Scott Galin

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

We’ve had a very strong year so far, with dozens of leases signed throughout the portfolio. A few deals did fall through, but no more so than in any other year, and for the usual reasons.

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

We completed a substantial refinance of a commercial property in our portfolio. It was challenging for several reasons: 1) lenders have been skeptical about the office market since the pandemic; 2) it has become more difficult to assign valuations to most assets because of somewhat muted transaction volume since the pandemic, and we don’t have enough clarity yet on when that volume of activity will return to historical norms; and 3) we arranged the refinance during a time when the trajectory for interest rates has done nothing but point upward.

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?

There is still a tremendous opportunity for B buildings due to the bifurcated nature of the office market. Space in Class A properties is in huge demand, and, while those leases are impressive, the majority of office tenants in the 3,000- to 15,000-square-foot range simply can’t afford those $100-per-square-foot-plus rents. They are seeking more reasonably priced space, which has greatly benefited the B office stock. The “in-between properties,” the A-minus properties, are struggling the worst. If B/B-plus office buildings were available at the right price point, we would be interested in taking a look.

What market outside of NYC do you like and why?

Given inconsistencies in the office market, we have been very active in investing in 100-plus non-office assets in multiple markets throughout the U.S.

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 follow the political landscape closely, but I don’t think the national midterm elections will have a meaningful impact on the NYC real estate market.

How many days per week are you in the office?

Typically, five.

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

Most are in a minimum of three days per week, some at five, with an average of four. However, more than 95 percent of our tenants are occupying their spaces at varying levels of staff and days per week, with several increasing the frequency.

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

It’s always an issue of supply and demand. There’s never any way to know for certain when we will reach the top of a market. But if NYC continues to rebound from the pandemic and rising interest rates continue to throw cold water on buyer appetites, the demand and pricing for rental units will remain strong.

ESG: fad or fixture?

ESG is definitely not a fad. It’s becoming a fixture.

Class quote

“For the skeptics who just a year or so ago were burying our city, saying we were dead in the water … NYC is back and will be better than ever. Plus, we have Aaron Judge! At least for now!”