News
This Morning's Summit: Night and Day
September 15, 2010
| Thanks to the over 600 of you who showed up this morning at the NY Real Estate Summit! We truly enjoyed sharing the sunrise with you. |
| If we could bottle up and sell the encouragement and positivity from our NYC Summit this morning at Cooper Union, we'd be rich-what a difference a year makes! "This is your market opportunity," said Cantor Fitzerald executive managing director Michael Lehrman to a crowd of 650, telling them that everyone's going to win-it's just a question of to what magnitude. |
 |
| Michael, right, spoke on our national panel with Westport Capital principal Matthew Landau, Brookfield Properties CEO of US commercial operations Dennis Friedrich, and Cole Schotz partner Leo Leyva, who moderated. Even with $1.4 trillion in loans due over the next two years, the extend-and-pretend model is over, he says, and we'll see tremendous activity over the next two years with plenty of money on the sidelines. Dennis says that it's a story of two markets-NY/DC and the rest of the country-but here we're seeing cap rates in the 5-6% range for Class A product, which will likely go down another 50 bps. Opportunities are in assets where you can create value and jobs, Matthew says, noting that Westport looks for broken deals and fixes them. There's more activity in the market, but it may be distressed buyers, he adds. |
 |
| For the NYC outlook, we turned to Eastern Consolidated chairman Peter Hauspurg, Fried Frank partner Jon Mechanic, SL Green director of leasing and real property Steve Durels, Vornado Realty Trust NY president David Greenbaum, and FTI Schonbraun McCann Group senior managing director Jahn Brodwin, who moderated. The panel should have been named "Much Ado About Nothing," says Jahn. After seeing sales transactions drop as much as 90% last year, the first half of '10 has eclipsed all of '09, Peter says. Even building values, which plunged from $1k/SF to $350/SF in a matter of 18 months, are rebounding-the Atlantic Bank Building at 960 Sixth Ave. "saw a cat fight" for $400/SF, and it's a Class B building. Future transactions, including 111 Eighth Ave., will test the market, he adds. Lenders are coming back, with banks like Morgan Stanley and Goldman Sachs repopulating securitized groups. |
 |
| A captivated crowd-and who wouldn't be with such an illustrious panel? We hit the bottom late Q1 or early Q2, says Steve, noting that SL Green projected 1M SF in leasing activity this year-but so far the firm has over 2M SF of inked deals, including half a dozen in the 100k-250k SF range. Vornado is seeing similar leasing growth; 20% of its deals have been expansions, while only 20k SF were retrenching, David notes. This is the time to plan for the future of NYC, he adds. In order for the city to remain an important financial center, we need modern office space, he says, which is why projects like Vornado's 15 Penn Plaza and Hudson Yards are important. The panelists say we also need to focus on quality of life,infrastructure, and transportation. |
 |
| Even our audience was in a cheerful mood, despite the 7 a.m. roll call. Above, we snapped Ruben Cos.' Adam Pogoda and Jonathon Yormak, Meridian Capital Group's Laurie Shapiro, Waypoint Residential's Peter Hopkins, and ScheinMedia's Jonathan Schein. Jonathan tells us that Ruben Cos. is actively looking for investments throughout the capital stack in NY, DC, and Boston, particularly in Class A office and luxury residential and their deals average $20M-$100M. Perhaps they could give a call to great sponsor Meridian for their financing needs-the firm arranges financing for transactions from $1M-$500M for multifamily, office, retail, mixed-use, and more. |
 |
| Ditmars Consultants' George Kondos, Roux Associates' Heather Dolland, Michael Levitt & Rubenstein's Jennifer Desser, DebtX's Ari Hirt, and Roux's Michael Roux. George, who manages shopping centers in the metro area, tells us that rents are stabilizing in the sector-but some are still seeing vacancy issues, and we won't see an uptick for another 6-8 months. NYC and Queens properties are doing particularly well, while it's a bit tougher as you go east onto Long Island. Michael says his firm is seeing an increase in development biz, especially for mid-sized projects. |
 |
| John Gallin & Son's Mark Varian, Alan Gaynor & Co.'s Alan Gaynor, John Gallin's Tom Gallin, and Loan Resolution Advisors' Jack Rosenfield. Congrats to John Gallin & Son, whose 30k SF office retrofit for the Rockefeller Brothers Fund at 475 Riverside Drive was just certified LEED Platinum. |
 |
| FTI Schonbraun McCann Group's Harvey Berenson, The Quest Organization's Michael Rosenblatt, FTI SMG's Laura Jackson, and Vornado's Martin Dresner. There's a reason why Laura was unusually peppy this morning-tax season is over, so she was looking forward to mental rest and relaxation after the summit. |
 |
| Target Contracting's Jennifer Paris, WMG's Patrick Morrison, Holm & O'Hara's William Holm and Valeria Kozhich, and Langan Engineering's Joel Landes. We're a fan of Patrick's-he traveled up from DC just to attend the summit, even with a very full plate. He tells us that it's the end of the government fiscal year, so now a lot of money is being spent. William tells us his law practice is seeing an uptick in sales and lease work, while Joel notes an increase of stalled development projects moving forward, thanks to new owners and money flowing again. |
