Sunday Summary: Real Estate Gets Political

And, while this newsletter doesn’t delve into politics too deeply, it’s not as though there aren’t serious real estate implications from either a future Trump or Harris administration that were touched on during the recent debate.

Vice President Kamala Harris, for one, touted her idea for 3 million new housing units. She also is advocating that homebuyers receive $25,000 for a down payment on their first home.

Former President Donald Trump has been approaching the problem differently. He told Bloomberg back in July that he planned to cut zoning and environmental regulations.

A lot of these promises probably won’t move the political needle very much, even if the policy that follows is critically important. “None of these are quick fixes with immediate returns in the political arena,” warned Sam Chandan, director of the Chen Institute for Global Real Estate Finance at the NYU Stern School of Business, “but the temptation to pursue policies that bolster demand before we address the fundamental supply issues are likely to be counterproductive, bidding prices up and exacerbating affordability challenges.”

Of course, the big policy that real estate professionals will no doubt have to track carefully is that of taxes. And that will be as much a state question as a national one. (It’ll likely be more complicated, regardless of the politics, thanks to the massive writedowns some of New York’s troubled properties are experiencing.)

And, on a local level, the politics got a lot more, uh, interesting this week given what’s been happening in Mayor Eric Adams’s circles.

New York’s mayor is currently caught up in a bribery probe, and his police commissioner resigned a few days ago … but what will that mean for the City of Yes, the most ambitious development proposal in New York since the time of Moses? (Robert Moses, that is.)

“In the real estate community, where stability and predictability are paramount, these investigations introduce significant uncertainty,” said Compass Vice Chair Adelaide Polsinelli. “Investors and developers, who are inherently cautious, may start to distance themselves, wary of any association with a potential scandal that could derail projects or slow down crucial approvals.”

Well, in the next mayoral election, one can always vote for Brad Lander over Adams.

“When I was a council member, I championed the city planning effort to [develop] Gowanus,” Lander told Commercial Observer. “And it was unique in a way. I think Gowanus is the only neighborhood where we raised our hand to put together a vision for the kind of growth that we could see. That means opportunities for housing that don’t exist otherwise. That means investments in public housing so that it’s not crumbling. That means new arts and industrial space, new open space, better infrastructure to make growth work.”

You can read more about Lander in our interview here.

Gary Barnett gets busy

Quick question: What the heck is going on with Gary Barnett?

It seems the master developer has been very, very busy this summer, because CO heard about three major transactions just last week.

First, Barnett’s Extell Development filed plans for a 29-story office and retail development with Ikea at 570 Fifth Avenue, following in the recent footsteps of a number of retailers who have decided to own their buildings.

Second, Extell is partnering with Kimpton Hotels & Restaurants for a 33-story, 529-key hotel which is being called Kimpton Rockefeller Center near (you guessed it) Rockefeller Center.

And, finally, Barnett is apparently selling off an East Harlem office development  at 180 East 125th Street for $70 million. (No word yet on who the buyer is.)

Ch-ch-ch-changes

There were a lot of personnel shifts in the last week.

Pat Murphy, Cushman & Wakefield (CWK)’s office guru, who counts heavyweights such as MetLife and the Major League Baseball Players Association among his clients, is leaving his respected perch for JLL (JLL). (Speaking of JLL, while Murphy is coming in, Sam Seiler is going out. The executive managing director is returning to CBRE (CBRE) after six years. And, speaking of returning sons, after a seven year stint in-house at Fisher Brothers, Charles Laginestra is returning to CBRE.)

We also learned that Trisha Connolly-Horowitz is leaving Avison Young to help the family office Catal Group run their first debt fund. (Ah, big debt funds. Hopefully Connolly-Horowitz will have the kind of luck that Madison Realty Capital had. They announced Thursday they raised $2.04 billion for their latest fund, which will be focused on distressed hotel, student housing, industrial, retail and office.)

Ripco Real Estate nabbed commercial real estate and banking pro Michael Winter as a partner in its debt and structured finance department, working mostly out of South Florida.

Finally, after a yearlong search, Freddie Mac (FMCC) has named PNC’s former real estate head, Diana Reid, to be its new CEO.

“Diana’s proven track record and vast experience in housing finance, real estate and capital markets make her an excellent choice to further Freddie Mac’s mission-driven work,” said board chair Lance Drummond. “I have the utmost confidence that she is the right person to take Freddie Mac into the future.”

In memoriam

Wednesday was a grim milestone — it was the 23rd anniversary of the terrorist attacks on the Twin Towers.

But, the night before, Gov. Kathy Hochul, Metropolitan Transportation Authority Chairman Janno Lieber, Port Authority head Rick Cotton, and many of the state’s most esteemed political and real estate figures assembled on the 80th floor of 3 World Trade Center to mark the publication of real estate legend Larry Silverstein’s book The Rising, about the destruction and the resurrection of the World Trade Center.

The book is a tour-de-force of insider gossip about what was one of the largest and most fraught reconstruction projects in the history of the United States.

“I think, to date, we’ve probably spent $20 billion to replace what I acquired for $3.2 billion,” Silverstein told CO from his office across the plaza a couple of weeks before the party. “But I think when you look at everything — the problems we faced, the difficulties, all of the naysayers, and God only knows they were there in super abundance telling me when I was making all these mistakes — we look out the window today with a deep sense of pride and maybe a wee bit of satisfaction.”

There’s certainly good reason for that. Silverstein’s story — that of a developer who responded to the catastrophe by rolling up his sleeves and rebuilding — is one of grit, endurance and vision.

You should read about it here — and then go out and buy Silverstein’s book.

And, while you’re out shopping for a book, treat yourself to a delicious slice of Paulie Gee’s pizza.

See you next week.