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Don't think rents will increase just because tenants are moving, said Newmark Knight Frank’s Eric Gural yesterday morning at NAIOP NYC’s breakfast panel—we need to see more positive absorption first. Joining Eric were Capstone Equities’ Joshua Zamir and media maven-slash-Madison Capital-turned-moderator Michael Stoler.
Capstone Equities' Joshua Zamir and Newmark Knight Frank's Eric Gural
Another misconception? No lending. Eric, right, discussed the respective $70M financings of 40 Worth St. and 515 Madison Ave, arranged by NKF’s Capital Group. The latter had many tenders because it was a sound property—so the idea that there’s no financing out there is wrong, it’s just not at 90% LTV anymore, he says. 40 Worth’s financing was a more difficult because Gap i s a tenant, and no retail tenant is AAA rated. (BabyGap's AAA for cuteness is not transferable.) Hosts of lenders are looking to be on loans, Joshua adds, noting that many are looking to ramp up their activity with low-leveraged, quality-tenanted assets.

Jones Lang LaSalle’s Paul Formichelli, Haworth’s Aret Lerian, Capstone Equities' Joshua Zamir, Madison Capital's Michae Stolerl, Newmark Knight Frank's Eric Gural, and Ackman-Ziff’s Joe Tufariello and Rick Lechtman
Jones Lang’s Paul Formichelli, Haworth’s Aret Lerian, Joshua, Michael, Eric, and Ackman-Ziff’s Joe Tufariello and Rick Lechtman. Since the wave of distress did not come to the market, the few properties for sale are attracting many prospective buyers, Eric says. If you can afford to wait for the long-term, you’ll do fine as a buyer (and we think the Gurals know a thing or two about holding properties). Another trend Joshua sees is owners with large portfolios thinking about REITs; many he knows are approaching advisors and investments banks to discuss IPOs.