Ronald Dickerman
President and founder at Madison International Realty
As its name implies, Madison International Realty invests all over the globe, with offices in New York, Los Angeles, London, Luxembourg, Amsterdam and Frankfurt, giving it a global perspective on commercial real estate. Among other things, it has a 50 percent stake in the Warsaw Spire tower.
But it also invests in the nitty-gritty neighborhoods outside of the CBDs, like the 52 shopping centers — predominantly grocery-anchored and predominantly in Florida and elsewhere in the Southeast — that it paid $1.05 billion for a stake of in 2017, with DDR Corporation, since rebranded as Site Centers. And when Forest City Realty Trust was breaking up, Madison picked up Atlantic Center and the Atlantic Terminal Mall, across from the Barclays Center arena in Brooklyn. It also controls Queens Place, Harlem Center and the Times Square Entertainment Complex, which includes Madame Tussauds.
Well known for his retail expertise, Ronald Dickerman remains one of New York’s go-to guys on real estate investing (he describes Madison as a “liquidity solutions provider to a multitrillion-dollar, non-liquid real estate market”) and a good one to ask where commercial property is going now that the pandemic and technological progress has led to many workers no longer being tied to their offices.
“I think the answer is both: We’re in a cycle and a secular shift,” he said. “It’s a very, very difficult environment to raise equity capital for real estate right now. We haven’t seen this since the 1970s.”
What that means is that as demand for office and physical retail downshifts in reaction to what’s happening in the world, inflation and rising interest rates are helping to create a cyclical downturn, putting pressure on just about everybody.
“The users of office buildings have completely changed,” Dickerman said. “On the other hand, things are accelerating, like data centers, cold storage, industrial, housing strategies like single-family homes for rent. This is really the temperament of the commercial real estate business today.”
