NYC Investment Veterans Launch Firm To Buy Up CRE's New Ugly Ducklings
Two veterans in New York City’s commercial real estate market have stepped out on their own, in the hopes of scooping up properties where owners have given up hope.
Neil Helman and Gerry Davis have banded together to launch Collins Realty Partners, which they say will specialize in buying value-add properties for $10M or more within a 100-mile radius of Manhattan and along the Boston-D.C. corridor.
"We're the kind of guys that like to look for opportunities to increase cash flow and change things around, turn around buildings that maybe aren't doing what they wanted to do or in situations where maybe an existing ownership has said they've run it as far as they want to run it,” Davis told Bisnow in an interview this week.
Davis, who began his career as an architect and whose own real estate career also spans three decades, most recently spent 15 years as a principal at Alchemy Properties. He oversaw the development of more than 1M SF across more than 18 NYC projects at Alchemy, according to a release. He has also held positions for an NYC family real estate office and worked as a vice president at M&T Bank.
Helman was most recently a principal at Avison Young in the investment sales division, and he has helped broker the sale of almost $2B of investment-grade properties in New York City in his 35-year career, including Columbia Property Trust and Normandy's $205.5M acquisition of 250 Church St. in 2019.
Helman and Davis told Bisnow they are looking to acquire properties primarily in New York City and a 100-mile radius in the Tri-State area that have lost tenants, charge below-market rents or have deferred maintenance that make them suited for adaptive reuse. They have yet to make their first acquisition, and they said they don't have a total investment target.
“Office and hotels may have a life as adaptive reuse for residential, which we're very open to exploring,” Helman said. “That's an age-old story that's been done time and time again, successfully taking an office property and redeveloping it as residential.”
As employers contemplated a return to in-person work, many looked to trophy buildings and upgraded Class-A offices in an attempt to lure workers. But that trend has created an existential crisis for an increasing number of Manhattan's Class-B and Class-C office spaces.
Collins Realty also sees opportunity in embattled storefronts and retail locations, Davis and Helman confirmed to Bisnow.
“I think a lot about street-level retail, and how beaten down it is in New York City, especially right now,” said Davis, who believes that the aftermath of the pandemic will create a reset on retail rents in Manhattan that could create interesting spaces for Collins Realty. “I think maybe that's someplace that we might want to play in.”
Manhattan's retail spaces have struggled as landlords grapple with the coronavirus pandemic's effects on foot traffic. Leasing activity for offices and retail saw a modest uptick in the second half of 2021, but rents continued to decline in locations like Herald Square and Times Square, where stores rely heavily on foot traffic for revenue.
Retail distress in NYC has been severe enough that even Vornado — the largest owner and manager of street retail in Manhattan — announced last August that it was selling off five failing Manhattan retail assets at significant losses.
Davis and Helman told Bisnow that they will rely on their long-running relationships in NYC real estate to pursue opportunities for value-add acquisitions currently present in the city's office and retail markets. They declined to name their investors, but said their years of industry experience has given them ample contact lists of high net worth individuals.
"We have the relationships in place to fund whatever actual equities required," Davis said. "Given that interest rates are shared or moving around, even with that, there is still capital out there."