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Chris Schlank, the founder of private equity firm Savanna — best known for its New York City office investments — sits down to talk with Bisnow about the uncertain terrain facing owners of urban office buildings.
Savanna owns about 7M SF of office space in New York City, and Schlank readily admits landlords like him are having a tough time right now. Workers aren’t coming back to the office as much as he had hoped, and even though companies are back looking for space, the demand in New York City is nowhere near enough to keep up with the new offices that are getting built.
Plus, he says, many tenants have felt no obligation to pay rent, even those who are well-capitalized — and the real estate community needs to work together to make city government aware of what the industry needs.
"We never got any money from the government for all our tenants that were not paying rent. A lot of tenants in our office buildings got a lot of PPP money, never gave us rent,” he said on the Bisnow Reports podcast. “A lot of people didn’t pay rent, you’d be surprised the moral compass that went completely upside down.”
He said that he has very large, well-known tenants that are still not paying rent — although he declined to identify them.
“[Landlord and tenant] courts were closed and overwhelmed," he said. "It’s shocking, it’s humbling to see the hubris of a lot of people out there, you know, take the money and run."
