Richard Kessler

Are you going to buy in `25? If so, what asset class?

Yes, we are going to be buyers in 2025, focusing on multifamily, industrial property, data centers and grocery-anchored retail.

Is there a single “good” sign you see in a distressed property that makes you want to buy it?

We’ll look for a property with good fundamentals but a broken capital stack.

What real estate or tax policy would you like to see from a Trump administration?

I’d like to see the administration keep 1031 exchanges, reduce the capital gains tax, lower interest rates, and provide more benefits to develop affordable housing.

Let’s talk about retail. What’s the kind of tenant you want?

We are keen on supermarkets.

Let’s talk about multifamily. Do you ever see yourself building normal, middle-class rentals again? What would stop you?

Yes. In fact, we’re doing just that in multiple markets. We’re working to obtain entitlements for a project in New York City, and we’ve got a 200-plus-unit multifamily development in final design in Boston. We’re also working on obtaining entitlements for a multifamily project in Bellevue, Wash. We’d be discouraged if there were changes to the regulatory environment around multifamily development, increased construction costs, or changes to debt and equity capital return requirements.

Which market (outside of NYC) do you like best? Which market (including NYC) are you most fearful of?

I like Bellevue, Wash., for every type of product, and Boston and Raleigh-Durham, N.C., for multifamily. I wouldn’t say I am fearful of markets, but I am cautious about New York City because of the many quality-of-life issues we must address.

What’s going to be your biggest expense in 2025?

Capital.

How’s the financing climate for new development and redevelopment — hot, cold or just right? 

Right now, the climate for development is cold. Loans to cost are down and equity requirements are up. Institutional investors are looking for higher returns on costs, predicated on the fact that there are alternative investment opportunities available to them at lower risk and with more favorable returns. It’s hard to get an institutional investor to back a multifamily product at a 5.5 percent return when they can get U.S. Treasurys at 4.5 percent.

What are your predictions for the mayor’s City of Yes, especially given the controversies within the Adams administration?

I am hoping that City of Yes does pass.

Lightning Round:

Your social media of choice?
LinkedIn.

AI: Helpful in CRE or a fad?
It’s too soon to know for sure, but AI is likely to be helpful and here for the long term.

Last movie you saw in a theater?
I can’t remember!

You’re going on a six-month expedition into the Amazon. What’s your last meal before you get on the plane?
I’d want to stop in Italy for a big meal at Da Vittorio.

Tesla or BMW?
BMW.

Will interest rates be below or above 4 percent on July 1, 2025?
Above.

If you could partner with one person in the business on a property, who would it be?
I’d love to be able to partner with Charlie Benenson again.

What are you tired of talking about?
The election.