americans with Disabilities Act] ADA lawsuit trolls that are nothing more than a shakedown (which is admittedly not entirely a local issue). We need local governments to realize we are partners. If local retail is strong that only helps the streetscape and provides sales tax, property tax and jobs to New York City, and a bit less to Seattle and UPS!

What’s your take on what’s happening to middle-market real estate firms like Eastern Consolidated, RKF and MHP? Brokerage is a tough business and in the historical boom years of 2012 to 2015 many people entered the field. It was bound to produce a shakeout when sales volume dropped precipitously in the last few years. That being said, every brokerage is different. Each of the firms you mentioned has a different story and I am sure that the vast majority of brokers at all three will continue to work in real estate and do well. Already you have seen most of Eastern Consolidated’s top producers land on their feet and continue to call us with deals.

How does the investment sales market get itself out of its rut? Simply put, sellers will have to lower their expectations on investment properties, especially those encumbered by rent regulations that are political footballs. When the new state senate is seated we have no idea what will happen to rent regulation and the uneasy balance that has been going on for many years. Uncertainty grinds the gears of commerce and investment to a halt.

Which tertiary market do you like best? The South Shore of Staten Island.

What action could the city take to improve transportation for New Yorkers? Work with the state to get the Brooklyn-Queens Connector (BQX) funded and under construction. It is complex, but a lot less complex than new subways would be, and it would connect many crucial neighborhoods rich in tech workers and companies that are currently cut off from one another. Also, more cooperation with the state and Metropolitan Transportation Authority to improve existing lines, tracks, and signals. We have amazing infrastructure—we should continue to invest in it. Congestion pricing is a great idea but any money raised must be earmarked specifically to mass transit. My fear is that money is fungible and it would be diverted elsewhere soon after implementation. It has worked in London and could here, too.

Will Donald Trump be on the ballot in 2020? If so, will be facing him? Who will win? Yes he will be; I think that’s pretty clear. Beyond that, who knows?

LIGHTNING ROUND:

Netflix or Hulu? Netflix.

Kombucha or cold brew? Cold brew.

Simpsons or South Park? Simpsons.

Robert Mueller or Rudy Giuliani? Rudy—beyond his latest exploits. To me he’ll always be the mayor who turned things around.

Peloton or SoulCycle? SoulCycle—nothing can beat the live experience!

Gold or Bitcoin? Neither makes sense to own as far as I am concerned.

Amazon or Barnes & Noble? Not a fair fight, but we still need the Barnes & Nobles of the world. It just requires better execution.

Plaza or Waldorf? Plaza.

Sweetgreen or Dig Inn? Don’t eat in either but they are both great concepts.

Michael Phillips
President, Jamestown

Is the great trophy asset sale a thing of the past? The most exciting thing about the New York City real estate market is that you can create trophy assets where you least expect them. Our most recent was earlier this year [with Chelsea Market].

Which trophy would you buy if money were no object? Penn Plaza or Governors Island.

Has retail hit bottom? (If not, what has to happen first?) We are still living in a world of winners and losers and by embracing omnichannel solutions brick-and-mortar retailers will see continued success.

Have the tax changes been good, bad or neutral? How come? It’s too early to tell and short-term gains may be tomorrow’s losses.

How does the investment sales market get itself out of its rut? Time solves many problems.

Which tertiary market do you like best? Any with a great university and local food culture.

Our current bull market can’t last forever… When’s the next recession and how do you plan to protect yourself for it? I’ve been thinking any day for three years and I haven’t been right yet. Low leverage and significant capital reserves to take advantage of the opportunities.  

What action could the city take to improve transportation for New Yorkers? More ferries.

LIGHTNING ROUND:

Netflix or Hulu? Netflix.

Kombucha or cold brew? Cold brew.

Simpsons or South Park? Neither.

Robert Mueller or Rudy Giuliani? Neither.

Peloton or SoulCycle? Peloton.

Gold or Bitcoin? Gold.

Amazon or Barnes & Noble? iTunes and Posman Books.

Plaza or Waldorf? The Lowell.

Sweetgreen or Dig Inn? Avocaderia.

Keith Rubenstein
Founder and Managing Partner, Somerset Partners

Is the great trophy asset sale a thing of the past? I think the definition of trophy will be narrowed, but trophies will always be coveted.

Which trophy would you buy if money were no object? The Louvre.

Has retail hit bottom? (If not, what has to happen first?) I’m not sure but seeing a sublease at the Polo Store on Fifth Avenue will be a good metric.

Have the tax changes been good, bad or neutral? How come? They have been real good, and Opportunity Zones will be very interesting.

What’s your take on what’s happening to middle-market real estate firms like Eastern Consolidated, RKF and MHP? They were all great companies but there is a lot of competition and fixed costs are becoming too onerous. It’s very hard to compete as a niche player.

How does the investment sales market get itself out of its rut? I’m not sure it’s in a rut. [There] never seems to be a shortage of competition when one tries to buy an asset.

Which tertiary market do you like best? Syracuse, N.Y.

Our current bull market can’t last forever… When’s the next recession and how do you plan to protect yourself from it?  I don’t see any recession on the horizon. But we generally look to our multifamily portfolio as a Great Recession and inflation hedge.

What action could the city take to improve transportation for New Yorkers? Very good question. I think the city needs continued support from the state and federal government. But most importantly, [the city] needs a system of crosstown surface transportation.

Will Donald Trump be on the ballot in 2020? If so, will be facing him? Who will win?  I have no idea about 2020. Hoping that someone like Michael Bloomberg would make a run. He is a viable candidate.

LIGHTNING ROUND:

Netflix or Hulu? Netflix.

Kombucha or cold brew? Neither.

Simpsons or South Park? South Park.

Robert Mueller or Rudy Giuliani? Mueller.

Peloton or SoulCycle? Peloton.

Gold or Bitcoin? Gold.

Amazon or Barnes & Noble? Barnes & Noble.

Plaza or Waldorf? Plaza.

Sweetgreen or Dig Inn? Dig Inn.

Gregg Schenker
President and Co-Managing Partner, ABS Partners Real Estate

Is the great trophy asset sale a thing of the past? No. The Plaza Hotel was recently sold. The Waldorf at a point in time will sell again. High-value condos—at a slower pace—continue to sell.

Demand for high-quality New York City real estate is strong globally. New York City continues to serve as the intellectual and cultural capital of the world. The businesses that locate in New York seek the most talented workforce along with an environment for collaboration. Therefore, investors want to own the city’s great iconic properties. There are many, new and old, which would top any investor’s wish list. They might not come up for sale often, although assets like 111 Eighth Avenue, 770 Broadway, the incredible new buildings at the World Trade Center and Hudson Yards would trade readily to willing buyers. In part due to high-quality well-capitalized longer-term institutional ownership, trading activity has, for the moment lessened, possibly because investors have come to the realization that quality New York City properties are very difficult to acquire and serve as terrific long-term investment holdings.

Which trophy would you buy if money were no object? I love so many buildings. Of the older vintage, the Flatiron [Building] for its beauty, 111 Eighth Avenue for its scale and infrastructure, 770 Broadway for its location and floor size. Of the newer buildings, the World Trade Center is phenomenal!

Have the tax changes been good, bad or neutral? How come? The new tax code has a number of positive elements. Examples: the lower corporate tax rate spurring new investment in hiring, as well as property, plant and equipment; increased activity around corporate mergers and attracting capital inflows to the U.S.; and the creation of Opportunity Zones will result in significant new investment in many areas throughout the U.S., which are now more economically viable for new investment and development. The new tax code also contains elements which are likely to be inflationary which over time may help to set up an environment for a steeper yield curve, an indicator of a healthy economy. On the other hand, the lack of deductibility of state and local taxes is a seismic shift in the economics of homeownership and is adding to the woes of the New York City residential condo market.

What’s your take on what’s happening to middle-market real estate firms like Eastern Consolidated, RKF and MHP? Diversification of sources of income has always been an important concept for managing concentration of risk and is necessary for companies to remain healthy through economic cycles. The slowdown in transactional income hurt some firms. I don’t believe we are seeing a major problem for middle-market firms, rather, [we are seeing] evidence that diversification of income sources (standard practice with larger firms) has proven to be critical. I also believe that proprietary-owned data will become increasingly important as more meaningful proptech emerges within the real estate industry. I am delighted to have a new partnership with Peter Hauspurg and other key members of the former Eastern team. They are consummate professionals with an unblemished long-term record of achievement.

Which tertiary market do you like best?  I like different areas for varying reasons: The Bronx, due to its relative affordability and unique neighborhoods; New Rochelle [N.Y.] due to a combination of very strong fundamentals and the designation of RXR as the master developer for the entire downtown area; and Jersey City [N.J.] due to its close proximity to Lower Manhattan and the infrastructure existing in and around the Jersey City/World Trade Center mass transit connection. Long Island City [Queens] is spectacular, with excellent access to transportation infrastructure and Midtown Manhattan.

When’s the next recession and how do you plan to protect yourself from it?  As it relates to real estate, net effective rental income compression began approximately a year and a half ago and most of the change in value appears to have already occurred, with net effective rents lower in many instances. The effects of new inventory coming online remains unknown, although job growth will be necessary to absorb new construction and older buildings will continue to require significant new investment to remain competitive. One way to take risk off is the conservative use of leverage, continuous reinvestment and thoughtful people making good operating decisions. Technology continues to bring about rapid change and [economist and political scientist Joseph] Schumpeter taught about the effect of creative destruction; we must be vigilant to embrace change.

Will Donald Trump be on the ballot in 2020? If so, who will be facing him? Who will win?  Trump will be on the ballot and is highly probable to win re-election. At this point in time there is no strong candidate to present meaningful opposition on behalf of the Democratic party.

LIGHTNING ROUND:

Netflix or Hulu? Apple TV.

Kombucha or cold brew? Kombucha.

Simpsons or South Park? PBS.

Robert Mueller or Rudy Giuliani? Giuliani.

Peloton or SoulCycle? All forms of good health and exercise.

Gold or Bitcoin? Central banks operating with discipline.

Amazon or Barnes & Noble? Amazon.

Plaza or Waldorf? Plaza.

Sweetgreen or Dig Inn? Sweetgreen.