Jeffrey Gural

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

I recently had a 15,000-square-foot space at 440 Lafayette Street coming up for lease. I knew the tenant was likely going to leave because they haven’t been using their offices since the beginning of the pandemic. I had a high-end architecture firm interested in the space, but the tenant kept dragging its feet. In the end, I lost both. I pride myself on not losing many deals, so this one was a bit frustrating because, like so many companies, the tenant couldn’t figure out if their workers were coming back to the office or not.

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

We successfully refinanced several properties across our portfolio in anticipation of interest rate increases. Each transaction was relatively easy because they were low-leverage loans. However, 40 Worth Street presented a few challenges because it involved making major capital improvements to the building to accommodate Legal Aid Society’s new 200,000-square-foot lease. In total, GFP Real Estate has refinanced more than $400 million in 2022.

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?

It depends on the location and property. Many of our buildings were once industrial or light manufacturing spaces that were converted to offices many years ago. Today, these buildings attract tenants looking for that cool factor in their offices — oversized windows, exposed brick and ceilings and a great location — so I would follow our playbook and convert them to cool office space for creative and tech-related companies. If the building was mostly vacant — and the floorplates make sense — I would certainly consider converting the building to a residential use. I believe the biggest challenge for conversions remains with the older Class A buildings — 30- to 40-year-old assets that most people would now consider A-minus or B buildings.

What market outside of NYC do you like and why?

We stick mostly to New York City, but do have several properties in Jersey City, N.J., that do quite well because they are well located and the residential rents are somewhat lower than in Manhattan.

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?

I have been following the elections very closely and consider several of the current Democratic leaders to be good friends. The Democrats have delivered a great deal of aid to New York state and New York City following the pandemic. I feel this could all change dramatically if we returned to a Republican administration, which passed legislation that disproportionately hurt blue states, such as the removal of certain (SALT) tax deductions, for example. At the state level, I would like to see the Democratic-led legislature reassess its position on items like bail reform, which has caused an increase in crime (and the perception of an increase in crime) and is hurting efforts to get employees back to the office full time.

How many days per week are you in the office?

I am in the office a minimum of three days per week, sometimes more.

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

It varies, and every tenant is different based on their business.

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

I am concerned that many landlords may be over-reaching on rents. I wouldn’t be surprised to see rent increases start to moderate soon, especially if we enter recession territory in the coming months.

ESG: fad or fixture?

Fixture. Focusing on environmental issues is very important, and investors and tenants alike are helping to drive that trend. We are always looking for ways to achieve better efficiencies across our portfolio while reducing our carbon footprint.