Exclusive Q&A with Leslie Himmel, the Largest Female Landlord in Real Estate
Himmel + Meringoff Properties' Leslie Himmel is without a doubt the $500M woman. Over her three decade-long career, this power woman has had her hand in over 45 acquisitions and financing transactions valued in excess of $2B. In 2011, she received the REBNY's Mendik Lifetime Leadership in Real Estate Award for her work on the New York real estate scene. On Dec. 1, Leslie will be speaking at Bisnow's Office Leasing, Development and Investment Series at 4 Times Square. Meantime, we caught up with her to see what she's been up to and what she predicts for 2016.
Bisnow: What was your most recent big deal?
Leslie: Our most recent deal is the highly successful repositioning, renovation and re-tenanting of 1460 Broadway, the 16-story, 215k SF commercial office tower we acquired last year by buying out Blackstone’s 49.9% interest in the building with our partner The Swig Company of San Francisco.
Our challenge was to lease up a building whose entire office component would soon be vacant. The law firm Skadden Arps had announced it was departing as of March 31, 2015. Moreover, the leases of existing retailers in the building’s street-level space were expiring as of December 2015.
The exciting part was the opportunity to totally reposition an office building in one of the most iconic locations in New York City: Times Square. We were tremendously fortunate because WeWork signed a lease for the building’s entire office space on the same day that Skadden Arps moved out on March 31, 2015.
Moreover, only a month later we signed Foot Locker, the global shoe retailer, for the entire 35k SF retail space, which will soon be transformed into a stunning three-level showcase featuring a totally glass facade on the base with the addition of state-of-the art LED signage. We are now well underway with the massive renovation of the building’s exterior and interior.
We structured the deal to create two separate condominiums—a retail condo and an office condo. From a legal, financing and tax position, this created value in each of the condominium units and ultimately makes overseeing operating expenses and taxes much more manageable.
What’s extraordinary about the story of 1460 Broadway was the timing. We leased the entire building to two tenants 24 months in advance of our 10-year projection. Plus signing the lease for WeWork on the very day that Skadden moved out was the most amazing synchronicity. There was virtually no downtime whatsoever.
Bisnow: Is there a trend you’ve been noticing?
Leslie: We are definitely seeing a renewed interest in Midtown. 729 Seventh, which is only a block from Rockefeller Center and close to virtually every NYC subway line, is already creating interest from prospective tenants in media, advertising, finance, technology and publishing and TAMI companies.
We see continued interest among international companies wanting to be here, venture capital companies seeking investment opportunities in New York and certainly the continued desire of Millennials to be in the city.
The only cloud on the horizon is the potential rise in interest rates. We spend a lot of time buying and refinancing properties, but ultimately, interest rates will rise; there is a limit to how much longer the Fed can hold rates at zero.
Recently, REIT stocks have been bouncing around, their value significantly impacted by just the prospect of rates going up. It will be interesting to see what happens to cap rates and pricing as the inevitable happens with interest rates rising at the end of this year or into next.
Bisnow: Would you call that the biggest threat for the new year?
Leslie: I think for us that's an opportunity. We have a huge war chest of cash. As long-term owners, when we buy something we have a long-term perspective, and I believe that as interest rates rise, it’ll be easier for operators like ourselves to purchase more properties.
Bisnow: Could you tell me what sort of issues you’re working on with REBNY?
Leslie: I’m very active with REBNY. I’m on the Executive Committee and the Board of Governors, and I've been co-chair of the Economic Development committee since 1992. And we continue to tackle issues of “How do we retain NYC’s position as the best, safest and most economical place to do business in the world?” City planning and zoning are frequent areas of discussion. We will soon see which way zoning will go in the boroughs, whether it will become more liberal or more restrictive. Also, finance is a major topic. REBNY is on the forefront of financing, to ensure our taxes are being fairly assessed.
Bisnow: What’s your best piece of advice?
Leslie: Your smile is your best umbrella.