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Silverstein Properties' Jeff Deitrich and TF Cornerstone's Jeremy Shell
TF Cornerstone acquisitions and finance head Jeremy Shell (right, with Silverstein Properties' Jeff Deitrich) said at Bisnow's recent New York Multifamily Summit (see previous coverage) that the run on maturities expected for 2013 doesn't worry him. His firm built its portfolio over 40 years and isn't facing a glut of loan expirations at once. In fact, the company is poised to take advantage of that misfortune among other firms. And yet, Jeremy says, he doesn't see a lot of those opportunities in the five boroughs.
Stonehenge managing director of investment management Richard Dansereau with Cubed Advisory Services' Geoff Ross
Stonehenge managing director of investment management Richard Dansereau (with Cubed Advisory Services' Geoff Ross) says effective rents have increased substantially since April, when his firm was offering two months of free rent. Jeremy says TF Cornerstone's rents are up 3% to 5%, and his firm still offers concessions, but only on initial lease-up. Jeff reports that Silver Towers on West 42nd Street is fully occupied thanks to one month of free rent, and rental rates are up a exceptional 7%.
Skyline Developers' prez Orin Wilf
Skyline Developers prez Orin Wilf agreed the exit potential from a prospective acquisition is higher than the historical level, and underwriting is bumping up land prices. Orin adds, though, that even when land prices were lower, ground-up development was too expensive. He points out that no rental apartments have been built on land purchased during the downturn. By example, he cites Silver Towers, which rose on a parcel Silverstein had already owned.
Metro Loft Management CEO Nathan Berman
CEO Nathan Berman's Metro Loft Management prefers to buy, say, an Art Deco landmark for less than land value and rehab and/or convert it to higher-class residential. That's what Metro Loft is doing with the cool old stuff in the Financial District, and it's working—the firm's portfolio has less than 1% vacancy. The Art Deco comment, by the way, was inspired by Metro Loft's December acquisition of the '32-vintage, 1M SF, 66-story 70 Pine St (for now, the fifth-tallest Manhattan building), which the firm will convert into 979 residential units or a hotel and apartment building. He adds that the demographics are changing Downtown, from 23-year-olds to 30-year-olds with babies. Upper East and West Siders are discovering the 25% lower rent, too.
WeiserMazars' Ron Lagnado
WeiserMazars' Ron Lagnado presided over our development panel, his third straight year of doing Bisnow the honor. (He should just get his own talk show, Multifamily with Ron, right after Ellen.) He asked the speakers what their dream Manhattan block is. Jeff says he's sticking with Downtown and the far West Side. Jeremy wouldn't mind the far West, but land prices won't allow that, he says—so, Long Island City. Richard says the West Village and Chelsea are the highest rent-getters in Stonehenge's portfolio, despite the lack of doormen and other Midtown luxuries. And Nathan says the Garment Center area is attractive, but he's sticking with his FiDi. The "most phenomenal site" in all of Manhattan, according to Orin, is CIM and Macklowe's Drake Hotel site at 57th and Park.
ConEdison Solutions' Tom Krol and Marcus & Millichap's Marco Lala
The multifamily market is so busy that we're not sure Marcus & Millichap investment property specialist Marco Lala (right) will have much time to read on his new Kindle, which was raffled off by our great sponsor, ConEdison Solutions' Tom Krol. Any recommendations for when he does sneak in a few e-pages?