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December 3, 2008



As one of Long Island’s largest owners and investors, Rechler Equity Partners has been a dominant force in industrial and office markets since the family developed NYC’s first industrial park in ’58 and what is now the nation’s second-largest industrial park in Hauppauge in ’61. It looks like next year will be even better for managing partners (and cousins) Gregg and Mitchell Rechler.  We’re so glad someone can say that, we stopped by their Melville office to see what’s in store.


They haven’t bought many properties in the past four years, they tell us, wary of artificially inflated prices. This has left them with a $50M war chest, ready to hop on any attractive investments. In particular, they’re interested in industrial sale-leaseback deals in anticipation of owner/operators’capital needs, given today’s unstable economic environment.


The firm’s development pipeline will also be busy in ‘09. Sears is vacating its 40-year lease at Motor Parkway and South Service Road in Hauppauge, which allows repositioning of the asset into Class A office space. Also on the ledger: the development of the Gabreski Airport site on County Route 31 in Westhampton, which will include 460k SF of industrial/R&D space and the first flagged hotel in the area; and the South Bronx’s 385 Gerard Avenue (pictured), which will be repositioned into a 12-story, 430k-SF Class A office building.


One of the Rechlers’ largest projects, the 300-acre, 3M-SF office/industrial development of Enterprise Park at Calverton in Riverhead, is on the drawing board, but they don’t expect a shovel in the ground for at least another three years. In the interim, they’re certainly not twiddling their thumbs. Work leaves little time for play for these execs, although they did relax over the holiday.

‘Perfect Trifecta’ Allows Future Savings

Right now, the market is experiencing a perfect trifecta of circumstances for family investors and developers with long-term outlooks: low relative valuations on real property and financial assets; historically low interest rates; and favorable tax rules. Taking advantage of these can save their families millions over time, says Mark Rubin, senior managing director of Private Client Advisory Services for The Schonbraun McCann Group, the real estate advisory arm of FTI Consulting.


Mark with colleagues Michael VanRossem, Charles Friedman, Jacqueline Bataille, Scott White, Joseph Falanga, Dorothy McAuliffe and Sylvia Pena. He tells us that taking advantage of current tax laws can allow families to achieve asset protection and estate tax reduction for future generations. They will need a professional team to review portfolios and plans, including legal counsel, accountants, insurance agents, and investment advisors. Since his firm already has ongoing close relationships with client families, he notes that he is often asked to organize and direct the team.


He points out that successful families not only think about their financial capital, but their human capital as well.  While he doesn’t disclose his client list, he notes that the Rudins, Fishers, Roses, Speyers, and Tisches invest not only in real estate, but family members’ intellectual development and philanthropic involvement. If you want a sneak peek into how some of New York’s biggest real estate families balance their financial and human capital, and their role in philanthropic initiatives, keep an eye out for Mark’s new book, Beneath the Skyline, which should be published next year. (But feel free to e-mail him if you’re looking for pointers.)

Arent Fox
Reznick Group
Casa Noble
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