Gregg Schenker

Tell us about a deal that did NOT go through this year and why it didn’t happen?

We were negotiating and in contract to purchase a building in Palm Beach Gardens. However, at this moment in time, the reset of asset pricing and shifting fixed-income markets caused our team to hesitate and exercise caution.

Have you refinanced anything in 2022? How difficult/easy was it?

We refinanced a multifamily property in Austin — 520 units, relatively new construction — with no difficulties, as we used one of the government-sponsored debt programs. We also placed, with no complications, a modest loan-to-cost mortgage on a previously debt-free retail building in Astoria, Queens.

There’s a lot of Class B and C office in NYC. If you could lay your hands on them at a really great price, what would you do with them?

I would operate the buildings for their highest and best use, which may be office. However, live-work lofts, medical and other uses are in demand, like conversion to multifamily if permitted by zoning and if the building is entirely or substantially vacant.

What market outside of NYC do you like and why?

South Florida Gold Coast. It has terrific population growth, job growth and a high-quality lifestyle. Florida is a tax-favorable state, with less regulation than most others, and the growth is continuing. As a lifelong New Yorker, I am all in for NYC. I pay my taxes and vote in the city, the greatest city in the world for many reasons, but I think the city has a long way to go in terms of being better organized on business development. Hopefully, the politicians will come to realize that businesses, wealthy taxpayers and capital can move rapidly when circumstances warrant. In spite of the disorganization, the city attracts business because of the talented workforce, cultural and educational institutions, and restaurants. However, that alone is not enough. When Bloomberg left office, the annual budget was $58 billion at a $1.5 billion surplus annually. Now the annual budget is over $100 billion at a massive, although not yet definitively quantified, deficit in the range of $6 billion.

There’s a midterm election this year. How closely are you following, and do you think the national political climate will have an effect in New York?

A more fiscally responsible Democratic House and Senate would helpNew York. However, in response to undisciplined spending — the plan put forth by the Biden administration to pay off student loans in an unfair manner, at a cost of $400 billion — Republicans are likely to pick up a majority in the House with Democrats holding the Senate.

How many days per week are you in the office?

I have been observing a minimum four-day week in the office; however, I work seven days per week.

How many days per week are your tenants in the office?

Seems to me many of our tenants have returned to the office. I estimate 75 to 80 percent for a minimum three- to four-day workweek. Almost all companies require a meeting place or office to gather and exchange information and ideas; collaborate, learn, teach, train, promote, and have the benefit of the in-person, sometimes nuanced intellectual transfer, and sometimes not-at-all nuanced — quite direct.

NYC apartment rents have reached never seen levels. How much further can it go? How does the housing squeeze play out?

Inflation will continue to cause rents to rise in the long term. In the short term, it seems to me multifamily free-market rents have peaked and should be set to fall slightly. The problem in New York is the housing shortage caused in part by rent regulation, supported by unmanageable policies, coupled with the very high cost to operate real estate, including the 30 percent of gross revenue real estate tax burden. I would gladly volunteer my time to help New York develop a sensible affordable and workforce housing solution.

ESG: fad or fixture?

Very important and here to stay.

Class quote

Integrity. Diligence. Loyalty.