Sunday Summary: REBNY Parties Like It’s 2019

Yes, there were protests outside along 12th Avenue, but one couldn’t pry the smile off Gov. Kathy Hochul’s face at the Real Estate Board of New York’s annual gala last Thursday.

And with fairly good reason. Everybody attending REBNY was still riding high from the recent passage of City of Yes, which clears the way for tens of thousands of new units of housing in New York City.

Pesky zoning laws (which were put on the books in the 1960s and not revised since) are finally being amended.

What’s more, after an initial stumble, the city’s congestion pricing plan (which REBNY had long championed) was finally implemented only a couple of weeks before the gala. The toll system will at least do something to preserve the MTA’s capital plan (even if that plan still has serious shortfalls).

But more than that, sales are happening. (Actually, big sales are happening.) Conversions are happening. Leases are happening. (Even bigger leases are happening.) Return to office is happening. Mergers are happening. Financings are happening.

In short, a lot of people in the room were taking a victory lap.

“If there are any elected officials who are not here tonight, you’re missing a damn good party,” Gov. Hochul crowed from the gala’s dais. “And to members of the legislature who want to get started on my agenda, we can start taking some votes right now.”

After making his initial stab at a budget earlier in the day, Mayor Eric Adams stopped by the gala early (but quickly made his exit), and the pols we spotted included New York City Council members Rafael Salamanca, Julie Menin and Keith Powers, as well as New York City Comptroller Brad Lander (who wants Adams’s job), former comptroller Scott Stringer (ditto), Manhattan Borough President Mark Levine and Congressman Ritchie Torres (who was also one of the night’s honorees).

But it was the brokers, lawyers and owners of commercial real estate who most made their mark on the night.

Everyone from RXR’s Scott Rechler (an honoree), to Newmark’s Barry Gosin, to Kramer Levin’s Jay Neveloff, to Fried Frank’s Jonathan Mechanic (another honoree), to Cushman & Wakefield’s Bruce Mosler to CBRE (CBRE)’s Mary Ann Tighe, to Rudin’s Bill Rudin, to BXP’s Hilary Spann and to Himmel + Meringoff’s Leslie Himmel were there to taste the wares from Daniel Boulud and catch up with each other.

And, while REBNY might be granted this moment to savor its victories, there’s a lot more ahead for the group.

The Relocation and Employment Assistance Program — aka REAP — which offers income tax credits to businesses willing to move above 96th Street or to the outer boroughs, is set to expire this year and needs to be replaced.

And the last few years have been tough on residential brokers.

But, for Jan. 16, in any event, everyone was more interested in floating from table to table, largely ignoring the speakers on the dais or the videos playing on the screens, and acting like the good, old days were here again.

Wait, REBNY wasn’t the only major CRE event of the week!

A few days before REBNY, the CRE Finance Council (CREFC) also held its yearly meeting in Miami at the Loews Miami Beach Hotel, attracting a record 2,300 attendees.

The mood was likewise pretty good!

“I think transactions for a number of reasons are going to increase, with one being I think people are just motivated,” said Slatt Capital’s John Darrow. “There’s a lot of debt that needs to get refinanced, especially if you had 10-year paper in 2015 or five-year paper in 2020. Liquidity is good and the market is tight.”

Post Brothers’ Matt Pestronk described himself as “very optimistic” about activity going into 2025.

And we’ve already seen a lot of activity in, say, the CMBS market with $104 billion of issuance last year versus $39 billion in 2023.

But the thing that we were most interested in was who was going to be the celebrity invited to the conference. (Past guests have included sports deities A-Rod, Shaq and Derek Jeter.) So this year matched with 3650 Capital’s Toby Cobb was… (drum roll….)

Ron Howard!

We hear he couldn’t get center square.

Thinking of L.A.

While all this was happening, a very different story was playing out in Los Angeles, which will be dealing with the fallout from the wildfires there for a very long time.

“We had about 15 minutes to pack whatever we could take, and our dogs, and 10 minutes after we left our neighborhood nobody could get out,” said Vicky Schiff of Avrio Real Estate Credit whose house was partially burned down during the conflagration.

Within 24 hours of the disaster, Schiff began looking for a new place to live and found from every broker she spoke to that they had been getting hundreds of calls from desperate Angelenos.

“There’s some landlords in L.A. that are kind of under the radar, and they own or manage 100 or 200 higher-end homes that are fully furnished,” Schiff said. “They didn’t know this was going to happen, but they were set up for this. So you could move in right away, but prices are very high, and it’s ultra competitive.”

And that’s the problem on the horizon. A bad housing situation in L.A. is about to get so much worse. Some 12,000-plus structures have been damaged or destroyed. The cost is looking like it will be $250 billion, according to AccuWeather. And, as this whole sordid business plays out, securing housing will be something like the Hunger Games.

“The upshot is that a lot of people who had been housed — who do have, for the most part, strong incomes — have just been thrust into the housing market, and they’re going to push up prices and rents, and also compete for contractors in an already tight labor market to get things rebuilt,” said Michael Manville, professor of urban planning at the UCLA Luskin School of Public Affairs.

We can only hope the city and its state act quickly in the face of such an unprecedented disaster.

Speak to you next week.