Presented By: Berdon LLP
Breakfast With Berdon: The Rebirth of NYC Office and Retail With Rockrose
Berdon Accountants and Advisors LLP has introduced a new video series called Breakfast with Berdon. Presented in conjunction with Commercial Observer, the series features interviews with commercial real estate’s movers and shakers.
Hosted by Meyer Mintz, tax partner and co-chair of the real estate group at Berdon, the first episode presents an interview with Justin Elghanayan, president of Rockrose Development Corp.
Mintz asked Elghanayan how, in the wake of COVID, landlords are making offices desirable enough for people to want to return.
“With substantial leverage by employees due to the labor crunch, companies are saying, ‘I have an extraordinary gym. There’s a lounge, and outdoor space,’ ” Elghanayan said. “We’re seeing a substantial spike in rents in New York City for buildings that service that need, because companies don’t want to lose their staff.”
Mintz then asked about changes to the nature of office space itself, including hotel-to-office conversions, and scenarios where employees “float,” working in different spaces around the office rather than have one permanent office and desk.
Elghanayan doesn’t believe this trend will gain traction, as he believes it “misses out on the fact that human beings operate most effectively when they’re in a setting they’re familiar with,” citing studies that reached this conclusion.
Talk then turned to changing impressions of Long Island City, where Rockrose has been a development pioneer, and where Elghanayan noted that for all the talk of LIC as a neighborhood in waiting, everything people want in a flourishing neighborhood is already in place.
Mintz then asked about city and state government’s effect on development in New York, especially given the push for affordable housing and the possible end of 421a. Elghanayan confirmed that these efforts are greatly complicating the development effort.
“The existential threat to us is not COVID. The deeper threat to us and to development in general is the political threat,” said Elghanayan. “The politics in New York City and state have gone so against development that many developers have fled to different localities. Without renewal of the 421a program, development of rental housing [here] is going to stop.”
Elghanayan was then asked his thoughts on what the city’s continued recovery from COVID would look like in the near future.
“All the forces that made these urban centers rise are still in effect,” Elghanayan said. “Why do people want to be in New York City? Because New York is awesome. It’s just so fun to be here. People love the energy of other people and all the bars and restaurants, and those are all still there.”
Finally, asked to sum up what Rockrose anticipates for itself in the next year or two, Elghanayan noted that the company has rental buildings in progress in Fort Greene, Hudson Yards and Court Square, plus great hope for the future.
“We’re just continuing what we’re doing,” Elghanayan said, “looking at acquisitions and enjoying the rebirth of New York.”
For more Breakfast with Berdon, click here.