Jonathan Landau On Launching His New Firm And Why He Left Fortis

Jonathan Landau is ready to make his mark in the coveted Miami market. 

The former CEO of Fortis Property Group started a new chapter in his career last month, and he is bringing his family along with the launch of Landau Properties. Landau will be working side by side with his daughter and son-in-law, Yaeli and DC Lowinger, and looking at developments in South Florida, New York and Boston.

The family firm plans to start construction on its debut development in the serene Bay Harbor Islands neighborhood, adjacent to Miami Beach, in May. The oceanfront site, which overlooks the exclusive Indian Creek Island, would offer the only private yacht club in the vicinity.  

Landau spent nearly two decades running New York City-based Fortis, working with the father-and-son duo Joel and Louis Kestenbaum. Joel Kestenbaum replaced him as CEO, The Real Deal reported.

In Landau's time at Fortis, he led several successful developments, including the One Lincoln office tower in Boston, which was refinanced for $1B last year, and the luxury Olympia Dumbo in Brooklyn, which is one of the most expensive condo buildings in the borough's history, according to TRD.

Fortis also has a couple of notable misses. It is the developer of the Seaport Residences tower, which is in foreclosure negotiations after it was notoriously found to be leaning 3 inches to the north. Construction was halted in 2020 amid payment disputes and has yet to resume as of November, New York YIMBY reported.

Landau spoke with Bisnow last week about his new venture, where he is planning his firm's next projects and about having to "pay to learn" from his past mistakes.

This interview has been lightly edited for clarity and length.

Bisnow: Why did you choose Bay Harbor Islands out of all the places in South Florida to launch your new firm?

Landau: I think that there's really different groups of buyers out there in every market, but particularly in Miami. The Bay Harbor area is super serene. This site is literally a stone's throw away from the Bal Harbor shops, which is really a hot spot. You have Indian Creek, the golf course beyond the water. It's a special location. Once you actually step out onto the dock there, you're almost transformed into tranquility. It’s beautiful as you go up in height, even if you get to the seventh and eighth floor of the building, you get ocean views, a great view of downtown and Brickell. What has been developed there are these large, very much high-density projects, which from my perspective is not necessarily what people who want to live in luxury are always looking for.

There are always people that are looking for something that's more bespoke, more boutique or special, more limited, right? And this site gave us an update. It's an extra wide site, we're building units that have 75 feet of uninterrupted water frontage.

It's just one of these spots that I felt was great. There is a lot going on in Bay Harbor Island, lots of new development, mostly smaller units, commodity-type products. We're going to deliver to the market something that's really special and different. And there are enough buyers interested in that bespoke product versus some kind of you know, high-rise Brickell tower.

Bisnow: With so many luxury products in the market, what is Landau Properties doing to make this debut development stand out from the rest?

Landau: Take a look at the buildings that I've developed with my prior firm, including Olympia, which is iconic. I'm not a cookie-cutter kind of guy. I don't have a big enough ego to think that I could do what everybody else does, but do it better, right? When I approach the design phase and put together the team of architects and designers and start looking at things from a clean-slate, blank-palette perspective, I'm always looking for something that's going to draw me to this. Some of the design was ready. I would say we cut in stone once we bought the property and we have massaged it and changed it a little bit. It's curvaceous. The look that we're going for is the mid-1950s, Miami Vice look. Something that is really still true to Miami and brings back that old sense of glory and glamour. There's no question that each project is different. But when I approach a project, I feel like we need to build something that is differentiated, that is special. Sometimes that might be a tall building in the Brickell area if it's the right time in the marketplace, or if the market demographic supports that.

In this case, there's a lot of new development in Miami, and I'm not interested in competing with the next guy that's building 900 units. It's just the story building. I want to build something where the experience of living in our building is special and when I come back after the project is done and visit the site and see the way that people live in this building — they even elevate it to a level that I never anticipated— that is real. I would call it development execution where you have a vision. You carry it through, maybe not the same thing as everybody else is doing, intentionally in my case, and you hope that other people see it that same way.

Bisnow: Have you secured any pre-sales?

Landau: We have not. We have nine units. We have a great team. Our sales and marketing team that we're putting together is probably the best in Miami. We're doing that in an interactive process where we look at the demand, we look at what's selling, we look at what's not selling, we look at what is available in the marketplace, we talk to people and say, 'What would you buy if you could design and describe the size and a managed package for your ultimate dream building?' Once we come to the market with our full presentation of what the units will look like, the design elements and the amenities, I think it's going to be absorbed very quickly, probably at a higher price than we underwrote. 

Bisnow: What drove the decision to leave Fortis and start this new firm?

Landau: I've done a lot of development work, ground-up development work, for the last 10 to 15 years in New York and Boston. I've always had an eye towards Miami. I've done a lot of office, property acquisitions and repositioning work with Fortis and a lot of the work that I did there was single-handedly directed by me. I felt like I had the experience accumulated over the last 18 years to be able to do that on my own. It was an opportune time given the collective experience that I had and the opportunities that were in front of me to venture off and start a family business.

My son-in-law had recently got into the business, and my daughter has been in the business with me [as well]. I have another son that's coming out of college. So I thought this was a great time to embark on it. There will be amazing opportunities over the next 24 months when there's a down cycle or modification to the mortgage, interest-rate wise, Covid-wise. It will all generate opportunities in the marketplace, and they're not always opportunities that spring up when events occur. Many times they appear when the dust settles or while the dust is settling. I think it's an opportune time to be able to do that. It takes a little bit of guts, but I believe in God and I think that I have the skills, I have the experience, I have the family members and the team around me to succeed and this is an opportune time with God's help to do it.

Bisnow: Obviously you had lots of successes at Fortis, but left a couple of unfinished projects. Did what happened at the South Street Seaport and in Cobble Hill play into your decision to leave?

Landau: No, I would say you take a look at any developer in New York City or probably Miami and they have their share of successes, and they have one or two projects that go badly. In construction, there's huge risk, and that's why a project that goes well is disproportionately profitable over other segments of the commercial real estate market and even just general investment markets.

That being said, I was not the primary person involved on the construction side of things. Where we went wrong on the South Street Seaport project was we hired a construction firm that wasn't local and had a great reputation for being an outstanding international construction firm. When you make one bad mistake in construction, it has an enormous downstream [effect]. It's an experience that I've learned from. Will I say that it didn't have any impact in my decision to leave? I think it's part of the experience that I felt comfortable with saying, 'OK, I've seen good deals, I've seen bad deals, I've lived through good deals and bad deals.' I've worked with some of the most amazing designers and contractors and great lenders and lousy lenders, and that is all the bag of what you take with you, right? So of course, it's something that factors into how confident you are to go off on your own but no, it wasn't the driving factor.

Bisnow: So you're the type of guy that thinks you never lose, you always learn?

Landau: Or maybe sometimes you have to pay to learn, right?

Bisnow: You said earlier that in construction, there's big risks. So for you personally, is that part of the thrill of the business?

Landau: You know, I don't live my life on the edge. But I do enjoy a challenge. I think I have the competence. I think I have the skill set in dealing with the architects, engineers, designers, contractors to navigate those risks, and that's what gives me comfort. I think it's almost as enjoyable to design something that you know, you think of, but you can't necessarily do yourself but with a team of people you bring something special to reality. That's exciting to me.

Bisnow: You’re launching this new firm and first project as many are expecting a recession in 2023, or at least a major real estate downturn. How are you approaching this project and future deals with that in mind?

Landau: Well, we underwrite sales prices from an investment perspective at less than what we think we're going to execute. That's No. 1. So if we think we can hit $2K a foot then we underwrite $1,500 a foot or $1,700 a foot so we have room. Maybe at $1,500 a foot the deal still makes money, but not as much money, then we like that.

Remember, development is something that takes time, usually a two- to three-year period of time at a minimum. So actually developing at the beginning of a downturn is an excellent thing to do because you don't need to be selling now, you need to sell when you're done, by the time you're done or shortly thereafter. And the fact is, you want to be selling into the recovery, not starting to sell in a healthy market wondering when the floor is going to fall out underneath because as you know, it's a cycle and everything tends to eventually drop. Whatever comes up comes down.

I actually think it's an opportune time to be developing right now. In South Florida, specifically, I think the demographics are better there than in other parts of the country that make it more resilient in this kind of downturn. But ultimately, it's about staying in the game, and I think starting a project right now, and knowing that you can most likely sell through two years from now, you'll be catching the rise versus worrying about where you drop off. That's a much better approach.

Bisnow: Do you see Landau Properties expanding to other sectors like office or industrial being that those markets are hot in South Florida (especially Miami) at the moment?

Landau: I’m working on a pretty large office project right now that I’ve spent almost 20 years of my life in. I think there's going to be tremendous opportunity in the office sector. The real question is how much stability will ultimately settle in because of the hybrid work-from-home [situation], do companies really occupy or use the amount of space that they have? There's going to eventually be an equilibrium, an adjustment period where things settle down and there's more risk associated with that. There's definitely a lot of risk in New York City office right now. There's a tremendous amount of space that was brought into the market over the last five years and you have this dislocation of where is office going, coupled with the new space that was brought on board. So you know that there are going to be opportunities. Again, I think in the office sector I'm looking for something differentiated, special, unique, opportunistic in a way that most people don't see it. If I find something like that, I'm chasing it.

Bisnow: This project that you're working on, just so I'm clear, in New York or is that here in Miami?

Landau: No, it's not in Miami. It's not too far from New York.

Bisnow: What else about Landau Properties can you tell me that no one else knows?

Landau: I think we're an open book. So to a certain extent I think most people know what I've done. A lot of our projects that I've worked on have been out there. I would say that I get up in the morning and coming to work with my daughter and my son-in-law is just an exciting atmosphere. As we grow this business because obviously we're going to need to bring other people in. I think that the environment and the energy that we have already and that we are going to build is going to drive us and is going to define us and that's something that it's obviously not known yet. But as we grow and we build with God's help, it'll shine through.

Bisnow: What makes you different as a developer from the rest of the out-of-town newbies?

Landau: I think I look at what's not there more than what other people do, meaning most developers look at the data and they develop based on the data. I think what the data doesn't show you is what supply doesn't exist. What you have to do is look to see is there a demand for something that hasn't been fed. That's more my approach than what other people might do. So I think that's a unique way of looking at it.

Bisnow: What else is in the pipeline for you and your firm?

Landau: We have a pretty large project that we're working on and hopefully we will close on the first phase of it this month or next month in New York. As I mentioned, we have a project outside of New York that's in the office sector and we're working on another project in Boston that could materialize. These are all locations that I have great contacts and I've worked in over the last 20 years and I think it's going to be exciting as we roll out here.

CORRECTION, JAN. 10, 5:15 P.M. ET: Fortis is the developer of the Seaport Residences tower in Lower Manhattan. A previous version of this story used an outdated name for the project. This story has been updated.