REBNY Leaders Jed Walentas and James Whelan On the NYC Mayor’s Race, Broker Fee Ban

The future of New York City’s commercial real estate industry appears bright as the metropolis continues to navigate its post-pandemic recovery. 

A return-to-office push, a recovering economy, and demand for housing development have all played a part in the overall health of the city’s CRE space. Indeed, office leasing soared throughout 2024 with 20 percent more activity than in 2023, and retail leasing activity had its best year in almost a decade in 2024, according to JLL data.

However, the city and CRE industry still face challenges, including immense difficulty in building more housing, an uncertain political landscape, and the overall impact of government policies, some of them new. 

Keeping a watchful eye over all of this is the Real Estate Board of New York (REBNY), which represents a broad cross-section of the city’s real estate industry, including developers, owners, managers and brokers in both the residential and commercial sectors. Over the years, the organization has played a key role in shaping the city’s real estate policies while also advocating for the interests of its members. 

Recently, Commercial Observer sat down with James Whelan, president of REBNY, and Two Trees Management’s Jed Walentas — who just finished his first full year as REBNY chairman after taking over from Douglas Durst in January 2024 — for a deep dive into the current state of the NYC CRE landscape. 

This interview has been edited for length and clarity. 

Commercial Observer: How do you view the current state of the New York City real estate market?

James Whelan: We’re coming out of a once-in-a-century trauma with respect to the pandemic. And 2024 was a clear indication that the city is really starting to pick up momentum in its recovery. That’s not to say there aren’t issues to address. But, when you speak to folks who operate in multiple cities in the United States, they’ll tell you New York City is rebounding far stronger than pretty much most of those other cities have. 

When it comes to top-flight commercial space in New York City, you’re increasingly seeing very, very strong leasing activity, and that’s starting to spread outward into other parts of the market.

Jed Walentas: The core of our business is really a referendum on the health of the city. Our folks only do well when the city’s doing well. In the simplest terms, our relationship is with buildings. The reality is that every civic element, every aspect of public good, affects our membership in a really profound way — public safety, schools, parks, transit. Ultimately, our industry is healthy when the city is healthy. 

The public safety situation is not perfect, and certainly dramatically improved, and, to Jim’s point, has improved over other cities. Obviously, there are still tremendous issues, but the overall public education and macro-
education infrastructure of the city is on an upward trend. All the things that make a city a city, a place where people want to live, obviously, all could still use improvement. But I think we’re in a very fundamentally healthy place, especially when you factor in the trauma that Jim talked about.

There were significant initiatives set forth by the city in 2024, particularly City of Yes and the 485x tax incentive for multifamily development. What is your perspective on their impact on development?

Walentas: City of Yes was a really healthy piece of legislation. I think it’s thoughtful, I think it’s smart, I think it’s going to have a profound impact on the city long term in lots of ways. The bill was passed into law in December, so in terms of an honest answer to the question “Have we seen an impact?” I don’t think anybody has seen an impact, but I think that we will. 

With 485x it is a little trickier. I think that legislation fell short of the public’s needs in a lot of ways for a lot of different reasons. I think the efforts by the governor to get something done were certainly appreciated and welcomed. But, the truth about housing is we’ve been under-building housing in the city for 75 years, and we put ourselves in a large deficit. Everybody understands that the city is underbuilt and that that affects the average renter out there profoundly.

Whelan: City of Yes was about zoning, and you don’t measure that in weeks, months or years. You measure in decades. But it was the most significant rewrite of the zoning code since 1961, and it’s going to have a very good, beneficial impact for the city in the years and decades to come. 

Why will City of Yes be more beneficial than 485x?

Whelan: It broadened the geographic boundaries by which you could do office conversions to residential space. It reduced the mandates in many parts of the city to build out parking, which data has shown over time was essentially overbuilt and sort of replacing the ability to build other things, like housing. 

So much of the housing conversation in New York in the last few years has been dominated by ideology, and it really comes down to math. And the problem with 485x is the math simply just doesn’t work in many parts of the city. Rental is the most important type of housing in the city, because New York is unique from any other American city in terms of its reliance on rental housing.

The City Council passed the Fairness in Apartment Rental Expenses Act in November. Its aim is to ensure that the party who hires the rental broker — usually the landlord — is responsible for paying the broker’s fee. Talk to us about REBNY’s decision to sue to block it.

Whelan: From a policy point of view, its impact is going to be that owners will increase rents in order to absorb the cost of the broker fee. And it’s going to make it a lot harder to find apartments here in New York City.

Going back a few decades, trying to locate an apartment was a bit of a challenge. You’d need to go grab The New York Times every Sunday, and get out there to see a listing, and you’d have to go see the brokers. Now, we’re all grown up and living in the age of StreetEasy and the like, with easier access. But, the way the law is written, if you’re a broker you’re not putting that listing out there unless you know how you’re going to be remunerated for your services.

Similarly, owners in a lot of instances will be hesitant to put those listings out as well. So, if you’re a consumer looking to find your next apartment, it’s going to be a hell of a lot more challenging. 

Thirdly, there will be an impact on the broker industry itself, and it’s going to put a lot of people out of work over time. So we’ve gone to court to block it and filed in federal court last month. I’ve litigated three times since taking over, and I’ve been successful each time. We feel very strongly that we’ve got a very good chance here. 

Now let’s talk politics. How does REBNY navigate political waters, particularly when it comes to working with individuals and groups who hold different political values and beliefs?

Whelan: You sit down, you have conversations, you see if you can compromise and get on the same page. And you’ve got to keep in mind “big city, small town,” so the folks that you are dealing with today you’ll probably be dealing with 10 to 20 years from now. 

Walentas: If you’re clear and straightforward with people, and you’re coming from a place of integrity, disagreements are not a problem. You’re always going to have disagreements with people — they have different politics, business plans, interests, preferences between boroughs, or commercial and residential, or housing versus retail, right? Everyone has a different personal agenda, and then also within the industry more broadly and the community of electeds or whomever. But, again, we want to continue to compress the gaps between expedient politics and healthy policies for the city.

How do you compress the gaps?

Walentas: Some of it is personal relationships and one-on-one conversations, some of it is getting the word out to the public through the media, some of it is educating the media to a large degree. It’s knowing where there are special interests that have gotten too much traction or too much influence in a way that becomes unhealthy or not in the city’s broad interest, and figuring out the right ways to illustrate that.

A lot of our industry from both an execution standpoint and a policy standpoint — for good or bad — is measured over years and decades, and sometimes there were things that were done for sound or reasonable reasons that turn out to have incredibly negative consequences. Certainly the 2019 state rent laws are proving to have a bunch of incredibly profound, negative consequences that certainly lots of people in our industry probably would say that they were very clear about at the time. 

With any policy there’s going to be unanticipated consequences, and the truth is nobody ever really knows, and there’s never one degree of stakeholders. There are myriad stakeholders that any policy is going to affect, and there’s balance, and you want to find the right balance. So, I think in terms of the question, how do you bridge that gap? Knowledge and information is the best way, and shining a light on what’s really going on and what the data really shows. 

What are your thoughts on New York City’s current mayoral race?

Whelan: The industry has had a good relationship with this administration. Our job, at the same time, is to be out there talking to everybody. So, we’ve sat down with other mayoral candidates to brief them on policy issues and the like. And we’ll just sort of see where the dust settles. 

Walentas: Our breadth of interest and the policies that affect us are so wide that with any one of those candidates there will be dozens of things that they agree with us on, or we agree with them on, and dozens where we disagree. 

I don’t know that the organization will ever take a position on something like this, but as individuals we all will. All of our members ultimately are going to vote for somebody. I guarantee that whomever they vote for there will be a million things they agree with them about, and thousands of things that they don’t. Ultimately, what we’re looking for is great leadership that’s going to make the city the most successful place.

What about on a national level? What do you think the impact of a second Trump term is going to be on commercial real estate?

Walentas: I have no idea. I’ve been doing this for 30 years, and I can’t point to a single federal policy that’s made me do anything different than I otherwise would have in terms of running my business. Policy by policy, there will be wins and losses. Our elected officials are going to do certain things that help our industry in narrow ways, and certain things that hurt our industry in narrow ways. 

Bringing it back to NYC, what are some of the bigger concerns on the minds of developers, landlords and brokers?

Whelan: It depends on the part of the market that we’re in, but No. 1 is obviously interest rates. That has an impact on everyone from being a developer to someone looking to purchase their next home. 

When it comes to the commercial side, it’s the return to office. But that is going in the right direction, and let’s hope it continues to go that way. 

In the rental market, it is the rental supply because it’s largely driven by supply and demand. You saw that during the pandemic, for example. People were leaving the city and the rents went down. So increasing rental supply is really a critical thing. 

What do you hope people will take away from this discussion?

Whelan: That coming out of the pandemic things are headed in the right direction. There’s a lot more to do. It’s a challenging road, but we’re going to be in there pushing and fighting for what’s best for the city, for what’s best for the industry. 

Walentas: For me, it’s just reinforcing the relationship between the industry and the city. The thing that most fundamentally affects our businesses is how healthy the city is and how prosperous our customers are. So everything from employment to cleanliness to crime to transit to parks to the livability of the city is our paramount thought every day. 

Amanda Schiavo can be reached at aschiavo@commericalobserver.com.