Nicholas Bienstock

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

We were starting the process of fundraising in early 2022, but when the capital markets melted down, it became clear that deep distress was developing across the New York real estate landscape. We decided to pause and reorient the investment strategy to target opportunities we believe will emerge from that deep distress.

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

The capital markets largely shut down in Q1. Lenders, who over the past three years of the pandemic exercised forbearance in anticipation of a recovering market, are now demanding that their loans be repaid. It’s a “risk-off” environment for lenders. To the extent that a lender still agrees to extend, it’s paired with a rate increase and a partialpaydown, which makes for a very difficult refinancing environment.

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?

A small handful of B and C office buildings have the physical characteristics to be redeveloped for an alternative use, such as apartments or hospitality. But that requires the right location, configuration, floorplate, fenestration, etc. Most older office buildings are not good candidates for residential redevelopment, even if the price is dirt cheap. Many tired, old office buildings in Class C locations are functionally obsolete.

What market outside of NYC do you like and why?

We opened Savanna’s offices in Miami and West Palm Beach three years ago. We are actively growing our South Florida business.

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?

We are all closely following the midterm election, but New York has its own political momentum, which is often independent of national politics. I’m grateful that with Mayor Adams and Gov. Hochul we have centrist leadership that is generally pro-business and pro-law and order.

How many days per week are you in the office?

Five days a week. I believe every aspect of business is better when teams work together in the office.

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

Every firm has incorporated some level of remote work. The most common pattern we see is requiring three to four days in the office. We track the occupancy of all of our buildings every day. Monday is light, but Tuesday, Wednesday and Thursday are up dramatically and are approaching pre-pandemic levels. Friday is very empty.

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

I believe the demand for apartments will continue, barring a recession. Young, talented people still want to come to New York on a scale that dwarfs any other city in the nation. My daughter just took her first job out of college and signed a lease with a roommate for a one-bedroom apartment near Gramercy Park. She is putting up a wall to create a two-bedroom. There were five bidders for the apartment, all at full price. She went to Vanderbilt, and all of her friends either have jobs in New York or are trying to get jobs in New York. The same is true with my son, who graduated from college two years ago. The younger generation — my children and their peers — will drive New York’s recovery and growth.

ESG: fad or fixture?

Fixture. There are several reasons for that. It is the right thing to do, and business owners should implement ESG policies for that reason alone. But, increasingly the major constituents of a real estate investment business — investors, tenants, employees, municipalities — simply require serious attention to ESG. In the long run, companies that fail to integrate ESG into every aspect of their business will do so at their peril.