Jeff Levine.
Jeffrey Levine
Founder & Chairman at Douglaston Development
In 2021, will you buy or sell any real estate?
As much as the real estate market has been frozen, in terms of transactions, by the virus, selling isn’t on the horizon at this time. Lower occupancies and collection rates, along with the fact that no evictions are being made, make it very difficult to sell, as the overall NOI [net operating income] has been greatly impacted. In terms of buying, certain forms of real estate — including retail, hotels and office space — have been very negatively impacted, with some additional distressed opportunities having yet to surface. Multifamily properties continue to be where the greatest opportunities remain.
How f@*$ed is retail?
Retail had long been suffering before COVID-19 arrived in March. The pandemic, coupled with working from home and the growth of the
e-commerce and home-delivery businesses, has further hurt the sector. Looking forward, opportunities to repurpose those retail spaces should be the chief focus for shopping centers down the line to neighborhood stores. The repurposing of those retail spaces for community service needs, health and beauty, fitness facilities and restaurants — which, inevitably, will make a comeback — is likely the best path forward for the sector.
How flexible are you with negotiating rents?
We’ve been very flexible in negotiating rents, as we long ago realized that the market — not the property owner — makes the rental market. With that in mind, we’ve been offering various concessions within our multifamily portfolio.
Where retail is concerned, rent negotiations, forgiveness, and forbearance are deemed on a case-by-case basis depending on the tenant’s individual use group within our retail base. We have offered the greatest flexibility with forbearance and forgiveness for businesses like fitness facilities and restaurants that rely on a high degree of personal contact and haven’t been able to conduct business effectively for the last several months.
We recognize that if we lose one of our existing fitness facilities, restaurants or art galleries that we’ll have to go through the process of engaging new tenants and brokers, requiring brokers fees and improvements, as well as free rent. So, often, the path of least resistance is to negotiate.
Are you in the market for financing?
Financing is very difficult at this time, even though interest rates are low, and terms and conditions are attractive. Lenders have increased their spreads and business as a result of the unknowns that exist within the marketplace today. This, coupled with current vacancy and collection issues, impacts NOI and makes refis quite difficult.
What do you think the city and/or state should do to help both real estate and the city?
It is a well-known fact that 52 percent of the operating budget of the city of New York comes from real estate. Through its current policies, the city is hurting the goose that lays the golden eggs. The regulations and continuing methodologies of taxation of real estate activities are making it impossible to develop real estate moving forward. Fiscal responsibility is the key to the city’s future.
How do you think the November election will affect real estate?
Many of the Trump administration’s actions have been damaging to New York in particular, specifically, the elimination of deductibility on both state and local taxes. Biden has indicated this elimination would be rolled back, but our city leaders should be cognizant of the fact that the continuation of high taxation has already led to an exodus of higher earners from our great city.
LIGHTNING ROUND
Where’s your apocalypse bunker? My home in New York.
Favorite at-home quarantine foods? Peanut M&Ms. Satisfies three food groups in one shot. Peanuts are protein, chocolate is sugary energy, and the hard candy coating speaks for itself.
Did you gain or lose weight during quarantine? Depends on the day.
Sourdough bread, banana bread, other? Challah bread.
Which TV show have you binged? My wife and I met Idris Elba at a function months ago. His British broadcasting series, “Luther,” is extraordinary. “Killing Eve” has been another favorite.
What restaurant did you go to when restaurants reopened? Many restaurants within walking distance of my home that offer outdoor dining.
Mayor de Blasio: Best Mayor or Best Mayor EVER? Best mayor we have today.
Where did you quarantine? At my home in New York with my wife, three children, and now two grandchildren with the birth of my new grandson.
Biden, Trump or Kanye? My wife and I are supporting Joe Biden because of his many years of moderate legislative experience.
