Multifamily Monday: Meet El Ad's CEO
El Ad Group CEO Udi Erez knows how to brand. The condos El Ad is planning at the site of the Manhattan Criminal Court at 346 Broadway will be called 108 Leonard St (props to 56 Leonard's success), and the 1M SF of condos El Ad and Silverstein are building at 59th Riverside will be known as One West End. Here's how Udi made his own name in real estate.
Before Udi, whom we snapped in his 575 Madison Ave office, came to North America, he taught fourth-year accounting at Hebrew University in Jerusalem for 10 years. He jokes that he left when the end-of-the-year student surveys stopped pegging him as the hottest prof. Later, as a partner in Arthur Andersen, he headed to Toronto to do an audit for Israeli mogul Isaac Tshuva. The way Udi tells it, he impressed Isaac by being atypical for an accountant: He looked at the entire business rather than just the spreadsheets and wrote a report even though it wasn’t required. Thus Isaac hired him as CEO of El Ad Canada in 2001.
Udi grew the small company into a $2B operation by ’07, including the $750M acquisition of 39 buildings, including Montreal's Olympic Village, in 2004. It was Canada’s largest deal at the time, hence the framed painting of the property in his office. Though his original bid came in a bit higher than the competing Canadian pension fund, Udi still had to prove to the seller, MetCap Living, that his company was a closer. And he did. The pension fund was looking at the Excel spreadsheet, he tells us, while he was looking at the real estate, and what he saw was enough green space to double the density, plus plenty of land left over.
When Udi moved to Toronto, he was the first in seven generations of his family to leave Jerusalem, and while he fell in love with Toronto (he even became a Canadian citizen), his wife and kids didn’t take to it and returned home. (Canada loves Udi and Israel back; snapped is the 2010-issued Canadian postage stamp that honors the countries’ relationship). He left El Ad in ’07 and started Erez Capital to invest in Canada and Upstate NY. When investor appetites faded, he happily retired, traveling the world and honing his Twitter skills. But Isaac wasn’t done with Udi and asked him to come to NYC to head up El Ad Group in 2011. Now, Udi's wife has taken to the Upper West Side, and he says he’s happy to be back in the office.
He says the company is focusing on condo development in Manhattan because, well, that's where the money is. When El Ad sold The Plaza (part of which it had converted to condos), it retained control of the neighboring 22 Central Park South and converted it to nine full-floor condos, launching sales recently. El Ad has just a penthouse left in each 250 West St (rendered above) and Franklin Place (rendered below) in Tribeca. And the company is planning 108 Leonard and moving forward on One West End. Udi tells us he likes to work on two or three projects at a time.
Underwriting is getting tougher, he says, but if the condo market breaks and he can convert to apartments and still break even, he’s fine with the deal. That’s what El Ad did with the Carlyle in LA. It was built as condos right before the market went south in ’09. So the company rented out the remaining units, many to movie stars, and now as the market returns, it's selling those units as condos again.