Owners Magazine 2019: Talking With the Top Developers and Owners of NYC

Nicholas Bienstock
Co-Managing Partner, Savanna

Which commercial lease was your biggest win this year? Almost Amazon for 1 million square feet at Court Square! But when bad politics killed that, we backfilled 500,000 square feet with a major insurance and telecom company. Not a bad six-month rebound.

Do you think we’re heading into a downturn? Why or why not? There are a lot of signs that the general U.S. economy is slowing and may be heading toward a correction. But corrections are a normal part of the business cycle, occurring every five or six years and lasting about a year. In fact, in NYC we peaked in investment sales in 2015 when a wall of offshore capital was paying uneconomic prices for assets. The market has already corrected significantly from that peak and is much more rationally priced today. Since 2017, we have bought over $2 billion of cash-flowing, fully occupied office buildings in NYC. A greater correction in NYC would be a further buying opportunity for Savanna.

What do you think the future looks like for WeWork and other coworking operators if the economy slows down? We started a coworking company called Kickstart, focused on high-growth tech companies in 1999. It minted money for two years, but when the internet bubble burst in 2001, our tenants who were on short-term license agreements packed their boxes and left. The combination of long-term fixed expenses and short-term revenues is a bad mixture in a downturn. That being said, the enterprise model embraced by Knotel, WeWork and other coworking businesses is likely to weather downturns more effectively than the desk-sharing model.

Is New York City losing its shine? Are property investors starting to look elsewhere? In New York City we are seeing at this moment the fastest-growing, most profitable companies in the world — Google, Apple, Amazon, Facebook, Uber, Disney, etc. — expand on a massive scale, dramatically growing their existing footprints. I take great comfort that these and other companies are making multibillion-dollar, multi-decade commitments to New York. When I grew up in the city, New York was all about finance. Over the past 30 years that has totally changed. Finance has stabilized since the financial crisis, but every other leg of the economy — health care, biotech, education, tourism, technology, professional services, media, advertising, venture capital — has grown dramatically. The business base of the city has never been more diverse. Political winds will blow in different directions, but New York has its own gravity and the business fundamentals of New York City are robust. So, while particular investors will cycle in and out for their own reasons, New York is and will remain one of the most attractive real estate institutional investment markets in the world.

Do the new rent laws present any opportunities for savvy owners? The laws have severely damaged the property values of the existing rent-stabilized and controlled-housing stock. By minimizing the ability of owners to raise rents to cover annual increases in expenses, the laws will force those who own and invest in this type of housing to squeeze profits out of those investments by cutting their operating expenses and minimizing ongoing capital investments to maintain those properties, leading to a deteriorating pool of housing stock for the tenants. I suppose reputable institutional investors who don’t want to play that game will sell assets, and the new buyers will be people who are more willing to operate the properties as slumlords. So the slumlords will be the “savvy” beneficiaries and the tenants will be the victims. It’s bad legislation that will ultimately harm those it’s supposed to benefit.

What’s the biggest headache in your job that no one knows about? Every job has highs and lows. My job has both, but typically much more good than bad.

What’s more important: having the best lawyer or having the best accountant? Both are important. But a good real estate acquisitions lawyer needs to recognize that he or she is being hired to help you do the deal and to advise you on the right ways to protect yourself while getting it done, not to highlight all the reasons not to do it. Don’t highlight a problem without suggesting a thoughtful range of solutions. It’s amazing how many lawyers we have encountered that just think it’s their job to highlight the problems.

Most underrated neighborhood in the city? Morningside Heights. I went to grad school at Columbia in the 1990s. Morningside Park was a wasteland littered with crack vials. The streets were dirty and dangerous. Now the neighborhood is beautiful and safe, with great retail and cafes spilling onto the streets. It’s an extension of the Upper West Side, with an academic vibe. Columbia is building a $6 billion, 7-million-square-foot extension to the campus to the north, making a massive commitment to the neighborhood for the next 100 years. We are nearing completion of The Vandewater (the name of the original Dutch landowner of Morningside Heights was Harmon Vandewater), a 33-story, 183-unit condominium between Columbia’s historic campus and the new campus extension. So, we love the area and are investing in it.  

If you could pick the Republican and Democratic nominees for President, who would they be? Give me a pragmatic centrist! I’d vote for Bloomberg above anyone.

LIGHTNING ROUND:

Favorite book? Highbrow, “War and Peace,” lowbrow, “The Hitchhiker’s Guide to the Galaxy”

Favorite restaurant? The local French bistro next to our house: Brasserie Cognac 

Favorite vacation spot? We go to Wellington, Florida, because my wife and daughters are competitive riders. But don’t go unless you like horses.

Favorite TV show? “The Office”

Favorite movie? “Pulp Fiction”

Favorite sport? I play a lot of doubles squash and tennis. But I’m a Yankees fan. 

Ben Brown
Managing Partner and Head of New York and Boston, Brookfield Property Group

Which commercial lease was your biggest win this year? We are very happy to have signed Cravath as the anchor for Two Manhattan West earlier this month.

Do you think we’re heading into a downturn? Why or why not? We’re still in the longest real estate recovery cycle on record and a recession will come at some point, but for now, fundamentals still look good. Given our low-rate environment it’s hard to see a cliff edge, but we shouldn’t be blind to the real possibility of a slowdown across the main economic indicators and drivers. That will be when folks will have to roll up their sleeves and create value.

What do you think the future looks like for WeWork and other coworking operators if the economy slows down? The demand for flex space is on the rise, and the market will provide it. An economic slowdown may well impact individual providers in varied ways, but the concept of flex is here to stay. I anticipate some consolidation in the space as smaller operators will have difficulty accessing the capital to grow and those with large platforms will find economies of scale in acquiring some smaller businesses.

Is New York City losing its shine? Are property investors starting to look elsewhere? New York still offers leading companies the talent they need to succeed and quality of life remains high. But no one should think New York’s business climate is invulnerable or take for granted that the city will continue to grow and add jobs and housing indefinitely. We are still optimistic about the strength and future of New York, but the anti-development atmosphere threatens that future and is more than a little concerning. It’s the number one investment market for capital and that shouldn’t change, but it doesn’t help when we give that capital a reason to place their chips in other cities.

How have you adjusted your business plan since the new rent laws were passed? The changed laws impact us somewhat less than some others, but the impact on the existing New York City housing stock overall will be unquestionably negative.

Do the new rent laws present any opportunities for savvy owners? A deterioration in the housing stock in general is bad for New York, and what’s bad for New York is bad for property owners. It’s unclear if this will create opportunity or just less transparency into how the market reacts and behaves, sometime that gray area can result in some wins, but we won’t know for years.

Is REBNY in need of a revamp? What needs to happen? It’s no secret that the state of play has changed both in the city and in Albany. REBNY leadership — Bill Rudin and Jim Whelan, first and foremost — recognize that, as well as the need to engage differently with stakeholders and legislators. We want REBNY to serve as a solutions-oriented, pragmatic stakeholder.

What’s the biggest headache in your job that no one knows about? We are a global business; our investments, our partners and our platforms span the globe. Because of this, sometimes it’s easy to get caught up with what happens in your backyard. We need to make local decisions based on global information flows, and it can be tricky to balance the two and keep a clear head.

What’s more important: having the best lawyer or having the best accountant? Both are absolutely critical. You’ll probably discover a weak lawyer before a weak accountant.

Most underrated neighborhood in the city? Mott Haven in the Bronx, though I think not for too much longer.

If you could pick the Republican and Democratic nominees for President, who would they be? I change my answer to the headache question.

LIGHTNING ROUND:

Favorite book? “Early Bird” by Rodney Rotham
(a kid from Florida can totally relate)

Favorite restaurant? Granger in Notting Hill
was our neighborhood place in London

Favorite vacation spot? Tuscany

Favorite TV show? Sportscenter

Favorite movie? “Raging Bull”

Favorite sport? Basketball

Marty Burger
CEO, Silverstein Properties

Which commercial lease was your biggest win this year? At the World Trade Center, we signed some of the most exciting and best-known companies in the city: Uber, Casper, Zola, Moët Hennessy. We are seeing a lot of very creative companies move to our buildings in Lower Manhattan, including Diageo and Kelley Drye to 3 WTC and Macmillan to 120 Broadway.

Do you think we’re heading into a downturn? Why or why not? I don’t think we’re heading into a downturn because I believe interest rates will stay low. I see positive net absorption of office space, I see positive net absorption of jobs in New York City, and we see apartment occupancy up, and rents up. That does not signal to me a downturn.

What do you think the future looks like for WeWork and other coworking operators if the economy slows down? I think coworking is here to stay. More times than not, when we give tours to prospective tenants, they ask if there’s coworking in the building. It’s an amenity for them. They don’t have to commit to permanent space. If it’s a law firm that has a big case, they need to bring in lawyers from out of town — they can put them in Silver Suites, our coworking space. So, coworking is here to stay.

Is New York City losing its shine? Are property investors starting to look elsewhere? I think New York is still stellar from a financial perspective, despite its politics. When there’s trouble around the world, investors are still going to see the United States as a safe haven. And those dollars will often come to New York and San Francisco before they go to other cities.

How have you adjusted your business plan since the new rent laws were passed? We’re still trying to figure it out.

Do the new rent laws present any opportunities for savvy owners? Based on the rent law regulations that were put in place, I don’t think there are new opportunities for any of us.

Is REBNY in need of a revamp? What needs to happen? REBNY is in good hands with James Whelan. And I think the real estate industry is always remaking itself. We’re always evolving.

What’s the biggest headache in your job that no one knows about? Trying to fit 48 hours of activity into 24.

What’s more important: having the best lawyer or having the best accountant? Best lawyer.

Most underrated neighborhood in the city? Bushwick.

If you could pick the Republican and Democratic nominees for President, who would they be? I think it’s going to be Trump and Biden.

LIGHTNING ROUND:

Favorite book? Right now, I’m reading Bob Iger’s “Ride of a Lifetime”

Favorite restaurant? Downtown, Nobu and CUT. On the Upper East Side, Elio’s and The Mark.

Favorite vacation spot? Capri in the summer. Vail in winter.

Favorite TV show? “Succession” (which is filmed at the World Trade Center)

Favorite movie? “Avengers: End Game”

Favorite sport? Skiing

John Catsimatidis
Chairman and CEO, The Red Apple Group, United Metro Energy

Which commercial lease was your biggest win this year? In large measure, my organization is not focused on commercial leases. However, in 2019, we are proceeding with an extraordinary combination residential condo-slash-hotel, with Class A office space and a variety of upscale amenities on the St. Petersburg, Florida, waterfront, gracing the city’s skyline. [This year], beyond my five luxury high-rise rental apartments in downtown Brooklyn, I am opening my first two luxury high-rise rentals in Coney Island on the Boardwalk on the Atlantic Ocean, 1 and 2 Ocean Drive.

Do you think we’re heading into a downturn? Why or why not? Most of the nation appears to be relatively stable and prosperous. However, I am very concerned about New York City and New York State. The new laws and regulations which have recently been enacted by the State Legislature and the City Council have triggered caution and fear among real estate developers, equity investors, and our high-net-worth population. They believe the legislature and the City Council will make conditions even more difficult. Data shows that affluent New York residents have begun divesting of their New York properties, moving their assets to states which they believe are more business-friendly with lower taxes. Some softness has been recently detected in the NYC real estate market.

What do you think the future looks like for WeWork and other coworking operators if the economy slows down? I have never been keen on the coworking operators as a business model. From my perspective, this sector has been more of a temporary trend.

Is New York City losing its shine? Are property investors starting to look elsewhere? Again, NYC real estate developers and equity investors have been shaken by abusive laws and regulations that the government has recently imposed. They’re afraid that the State Legislature, [and] the New York City Council will continue to inflict more damage on the real estate market. I have just completed a mega-investment in Coney Island which will be an important contribution to bringing renewed confidence … turning around this once-glorious, famous leisure and vacation site. If NYC leaders are positive about my efforts, I would like to develop three more towers at Coney Island. If they are not welcoming, I am going to make more real estate investments in Florida.

How have you adjusted your business plan since the new rent laws were passed? We are analyzing how both New York and Florida now each have about 20 million people. In the next five years, Florida could be up to 25 million people whereby their state is more conducive to growth and development. New York’s population may see an erosion to about 18 million. And the economic demographics of the people remaining in New York may be markedly lower, as residents in high tax brackets move to alternative states. Policymakers cite New York’s tourism activity — but I consider this a false-sense economic development. Economic development, to me, means attracting permanent residents.

Do the new rent laws present any opportunities for savvy owners? Consider that I began making my fortune through my ability to acquire properties for “cents on the dollar” in once-great neighborhoods which, because of government failures, became blighted and distressed. The punitive laws enacted by the State Legislature and the New York City Council bring the risk of pain and devaluation of real estate. When landlords and owners walk away from properties like they did in the ’60s and ’70s, someone will swoop up the bargains.

Is REBNY in need of a revamp? What needs to happen? Yes! They completely miscalculated what the State Legislature and the City Council have done. An interesting statistic: About 62 percent of all contributions to political campaigns have some connection to an element of real estate.

What’s the biggest headache in your job that no one knows about? Working with some people who get consumed by their personal problems where it adversely affects their ability to perform because they are so preoccupied.

What’s more important: having the best lawyer or having the best accountant? Both are important.

Most underrated neighborhood in the city? I believe they are: Harlem, Washington Heights and Coney Island.

If you could pick the Republican and Democratic nominees for President, who would they be? Whoever they turn out to be, they both need to have common sense in carrying out their duties, in making their decisions.

LIGHTNING ROUND:

Favorite book? Two books which I read in my youth which made a lasting impression on me:“Jason and the Argonauts”, the mythical Greek hero on his adventurous quest for the golden fleece; and, “Zorba the Greek,” the novel written in 1946 by Cretan author Nikos Kazantzakis, later adapted for a play and a film.

Favorite restaurant? I do not have a “favorite” but I love both great Italian and Greek restaurants.

Favorite vacation spot? I have been blessed to travel all over the world. I love beaches and oceans. In summer 2020, I want to spend some “vacation” at my new development, “Ocean Drive” on the Boardwalk and the Atlantic Ocean, in Coney Island, Brooklyn.

Favorite TV show? “NCIS”

Favorite movie? Two relatively recent ones, “Air Force One”, and “Olympus Has Fallen”

Favorite sport? Baseball and the New York Yankees!

Isaac Chera
Principal, Crown Acquisitions 

Which commercial lease was your biggest win this year? Celine on Madison Avenue.

Do you think we’re heading into a downturn? Why or why not? We have been in a downturn.

What do you think the future looks like for WeWork and other coworking operators if the economy slows down? I think WeWork would benefit from a slowdown.

Is New York City losing its shine? Are property investors starting to look elsewhere?New York will always be a safe bet for global capital; and, yes, investors are looking in the boroughs of New York, and in New Jersey and D.C.

What’s the biggest headache in your job that no one knows about? We all share the same headaches.

What’s more important: having the best lawyer or having the best accountant? Best leasing broker.

If you could pick the Republican and Democratic nominees for President, who would they be? Pick the person, not the party.

LIGHTNING ROUND:

Favorite book? “The Go-Giver”

Favorite restaurant? Nobu

Favorite vacation spot? St. Barths and Napa

Favorite sport? Hockey

Christopher Conlon
Executive Vice President and CEO, Acadia Realty Trust 

Which commercial lease was your biggest win this year? Three leases in the aggregate make up Acadia’s biggest lease transaction(s) this year … all at City Point in Brooklyn. Camp (12,000 square feet), Casper (2,400 square feet) and McNally Jackson (5,800 square feet). Game-changing additions all opening late 2019.

Do you think we’re heading into a downturn? Why or why not? Not smart enough to call macroeconomic trends but with low rates, low unemployment and an expected strong holiday shopping season approaching … I’m still bullish.

What do you think the future looks like for WeWork and other coworking operators if the economy slows down? WeWork’s future looks very bad … reckless exuberance. As for others, like Industrious, Knotel, Convene and Spaces, the future looks bright. Steady, thoughtful growth seems to be a winning formula. Oh yeah, and profitability.

Is New York City losing its shine? Are property investors starting to look elsewhere?Property investors look to NYC and then look away in waves. Any lull is temporary. NYC is a global powerhouse that will continue to attract investment over any extended measuring period. Its economic generators like finance, culture and tourism are strong drivers of investment attraction.

How have you adjusted your business plan since the new rent laws were passed? Acadia has very little residential as we are focused on urban and street retail properties. That said, we are watching to see what, if any, ripple effects could emerge. So far, these new rent laws are not bleeding through to affect other property types. We shall see.

What’s the biggest headache in your job that no one knows about? Trouble finding time for self care … meditation and fitness. I’m winning but it’s becoming more and more difficult. A 2020 resolution for sure.

What’s more important: having the best lawyer or having the best accountant? As a public company, we value the contributions and importance of accountants and lawyers equally. If we count wrong, restatements can be costly and painful. If we risk REIT compliance status, there can be devastating legal consequences. The good news is that, with 20 years of successful operating history as a public company, we have the best accountants and lawyers we could hope for.

Most underrated neighborhood in the city? Easy. Downtown Brooklyn where we developed City Point. It still astonishes me how little people appreciate the depth and gravity of this important submarket.

If you could pick the Republican and Democratic nominees for President, who would they be? Michael Bloomberg.

LIGHTNING ROUND"

Favorite book? “The Power Broker” by Robert Caro

Favorite restaurant? Blackbarn at 19 East 26th Street in NoMad

Favorite vacation spot? Nantucket

Favorite TV show? “Ray Donavan”

Favorite movie? “American Beauty”

Favorite sport? Watching, Baseball (New York Yankees); Playing, Snowboarding

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

Which commercial lease was your biggest win this year? The Hudson Square Portfolio’s joint venture (Trinity, Norges and Hines) with Publicis, encompassing a renewal for 20 years and expansion into the Penguin space for total of 980,000 square feet.

Do you think we’re heading into a downturn? Why or why not? Economic indicators remain strong and balanced with consumer debt levels low and positive wage growth (70 percent or so of the economy). I am concerned that the politics of the 2020 election could disrupt the economy and the private economy’s faith in the future, which will limit activity in the investment sector in such a way that we lose our position as being at the leading edge of innovation. It seems to me the media is focused on the business cycle, but I think we may be going through a period of secular change.

What do you think the future looks like for WeWork and other coworking operators if the economy slows down? Like other owners, Hines has formed a new group, led by Charlie Kuntz, to provide coworking space in our buildings. We have also teamed up with Convene to provide space that has service amenities. Of course, there’s nothing really proprietary about WeWork’s idea of shared space and flexible lease terms (think of Regis as a predecessor). My sense is that this kind of undertaking is better done incrementally because few firms could afford the scale of losses for running an operating business based on fast and large-scale expansion, as WeWork has done. But we respect their current management and role in expanding the way office space can provide solutions to our user base.

Is New York City losing its shine? Are property investors starting to look elsewhere? NYC can only be looked at sector-by-sector. Tourism is adversely impacted by the situation with China. Sticks-and-bricks retail has been disrupted by Amazon and others. Multifamily in New York will be adversely impacted by the recent regulatory changes and the condominium sector has excessive inventory, especially at the high end. Producing affordable housing and last-mile industrial space will be stronger in New York than elsewhere. We have had very strong investor interest in the two senior housing projects Hines is carrying out with Welltower, at 56th and Lexington and 85th and Broadway.

As for commercial office buildings, I do not think NYC is losing its shine, but its employment growth hardly compares to San Francisco. But for investors, it remains, along with London, one of the two global markets that are first-choice destinations for global and domestic capital. In fact, the workplace is really being reinvented and we see that in the great success of One Vanderbilt as well as our large portfolio (6 million square feet) with the Hudson Square joint venture, which offers loft-like space with large floors in buildings and a neighborhood that feels like it’s as much a part of the spirit and history of New York as it authentically is.

I think part of what’s happening is that many investors are over-allocated to the office sector (which is mature) and they are seeking more exposure for their capital to emerging sectors such as industrial buildings (for bulk distribution as well as fulfillment centers that have robotic capability).

How have you adjusted your business plan since the new rent laws were passed? This is not a space we have been active in.

Do the new rent laws present any opportunities for savvy owners? Too early to tell.

Is REBNY in need of a revamp? What needs to happen? It would be presumptuous of me to say whether they did or did not need a revamp.

What’s the biggest headache in your job that no one knows about? There is a false perception that real estate is a business of bricks and mortar. But most developers will say that it is really a business of people, particularly those that work well in a team setting. My biggest challenge involves just a few people that do not share that attitude.

What’s more important: having the best lawyer or having the best accountant? The best lawyer: Ron Sernau of Proskauer Rose who leads their real estate practice and has worked with Hines NY for the last 26 years or so. He is almost irreplaceable to our work here.

Most underrated neighborhood in the city? Sunnyside Yards in Queens. PAU’s scheme for this is exceptionally inventive and forward thinking.

If you could pick the Republican and Democratic nominees for President, who would they be? Michael Bloomberg would be my first and only choice, and it would not matter to me which party he ran for. I have lost complete faith in the political architecture (our primary system) of the two-party system.

LIGHTNING ROUND:

Favorite book? “Ego Is the Enemy”
by Ryan Holiday

Favorite restaurant? Stemwinder in
Ludlow, Vermont

Favorite vacation spot? Our home in Vermont

Favorite TV show? The new documentary on Bill Gates streamed by Netflix, though I’m not sure that qualifies as a TV show

Favorite movie? A tossup between
“Saving Private Ryan” and “Cinderella Man”

Favorite sport? Mogul skiing and touring

Craig Deitelzweig
President and CEO, Marx Realty

Which commercial lease was your biggest win this year? Although not our largest lease, the roughly 60,000-square-foot lease expansion, extension and relocation by ANA at 10 Grand Central was our most impactful as it freed up the top four floors of the building. These floors are now part of our ridiculously high-end Penthouse Collection, with private outdoor space, direct, in-your-face views of the Chrysler Building and soaring, 20-foot ceilings. We anticipate achieving some of the highest rents in Midtown for this space.

Do you think we’re heading into a downturn? Why or why not? All of our indicators show that the New York City market is as strong as ever and our portfolio has never been busier. Likewise, the commercial real estate markets in cities like Atlanta and D.C. continue to show steady growth.

What do you think the future looks like for WeWork and other coworking operators if the economy slows down? These coworking groups will perform poorly during a recession. They have performed poorly during past recessions and the durational mismatch inherent in their business model persists today. The challenges that I have seen are that they expanded far too fast and along the way they were able to convince some of the market players that having a location in their building was a benefit to the landlord and other tenants. I don’t believe that outsourcing culture and community is ever a good idea, so at Marx we create hospitality-like experiences and dramatic spaces specially tailored for our tenants and all the while reinforcing the building’s unique brand and heritage.

Is New York City losing its shine? Are property investors starting to look elsewhere? New York is one of the strongest and most dynamic office markets in the world and continues to improve with the explosion of technology companies locating and expanding here. New York will remain a prime and stable choice for investors.

How have you adjusted your business plan since the new rent laws were passed? Thankfully, we do not have multifamily assets in New York. 

Do the new rent laws present any opportunities for savvy owners? Nothing good will come out of these regulations. The biggest concern to New York today is the increasing burdens that these ever-expanding regulations pose on the local economy.

Is REBNY in need of a revamp? What needs to happen? REBNY continues to do a great job educating the public on the impacts of over-regulation on the economy. We all need to work together to help prevent another Amazon debacle from reoccurring. [It’s] hard to understand how well-paying and “new economy” jobs in Queens (my hometown) were somehow considered a bad thing. 

What’s the biggest headache in your job that no one knows about? We have been credited with being the first to truly marry office and hospitality and reinvent the office product. As a result, our buildings have doormen outside; music in our lobbies; a signature scent being diffused through the HVAC system; and a club floor with a lounge, high-end cafe and beautifully landscaped outdoor terraces. Overall, the biggest challenge we address every day is that details matter. We make sure all of our tenants and guests are properly welcomed, so our front-of-house associates undergo rigorous training to ensure that everyone performs the Marx way of treating our tenants. Our goal is to perfect the art of making our tenants feel special at “hello.”

What’s more important: having the best lawyer or having the best accountant? I’m a former Skadden lawyer, so I understand the incredible value a sharp lawyer provides.

Most underrated neighborhood in the city? Midtown East. It is by far the most transportation convenient and offers the most diverse talent pool in the entire city. The restaurants, fitness venues and services available make it a great location for finance, tech, legal and creative firms. In the past, any landlord who owned an office building near Grand Central barely had to lift a finger to be successful. The tenants came to them. Now, with new building stock being built on the west side, many of the buildings in the Midtown East market need to be reimagined. Landlords content with the success of the past will fall further behind while creative owners will continue to thrive. We are actively pursuing acquisitions of these types of assets in Midtown.

If you could pick the Republican and Democratic nominees for President, who would they be? Lyndon Johnson versus Ronald Reagan.

LIGHTNING ROUND:

Favorite book? I love reading biographies of visionaries and industry titans.
Too many to pick just one.

Favorite restaurant? Serendipity 3. We have enjoyed a delicious sundae celebration for every one of my kids’ birthdays.

Favorite vacation spot? We’re heading to Australia this winter and I already know it will be our best vacation!

Favorite TV show? “Succession,” even though I try to raise my kids to be the complete opposite of those kids

Favorite movie? “Scarface.” Queens was a pretty rough place when I was growing up so this reminds me a bit of my childhood.

Favorite sport? Baseball. The Mets are my favorite (and most heartbreaking) team by far. Next year is our year.

Ronald Dickerman
Founder and President, Madison International Realty

Which commercial lease was your biggest win this year? We are planning to announce a major leasing event at Atlantic Center in Brooklyn. It will be exciting. Stay tuned.

Do you think we’re heading into a downturn? Why or why not? Growth is slowing but the U.S. economy has momentum despite the drag of trade wars with China, political uncertainty in our own upcoming election, and turbulence in the IPO market. The Fed is cutting rates, which is expansionary; REITs have rallied, which is a leading indicator for property. The economy has room to run.

What do you think the future looks like for WeWork and other coworking operators if the economy slows down? Coworking is a viable method of offering flexible office space to offices and is here to stay. WeWork is a better, more viable company today than the day before its CEO departed. All operators will be pressured in a downturn but, if they respond actively, will be better positioned on the other side.

Is New York City losing its shine? Are property investors starting to look elsewhere? NYC continues to offer investors long-term opportunities as a world-class destination unequaled by any other city in all economic environments. Today, many cities in the Sun Belt and internationally offer better opportunities for growth with less regulation and tax overhang; however, they don’t possess the same downside resiliency of NYC. It’s a trade-off.

How have you adjusted your business plan since the new rent laws were passed? We are buying affordable housing in NYC. We have lowered our pricing targets by 25 percent-plus and increased our return expectations given the regulation. We are about to announce an equity JV with a very experienced NYC operator. There continues to be a fundamental shortage of affordable housing in our city. The regulation will stifle supply and artificially cap rental rate growth. Something has to give.

Do the new rent laws present any opportunities for savvy owners? Read my previous answer.

Is REBNY in need of a revamp? What needs to happen? It’s large, but still a central meeting place for participants in our industry.

What’s the biggest headache in your job that no one knows about? Clearing my email inbox. We have a global business and my emails flow 24/7.

What’s more important: having the best lawyer or having the best accountant? Best lawyer. The type who can think like business people.

Most underrated neighborhood in the city? Tribeca. My son just moved there and we love trying its restaurants.

If you could pick the Republican and Democratic nominees for President, who would they be? Our political process is broken. We are no longer finding the best and the brightest. That’s as far as I will comment.

LIGHTNING ROUND:

Favorite book? “Margin of Safety” by Seth Klarman (never stop using its lessons)

Favorite restaurant? The Grille

Favorite vacation spot? Super-secret location in the Bahamas with family

Favorite TV show? “Homeland”

Favorite movie? Anything sci-fi

Favorite sport? Formula 1

Douglas Durst
Chairman, The Durst Organization

Which commercial lease was your biggest win this year? Bank of Montreal at 151 West 42nd Street for 215,000 square feet.

Do you think we’re heading into a downturn? Why or why not? No! The residential and commercial leasing markets are both strong; however, there are serious fundamental problems with the economy. Locally, the city’s budget is not positioned for a downturn, and the new rent laws will negatively impact the housing market and the property tax levy. 

What do you think the future looks like for WeWork and other coworking operators if the economy slows down? Coworking existed before WeWork and it will exist after them. 

Is New York City losing its shine? Are property investors starting to look elsewhere? No! People park money in New York by buying real estate, and while some people do not like this, it provides tax revenue, jobs and economic activity. 

How have you adjusted your business plan since the new rent laws were passed? [We’ve adjusted] a little; our portfolio has very few traditional rent-regulated units. However, in projects under development, we now make sure that all the units initially rent for at least $2,775 a month.

Do the new rent laws present any opportunities for savvy owners? The opposite. They discourage construction and capital investment. It’s as if they modeled NYCHA.

Is REBNY in need of a revamp? What needs to happen? We have new leadership and we need to get used to a new reality.

What’s the biggest headache in your job that no one knows about? Getting through my emails before deciding what to have for lunch.

What’s more important: having the best lawyer or having the best accountant? They can both get you in and out of trouble.

Most underrated neighborhood in the city? Astoria.

If you could pick the Republican and Democratic nominees for President, who would they be? Jody Durst.

LIGHTNING ROUND:

Favorite book? “City for Sale”
by Wayne Barrett and Jack Newfield

Favorite restaurant? Aureole

Favorite vacation spot? Ibiza

Favorite TV show? “Succession”

Favorite movie? “Trading Places”

Favorite sport? Tennis

Jake Elghanayan
Principal and Senior Vice President, TF Cornerstone

Which commercial lease was your biggest win this year? Our two most exciting commercial deals this year are both, in a sense, amenities to our buildings (and the greater neighborhood, in the case of the second). We will be partnering with Industrious to convert the 43rd floor at 152 West 57th, Carnegie Hall Tower, which has one of the most beautiful outdoor terraces I’ve ever seen in New York, into a conference center and flexible working space. CHT is a boutique and iconic Plaza District office address and we think that enhancing the conferencing and flex-work opportunities will serve our tenants very well.

On the other end of the spectrum, we are very excited to be bringing another Chelsea Piers to Pacific Park in Brooklyn, totaling nearly 100,000 square feet. This location will also include Chelsea Piers’ Fieldhouse business, with its focus on youth sports programs, which should resonate in an area of Brooklyn with lots of growing young families and few large-scale recreational facilities. With the 72,000 square feet of public open space included in the development, Chelsea Piers will be a great amenity not just for Pacific Park residents but for Brooklyn families throughout the community.

Do you think we’re heading into a downturn? Why or why not? Our business model is to maintain relatively low leverage, so I don’t worry too much about the inevitable cycle of ups and downs. New York has benefited from a more secular trend towards increased urbanization, which seems likely to continue. However, it would be a mistake to take this trend for granted; things can change.

What do you think the future looks like for WeWork and other coworking operators if the economy slows down? WeWork and the other flexible work providers filled a gap in the commercial market and will likely continue to grow as a subset of space users prize flexibility over price or customization. TF Cornerstone recently made a small investment in Industrious because we believe this trend still has legs. They are pushing the traditional landlord-tenant relationship to focus on service and hospitality, which very much aligns with how we work with our tenants and the level of amenities and flexibility we think modern tenants expect and demand.

Is New York City losing its shine? Are property investors starting to look elsewhere? New York’s energy, diversity, and culture are unmatched globally. Neighborhoods like Long Island City are now joining the national spotlight as one of the best areas to move a business or to start a family. The main challenges New York faces are political, both locally and at the federal level. A recent Baruch study estimates that by 2040 about 70 percent of Americans are expected to live in the largest 15 states (due to large urban areas) but will have only 30 percent representation in the U.S. Senate. That lack of representation allows for policies that discriminate against us, like the elimination of the SALT deduction by the current Congress.

How have you adjusted your business plan since the new rent laws were passed? We were not significantly impacted. We’ve seen the ups and downs of cycles, complied with various new regulations passed over the past five decades, and our position as multi-generational owners is to continue to manage our portfolio carefully, with confidence in the New York market.

Do the new rent laws present any opportunities for savvy owners? The city needs affordable housing, both the preservation of existing units and the development of new ones. We are in the process of building nearly one thousand new affordable housing units between our Hunters Point South and Pacific Park developments. Our emphasis on sustainable mixed-use plans with affordable housing opportunities has stood the test of time, and we don’t see any reason to change course.

Is REBNY in need of a revamp? What needs to happen? As an industry we need to do more to engage with our critics, address concerns, and reform proactively. I also think we could do a better job explaining the importance of the private sector in the creation and improvement of housing, as well as the support real estate owners and professionals provide to the city’s cultural, health, and social institutions.

What’s the biggest headache in your job that no one knows about? The big-picture stuff is fun, but the details and creating the right company culture are what ultimately determine whether we will be successful.

What’s more important: having the best lawyer or having the best accountant? I’ll say lawyer, but as a former lawyer, I might be biased.

Most underrated neighborhood in the city? I love exploring neighborhoods and frequently say to myself, “Wow, this neighborhood seems like it would be a great place to live.” That’s one of the great things about New York.

If you could pick the Republican and Democratic nominees for President, who would they be? There doesn’t seem to be a question about the Republican candidate. I’m hoping for Biden to emerge on the Democratic side.

LIGHTNING ROUND:

Favorite book? Tough question … any Philip Roth, Steinbeck, or Dostoyevsky

Favorite restaurant? Locando vini e olii

Favorite vacation spot? Recently, Greece

Favorite TV show? “The Sopranos”

Favorite movie? “Lawrence of Arabia”

Favorite sport? Baseball

Justin Elghanayan
President, Rockrose Development

Which commercial lease was your biggest win this year? Our lease with SmithBucklin at Alexander Court in D.C. was a big win for us, because it was a long-term lease on a low floor of our new trophy office building. When designing Alexander Court, we bet on tenants paying top dollar to be part of such an amenity rich-building. Getting a low-floor tenant to stretch its budget just to be part of the building felt like an important success.

Do you think we’re heading into a downturn? Why or why not? Given the length of the current recovery, there’s probably a downturn coming. That’s the nature of this business. I wouldn’t trust anyone who can say exactly when it will happen, but I will be prepared for it.

What do you think the future looks like for WeWork and other coworking operators if the economy slows down? WeWork and other coworking properties represent a small percentage of the commercial real estate market. New York’s commercial market will survive a slowing of the economy, with or without WeWork.

Is New York City losing its shine? Are property investors starting to look elsewhere? As the development environment gets increasingly difficult in NYC, developers and investors naturally consider alternative areas that make more sense on their balance sheets. This is a scary political environment.

How have you adjusted your business plan since the new rent laws were passed? Changes in rent laws have forced us to re-evaluate all of our current projects and future plans. Success in this business has always required making predictions about the future, such as the future economy, political environment, construction costs, rent laws. Those predictions seem especially difficult right now, but this has always been the case, to some extent.

Do the new rent laws present any opportunities for savvy owners? Every challenge presents new opportunities, you just need to know where to find them.

Is REBNY in need of a revamp? What needs to happen? This is a new environment for the real estate industry. Things are changing quickly, and developers don’t like uncertainty. REBNY is adapting, and it will need to continue to do so. REBNY will always have an important role to play in analyzing and communicating the long-term economic impacts of short-term political proposals.

What’s the biggest headache in your job that no one knows about? Today’s political environment is very frustrating. Major decisions are being made, sometimes to send a political message, without necessarily understanding the long-term impacts of those decisions. Our political environment doesn’t allow elected officials to make decisions based on an objective analysis of the facts.

What’s more important: having the best lawyer or having the best accountant? I’d go with having the best lawyer. A great lawyer should be thinking like an accountant when providing legal advice.

Most underrated neighborhood in the city? The resurgence of Harlem has been trumpeted for years, but I still think it’s an underrated neighborhood. With its proximity, transit options, cultural diversity, and beautiful housing stock, it’s still undervalued compared to other Manhattan neighborhoods.

If you could pick the Republican and Democratic nominees for President, who would they be? After just binge-watching Dwayne Johnson in “Ballers,” I’d vote for The Rock as a Democrat or a Republican.

LIGHTNING ROUND

Favorite book? “Crime and Punishment” by Fyodor Dostoevsky

Favorite restaurant? Rucola

Favorite vacation spot? Martha’s Vineyard

Favorite TV show? “The Sopranos”

Favorite movie? The Lord of the Rings movies

Favorite sport? Basketball

Ziel Feldman
Chairman and Founder, HFZ Capital Group

Which commercial lease was your biggest win this year? At our historic landmark building in Detroit, the Fisher Building, we have completed over 100,000 square feet of new leases in 2019, with tenants including blue-chip not-for-profits and large national services companies. Our occupancy is now approaching 90 percent, up from 30 percent when we bought the building out of special servicing following Detroit’s bankruptcy. 

Do you think we’re heading into a downturn? Why or why not? Employment levels, especially among lower to middle income are at record highs; interest rates are at record lows; overabundance of liquidity outweighs politically self-induced tariff challenges. So no, I don’t think so.

What do you think the future looks like for WeWork and other coworking operators if the economy slows down? It’s certainly clear that there is a demand for flexible workspace and I don’t think that disappears entirely in a slowdown, but there will be a test of the depth of the market and pricing elasticity in a down market. Ultimately, as in other cyclical businesses, companies with strong balance sheets and measured levels of exposure will be okay.

Is New York City losing its shine? Are property investors starting to look elsewhere? No. However, misguided politically self-induced regulations, including elimination of “broken glass crimes,” and demonization of our police force and department of education decisions, just to mention a few, will dramatically reduce our shine.

Do the new rent laws present any opportunities for savvy owners? I do not see any.

Is REBNY in need of a revamp? What needs to happen? REBNY is and always has been a strong ally for the industry and we will continue to work with them to advocate on behalf of forward-looking policies that will help this city continue to thrive.

What’s the biggest headache in your job that no one knows about? Constant interruptions from my team while I’m trying to do my daily transcendental meditation. 

What’s more important: having the best lawyer or having the best accountant? I prefer having the best luck.

Most underrated neighborhood in the city? Hell’s Kitchen, where we developed our 53rd and Eighth condo project.

LIGHTNING ROUND:

Favorite book? “Sapiens: A Brief History
of Humankind”

Favorite restaurant? Springbone Kitchen

Favorite vacation spot? Bridgehampton

Favorite TV show? “Shtisel”

Favorite movie? “Pulp Fiction”

Favorite sport? Golf

Winston Fisher
Partner, Fisher Brothers

Which commercial lease was your biggest win this year? It’s a great feeling when an existing tenant opts to extend and expand within our portfolio. It shows they appreciate the level of service we’re providing and the investments we’re making to modernize our buildings. The best example is Evercore, which expanded its footprint at Park Avenue Plaza to 350,000 square feet and extended its lease through 2034. Other recent examples include Duff and Phelps and General Atlantic at Park Avenue Plaza, and Global Infrastructure at 1345 Avenue of the Americas.

Do you think we’re heading into a downturn? Why or why not? Economic expansion has been going on for more than a decade, and a downturn is inevitable at some point. The risk is certainly greater today than at any point in the recent past due primarily to global forces. We will need smart monetary and fiscal policy to avoid a recession in the near future.

What do you think the future looks like for WeWork and other coworking operators if the economy slows down? Coworking has exploded in popularity while the economy has continued to expand, but at some point these operators will have to prove their ability to match assets to liabilities during a downturn. That will be the true test of their staying power.

Is New York City losing its shine? Are property investors starting to look elsewhere?New York City has continued to attract global capital inflows, but the price of doing business here keeps growing. Recently enacted legislation has heightened costs even further and to levels that are forcing people to reconsider New York City. It’s imperative that we stay vigilant to protect all constituents, including the entities who want to invest in housing and commercial development.

What’s the biggest headache in your job that no one knows about? Unfortunately, technology for the real estate sector is still in its infancy. It’s a challenge to be forward looking and to find sustainable tech platforms.

What’s more important: having the best lawyer or having the best accountant? You can’t pay your lawyer if you don’t know where your money is.

Most underrated neighborhood in the city? I am going to go with the Upper East Side. It might not be considered cool right now, but the Upper East Side has incredible restaurants and solid transportation options, including the newest subway line in New York City. The neighborhood also presents tremendous value for renters.

If you could pick the Republican and Democratic nominees for President, who would they be? We really need transformative candidates on both sides of the aisle who are pragmatic, fact-based and believe in national unity.

LIGHTNING ROUND:

Favorite book? “The World is Flat” by Thomas Friedman

Favorite restaurant? Sushi Yasuda

Favorite vacation spot? Anywhere that requires an eight-hour-plus flight

Favorite TV show? “The Wire”

Favorite movie? “Airplane!”

Favorite sport? Whatever sport I’m playing. I would much rather play than watch.

Scott Galin
President and CEO, Handler Real Estate Organization

Which commercial lease was your biggest win this year? It’s difficult to choose one. We’ve completed many leases this year for prominent tech, not-for-profit, and law firm tenants, both in our owned properties and third-party leases on behalf of both tenants and landlords.

Do you think we’re heading into a downturn? Why or why not? Actually, I believe we entered a modest downturn about 18 months ago, but it’s category- and location-specific. The residential rent regulations are still playing out, so it’s a bit unclear right now what that will mean longer term. The commercial leasing market is still strong, but the economy has become a bit more challenging for small- and mid-sized tenants. Transacting with them has required a little more effort this year, but the deals are still getting done. On a macro level, however, I do not foresee a major downturn.

 What do you think the future looks like for WeWork and other coworking operators if the economy slows down? There’s been enough press about that in the last 30 days.

Is New York City losing its shine? Are property investors starting to look elsewhere? New York City is as desirable a market as it has ever been. That said, multifamily investors are definitely looking at other markets right now both in the tri-state region and around the U.S., while other investors, specifically international investors, are on the sidelines for various geopolitical and economic reasons. The desire to invest here remains unabated. Once the investment sales market makes it way through this current cycle, I anticipate another round of heavy activity.

How have you adjusted your business plan since the new rent laws were passed? We are passive limited investors in several multifamily properties, so we are far less involved on a day-to-day basis, but I know that many of our general partners have adjusted their business plans accordingly or are in the process of doing so.

Do the new rent laws present any opportunities for savvy owners? 100 percent, yes. Any time there is disruption in the market, new opportunities emerge. Cap rates are going up, yet interest rates are still low. Some investors will come out of this cycle having made very opportunistic deals. 

Is REBNY in need of a revamp? What needs to happen? REBNY still plays an important role in our industry. I’m looking forward to seeing what ideas Jim Whelan will put into place.

What’s the biggest headache in your job that no one knows about? Me dealing with me. I put an extraordinary amount of pressure on myself.

What’s more important: having the best lawyer or having the best accountant? Owning properties in the best locations!

Most underrated neighborhood in the city? Garment District.

If you could pick the Republican and Democratic nominees for President, who would they be? Lincoln and FDR.

LIGHTNING ROUND:

Favorite book? “Grant” by Ron Chernow

Favorite restaurant? Il Postino

Favorite vacation spot? Ana Capri, Paris, Bermuda

Favorite TV show? “Call My Agent” (French show on Netflix)

Favorite movie? “The Graduate”

Favorite sport? Baseball

MaryAnne Gilmartin
CEO, L&L MAG

Do you think we’re heading into a downturn? Why or why not? New York’s fundamentals are strong, but I do see a correction, if not a modest downturn, which creates big opportunities for folks like us.

What do you think the future looks like for WeWork and other coworking operators if the economy slows down? While there’s plenty of culpability to go around, WeWork’s troubles are largely its own doing. I think it will course correct, right-size itself, and adjust the market’s expectations.

Is New York City losing its shine? Are property investors starting to look elsewhere? Political headwinds and the cost of doing business make it ever more challenging to build and operate here. New York remains the global capital of the world, but the barriers to entry keep getting higher and higher. Again, we will create opportunities due to this.

How have you adjusted your business plan since the new rent laws were passed? We will concentrate our building in neighborhoods where the majority of the market rents are already over $2,000 per month. With this strategy, we still have a multifamily business in new construction. That said, we are borough builders too and the new rent laws are foreboding for areas outside of the urban core — hopefully time will produce a political awakening up in Albany.

Do the new rent laws present any opportunities for savvy owners? Other than producing a less cluttered field of developers, the new laws present more of a workaround than an opportunity for savvy developers.

Is REBNY in need of a revamp? A lot.

What’s the biggest headache in your job that no one knows about? This job is full of headaches for all of us in this business. That’s what keeps it fun and real. Telling you how I cope with them would be revealing my secret sauce.

What’s more important: having the best lawyer or having the best accountant? Having the best lawyer with an accounting background.

Most underrated neighborhood in the city? Bushwick.

If you could pick the Republican and Democratic nominees for President, who would they be? I’m not foolish enough to answer that question.

LIGHTNING ROUND:

Favorite book? Elena Ferrante’s Neapolitan novels

Favorite restaurant? Crown Shy

Favorite vacation spot? Maldives

Favorite TV show? “Fleabag”

Favorite movie? Too many good ones to pick

Favorite sport? 10th grade girls’ volleyball 

Larry Gluck
Founder and CEO, Stellar Management

Which commercial lease was your biggest win this year? We are grateful for every firm that leases spaces at our buildings across the city, each of those leases is a win in my book. A highlight this year would be signing up over 300,000 square feet of space at One Soho Square. One of those deals we agreed to an LOI on Thursday and signed a lease on Tuesday. A lot of tenants and landlords talk about being able to move quickly, but I don’t think anyone has done what we did.

Do you think we’re heading into a downturn? Why or why not? I wouldn’t be holding my breath waiting for a downturn. Although at some point there will be a tipping point and things will get worse before they get better again. We leave the crystal ball gazing to others and just try to find good real estate deals. 

What do you think the future looks like for WeWork and other coworking operators if the economy slows down? Certainly, the rate of expansion into new space will slow. However, for their existing spaces, there is a line of thought that says end users may prefer the flexibility their model provides in short-term [or] no-term office space in a recession. Whether you are a landlord that did or did not rent space to coworking operators, they were a key component of the rising tide of office rents and net absorption across the city, and without them, your guess is as good as ours.

Is New York City losing its shine? Are property investors starting to look elsewhere? For us, NYC will never lose its shine. I don’t know what other folks are doing and that is their prerogative. We have a singular focus on New York and conviction in the long-term prosperity of our great city.

How have you adjusted your business plan since the new rent laws were passed? At Stellar, over the last few years our notable deals have been some office redevelopments and a ground-up residential buildings in Brooklyn.

Do the new rent laws present any opportunities for savvy owners? Not necessarily new opportunities, but I think these new rent laws are pushing owners to re-evaluate their core competencies and the future of their businesses.

Is REBNY in need of a revamp? What needs to happen? Real estate is in the global political spotlight, not just in New York. I think REBNY works hard across the aisle to advocate as best they can for the industry.  

What’s the biggest headache in your job that no one knows about? Listening to all my voicemails. It’s 2019, send me an email or text.

What’s more important: having the best lawyer or having the best accountant? Lawyer, but I’m biased as I started out as a lawyer.

Most underrated neighborhood in the city? Washington Heights, though it’s hardly underrated these days.

If you could pick the Republican and Democratic nominees for President, who would they be? I make it a habit to not talk politics at the dinner table, but if I had my picks they would definitely be from the Avengers movie.

LIGHTNING ROUND:

Favorite book? “Pillars of the Earth”

Favorite restaurant? Campagnola on the
Upper East Side

Favorite vacation spot? Mexico, but really anywhere in Latin America

Favorite TV show? “Ray Donovan”

Favorite movie? “The Godfather”

Favorite sport? Golf to play and football to watch

Francis Greenburger
Chairman and CEO, Time Equities Inc.

Which commercial lease was your biggest win this year? The largest lease is with Atlantic Credit & Finance at the Roanoke, Virginia, property (111 Franklin Road). The lease is for 53,775 square feet starting at $994,837.50 per annum for 10 years.

Do you think we’re heading into a downturn? Why or why not? Yes, too many lead indicators are showing negative trend lines.

What do you think the future looks like for WeWork and other coworking operators if the economy slows down? Coworking companies must find an economic model or go out of business.

Is New York City losing its shine? Are property investors starting to look elsewhere? Yes.

How have you adjusted your business plan since the new rent laws were passed? [I’ve] limited my upgrades to existing properties to meet minimum legal standards.

Do the new rent laws present any opportunities for savvy owners? Only if cap rates go up significantly.

Is REBNY in need of a revamp? What needs to happen? [They need to] improve their outreach to owners around the city.

What’s the biggest headache in your job that no one knows about? Complying with constant and expensive regulatory changes.

What’s more important: having the best lawyer or having the best accountant? Both, but if only one, lawyer.

Most underrated neighborhood in the city? A number of the waterfront neighborhoods in Queens.

If you could pick the Republican and Democratic nominees for President, who would they be? Mitt Romney and Amy Klobuchar.

LIGHTNING ROUND:

Favorite book? “9th Street Women”

Favorite restaurant? Gotham

Favorite vacation spot? Anguilla

Favorite TV show? PBS

Favorite movie? “Out of Africa”

Favorite sport? Tennis

Jeffrey Gural
Chairman, GFP Real Estate

Which commercial lease was your biggest win this year? HHC at 100 Pearl Street.

Do you think we’re heading into a downturn? Why or why not? Eventually, but I’ve never known anyone that is able to predict when a downturn will happen.

What do you think the future looks like for WeWork and other coworking operators if the economy slows down? It depends on if they have proper funding and a good product, but I don’t think anyone really knows the future of WeWork.

Is New York City losing its shine? Are property investors starting to look elsewhere? Obviously there’s concern about the direction the city and state are going in politically, but I still think New York is the place [in which] global companies need to have a presence and [to which] young people gravitate after college.

How have you adjusted your business plan since the new rent laws were passed? We own very little residential property so it hasn’t affected us.

Do the new rent laws present any opportunities for savvy owners? I assume that there will be opportunities out there for properties that are now considered overleveraged, but residential is not our forte.

Is REBNY in need of a revamp? What needs to happen? REBNY is fine. They just need to adjust to the political realities in Albany and Gracie Mansion, as I don’t think that is going to change anytime soon.

What’s the biggest headache in your job that no one knows about? That I can’t stop working because I’m addicted to my iPad.

What’s more important: having the best lawyer or having the best accountant? Accountant.

Most underrated neighborhood in the city? The Rockaways.

If you could pick the Republican and Democratic nominees for President, who would they be? Joe Biden.

LIGHTNING ROUND:

Favorite book? “1984”

Favorite restaurant? Peter Luger

Favorite vacation spot? St. John

Favorite TV show? “60 Minutes”

Favorite movie? “Cool Hand Luke”

Favorite sport? Football

Leslie Himmel
Co-Managing Partner, Himmel + Meringoff Properties

Which commercial lease was your biggest win this year? We are very proud of putting Israel’s premier VC firm and cybersecurity leader, Jerusalem Venture Partners, in its new U.S. headquarters at 462 Broadway. Cybersecurity is a growing and important industry in the U.S. and New York in particular and as always we are at the forefront of backing growth industries.

Do you think we’re heading into a downturn? Why or why not? We may be experiencing a slowdown but as the market takes a pause and resets we see this as a chance to uncover new opportunities that particularly those, like us, with deep war chests of cash can take advantage of. When things slow down, we tend to go faster.

What do you think the future looks like for WeWork and other coworking operators if the economy slows down? Coworking is here to stay and companies operating in this space will become more focused on the bottom line versus the top line.

Is New York City losing its shine? Are property investors starting to look elsewhere? New York City remains the single greatest market in the world and continues to attract leading businesses. Just ask Google, Amazon and Facebook.

Is REBNY in need of a revamp? What needs to happen? What needs a revamp is the political environment, which should become more pro-business.

What’s the biggest headache in your job that no one knows about? I love what I do. It is literally the opposite of a headache.

What’s more important: having the best lawyer or having the best accountant? They’re equally important.

Most underrated neighborhood in the city? Midtown East and the Upper East Side.

If you could pick the Republican and Democratic nominees for President, who would they be? Bloomberg and Bloomberg.

LIGHTNING ROUND:

Favorite vacation spot? Aspen

Favorite sport? Tennis and skiing

Mitch Hochberg
President, Lightstone Group

Do you think we’re heading into a downturn? Why or why not? From a macro-perspective, the runway must end at some point. That being said, aside from general malaise, most notably seen in the New York City condo markets, there is continued strength in our core businesses. Once supply and demand balances, growth will be re-established in the residential arena. The recent floundering of IPOs is somewhat of a canary in a coal mine in that lofty valuations are starting to feel the weight of gravity. Those who can produce real earnings with growth will be rewarded, regardless of industry, as fundamentals still dictate ultimate valuation. Nonetheless, we live in a dangerously interconnected world that can suffer from either a black swan event or a contagion that creates a flash crash of sorts.

What do you think the future looks like for WeWork and other coworking operators if the economy slows down? The trend of smaller, focused utilization of office spaces is here to stay. However, coworking operators suffer from seemingly limitless long-term liabilities coupled with short-term sublease revenues that may prove to be erratic as unprofitable startups lose their luster. At some point, the music stops and the herd mentality will erode net-effective sublet lease rates. Everything boils down to supply and demand. It’s been too much too soon in terms of the growth of WeWork. That ambitious growth has yet to be tested in a sustained downturn, but get your popcorn ready.

Is New York City losing its shine? Are property investors starting to look elsewhere? There is simply too much human capital in terms of talent, culture and titans of industry in New York City. While New York will continue to remain the center of the universe, from a shorter term view, SALT implications and localized politics will steer capital flows disproportionately to the Sun Belt and other more business-friendly locations. There is a growing subset of developers who have become frustrated with the city and are clearly looking elsewhere. It’s hard to believe that the trend will persist indefinitely, as ego, passion and the inevitable flight to safety will take root. History has shown that NYC bounces back in even the darkest of times. Never bet against New York.

How have you adjusted your business plan since the new rent laws were passed? We’re building ground-up in scale as opposed to seeking out value-add deals. Our city is in desperate need of both infrastructure upgrades and modern buildings to replace antiquated supply. The new rent laws have all but frozen capital investments in older housing stock and have put a dagger into a value-add investment strategy. Tenants’ safety and quality of life will be adversely affected by this new legislation. The new laws will lead to a wide schism between newer-construction buildings and an increasingly dilapidated housing stock. When the real estate investment community has no economic motivation to invest in older housing stock, public-private partnerships will slow to a trickle and everyone loses.

Do the new rent laws present any opportunities for savvy owners? Panic typically doesn’t occur in NYC. However, there will be situational opportunities driven by debt maturities, breaches of covenants and sunsets of funds or capital sources. Those forced to sell with business plans that are no longer viable will suffer, and the buyers of the broken deals will be rewarded with patience. Regulation waxes and wanes, and the impatient will suffer while those who can afford to ride out the storm should benefit.

Is REBNY in need of a revamp? What needs to happen? The overall tone in our industry needs to be changed. Real estate owners cannot be perceived as the adversary within the urban fabric. There was a collective failure across the entire industry to not recognize this sea change coming right for us. Rather than be reactionary, there needs to be compromise rooted in public-private partnerships. Economic incentives need to be re-established for the business community to drive investment and improve the overall quality of life for residents.

What’s the biggest headache in your job that no one knows about? Anything having to do with shutting off or turning on gas. Why is that so difficult to do in New York City?

What’s more important: having the best lawyer or having the best accountant? If you don’t have the right lawyer, there may never be any money to count.

Most underrated neighborhood in the city? I might be biased by the recent opening of our Moxy East Village, but I would have to say the East Village. It still has all the urban grit that made it what it is, but every time you walk around there you uncover something new.

If you could pick the Republican and Democratic nominees for President, who would they be? Abraham Lincoln and Franklin Roosevelt.

LIGHTNING ROUND:

Favorite book? “The Last Lion,”William Manchester’s Winston Churchill biography

Favorite restaurant? Villa Verde in Capri

Favorite vacation spot? Capri. There’s Italy, and there’s everything else.

Favorite TV show? Right now, “Fauda,” but only if you watch in Hebrew with subtitles

Favorite sport? Hockey. And those who knock it haven’t been to a live game.

Jonathan Iger
CEO, Sage Realty Corporation

Which commercial lease was your biggest win this year? WeWork at 437 Madison Avenue. In this environment where large blocks of space sit on the market for years, leasing 362,197 square feet across 12 consecutive floors is a major win. After having a strong relationship with an existing long-term Fortune 200 tenant, we considered several interested parties and successfully negotiated a lease for the entire block of space 15 months ahead of the current lease expiration. We look forward to WeWork bringing in enterprise users of the same caliber as our Fortune 500 roster to the building.

Do you think we’re heading into a downturn? Why or why not? We are not heading into a downturn. Specific to New York City, our economy is not as reliant on just a handful of industries as it was a decade ago. We’re seeing healthy leasing activity from technology, advertising, health care, media and information tenants, while flexible space providers are continuing to grow. Then there are nascent industries such as artificial intelligence, autonomous vehicles, and others in the early stages of innovation that have tremendous runway. The space needs of those industries have yet to be realized.

What do you think the future looks like for WeWork and other coworking operators if the economy slows down? The coworking model has greater exposure to an economic downturn as their customers will have greater flexibility to mitigate their real estate costs in the short-term. That said, real estate in general is always exposed to an economic downturn but those companies, including coworking now, that are well capitalized, well run and provide value with a focus on service will weather the storm against their competition and come out stronger as the market rebounds. We’ve been around since 1924 and successfully operated through 15 recessions including the Great Depression and the more recent Great Recession by following these tenets.

Is New York City losing its shine? Are property investors starting to look elsewhere? Absolutely not. In fact, New York has never been stronger. On a weekly basis, we continue to hear about significant new assignments and new leases being closed that did not exist three months ago. When national and international companies are looking where they want to attract and retain talent, New York is the number one city to do so. Along with that, neighborhoods like Hudson Yards, the Meatpacking District, Hudson Square and the east side of the Financial District are coming into the forefront. It’s not losing its shine; it’s the exact opposite.

To the second part of the question, I can only speak on the commercial side. Overall, the economics of real estate have changed. While there are still plenty of opportunities, there are fewer in the city if you are a short-term holder. If you have a long-term outlook, this is where property investors, both local and foreign, should continue to be looking. We may not have the two to three year growth that other cities may have, but that’s because we provide tremendous stability. For long-term investment, NYC remains the solid option and safest place for investment.

How have you adjusted your business plan since the new rent laws were passed? We are 100 percent commercial real estate. It’s been our core focus since the early 1950s as owners, developers and managers. We believe that there’s a tremendous amount of overregulation occurring in the city, but the new rent laws have no effect on us because we are commercial.

Do the new rent laws present any opportunities for savvy owners? Throughout our 90-year history, we find that times of disruption — both from the market in general or spurred by government regulation — provide tremendous economic opportunities for those who can find it.

Is REBNY in need of a revamp? What needs to happen? Our industry has multiple verticals and sectors that may even have conflicting interests. One trade organization cannot represent the needs, concerns and issues that face us all.

What’s the biggest headache in your job that no one knows about? While millennials have the spotlight, I am much more focused on building, renovating and repositioning our properties that will appeal across generations, including [to] Gen-Zs and baby boomers. With drastically different viewpoints on workspace, value of time, and general priorities, my job is to anticipate the needs of the dynamic workforce of the future. Beyond spatial design that will resonate with a more diverse workforce, we will need to continue providing different types of services and exploring various communication tools that will enable individuals to be more productive, where and how they may choose to work.

What’s more important: having the best lawyer or having the best accountant? Having an accountant who is also an attorney.

Most underrated neighborhood in the city? Midtown East/Turtle Bay and the surrounding area. It has amazing transportation and an incredible mix of residential that abuts a very vibrant commercial area. Every street is tree-lined, and there are some amazing hidden gems around every corner, such as Greenacre Park. It’s like a West Village in the middle of Midtown. You just need to know where to look.

If you could pick the Republican and Democratic nominees for President, who would they be? I will follow the old Hell’s Kitchen bar adage — you can have anything to drink as long as you don’t talk about religion or politics.

LIGHTNING ROUND:

Favorite book? “This Side of Paradise” by

F. Scott Fitzgerald

Favorite restaurant? Craft

Favorite vacation spot? Anyplace I haven’t been

Favorite TV show? “The Wire”

Favorite movie? “Rebel Without a Cause”

Favorite sport? Formula 1

Steve Kaufman
President, The Kaufman Organization

Which commercial lease was your biggest win this year? We recently signed a 7,500-square-foot lease for women’s sustainable shoe wear company Rothy’s, which has a cult-like following among consumers and celebs alike, at our 236 Fifth Avenue property in NoMad. 

Do you think we’re heading into a downturn? Why or why not? The commercial real estate industry is cyclical in nature and if history is any indicator, we will likely see a downturn before too long.

What do you think the future looks like for WeWork and other coworking operators if the economy slows down? They will face challenges to be sure. However, coworking firms will continue to have a significant presence in the industry for the foreseeable future.

Is New York City losing its shine? Are property investors starting to look elsewhere? Some investors and developers may be interested in other cities. But from my perspective, New York City remains the most desirable market in the country.

What’s the biggest headache in your job that no one knows about? The increasing cost of improvements to tenant spaces.

What’s more important: having the best lawyer or having the best accountant? It depends on the situation, but I always want a stellar accountant.

Most underrated neighborhood in the city? Washington Heights.

If you could pick the Republican and Democratic nominees for President, who would they be? Senator Mitt Romney and Senator Amy Klobuchar.

LIGHTNING ROUND:

Favorite book? “Lonesome Dove”

Favorite restaurant? Keens Steakhouse

Favorite vacation spot? Any ski resort

Favorite TV show? “Downton Abbey”

Favorite movie? “Pulp Fiction”

Favorite sport? Skiing

David Kramer
President, Hudson Companies

Which commercial lease was your biggest win this year? We’re primarily residential developers, but we’ve had a lot of fun at the Breeze leasing up retail and creative-class office space in East Williamsburg. The game changer was signing the Lavender Lake team to a rooftop bar and restaurant; that’s going to be amazing.

Do you think we’re heading into a downturn? Why or why not? Reminds me of the old joke, we’ve been well prepared for seven out of the last two recessions. As a developer, you always have to assume things will go south at some point and you need to balance your natural bullishness with actual data. In this case, there are some reasons to support any Pollyanna instincts: NYC has the lowest crime rates, wage growth, low unemployment and the highest job numbers in its history. That counts for something in my book.

What do you think the future looks like for WeWork and other coworking operators if the economy slows down? I’m pretty confident that WeWork is worth somewhere between $48 and $70 billion. And if times get tough, the CEO just needs to grab a private flight to Israel. What could possibly go wrong?

Is New York City losing its shine? Are property investors starting to look elsewhere? I don’t think NYC is losing its shine in the real world. Young people still want to come here, and this is the place where we have restaurants and theater and tech and business. There’s a reason Amazon wanted to come here for our labor pool despite our high costs. And we even have shiny new Jets and Giants QB’s. However, New York City politics has definitely lost its shine. From Amazon to the rent laws to hotel permits, our industry has very little confidence in a fair and balanced approach to real estate.

How have you adjusted your business plan since the new rent laws were passed? Luckily, we’ve never been into harassment, so it was never our plan to buy rent-stabilized apartments with aggressive turnover assumptions. That’s the one silver lining in a terrible law, all those investors will hopefully go find a new business plan.

Do the new rent laws present any opportunities for savvy owners? Not really.

Is REBNY in need of a revamp? What needs to happen? Jim Whelan is a terrific, substantial guy whom I’ve known long before he started working for REBNY. He’ll be thoughtful and effective. I think the challenge for REBNY and RSA and other groups is that two decades of prosperity have led to a tsunami of anger and hostility towards the industry, and it’s going to be hard for any group to soften all of these over-corrections. We need to talk about what’s the best way to promote affordability, upkeep and growth so that we don’t turn into San Francisco, and we need to reach out to like-minded partners who are not landlords.

What’s the biggest headache in your job that no one knows about? People don’t know, or really care, about how incredibly hard it is to get anything done, and when it happens, it’s taken for granted: getting a demo permit, getting a building permit, getting a TCO, scheduling inspections, getting your 421a exemption input into the system. Shall I go on or are you already asleep?

What’s more important: having the best lawyer or having the best accountant? Reminds me of the quote that you need three things in life: a good doctor, a forgiving priest and a clever accountant. I think I vote for the doctor.

Most underrated neighborhood in the city? Prospect Lefferts Garden. It has Prospect Park, landmark housing, B, Q, 2 and 5 subway access and improving retail. Come visit Edie Jo’s, Flatbush’s much-talked-about new restaurant, to see what I’m talking about.

If you could pick the Republican and Democratic nominees for President, who would they be? Michael Bloomberg and Michael Bloomberg.

LIGHTNING ROUND:

Favorite book? Robert Caro’s four-volume biography of LBJ

Favorite restaurant? Nobu

Favorite vacation spot? Belize

Favorite TV show? “Six Feet Under”

Favorite movie? “Jerry Maguire”

Favorite sport? To play, tennis. To watch, NFL.

Jeffrey Levine
Founder & Chairman, Douglaston Development

Which commercial lease was your biggest win this year? We have been focused on the retention of our existing tenant base in our typical mixed-use street-level neighborhood retail portfolio. Keeping feet on the floor is key.

Do you think we’re heading into a downturn? Why or why not? The stock market is near all-time highs, interest rates are near all-time lows and the unemployment rate is minimal. In spite of this, we continue to experience only moderate GDP growth and ever-increasing debt, and none of this portends well for the future.

What do you think the future looks like for WeWork and other coworking operators if the economy slows down? I think the recent failure of WeWork’s IPO speaks louder than words, and an economic slowdown will have a profound negative impact on other large coworking ventures, as well as commercial owners with significant exposure to them. That said, there is a need for coworking space as an amenity at multifamily properties and the hospitality industry, or as a smaller component in larger commercial office properties.

Is New York City losing its shine? Are property investors starting to look elsewhere? We are already experiencing a retail apocalypse and a condominium catastrophe. The elimination of state and local income tax deductibility, coupled with the cap on mortgage interest deductions, on top of the continuing disparity of excess real estate taxes placed upon new residential development, is resulting in the exodus of a number of high earners from New York State. The state legislature has promulgated rent regulations that, in addition to putting the brakes on the development of new multifamily rentals, have severely impacted the value of the existing rent-regulated housing stock, motivating many real estate investors to look elsewhere for better risk-adjusted return alternatives.

How have you adjusted your business plan since the new rent laws were passed? In as much as the economics of market-rate housing are challenged at this time — and we have been active in subsidized housing for over 40 years — we continue to be focused on the need for special needs, senior, supportive and affordable housing. As a vertically integrated real estate development, building construction and property management company, we are well positioned to competitively participate. We have also been fortunate over the years to have established an office in Phoenix, Arizona, which continues to experience significant growth due to its lower cost of living, more business-friendly regulatory environment and continuous population growth. Senior living has been our focus as well as market-rate multifamily rentals. In New York, we continue to focus on the residential tenant experience in our properties, striving to provide a high quality of service so as to maintain strong levels of occupancy.

Do the new rent laws present any opportunities for savvy owners? Clearly the new rent laws are quite damaging for property owners whose model was the increasing of rent through methods that are no longer permitted. Such property owners may have in fact been over-leveraged due to zealous projections of increasing rents, and that will result in distressed opportunities to purchase such assets at cap rates that may be satisfactory to some investors. In addition, unregulated multifamily properties will command a premium as the new rent regulations coupled with the high burden presented by the Affordable Housing New York Program will limit the creation — and supply — of new multifamily units and rents on those units will be driven upward.

Is REBNY in need of a revamp? What needs to happen? REBNY has always served the real estate industry well. It has a committed and intelligent staff of professionals now led by James Whelan. I believe that with the leadership provided by the executive committee, it will adapt to the changing social and political environment, giving the voting public and elected officials the knowledge they need to allow the real estate industry to continue to keep our great city healthy and growing.

What’s the biggest headache in your job that no one knows about? Everybody wants to be the quarterback! All businesses need blocking and tackling to accomplish their objectives. The administration of operations is critical to the success of all enterprises.

What’s more important: having the best lawyer or having the best accountant? A good accountant will keep you out of trouble. A good lawyer will get you out of trouble. It’s better to keep out of trouble than to get out of trouble.

Most underrated neighborhood in the city? The Upper East Side, which has been the victim of chaos due to the construction of the Second Avenue subway for the last decade, has had its values impaired and a change in demographics that has made it a real upside opportunity for investors.

If you could pick the Republican and Democratic nominees for president, who would they be? President Trump, if he isn’t impeached, will clearly be the GOP candidate. I hope and believe Joe Biden will be the Democratic candidate.

LIGHTNING ROUND:

Favorite book? “The Fifties” by David Halberstam

Favorite restaurant? Crown Shy

Favorite vacation spot? Anywhere with the three S’s: Sun, Sand and Saltwater!

Favorite TV show? “Luther” on the BBC

Favorite movie? “Armageddon”

Favorite sport? Tennis

David L. Levy
Principal, Adams & Co.

Which commercial lease was your biggest win this year? Dashlane at 44 West 18th Street — 33,384 rentable square feet.

Do you think we’re heading into a downturn? Why or why not? While there is definitely concern about the immediate future in some areas of the city, there does not seem to be any slowdown in others. If the IPO market continues to drag that could have a negative effect.

What do you think the future looks like for WeWork and other coworking operators if the economy slows down? We have zero exposure to WeWork and its competitors. We made a decision years ago that the long-term quality of life for our tenants was more important than the easy deal. We have felt and continue to feel that while there will always be a place for coworking, it will never take the place of the traditional office lease.

Is New York City losing its shine? Are property investors starting to look elsewhere? If you believe the publications, yes, but New York City has always been and will always be the greatest city in the world. Where else would you rather own property?

What’s the biggest headache in your job that no one knows about? Air Temperature. Two people share an office, one is hot; the other is cold.

What’s more important: having the best lawyer or having the best accountant? The best building managers are the most critical for us.

Most underrated neighborhood in the city? The Transit Triangle: world’s best transportation, beautiful loft buildings, ever-improving food options. The area between Penn Station, Port Authority and Grand Central Terminal offers it all.

If you could pick the Republican and Democratic nominees for President, who would they be? Two individuals that are bold, charismatic leaders with ethics and morals. It’s just a dream!

LIGHTNING ROUND:

Favorite book? “Catcher in the Rye”!

Favorite restaurant? In New York, Lucali. In the world, Azurmendi in Spain.

Favorite vacation spot? Never go to the same place twice

Favorite TV show? Yankee baseball on YES

Favorite movie? “Field of Dreams”

Favorite sport? Obviously Baseball

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

Which commercial lease was your biggest win this year? LinkedIn’s seventh and eighth expansions and lease extensions at the Empire State Building.

Do you think we’re heading into a downturn? Why or why not? Of course, we’re always heading into a downturn! But not now, not today.

What do you think the future looks like for WeWork and other coworking operators if the economy slows down? I never thought the future was all that bright for this sector, even if the economy did not slow down. A lot of private equity has gone into a business model that does not work, which will cause landlords pain and that will cause some disruption in the market.

Is New York City losing its shine? Are property investors starting to look elsewhere? New York City is The City. There is a ton of equity and debt available. On a relative basis, it will always be the most sought-after market in the United States.

Is REBNY in need of a revamp? What needs to happen? The opportunities for REBNY to represent the real estate industry have expanded to a broader field of play, number of issues, and players with whom relationships need to be built. In any situation like that, it makes sense to consider what changes an important industry organization like REBNY should undergo to achieve maximum effectiveness.

What’s the biggest headache in your job that no one knows about? There is always pressure to respond to the latest fad, idea, analyst report, or investor comment. We have to remember that this is ocean racing … we are here to make the right decisions over the long run, and not to pivot on a dime to every new thing.

What’s more important: having the best lawyer or having the best accountant? There are many accountants who can do an excellent job … There are not many lawyers who really can add value.

LIGHTNING ROUND:

Favorite book? “Angle of Repose,” by Wallace Stegner

Favorite restaurant? Raoul’s

Favorite TV show? “The Big Bang Theory”

Favorite movie? “Sometimes a Great Notion”

Favorite sport? Anything challenging, fun, and competitive

Meredith Marshall
Co-Founder and Managing Partner, BRP Companies

Which commercial lease was your biggest win this year? Our biggest commercial win this year was the closing of an approximately 7,000-square-foot space for Compass at 1320 Fulton Street, a newly constructed mixed-use building in Bed-Stuy, Brooklyn. While this wasn’t our largest lease in size, it was a major win for the submarket, bringing a high-profile real estate brokerage firm to the area. Considering this, this was our biggest win in terms of value and market validation.

Do you think we’re heading into a downturn? Why or why not? I don’t want to jinx the market, but based on analyst research, we’ll likely be seeing a mild market downturn or a brief recession in the near future.

Is New York City losing its shine? Are property investors starting to look elsewhere? New York City definitely isn’t losing its shine. While there may be some uncertainty around a few regulatory initiatives, New York City is still the most attractive market in the world.

How have you adjusted your business plan since the new rent laws were passed? BRP wasn’t significantly impacted by the passing of the rent laws, so there was no need to adjust our business plan. We have many newly constructed units coming online, but they are less affected by the regulations than existing regulated properties.

Do the new rent laws present any opportunities for savvy owners? Yes. For example, our newly constructed units likely have greater value now that many other portfolios have seen their values diminish with the passing of the new rent laws. If you look at our side of the business, these units continue to increase in value.

Is REBNY in need of a revamp? What needs to happen? REBNY has been a wonderful resource for the real estate community, and while I don’t think they’re in need of a revamp, I predict they’ll respond to the current environment accordingly.

What’s the biggest headache in your job that no one knows about? Convincing all parties to get on board with a particular transaction or policy initiative. At BRP, we take pride in being innovators in mixed-use, mixed-income development, but it’s often difficult to get people to buy into our vision and goals in a timely manner.

What’s more important: having the best lawyer or having the best accountant? It’s important to have everything best-in-class. To be successful, you want the best contributors as required. You need the best lawyer for a particular job, and the best accountant for a particular job.

Most underrated neighborhood in the city? Jamaica, Queens.

If you could pick the Republican and Democratic nominees for President, who would they be? Whoever the people pick.

LIGHTNING ROUND:

Favorite book? “The Fire Next Time”
by James Baldwin

Favorite restaurant? Gotham Bar & Grill

Favorite vacation spot? It’s a tie: Montego Bay, Jamaica, and Martha’s Vineyard

Favorite TV show? “Black-ish”

Favorite movie? “Coming to America”

Favorite sport? Baseball

Nelson Mills
President and CEO, Columbia Property Trust

Which commercial lease was your biggest win this year? In late 2018 we closed out the leasing of 315 Park Avenue South and renewed Twitter’s lease at 249 West 17th Street, entering 2019 at 99 percent leased across Manhattan. We have strong early interest at 799 Broadway, a 182,000-square-foot ground-up office project in Greenwich Village that we are developing with Normandy Real Estate Partners. 

Do you think we’re heading into a downturn? Why or why not? Seemingly not, at least not in a major way in the near term. Interest rates should remain low, and job growth has been modest but steady. Significant capital is still flowing to U.S. real estate investment, though investors have become a bit more cautious and discerning. So, focusing on high-quality, well-located opportunities is key. 

What do you think the future looks like for WeWork and other coworking operators if the economy slows down? WeWork is currently experiencing significant turmoil, to say the least. But they and other coworking platforms have demonstrated substantial demand for their product. The WeWork phenomenon has forced office landlords to reconsider various aspects of our business models, including amenity and service levels, as well as flexibility in lease terms. The primary risk of the coworking model has always been the arbitrage between short-term revenues and long-term lease obligations. An economic downturn would certainly create stress to that model in the near term. The counterargument is that tenants will be less likely to commit to traditional long-term leases in such an environment, potentially creating an even greater demand for the concept. 

Is New York City losing its shine? Are property investors starting to look elsewhere? New York City is clearly a bifurcated market right now. New construction and rehabilitated vintage product are being absorbed quickly at impressive rates, while commodity space is losing tenants to those properties. Also, Midtown South and West Chelsea are experiencing booming demand, largely driven by major tech and media. The pace and type of TAMI activity we’re seeing in those submarkets is similar to what we experienced in the SOMA submarket of San Francisco beginning in 2014.

What’s the biggest headache in your job that no one knows about? While not unique to Columbia, communication with our investors and the market about the significant drivers of our business — opportunities, risks and expectations — is always a challenge. In the face of so much noise about the overall economy, trends within our specific markets, and recent WeWork headlines, it’s difficult to differentiate our story of success. Of course those market forces are relevant — we’re all sailing in the same ocean after all. But so much of an individual company’s success is determined on the front lines, one deal at a time and by consistently executing on a well-founded strategy.

What’s more important: having the best lawyer or having the best accountant? Both are crucial, and fortunately, we have some great ones. We rely not only on their technical knowledge but also on their ability to understand and relate to our business strategy. We view them as key advisors and true business partners.

Most underrated neighborhood in the city? Meatpacking District and the West Village. Those are terrific live-work-play destinations that should see increasing commercial development and redevelopment activity fueled by the expansion of major tech.

If you could pick the Republican and Democratic nominees for President, who would they be? Trump vs. Warren would be entertaining, for sure. But we’re already getting more entertainment than we need. Are we ready for an independent candidate?

LIGHTNING ROUND:

Favorite Book? “Just Mercy” by Bryan Stevenson

Favorite restaurant? Gramercy Tavern

Favorite vacation spot? Newport, Rhode Island

Favorite TV show? “Succession”

Favorite movie? “Godfather II”

Favorite sport? Baseball, especially the playoffs

Daniel Moore
President and CEO, Rockefeller Group

Which commercial lease was your biggest win this year? Our biggest win was completing the repositioning of 1271 Avenue of the Americas — from zero to 98 percent leased in less than two years. An amazing accomplishment by our in-house team, our friends at CBRE, and the brokers who represented our new world-class tenant roster.

Do you think we’re heading into a downturn? Why or why not? I think we’re at risk of talking ourselves into a downturn, despite continued (though sub-par) economic growth and historic strength in the labor markets. The psychology of the market is one of anticipating bad news, with consensus forecasts of a recession in 18 to 24 months — which has been the consistent forecast for the last four years.

What do you think the future looks like for WeWork and other coworking operators if the economy slows down? The most successful coworking model has yet to be determined and an economic contraction will likely bring clarity to who’s been “swimming naked.” Someone’s holding the risk of a non-trivial asset or liability mismatch. If it’s not the operator, it’s the building owner, whether they know it or not.

Is New York City losing its shine? Are property investors starting to look elsewhere? Investors have certainly broadened their scope. Amazon’s HQ2 experience, recent legislation and the current political environment have contributed to this.

How have you adjusted your business plan since the new rent laws were passed? [We’ve] not, materially.

What’s the biggest headache in your job that no one knows about? I love my job. Even the headaches.

What’s more important: having the best lawyer or having the best accountant? Best lawyer. Nobody ever sang, “send accountants, guns and money.”

Most underrated neighborhood in the city? NoMad.

If you could pick the Republican and Democratic nominees for President, who would they be? Highly competent, ethical people of integrity who appreciate what makes America a singular idea in the history of the world, but are willing to acknowledge where we as a country fall short of our ideals. People of character who understand the challenges the nation faces at home and in the world; who can be tough on issues, but good to people, even when they disagree.

LIGHTNING ROUND:

Favorite Book? “Infinite Jest”

Favorite restaurant? Gramercy Tavern

Favorite vacation spot? Park City, Utah

Favorite TV show? “Band of Brothers”

Favorite movie? “Star Wars” — the 1977 original

Favorite sport? To do, skiing; to watch, anything one of my three sons is playing

Jason Muss
Principal, Muss Development

Which commercial lease was your biggest win this year? I would call it a win-win. We arranged a 43,000-square-foot renewal and expansion with EmblemHealth at our Flushing Plaza property in Flushing, Queens. It was the perfect use of many of our skills, including extensive tenant improvements on new space, refurbishing existing space, tenant relations, and strong dealings with the brokerage community (Brian Collins from Colliers represented the tenant). EmblemHealth benefitted from our flexibility and I think we both benefit from the strong relationship we have built over 30 years. With that lease we were able to take care of an important tenant under a long-term lease while reducing vacancy in the 266,000-square-foot building to under 2,000 square feet.

Do you think we’re heading into a downturn? Why or why not? We are not heading into a downturn. Business in New York City is thriving. We own properties in neighborhoods as diverse as Astoria, Queens; Rossville, Staten Island; Downtown Brooklyn; and the Upper East Side of Manhattan. Almost uniformly we are as close to 100 percent occupancy as ever and both commercial and residential tenants continue to want to move into these areas. The only wounds we are collectively suffering are self-inflicted, such as allowing subways to be populated by petty criminals and creeps, or over-regulating businesses with needless duplicative and onerous regulations. That has to stop. 

What do you think the future looks like for WeWork and other coworking operators if the economy slows down? The coworking business model has boomed tremendously, but it has been funded out-of-pocket by private equity firms from around the world. What happens if the money flow stops? Is the business as profitable as promised? At the end of the day, owning commercial real estate just isn’t that sexy; it’s largely a long-term investment and is best run and operated conservatively and prudently. All that said, coworking itself is certainly bringing new tenants into the market and that has been a good thing both locally and beyond. Our tenant Regus in Forest Hills continues to do well and keep their space full. 

Is New York City losing its shine? Are property investors starting to look elsewhere? In no way whatsoever is New York City losing its shine. Great cities remain great, through all kinds of leadership and political situations. And there is no other New York City, which is the financial, fashion, culinary, tourist and, increasingly, the tech capital of the United States and, by extension, the world. That doesn’t mean it’s currently a good time to buy a building here, though! We need to see just how confiscatory and punitive the local and state governments want to become with the good folks in the real estate industry who contribute more in taxes and civic involvement than any other group. We’ll know more in the coming years.

How have you adjusted your business plan since the new rent laws were passed? We haven’t. Rent-stabilized buildings have never been our core business. But it has made us very wary of other possible changes to various laws that will directly or indirectly affect us and the rest of the industry.

Do the new rent laws present any opportunities for savvy owners? Absolutely. What they are, I couldn’t say.

Is REBNY in need of a revamp? What needs to happen? Having personally worked alongside Jim Whelan for several years, I can say assuredly that REBNY is in great hands! He is capable, tough and pragmatic. We will hopefully see a more politically engaged membership in the coming years. The real estate industry has to consistently highlight just how many kinds of taxes and fees we pay. If the activities that generate cash for the city get punished, then the ripple effects won’t be pretty.

What’s more important: having the best lawyer or having the best accountant? That’s a great question and there isn’t a straight answer. For acquisitions and development, clearly the lawyer is most crucial. For the ongoing management of a portfolio, including financings, capital improvements and dispositions or 1031 transactions, the accountants are indispensable.

Most underrated neighborhood in the city? Sheepshead Bay and Brighton Beach. South Brooklyn is the next big thing. The beach access and subway connectivity, combined with an incredibly educated and entrepreneurial local population, will continue to lift the tide on the Atlantic Ocean. 

If you could pick the Republican and Democratic nominees for President, who would they be? The nominees will be Donald Trump and Joe Biden.

LIGHTNING ROUND:

Favorite book? “Shogun” by James Clavell.A masterpiece.

Favorite restaurant? Mike’s Bistro on East 54th (a great guy and amazing food!)

Favorite vacation spot? Tel Aviv

Favorite sport? To play, golf. To watch, basketball.

Michael Phillips
President, Jamestown

Do you think we’re heading into a downturn? Why or why not? The market in New York is softer than it has been, but it still remains a have-and-have-nots leasing market. Landlords with great, well-located space are leasing and the ones that aren’t are having a hard time moving space.

What do you think the future looks like for WeWork and other coworking operators if the economy slows down? I don’t think it’s coworking vs. conventional leasing; we’re all on the same boat together, both long- and short-term lease operators. One advantage that coworking has shown is their commitment to technology and building communities in the virtual space, which has yielded added value. We all need to be paying attention to app technologies that reinforce making the workforce and tenants sticky. There is, and will continue to be, a market for companies that prefer to take temporary space vs. having big TI’s and long term lease obligations.

Is New York City losing its shine? Are property investors starting to look elsewhere? Political uncertainty is always challenging, but there is no place like New York City.

Is REBNY in need of a revamp? What needs to happen? Yes, I think it is in need of a revamp and it’s getting one with great leadership around adopting new technologies and speaking to a younger generation.

What’s the biggest headache in your job that no one knows about? Covering trends globally and paying attention to how the world is evolving. The distance between leading a trend and following a trend is a very short.

What’s more important: having the best lawyer or having the best accountant? Yes.

Most underrated neighborhood in the city? Forest Hills, Queens.

LIGHTNING ROUND:

Favorite book? “Palace Is for the People”

Favorite restaurant? The James Beard House

Favorite vacation spot? Anywhere my partner and dog are

Favorite TV show? “Secret City”

Favorite movie? “The Deep”

Favorite sport? Sailing

Scott Rechler
Chairman and Chief Executive Officer, RXR Realty

Which commercial lease was your biggest win this year? The RXR Realty and Airbnb hospitality partnership was one of our biggest announcements this year. This partnership will leverage the respective best-in-class attributes of each company to reimagine how urban hospitality can provide all the comforts of home in locally designed, beautiful hospitality suites, while providing guests with the standards and services of a five-star hotel. The first incarnation of this partnership will take place at 75 Rockefeller Plaza. By combining nearly 200 hospitality suites with the building’s experiential retail, such as Club 75 restaurant and club, the Convene conference center and mix of flexible and traditional office space, 75 Rockefeller Plaza will serve as a model for the “vertical mixed-use” buildings of the future.

We believe that the future of real estate will not just be about putting up four walls, but instead, activating what happens within those four walls to better optimize the tenant experience and building use. The way people live, work, play and stay has changed, so their use of space needs to change as well. For example, while people used to work from 9 to 5, today they’re working more like 5 to 9. This has resulted in the merger of home and work life and the glue that brings that together is community.

Do you think we’re heading into a downturn? Why or why not? The New York City office and rental residential market has been incredibly resilient. Our thesis for New York City has been, and continues to be, that New York City is a magnet for talent and that the most important ingredient for a company to succeed in today’s global, idea-based economy is talent. Thus, more and more of the fastest growing companies have been expanding in New York City. This past year we saw meaningful commitments by Google, Facebook and Disney, to name just a few, to New York City. The more companies locate here, the more talent will be attracted to this market.

New York City’s recent economic vitality has been fueled by this positive self-reinforcing cycle, which has enabled the market to absorb the new supply that has been added, while also enabling landlords to upgrade their existing stock to compete in the 21st century. I do not see a slowdown of demand, which bodes well for the overall health of the market.

What do you think the future looks like for WeWork and other coworking operators if the economy slows down? We believe that flexible workspace is here to stay because tenants value the flexibility, one-stop procurement, and highly curated spaces that coworking provides. The unanswered questions as we go forward are whether that space has been priced appropriately or, has venture funding been subsidizing the cost of that space, and how will the sector perform in a down cycle?

WeWork deserves credit for seeing this trend early. Unfortunately, they grew too quickly and lost discipline. They now seem to be taking the right steps under their new leadership. They are refocusing back to their core business, shedding non-core businesses and exiting unprofitable markets. They need to quickly regain confidence from landlords, tenants and lenders that are concerned about their ability to survive and then, I think they should quickly recapitalize (no matter what the price) with enough equity and debt to fund their restructuring plan and put them on a clear path to profitability.

What’s the biggest headache in your job that no one knows about? We’re going through a transformative moment where technology and the way people live, work, play, and stay are forcing us to view real estate through a different lens. The biggest challenge is to ensure that we’re staying ahead of that trend and getting our entire team’s mindset focused on this new dynamic. In today’s world, standing still is really moving backwards and what was true yesterday is unlikely to be true tomorrow. It’s critical that we regularly recalibrate reality and adjust our business plans to reflect that new reality.

Most underrated neighborhood in the city? New York City’s most underrated neighborhoods are actually not neighborhoods in the city at all, but in our transit-oriented suburban downtowns. We need to be thinking more about these neighborhoods as part of a larger regional strategy as opposed to something separate from New York City. Looking through this regional lens is critical if we are to provide affordable housing alternatives for our workforce. There are 27,000 people per square mile in New York City. If this expanded regionally, that number goes down to about 2,700 people per square mile. So clearly there are more opportunities to add density in those markets that surround the city than in New York City itself.

LIGHTNING ROUND:

Favorite book? “Zone to Win” by Geoffrey Moore— great insight about how to build businesses that are equipped to compete in the 21st century!

Favorite restaurant? Blue Ribbon Brasserie in Soho— great comfort food

Favorite vacation spot? Lake Powell, Arizona, or any place around the world where I can get close to Mother Nature

Favorite TV show? “This is Us”— I love a good cry!

Favorite movie? “Rudy” — I love watching the underdog succeed

Favorite sport? Football and, of course, the New York Giants. Go Blue!

Keith Rubenstein
Founder and Managing Partner, Somerset Partners

Which commercial lease was your biggest win this year? It’s currently in the works and being finalized, and it will create a new entertainment destination in the South Bronx.

Do you think we’re heading into a downturn? Why or why not? We are heading into a correction, not a downturn — nothing like the last apocalypse.

What do you think the future looks like for WeWork and other coworking operators if the economy slows down? Yuck.

Is New York City losing its shine? Are property investors starting to look elsewhere? New York City will always be unique and desirable for many reasons. It’s the most dynamic city in the world. They always look here first — the trick is what they find.

How have you adjusted your business plan since the new rent laws were passed? Most of our residential is outside New York City, and any new development will be under exemptions for Affordable New York.

Do the new rent laws present any opportunities for savvy owners? Yes! I think there will be successes on the constitutional challenge, and this is a buying opportunity.

Is REBNY in need of a revamp? What needs to happen? I have no opinion on that.

What’s the biggest headache in your job that no one knows about? Finding new opportunities that nobody sees, and keeping the teams happy.

What’s more important: having the best lawyer or having the best accountant? Lawyer!

Most underrated neighborhood in the city? Mott Haven, South Bronx

If you could pick the Republican and Democratic nominees for President, who would they be? Michael Bloomberg or Scott Rechler.

LIGHTNING ROUND:

Favorite book? “The Power Broker”

Favorite restaurant? Beast London

Favorite vacation spot? Lanserhoff, Austria

Favorite TV show? “Ray Donovan”

Favorite movie? “Goodfellas”

Favorite sport? Football

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

Which commercial lease was your biggest win this year? Each lease contributed to keeping our portfolio 98 percent leased, so I value every one of them. I am very proud of the ABS team and the dedicated effort to managing real estate and understanding our business operations.

Do you think we’re heading into a downturn? Why or why not? I recognize the very long length of the current U.S. economic expansion and the reasons why the expansion defies conventional wisdom; however, I do not believe we are headed for a substantial downturn. Rather, I think we are headed for an extended period of low or no growth and low interest rates consistent with the indication of a flat yield curve. One item of significant concern is the current dislocation in the Repo credit market. It appears there is a lack of liquidity in the market. Finally, on a local note, New York City remains the choice location for companies to attract the most talented workforce. However, better local leadership would aid in economic development efforts.

What do you think the future looks like for WeWork and other coworking operators if the economy slows down? The economy is changing based upon technology — what Joseph Schumpeter referred to as “creative destruction.” The problem with coworking is the very high capital expense related to turnover and construction, which may not be fully baked into the model (only the initial capital, which in most cases is provided by the landlord). Coworking is likely to hold a permanent position in the dynamic of office leasing and how companies lease and use office space. However, ABS has never accepted turning over our very valuable buildings to coworking tenants. Rather, we manage our space for and with our direct tenants.

Is New York City losing its shine? Are property investors starting to look elsewhere? The tax code makes New York less desirable to own non-primary residences. But New York remains the number one city in the world without question. Investors always study comparable investments and capital flows dynamically based upon efficient solutions, opportunity, and government policy. At the moment, the real estate investment space is complicated and changing in many ways. Older buildings have been forced to make massive new investment in infrastructure to keep up with new buildings and high-quality offerings. These very high costs reduce investor returns.

How have you adjusted your business plan since the new rent laws were passed? We have stopped reinvesting in statutory regulated apartment renovations because the return on new investments is no longer advantageous.

Do the new rent laws present any opportunities for savvy owners? Possibly, although the global economic markets tend to be highly efficient.

Is REBNY in need of a revamp? What needs to happen? For decades, REBNY has not been wholly objective in analyzing serious issues and has decided upon a point of view on positions that is not sustainable — mostly related to profit for property owners. REBNY would be more effective with a carefully balanced approach to matters affecting all residents and stakeholders of New York. For example, REBNY should embrace statutory housing and argue for fairness in the statue.

What’s the biggest headache in your job that no one knows about? Even though one might think that buildings are at the heart of a successful real estate firm, the reality is that the people are the key. My greatest challenge as a leader is making sure all of our employees are treated well, compensated fairly and feel good about their work at ABS and about giving 100 percent effort.

What’s more important: having the best lawyer or having the best accountant? Both are important. If I had to choose, I would choose the law. My father and grandfather were attorneys, and the best professionals I know are lawyers— Steve Simkin, Larry Simon and Bob Safron, among others.

Most underrated neighborhood in the city? Areas of the Bronx near mass transit have tremendous potential to be revitalized into the type of family-friendly and prosperous environments that flourished prior to the Robert Moses era of rebuilding and dividing neighborhoods with highways. I also believe Greenpoint is underrated and wonderful.

If you could pick the Republican and Democratic nominees for President, who would they be? Michael Bloomberg— truly a world class gentleman, businessman, philanthropist, and former politician; and Bill Clinton, who has experience with the job, and served our country well as a centrist president who delivered a balanced budget.

LIGHTNING ROUND:

Favorite book? “Atlas Shrugged”

Favorite restaurant? Marea

Favorite vacation spot? Mallorca

Favorite TV show? “60 Minutes”

Favorite movie? “Broadway Danny Rose”

Favorite sport? Football

Craig Solomon
Chief Executive Officer, Square Mile Capital

Which commercial lease was your biggest win this year? Leases to Amazon aggregating approximately 800,000 square feet in connection with the creation of Amazon Campus, Culver City, Los Angeles, comprising creative office, studio and related space. 

Do you think we’re heading into a downturn? Why or why not? I’m no economist but I would venture to say that we’re looking at a sustained period of modest to very modest growth in the absence of an unforeseen major “black swan”-type event, which cannot easily be predicted. With near-zero interest rates dominating much of the rest of the world, it seems reasonable to expect that in the U.S. a low interest rate environment will be the norm for the foreseeable future, encouraging some spending, job gains and GDP growth. As for CRE generally, we’ve been in a period of relatively modest price correction for a number of years now, to be expected after so many years of substantial price appreciation. But it seems to me that a combination of the same factors buoying the economy generally as well as the sheer amount of liquidity-slash-dry powder sitting in the coffers of institutional investors and private equity worldwide, and sound supply-demand fundamentals, generally speaking, across most markets and asset classes, do not point to a near-term severe correction.

What do you think the future looks like for WeWork and other coworking operators if the economy slows down? We have no material WeWork tenancy, but I’ve been thinking for some time even before the failed IPO and C-suite coup that the company may be real estate’s version of Sony BetaMax. Coworking and coworking collaborative spaces are, I believe, a structural shift in the way people use space and work, not a flash-in-the-pan idea. However, that traditional owner-operators and integrated leasing management platforms have built in pricing advantages and expense efficiencies in providing collaborative coworking environments, which doesn’t portend well for WeWork. If I had to guess, they will survive as a less dominant force in what will become a fragmented market with intense competition and will evolve their model over time as a disruptor. I think the so-called enterprise portion of the model, which provides short and longer term space solutions for small companies unwilling to incur the capital outlays of a move and larger companies “in between” permanent spaces, is super smart and has real legs.

Is New York City losing its shine? Are property investors starting to look elsewhere? For so long as NYC maintains its status as one of the premier knowledge centers, I wouldn’t bet against property investment here. NYC benefits from a highly educated workforce and a continuing inflow of among the best and the brightest, premier institutions of higher learning, first-class hospital systems, a burgeoning media and tech presence and continues to be a global financial center.

Is REBNY in need of a revamp? What needs to happen? Not touching that one.

What’s the biggest headache in your job that no one knows about? I could write a multi-volume set answering that question, but I’ll share two: First, as our business has grown into one with multiple strategies and business lines and larger numbers of investment professionals, maintaining the company culture that we’ve nurtured has been an increasing challenge. We’ve rejected what I would refer to as a separate P&L approach in favor of holistic participation because, among other things, that encourages a full exchange of ideas, data and experiences, which best serves our investment partners and makes for a more collegial work environment. This is an approach that takes buy-in from extremely talented professionals who must get comfortable being reliant as much on their colleagues as on themselves. Second, keeping up with ever-increasing investor demands for specialized investment structures, access, tailored reporting and fulsome analytical support is an ongoing process which requires more and more resources. I could go on and on. 

What’s more important: having the best lawyer or having the best accountant? That’s sort of the choice between Scylla and Charybdis. We’re nowhere if we can’t count the beans and if we can count them we need to protect them. The key here is to have professionals that work seamlessly in the context of our business and are at once prudent, practical and solution-oriented.

Most underrated neighborhood in the city? I would have said South Bronx but its time seemingly has come.

If you could pick the Republican and Democratic nominees for President, who would they be? Democrat: Bloomberg, Republican: Bloomberg.

LIGHTNING ROUND:

Favorite book? “The Prime Ministers”

Favorite restaurant? Vicolina.

Favorite vacation spot? My house in Sagaponack

Favorite TV show? “Peaky Blinders”

Favorite movie? “The Godfather”

Favorite sport? Football