Gregg Schenker

What is the thinking behind the multifamily project at 515 West 57th Street? 

Our view is simple: The site, the location and the neighborhood can accommodate far greater density than current zoning permits. 515 West 57th Street is a through-block site, with frontage on both 57th and 58th Streets, in a neighborhood anchored by Mount Sinai, John Jay College and Fordham. We are seeking a rezoning to build a 30-story building of roughly 394 apartments, including 119 permanently affordable units. 

New buildings of this scale create construction and permanent jobs, and they generate significant tax revenue for New York City for decades. 

How is the multifamily development market in general in New York City now? 

The multifamily development market is very strong, for both sales and rentals. In Manhattan, median rents reached $5,285 in August, up 7 percent year-over-year and the 24th straight month of annual gains, while vacancy fell to 1.51 percent, the lowest since 2019. Third-quarter sales rose 9 percent to the best third quarter since 2022, and the median price hit a record $1.25 million. 

The constraint in general is supply: Sponsor inventory is at its lowest level since 2012. The challenge for developers right now is cost — construction, financing and time — but demand is not the question at this time. 

How would you describe the office leasing market in New York now, and how does it compare  to a year or two ago? 

The climate right now is extraordinary for well-located buildings in very good physical condition. Manhattan has now leased more than 10 million square feet in four consecutive quarters, something that hasn’t occurred since 2002. 

Furthermore, availability has tightened for 10 straight quarters, to 12.4 percent, from more than 18 percent in early 2024, and average Class A asking rents have hit a record $85.45 per square foot, with the very best floors in trophy towers now exceeding $300 per square foot. Midtown is back to pre-pandemic availability. However, the market is bifurcated: Tenants are paying for quality and location, and obsolete buildings are falling further behind. 

Any particular areas — geographically or by asset class — are you looking to pursue? 

Our Receivership Practice and Special Situations group is focused on well-located properties that need to be recapitalized and rebuilt in the New York City and South Florida office markets, where demand for high-quality, rebuilt properties remains very strong.

There are many such properties: The significant disruption in values and the rapidly changing interest-rate environment have left good buildings with capital structures that no longer work. We do the necessary research to fix the balance sheet, reinvest in the physical plant and reposition the asset for the best possible outcome. 

Where are you getting your money — or, how would you describe your investor base? 

We invest with wealthy families who want real estate exposure in their portfolios and who have patient capital. That patience is an advantage. 

For example, a rezoning like 515 West 57th takes years, and rebuilding a distressed property does not often happen on a fund’s timetable. Our partners have held onto their assets for a long time, and have sometimes invested many years into them through sweat equity — they are not forced sellers nor are they managing to a quarterly mark. So we can make decisions on their personal experience, the merits of the asset and, when warranted, hold through cycles.

If you could change one area of global or local tumult, what would it be? 

I would wave a magic wand and change human nature: Eliminate greed and war, and provide housing, health care, clean drinking water, food and medicine for all the peoples of the world. That sounds idealistic, maybe ridiculous. However, the fundamentals support it, and so it is quite possible. The resources exist — what is missing is the will. 

Today’s conflict in the Persian Gulf shows how directly war reaches everyone, through energy prices, inflation and interest rates, all the way to what it costs to house a family in New York. 

Is the opportunistic investment window still open, or has it closed?  

Open, and, if anything, even wider. The Fed raised rates in September for the first time since 2023, and the 10-Year Treasury is near 5 percent, its highest level since 2007. Loans made when the cost of capital was extremely low keep coming due into a far more expensive world, and many owners cannot refinance without new equity. 

That is where patience pays dividends. The opportunity is in good real estate with broken capital structures.

Lightning Round:

Your AI platform of choice? Claude by Anthropic. Genuinely useful. Probability favors AI reaching a singularity, a turning point where self-improvement surpasses human intelligence. From then on, human predictions may become obsolete, as machines design and build ever smarter systems in a chain reaction. The outcome could cut either way.

Who would play you in a movie? Mark Twain — a very interesting historical and literary figure; the ability to benefit from his interpretation and perspective would be humorous. 

One prompt you’d never give AI. None — I’ll ask it anything. Taking the advice is another matter. 

Jalen Brunson or Aaron Judge? Brunson — an incredible desire and ability to win against the odds. 

“Oppenheimer” or “Odyssey”? “Oppenheimer.” I prefer history over mythology.  

Tom Holland, Andrew Garfield or Tobey Maguire? Tobey Maguire. 

Have you ever eaten pizza with a knife and fork? Many years ago, at Ray’s. Now I eat pizza with my hands, the way it should be. 

The most money you’ve ever spent on a hamburger? $70, for the DB Burger Royale at Daniel Boulud’s db Bistro Moderne on West 44th. Fabulous, and worth it. 

Bank or non-bank? Bank. Because relationships matter.  

Last book you read? The Maine Woods by Henry David Thoreau. 

Borrowing costs — up or down in 2027? Up — and for longer. 

What was your nickname when you grew up/started out? Chairman Mao, courtesy of my older sister Meryl when I was 7 or 8. She still uses it when frustrated with me. 

How long do we have before AI kills us all? Protections belong in the programming, along with guardrails against those who would use AI to do harm

Where’s your secret escape compound? (Think Peter Thiel’s New Zealand Plan B.) My sailboat, Northern Star, and property in the state of Maine. Hopefully, never needed for that purpose.