NYC Real Estate Icon Bill Rudin on Disruptive Technology, WeWork and the Family Business
Few people better understand the unique joys and complexities of running a family-owned real estate empire than Rudin Management CEO Bill Rudin. Today, the New York City-centric property dynasty founded by his grandfather more than a century ago is up to its fifth generation. And you can hear more insights from Bill at BOLD: Bisnow's full-day national Office Leasing, Development and Investment Series at 4 Times Square in Manhattan on Dec. 1.
Bisnow: Where does the NYC office market stand in the current cycle?
Bill Rudin: We’re definitely not going back to the mid-90s where we had 30 million square feet of vacant office space in Lower Manhattan. Our economy has become so diverse, plus we’re seeing that it’s not just the traditional midtown versus downtown. It’s about midtown South and Chelsea, as well as the Meatpacking District, Brooklyn and Queens. The current trend for urbanism is such that companies are following where people live versus the trend my dad dealt with where people were leaving the city. They’re paying a premium to be in the city, but that all has a positive impact and the companies want to be here because the best and the brightest are here—as opposed to the 1970s when there was the flight and my dad was running the company, it’s going the opposite way.
Bisnow: Last month you refinanced 32 Sixth Ave. Do you currently have any plans to refinance any other properties in your portfolio while interest rates remain low?
Bill: Over the last couple of years we’ve been doing a series of refinancings, but there’s nothing new currently in the pipeline.
Bisnow: When it comes to attracting TAMI tenants versus the legal, professional and financial services firms that have long been a mainstay of your portfolio, can you name any differentiators that might not be obvious?
Bill: We really have to do the same thing in that we have to provide that same type of culture, infrastructure and amenities to be able to attract Millennial tenants, so I think it’s basically gone across the board.
Bisnow: Speaking of attracting TAMI tenants, how’s your micro-apartment project with WeWork at 110 Wall St going?
Bill: They opened up the WeWork part in the middle of October, and they’re working on WeLive, which they’ll probably be opening at the end of November or early December. We can’t wait to see that done. We think it’s going to be a very exciting addition to Downtown and the offerings the city has to attract small, entrepreneurial companies and young people who want to live in New York. It’s really filing a void in the marketplace and we think and hope it’s going to be successful.
Bisnow: Would you consider doing it in other areas of the city?
Bill: We don’t have any buildings in our portfolio right now that would fit the criteria that was really unique for when 110 Wall St got hit after Hurricane Sandy and became empty. You really need an empty building to make this kind of a conversion, and we’re obviously doing this deal with WeWork at the Brooklyn Naval Yard on Dock 72 where they’re the main tenant, so we’re definitely open to that.
Bisnow: What’s the latest with that?
Bill: Along with our partners Boston Properties, we’re going to break ground in early 2016. We have started our marketing to the tenant and brokerage world and have gotten a very positive response to the unique design and economics that this project has working in collaboration with WeWork. This will be the first new office building built in Brooklyn in several decades and will have a very unique infrastructure component.
Bisnow: You’re known for integrating technology and design in adaptive reuse projects like the former Saint Vincent’s Hospital, now Greenwich Lane, where it was just revealed that the first two units sold for roughly $19.5M and $16.3M. What new technologies have you incorporated and why?
Bill: First of all, we used technology in the design of the building, as well as technology that had never been used before in terms of marketing and selling the project. It was a multifaceted level strategy and we had no brochure. We pre-sold them using a proprietary technology that allowed us to bring up all the different floor plans and renderings of the apartments and the public spaces on a desktop that, for lack of a better description resembled an iPad on steroids.
Bisnow: How many members of your family are in the business currently?
Bill: There are eight family members, plus many more of us who are involved in our foundations.
Bisnow: What are some of the most important real estate lessons that you learned from your dad Lou and your grandfather Samuel, and what lessons are you trying to impart to your kids?
Bill: I think the most important lesson I learned and am trying to pass along is to be responsive to our philanthropic and civic responsibilities. In other words, we’re part of that ecosystem that doesn’t just look at our real estate as a stand-alone, and that’s one of the main core values of both our business and family.
Bisnow: At the Rudin family dinner table, is talk of real estate allowed or banned?
Bill: At every meal, the conversations are usually broad-ranging on different issues that are not just about real estate. It’s about what’s going on in the world or what’s going on with my kids and grandchildren. My daughter Samantha has a child and my son Michael is about to have a child with his wife, so it’s always about the future and what’s going on with their lives.
Bisnow: How has working with your kids made you more attuned to the real estate needs of Millennials?
Bill: They’re both actively involved in the business and I think what they’ve done is brought their unique aesthetic and thought process as Millennials to all of our projects. I think that’s the beauty of this family business because each generation has brought to the table their unique perspective and we build on each other.
Bisnow: Besides rollerblading, what do you do to release stress?
Bill: I love spending time at the ocean on Long Island, swimming with my wife Ophelia, catching up on TV shows, whether it’s Scandal, House of Cards or Blue Bloods and spending time with our granddaughter Elle. This is what I do to relax, but rollerblading is also a big part of it.
Hear more from Bill and other industry titans at America's leading office conference, Bisnow’s Office Leasing and Development Series (BOLD) in Manhattan on Dec. 1. Register here.