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January 11, 2011 

Hear Prudential Real Estate Investors principal Chip Walters at Bisnow's Multifamily Summit. Over 250 already RSVPd'. Jan. 28. NY Bar Association. Sign up today!

Congrats, nerds. "Bright Flight" is no longer the term used for running from lunch-money-stealing jocks. Today, it's evidence of a dramatic shift in the location of housing demand—young people who want to live in downtowns rather than 'burbs, says Jonathan Rose Cos president Jonathan Rose (who will be speaking at Bisnow’s Multifamily Summit on Jan. 28).
Jonathan Rose Cos' Jonathan Rose
Boomers (less drawn to the sand states) also want to be downtown, Jonathan tells us. There's an increased preference for renting versus buying, too. This demographic shift has been seen nationally, but the tremendous influx has particularly benefited New York, he says. Apartments in downtowns near transit centers are doing well in suburban cities like New Rochelle, Stamford, and White Plains (his firm and the Malkin family are building Metro Green in Stamford, an apartment project near Metro-North, and its first phase is 100% occupied). Hear more from Jonathan—including consumers’ response to green building—when he joins some of the top names in multifamily real estate, including our newly announced speakers: Abacus Capital Group’s Benjamin Friedman and Massey Knakal’s James Nelson. Great networking too! Click here to see all speakers and register.

Fiscal Reality
Schulthe Roth's Jeff Lenobel, Richard Ravitch, and Mill Pond Capital's Adam Marsh
We’d be on a tropical island if we just finished a stint as NYS lieutenant governor only 10 days ago. But not Richard Ravitch. Yesterday, he spoke at National Realty Club’s luncheon at the Friar’s Club, where we snapped him (center) with Schulte Roth’s Jeff Lenobel and Mill Pond Capital’s Adam Marsh. He warns that we have a very pervasive lack of sophistication about the fiscal problems New York State faces. Although what we’re experiencing is not fundamentally different from other states—expenditures rising faster than revenues—this isn’t a problem rooted in the recession, but 10-15 years ago, when impactful decisions were made on subjects like Medicaid, healthcare, and education.
Richard Ravitch
The state has already used up to $28B in “one shots” to balance the budget and strained to avoid higher taxes and “politically painful” cuts, but has dramatically cut money for higher education and infrastructure. The MTA (Richard once headed it) and DOT are “extremely concerned about the level of depreciation,” he says. How do states deal with financial obligations? Not in the 25 to 30 schemes he’s aware of to kick the can down the road, he says. The greatest risk we face is confiscatory taxes—history suggests that courts want government to exercise its tax power to meet obligations. For NYC, this could mean an added $2.5B to $3B to the deficit.

Get Those Résumés Ready!
We’re on the verge of another hiring boom in real estate, reports The Bachrach Group managing director Chris Papa (right, with Allan Ageman, Michelle Tomsia, Richard Bachrach, Alexandra Roth, and Jordan Shapiro). Across the board, firms are looking for analysts and associates after staffing cuts forced more senior-level employees to take on some of these responsibilities. Around April, expect more moves in the VP level and above—clients were just getting used to not having to give bonuses and salary bumps, he says. But if they want to retain top talent, they’ll have to bring these perks to proper levels. “They can’t rest on their laurels anymore,” he warns. Even though the firm has been national for a few years, the activity has persuaded The Bachrach Group to open an office in San Francisco to provide real estate executive search and recruiting services to the western portion of the US and Canada. The new office opens next week, and we can expect further branch expansion in the Tri-State area, Chris says.

Worst Fears Visualized
Rising Currents MoMA exhibit
Much of NYC’s coastlines could be underwater in the next 50 to 100 years (sooner if you believe Michael Bay and Roland Emmerich), says Mary Jane Augustine, construction attorney, sustainability advocate, and NY office managing partner of McCarter & English. She showed Legal Bisnow this picture from the Rising Currents MoMA exhibit that brings together interdisciplinary teams to re-envision the NY and NJ coastlines in ecologically friendly ways. Mary Jane’s no stranger to the MoMA; she negotiated the design contract with Yoshio Taniguchi for its renovation (and 25 other museums), as well as the contracts for the New Meadowlands Stadium, the Gazprom Tower in St Petersburg, Russia, and the renovation of Grand Central. Mary Jane tells us she’s working on some of the transactional aspects of the San Fran MoMA design and the Memorial/Visitors Centerat the WTC.
McCarter & English's Mary Jane Augustine
Though the firm just had two of its best three financial years in its 166-year history (without layoffs or furloughs), Mary Jane’s not taking a breather. While simultaneously practicing law and managing the NYC office, she’s putting in long hours at night doing grad work in sustainability through Harvard online courses. She started the program in January ’10, right before she made managing partner, to enhance her knowledge in an increasingly hot area closely related to construction. Mary Jane, one of only 500 LEED AP attorneys in the country (the firm has five), says to draft and negotiate effectively, it's critical to understand green building principles like energy efficiency, water conservation, indoor air quality, and sustainable materials.
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