Commercial Observer – September 28, 2021

Plus

16 The many structures of Newark 22 Atlantic City hedges its bets 30 Robert Durst’s final chapter SEPTEMBER 28, 2021

Flex Appeal Jamie Hodari’s Industrious is trying to capitalize on businesses no longer being wedded to the long-term lease

NEW JERSEY ISSUE

L&L Holding Company celebrates over 20 years of innovative real estate development.

425 Park Avenue

Terminal Warehouse

TSX Broadway

390 Madison Avenue

New York

New York

New York

New York

We've Built the Healthiest Building in New York — Because Our Futures Depend on It 114 Fifth Avenue

142 West 57th Street

150 Fifth Avenue

195 Broadway

New York

New York

New York

New York

200 Fifth Avenue

222 Broadway

Ironworks West Chelsea

600 Third Avenue

New York

New York

New York

New York

The Wynwood Plaza

L&L Holding Company’s prestigious portfolio includes a combination of brilliantly-restored landmark buildings and next generation architectural icons.

With every new project, L&L sets new standards for innovation, design and wellness.

Addresses include: 425 Park Avenue, 390 Madison Avenue, Terminal Warehouse, TSX Broadway, 200 Fifth Avenue and The Wynwood Plaza.

Florida

ll-holding.com

DESIGN BY CONWAY+PARTNERS

L&L Holding Company Portfolio

L&L Holding Company celebrates over 20 years of innovative real estate development.

425 Park Avenue

Terminal Warehouse

TSX Broadway

390 Madison Avenue

New York

New York

New York

New York

We've Built the Healthiest Building in New York — Because Our Futures Depend on It 114 Fifth Avenue

142 West 57th Street

150 Fifth Avenue

195 Broadway

New York

New York

New York

New York

200 Fifth Avenue

222 Broadway

Ironworks West Chelsea

600 Third Avenue

New York

New York

New York

New York

The Wynwood Plaza

L&L Holding Company’s prestigious portfolio includes a combination of brilliantly-restored landmark buildings and next generation architectural icons.

With every new project, L&L sets new standards for innovation, design and wellness.

Addresses include: 425 Park Avenue, 390 Madison Avenue, Terminal Warehouse, TSX Broadway, 200 Fifth Avenue and The Wynwood Plaza.

Florida

ll-holding.com

DESIGN BY CONWAY+PARTNERS

L&L Holding Company Portfolio

Developed by L&L Holding Company and designed by Lord Norman Foster of Foster + Partners, 425 Park Avenue reflects the creators’ holistic and prescient approach to workplace wellness.

The Park Floors

Exclusive amenity floor, The Diagrid Club, with programming by celebrated Chef Daniel Humm and The David Lynch Foundation.

“Healthy buildings...can breathe and work with nature to produce controlled indoor environments that, in addition, consume less energy.”

13,900 RSF Column Free 13'6" Slab Heights Floor-to-Ceiling Windows Unparalleled Views of Central Park

@425ParkAvenue

Norman Foster on a Post-COVID Future, Architects' Journal 2020

53'-8"

• • • • •

123'-8"

425ParkAve.com

FOR LEASING INQUIRIES CONTACT David C. Berkey 212 920 3388 david.berkey@ll-holding.com

Andrew Wiener 646 341 9838 andrew.wiener@ll-holding.com

Developed by L&L Holding Company and designed by Lord Norman Foster of Foster + Partners, 425 Park Avenue reflects the creators’ holistic and prescient approach to workplace wellness.

The Park Floors

Exclusive amenity floor, The Diagrid Club, with programming by celebrated Chef Daniel Humm and The David Lynch Foundation.

“Healthy buildings...can breathe and work with nature to produce controlled indoor environments that, in addition, consume less energy.”

13,900 RSF Column Free 13'6" Slab Heights Floor-to-Ceiling Windows Unparalleled Views of Central Park

@425ParkAvenue

Norman Foster on a Post-COVID Future, Architects' Journal 2020

53'-8"

• • • • •

123'-8"

425ParkAve.com

FOR LEASING INQUIRIES CONTACT David C. Berkey 212 920 3388 david.berkey@ll-holding.com

Andrew Wiener 646 341 9838 andrew.wiener@ll-holding.com

TABLE OF CONTENTS

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Max Gross Editor-in-Chief

Cathy Cunningham Deputy Editor, Finance

Tom Acitelli Deputy Editor, News

Greg Cornfield, Chava Gourarie Associate Editors

Tanya Meyer Copy Editor

Rebecca Baird-Remba, Mack Burke, Andrew Coen, Celia Young Staff Writers

28 4 NEWS BRIEFS

Lease Deals

The Sunshine State has seen a spike in COVID cases and deaths, but its real estate market continues to hum.

16 FEATURES

Executive Director

SALES Brigitte Baron Partnerships Director

Sales Executive

A Tale of Two Floridas

ChartFinance

Robyn Reiss

Amy Cogan

New York’s restaurants and bars navigate the city’s vaccine mandates.

Debt Deals of the Week

Social Media Editor

Senior Account Manager

Jamie Hodari

12 FINANCE

Josh Rozbruch

Web Editor

Natalie Reichel

The Sit-Down

Check, Please

Nicholas Rizzi

Kevin Homa Senior Client Success Manager

Ryan Leigh, Gabriela McNichol Client Success Managers

Morbid Curiousity

MARKETING & EVENTS

Real estate heir Robert Durst’s disturbing, decades-long story ends in a murder conviction in Los Angeles.

Ashley Roseman Senior Events Manager

Emily Benner Event Coordinators

Google It What the tech giant’s buy of the St. John’s Terminal means for Manhattan.

24

DESIGN, PHOTO & PRODUCTION Jeffrey Cuyubamba Art Director

Stephanie Novak Julia Cherruault Graphic Designer

22

Josh Haas Vice President, Product

Charles Taffet

New in Newark

32

Large residential projects are helping revitalize New Jersey’s largest city.

A struggling Atlantic City sees salvation in the diversification.of its economy.

2 | SEPTEMBER 28, 2021 | COMMERCIAL OBSERVER

16

Senior Prouduct Manager

Ramon Encarnacion IT Manager

OBSERVER MEDIA

ENDNOTES

Rolling the Dice

Photo Editor

Joseph Meyer Chairman

34 The Plan

Michael Rose

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Eric Adams: Turn Distressed NYC Hotels Into Supportive Housing Eric Adams early last week pitched turning distressed hotels in New York City into supportive housing to tackle a homelessness crisis that has worsened during the pandemic.

The Democratic mayoral nominee’s plan calls for converting scores of defunct and underused hotels, primarily located in the outer boroughs, into 25,000 units of permanent affordable housing, noting that it would be cheaper to fix up hotels than build apartments from scratch.

“The combination of COVID-19, the economic downturn, and the problems we’re having with housing is presenting us with a once-in-a-lifetime opportunity,” Adams said in Sunset Park, Brooklyn, outside a shuttered hotel. “We can use this moment and find one solution to solve a multitude of problems.”

Six weeks before Election Day, Adams reintroduced his housing plan that he first floated in February, when the rate of homelessness reached a peak of 20,822 single individuals and a second wave of COVID infections buffeted the city.

Less than half of the jobs in the leisure industry had been recovered as of March 30, and as many as 200 of the city’s 700 hotels had been temporarily or permanently closed — making a handful of non-union, low-wage hotels scattered across the city a ripe target for politicians.

In January, then-Gov. Andrew Cuomo called for converting vacant hotels and offices in Midtown into affordable housing. A month later, Adams complained about the “oversaturation” of lodges in Brooklyn, Queens, and the Bronx, and proposed that the city adapt them for residential use. By June, state lawmakers passed a bill allowing the state to purchase these properties and attached $100 million to fund the initiative.

But that money could dry up quickly.

Hotels in Manhattan sold for a median price of $275,000 per unit by the end of 2020, Bloomberg reported. Adams wants the city to chip in more of the cost to get the conversions going.

“You need the city to invest city dollars to acquire and convert these units,” he said. “The numbers just make sense.”

New York City has used hotels as temporary homeless shelters before. In 2015, Mayor Bill 4 | SEPTEMBER 28, 2021 | COMMERCIAL OBSERVER

de Blasio announced a plan to create 15,000 units of supportive housing over a 15-year period. But some sites ran into vehement local opposition. Elmhurst, Queens, residents protested a shelter that the city opened in the former Pan American Hotel in 2015, and Maspeth demonstrators forced the city to scrap its plans for a shelter four years later.

When the pandemic started last spring, the city moved thousands of unhoused individuals and families from shelters into boutique hotels as occupancy rates plummeted. By June, the de Blasio administration reversed course and started moving 8,000 homeless people out of hotels and back into shelters after complaints from neighborhood residents.

Adams’ plan has the support of the city’s

MOVING: Eric Adams’ plan calls for creating 25,000 affordable housing units. powerful hotel workers union, which has been simultaneously pushing a special permit that would significantly limit the construction of new hotels citywide like those Adams has decried.

“Even before COVID drastically reduced tourism, we saw unchecked hotel overdevelopment jeopardize good-paying jobs and community safety. And now, with thousands of rooms to be built, but no customers to fill them, the problem has only gotten worse,” said Rich Maroko, president of the New York Hotel Trades Council.

Vijay Dandapani, who represents the city’s beleaguered hospitality industry as president and CEO at the Hotel Association of New

York City, said as long as the city refrains from using eminent domain to seize properties, hotel owners shouldn’t have any concerns about Adams’ idea.

But some housing advocates say that for Adams to reach his goals, he cannot ignore vacant boarding houses in the heart of the city.

“You really need Manhattan in that calculus, but the policy to target vacant and underperforming hotels is a really smart policy and very timely,” said Brenda Rosen, president and CEO of Breaking Ground, a supportive housing nonprofit. “We really think it’s a smart idea and it’s one that is not going to come along again for a long time, as New York recovers.”—Aaron Short

Avison Young Acquires Singer & Bassuk Organization Avison Young has acquired The Singer & Bassuk Organization (SBO), with Andrew (Andy) Singer and Scott Singer, the father-andson founders of SBO, joining Avison Young as principals and co-leads of the brokerage’s tri-state debt and equity group. Commercial Observer broke news of the acquisition last week.

SBO — a highly respected, multigenerational, New York-based boutique real estate finance intermediary that has arranged debt and equity since the 1960s — has closed transactions on behalf of some of the most noteworthy owners and developers in the country over the years.

“The decision to join Avison Young was not taken lightly,” Scott Singer said. “With a family history of being fiercely independent, real estate finance intermediaries for more than 50 years, we have now made the strategic choice to align ourselves with a collaborative and dynamic platform which already includes many long-time friends and associates.”

He added, “this was the right transition, at the right time, and we are excited to bring our talented team and decades of debt and equity financing experience to the Avison Young family.”

Kathleen McSharry, Jeffrey Moroch and Alan Schwartz, previously senior directors at SBO, are also joining Avison Young’s New York office.

Financial terms of the transaction were not disclosed.

“Scott and Andy are leading experts in debt and equity finance for projects large and small, throughout the New York metro area and around the country. There is no more experienced and creative

duo in the industry,” John Kevill, president of U.S. capital markets for Avison Young, said. “We are excited to add their capital advisory expertise to our existing investment sales team in the tri-state region.”

In their new co-lead roles, the Singers will collaborate closely with Kevill and also James Nelson, Avison Young’s head of tri-state investment sales, to arrange full capital markets solutions for real estate owners and developers across the U.S. “This acquisition is of particular strategic importance to Avison Young, as their deep relationships with some of the most prominent New York developers will help us continue to grow our client base,” Nelson said. “Their consultative style to problem solving has won Singer & Bassuk a multitude of awards for creative deal execution and is a perfect fit for Avison Young’s client first approach.”

Indeed, SBO is a six-time winner of the Real Estate Board of New York’s “Most Ingenious Deal of the Year” award.

The SBO team’s track record of high-profile closings includes a $325 million refinancing for TF Cornerstone’s Carnegie Hall Tower on Billionaires’ Row and a $450 million construction loan for 250 57th Street.

In July 2020 — at the height of the pandemic — the SBO team closed a $100 million refinance for Jack Resnick and Ruben Companies’ office property at 52 Broadway in the Financial District.

The deal marked the third refi SBO had closed on the property on behalf of the owners — all during similarly tumultuous economic times.—Cathy Cunningham

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Penn South Sells Hudson Square Office Building for $46M

TRADING UP: 39 Clarkson last sold for $27.2 million two years ago.

Investment firm Penn South Capital has sold its boutique office building at 39 Clarkson Street in Hudson Square for $45.9 million, less than two years after purchasing the property for $27 million, according to Penn South founder Parag Sawhney.

The buyer is a group of foreign investors from the Middle East doing business as Vanquish LLC. Sawhney said they approached him with an all-cash deal that closed in 30 days, on Sept. 9. The six-story, 30,000-square-foot property had not been on the market before the sale.

Penn South bought the building, which was originally the Kopper’s Chocolate factory, from LTN Capital in December 2019 for $27.2 million. LTN also sold Penn South two small residential buildings on the Lower East Side as part of the deal.

During the pandemic, Sawhney and his colleagues spent about $5 million renovating the property between Hudson and Greenwich streets. The work included moving the elevator core, renovating the facade, adding lot line windows, and replacing the roof.

He explained that the investors were drawn to the

property because it was one of the few small, renovated office buildings in Hudson Square. It also happens to be near Google’s under-construction campus at St. John’s Terminal, which the tech giant dropped $2.1 billion to buy earlier this month.

“The location was something that attracted them,” Sawhney said. “Also, when they saw the building from the inside, they could picture doing something cool with it.”

When he purchased the building, “there was absolutely no comp for a smaller building in Hudson Square,” the real estate exec explained. The other commercial projects in the neighborhood are massive undertakings, like Disney’s new 1.2 millionsquare-foot headquarters, the 1.3 million-square-foot renovation of St John’s Terminal at 550 Washington Street, and Trinity Church’s multi-building office portfolio.

The building at 39 Clarkson has one tenant in place — a mental health startup called Talkiatry that leased 5,800 square feet in January — but Penn South paused its leasing after the buyers requested that it remain as vacant as possible.—Rebecca Baird-Remba

Mack-Cali Under Contract to Sell Jersey City’s 101 Hudson Street

The City Planning Commission (CPC) last week approved the New York Blood Center’s plans to build a $750 million, 16-story life sciences hub at the site of its three-story headquarters in the Upper East Side, pushing the project on to the New York City Council despite opposition from council members and residents. In a separate vote, the commission advanced the rezoning of Gowanus, Brooklyn, to foster denser development.

The CPC voted 8 to 2 on Sept. 22 to approve the blood center and Longfellow Real Estate Partners’ plan to build a new 596,000-squarefoot building at 310 East 67th Street, dubbed Center East, with plans to rent out space to for-profit life sciences companies.

Residents and elected officials had raised concerns that the new 310 East 67th Street tower would add more space than the blood center needs and would put a neighboring school and park in the shade.

The proposal, first announced in October, calls for the blood center to occupy about a third of the space, with Boston-based Longfellow leasing the remainder of the space to three to 10 for-profit companies, the New York Post reported.

The center, meanwhile, has argued that the project will bring jobs, affordable blood services to the city’s hospitals, and help the center develop treatments and cures for diseases, according to a statement from the center.

Labor leaders support the project for creating construction jobs, and the Manhattan Chamber of Commerce has backed the project for increasing the burgeoning life sciences industry’s presence in the city.

6 | SEPTEMBER 28, 2021 | COMMERCIAL OBSERVER

COURTESY OF DBOX

NYC Planning Commission Approves Gowanus, Blood Center Rezonings

CAPITAL FLOW: The Blood Center’s addition will cost $750 million.

In the Gowanus vote at the same meeting, all but two City Planning Commission members voted in favor (one of those two other votes was an abstention). The rezoning, long backed by the de Blasio administration, would encompass an 82-block swath along Fourth Avenue, between Atlantic Avenue and 15th Street.

The proposal, if approved by the city

council, could lead to the construction of as many as 8,000 homes, with 3,000 of them below-market rate, in an area of South Brooklyn that has become wealthier and less diverse compared with the city at large.

Planning commissioners indicated the rezoning is likely on track for passage before the end of the year.—C.Y. and A.S.

Mack-Cali Realty Corporation is under contract to sell 101 Hudson Street in Jersey City, N.J., to The Birch Group for $380 million. The deal is expected to close in the next 30 days, sources said. Cushman & Wakefield’s Adam Spies, Andy Merin, David Bernhaut and Kevin Donner arranged the sale, sources said.

The 42-story, Art Deco-inspired office tower at 101 Hudson spans 1.2 million square feet and is one of the tallest buildings in Jersey City. Built in 1982 and also known as the Merrill Lynch Building, the property counts Merrill Lynch Private Client Group, AIG and life sciences company Apprentice.io among its tenants. Mack-Cali acquired the building in 2004 for $329 million.

The acquisition is the latest of several New Jersey office building purchases by The Birch Group, which is led by founder and CEO Mark Meisner and based in Nanuet, N.Y. In April, it acquired a four-building, 843,300-square-foot office portfolio in Short Hills for $255 million, also from Mack-Cali, and, in July, it acquired a 200,000-square-foot office portfolio in Princeton from BentallGreenOak for $47.3 million.

As for 101 Hudson, the property doesn’t only house top tenants, it’s also home to several peregrine falcons. The endangered birds nest on its rooftop.

Officials at Mack-Cali, Birch Group and C&W declined to comment.—C.C.

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NEWS

Today’s Special New York’s restaurant industry has embraced the city’s vaccination requirements as a lifeline out of its toughest time period in decades

t was after an employee turned in a second vaccine card, with different dates and a different vaccine brand, that George Constantinou realized he had found a fake. Well, that and the employee’s confession. “[The first card] was just a bad photocopy job,” Constantinou, a Brooklyn restaurant owner, told Commercial Observer. “Then, when we asked him to bring it in for us to inspect it, he commented that he didn’t have it anymore — [that] he lost it. So, he brought in a new card and it had totally different dates, I think it was even a different vaccine … We couldn’t have him on the team [after that].”

Constantinou, whose portfolio includes Bogota Latin Bistro, Miti Miti Modern Mexican and Medusa Greek Tavern, all in Park Slope, is one of the many restaurant owners across New York dealing with the city’s new vaccine requirements. Employees must be vaccinated to work in indoor spaces like restaurants, concert halls and gyms. And patrons of those venues must be vaccinated to come inside.

The requirements follow perhaps the roughest patch in living memory for the New York City restaurant industry. Restaurants, bars and nightlife venues were devastated by the COVID-19 pandemic and the restrictions that followed, like limiting capacity on indoor dining and eateries’ hours of operation. Hundreds of establishments in the city have closed permanently.

Excluding one violent instance at a location of Carmine’s Italian Restaurant, the restaurant industry has seen a relatively smooth start to the enforcement of the vaccine requirements, which began Aug. 17 but hadn’t been enforced by the city until last week, starting on Sept. 13.

The city hadn’t, as of Wednesday, levied any fines on eateries, either — though in the first week of the program, city inspectors did issue 4,096 warnings at the 11,636 eateries they inspected from Sept. 13 through Thursday, according to city spokesman Mitch Schwartz.

But what has turned heads — and camera phones — was the violent altercation at the Upper West Side Carmine’s. A group of outof-state restaurant-goers attacked the eatery’s hostess on Sept. 16, allegedly because she had asked to see proof of vaccination from them. The three tourists dispute that claim, however, saying the hostess used a racial slur before lunging at the three women. (Carmine’s disputes this claim.)

While it’s unclear what happened at Carmine’s that day, the fear of customers 8 | SEPTEMBER 28, 2021 | COMMERCIAL OBSERVER

ANGELA WEISS/AFP VIA GETTY IMAGES

By Celia Young

NO PROOF, NO SERVICE: New York City launched a vaccine requirement for restaurants and bars on Aug. 17, and began enforcing it Sept. 13. getting upset, or even physical, with wait staff is something New York restaurant owners and workers dread.

“Our staff are really being put in a difficult position and I don’t know that they are protected or safe in that,” Sarina Prabasi, co-founder of Buunni Coffee, which has three locations in Manhattan, told CO. “It’s really hard for our staff, because I think everybody recognizes that service work and working in food and beverage is some of the more difficult work in general, and then you have to basically be on the frontline of public health policy.”

Prabasi said she’s had patrons yell at her staff, putting workers in the uncomfortable position of telling a customer that they’re not always right. While the vast majority of her coffee shop clientele have been supportive of the vaccine requirement, even going as far as to thank staff for enforcing the rules, Prabasi said what sticks most in her mind are the bad experiences.

She also felt that while restaurants and other indoor establishments had a month to start implementing the policy before it was enforced, the ever-changing guidance from the city and state still weighed on her mind, especially when it came to mask-wearing.

“Our mask policy goes beyond the city’s that we require masks, regardless of your vaccination status. We had to do that because we’re trying to keep everybody safe,” Prabasi

said. “I think, overall, it’s been very mixed messaging … I understand why there was such a focus on vaccination and creating a key to New York City. But what about masks?”

Prabasi and Constantinou both said they’ve had trouble with unvaccinated employees.

Constantinou had to fire three of his 100 employees who did not get their first shot by the enforcement date of Sept. 13. Prabasi, too, had to let people go. So did Ed Raven, the owner of Greenpoint Beer & Ale Co. and watering hole Brouwerij Lane, both in Greenpoint.

“Everybody on staff now is fully vaccinated,” Raven told CO. “We only had one incident with a cook. He felt that this was being forced on him … [He resigned in an email, saying] that his body was a sanctuary and that he could do whatever he wants with it.”

While it was somewhat difficult to replace the cook, Raven said his brewery was finally getting back to its normal, or normal-for-apandemic, groove. He hopes that more New Yorkers will get vaccinated so his businesses can return to pre-COVID procedures.

“I just wish everybody was getting vaccinated so we can go back to a semi-normal business plan,” Raven said. “It’s just ridiculous that we have to do all of this stuff because there are people out there who don’t want to get vaccinated. The irony is that during the pandemic, everyone was screaming for vaccination, and now that we have it, people don’t want it. It’s just crazy.”

Raven and his staff check the vaccine cards and IDs of patrons, and then give each a wristband to keep track of who has been checked, he said. He hadn’t yet been visited by a city inspector, though Constantinou and Prabasi both told CO that inspectors had stopped by their establishments.

City inspectors are charged with ensuring that each restaurant has signage, provided by the city, that informs customers about the new policy and that restaurant staff are asking for vaccine cards, said Schwartz. The inspectors come from a collection of 13 different city agencies, including the Department of Health, from which an employee visited Constantinou.

Businesses can incur a maximum of $5,000 per noncompliance penalty. The first violation of the policy carries a warning, a $1,000 fine for the second, a $2,000 fine for the third and the fourth, and any following violations carry a $5,000 fine, Schwartz told CO. Andrew Rigie, head of the New York City Hospitality Alliance trade group, wants the city to focus on education and training before issuing fines as a last resort.

“We’ve been on the frontlines of all the different, ever-changing regulations with so much stress and economic catastrophe,” Rigie told CO. “It puts an enormous burden on the industry, but we’re working hard and working together to get through this, because we know we need to keep our customers [and] our employees healthy and safe.”

While Rigie says some smaller restaurants have offered more limited indoor seating, he hadn’t heard of the requirements forcing industrywide changes, like restaurants not reopening or widespread harassment of restaurant staff.

Rigie said his organization was working with the city to encourage restaurant workers and patrons to get vaccinated through pop-up vaccination locations, and that the hospitality alliance has hosted online training sessions to educate restaurant owners about the requirements.

He thought the requirement had certainly helped the city see high vaccination rates — nearly 80 percent of Manhattan residents had, as of Sept. 23, received at least one dose of a COVID-19 vaccine and nearly 70 percent of New York City residents had, according to city data.

“Restaurants are the anchors of communities,” Rigie said. “They’re community gathering spaces … and people respect them. So it’s a good way to get the message out and further support the communities that they serve.”

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17,282 Relocation

13,445 Relocation

12,022 Relocation

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11,362 Relocation

German bank Norddeutsche Landesbank-Girozentrale (Nord/ LB) will relocate its North American headquarters from the Grace Building to 505 Fifth Avenue.

Nord/LB signed a 15-year lease for 17,282 square feet on the entire seventh and eighth floors of the 26-story building between West 42nd and West 43rd streets, according to landlord brokers JLL. Asking rents in the building range from $78 to $88 per square foot, as CO previously reported.

The bank, one of the largest in Germany, currently has its North American home base a block away at the Grace Building at 1114 Avenue of the Americas. It’s planning on occupying its new 505 Fifth digs as soon as possible and has already moved into temporary space in the building, according to JLL. “Nord/LB joins a roster of leading corporate tenants in this elegant, centrally located tower,” JLL’s Diana Biasotti said in a statement. “This transaction continues the leasing momentum in the building and demonstrates the enduring appeal of ideally located, superior-quality space.”

Biasotti represented the landlord, Stawski Partners, along with colleague Kyle Young. John Johnson of Savills handled the deal for Nord/LB. A spokesperson for Savills did not respond to a request for comment.—Nicholas Rizzi

Liakas Law is moving east.

The law firm signed a 15-year lease to relocate from its 65 Broadway offices to 13,445 square feet at The Trump Organization’s 40 Wall Street. A representative for tenant broker Savills did not disclose the asking rent.

“Liakas Law has experienced a tremendous amount of growth since its founding several years ago,” Savills’ Peter Cipriano said in a statement. “The firm’s leadership team tapped us to identify a high-quality space that will allow them to attract and retain talent for many years to come.”

The law firm plans to relocate to its new offices on the 48th and 50th floors of the 47-story 40 Wall, also known as the Trump Building, in the second quarter of next year, Cipriano said. The move means Liakas will expand its footprint in the Financial District by about 5,000 square feet from its approximately 8,600-square-foot offices just west of the New York Stock Exchange.

The neo-Gothic tower was first built in 1936 and landmarked by the city in 1995, when Trump ground leased the building, CO reported.

Savills’ Cipriano and Daniel Thompson handled the deal for Liakas Law. Myles Fennon represented the Trump Organization in-house. Fennon did not respond to a request for comment.—Celia Young

Cr yptocurrency exchange Apifiny is moving from the Financial District to Midtown.

The startup has inked a five-year, 12,022-square-foot lease for part of the 35th floor at 1675 Broadway, landlord Rudin Management Company announced Sept. 20. A Rudin spokesperson declined to provide the asking rent in the deal.

Apifiny will move from 199 Water Street in the Financial District to the 35-story building at Broadway and West 52nd Street later this month.

Colliers International’s Sam Einhorn represented Apifiny in the transaction, while Rudin’s Robert Steinman handled negotiations in-house for the landlord.

“As a company with a strong commitment to technolog y and innovation, we are thrilled that Apifiny has chosen 1675 Broadway for its new Manhattan offices,” Michael Rudin, an executive vice president at his family’s firm, said in a statement. “We believe Apifiny will benefit from 1675 Broadway’s central location and best-inclass infrastructure and connectivity as they continue to grow here in New York City.”— Rebecca Baird-Remba

Textile firm Nassimi will move its headquarters from 7 Penn Plaza to 550 Seventh Avenue.

Nassimi signed a seven-year lease for 12,005 square feet on the entire 15th floor of Adler Group’s 24-story building between West 39th and West 40th streets, according to a source with knowledge of the deal. Asking rent was $55 per square foot.

The firm — which creates faux leather and polyurethane textiles — currently has its offices at 7 Penn Plaza, also known at 370 Seventh Avenue, and plans to move to its new Garment District digs in November, the source said.

Daniel Lolai of LSL Advisors represented the tenant in the deal, while the Kaufman Organization’s Michael Heaner and Sam Stein handled it for the landlord. Lolai declined to comment and a spokesperson for Kaufman did not respond to a request for comment.

The Art Deco building at 550 Seventh formerly was one of the most fashionable Garment District buildings for designers, previously boasting the likes of Ralph Lauren, Donna Karan and Oscar de la Renta as tenants, Women’s Wear Daily reported.

The 225,000-square-foot building lost those flashy designer in recent years, but it still has a number of smaller brands as tenants, including Mavi Jeans, Jill Stuart and Ben Elias Industries, according to WWD.—N.R.

The In Mocean Group isn’t putting its swim trunks away this September.

The manufacturer of InMocean swimwear is expanding its headquarters at 463 Seventh Avenue to more than 59,000 square feet.

In Mocean signed a 10-year lease for an additional 11,362 square feet on part of the eight floor of the Garment District office building for new offices and a showroom space, according to landlord Adams & Co. Asking rents were $52 per square foot.

“They needed more space,” said Adams & Co.’s David Levy. “They have a long-term commitment to the building and it made perfect sense for them to expand within the building their [headquarters] are already in.”

While the deal closed in the last week of August, the swimwear company won’t move into the space until it’s been fully demolished and renovated in about six weeks, said Levy. The spot was formerly occupied by Maxima Apparel Corp., which relocated to Long Island in March.

Other tenants at the building include women’s apparel designer

By Design, Adjmi Apparel Group, fashion industry consultancy The Doneger Group and NewYorkPresbyterian Hospital.

Adams & Co.’s Levy handled the deal in-house. In Mocean did not have a broker, Levy said. In Mocean did not respond to a request for comment.—C.Y.

10 | SEPTEMBER 28, 2021 | COMMERCIAL OBSERVER

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LEFT TO RIGHT: LINCOLN PROPERTY GROUP, WELCO REALTY, SINVIN REAL ESTATE, OPEN IMPACT REAL ESTATE, SL GREEN

LEFT TO RIGHT: COURTESY OF KOHN PEDERSEN FOX, ROY ROCHLIN/GETTY IMAGES,

Lease Deals of the Week

LEASES

LEFT TO RIGHT: LINCOLN PROPERTY GROUP, WELCO REALTY, SINVIN REAL ESTATE, OPEN IMPACT REAL ESTATE, SL GREEN

Lease Deals of the Week PianoPiano

Apple

Jonathan Adler

LUMA Partners

10,750 Relocation

10,391 New

8,000 New

7,080 Renewal

PianoPiano, a family-owned piano rental company, is moving its musical instruments to the Upper West Side at 37 West 65th Street.

From uprights to grands, the company’s pianos will relocate several blocks north from their previous Hell’s Kitchen space at 244 West 54th Street, according to Lincoln Property Company’s Jeffrey Rosenblatt, who represented the tenant in the deal.

Asking rents were $65 per square foot for the 16-year lease.

PianoPiano was drawn to the new, 10,750-square-foot showroom and rehearsal space because of the storefront’s proximity to Lincoln Center and private performance conservatory The Juilliard School, Rosenblatt told Commercial Observer.

The price of the space was also a draw. The coronavirus pandemic has pushed retail rents down in Manhattan, especially in areas popular with tourists and daytime commuters, as businesses have shuttered, and PianoPiano is using the downturn to help its business.

“They wanted to take advantage of the market,” said Rosenblatt.

“They don’t want to have to move again for a long time.”

The building is owned by a partnership between Friedland Proper ties, Chicago-based Benjamin Limited Partnership and EMB Realty, according to PropertyShark and property records.

Rosenblatt handled the deal for the tenant. The landlords did not have a broker.—C.Y.

Bronx residents won’t have to trek to the Upper East Side or Yonkers anymore to get the latest Macbook and iPhone.

Apple opened its first location in the Bronx on Sept. 24 — the same day the company released the iPhone 13 — in a ground-floor store at the main entrance of the Mall at Bay Plaza in Baychester, brokers said.

“Basically, the No. 1 thing they were looking for is population density and it’s incredible in that area,” said Jim O’Brien, Welco Realty’s vice president of leasing, who worked on the deal. “Within five miles, you’ve got more people than some states have.”

The multinational technology company will immediately become an anchor tenant, after inking a deal for 10,391 square feet in the mall’s Center Court area — adjacent to an H&M store, Aldo shoes, and a Victoria’s Secret boutique. The store is directly between the 780,000-square-foot mall’s two other anchor tenants, Macy’s and JCPenny.

Brokers declined to reveal the terms of the lease or the rental price.

“Their preference is to have a column-free space, they’ll work with you,” said Jerry Welkis, president of Welco Realty, who represented the mall’s landlord, Prestige Properties. “It’s just their look. I think they like to show a big expanse. That’s just their marketing.”—Aaron Short

Furniture designer Jonathan Adler plans to open an 8,000-square-foot SoHo outpost at 382 West Broadway, brokers on the deal confirmed.

The designer signed a 10-year lease for the entire one-story building between Spring and Broome streets, The New York Post first reported. Asking rent was $650,000 per year, according to landlord broker Christopher Owles of Sinvin Real Estate.

The storefront — which includes space on the first floor, lower level and the mezzanine — brings Jonathan Adler back to the neighborhood after the designer previously closed its SoHo storefront at 47 Greene Street.

Jonathan Adler also has New York City outposts in the Upper East Side, Greenwich Village and the Upper West Side.

The brand started looking for another New York City location about six months before the coronavirus pandemic hit, and ultimately landed on SoHo to resurrect its presence there and because of the cheaper rents in the area, according to tenant broker Janet Liff of J. Liff Co. “I hate to say that this timing worked for us, but it did,” Liff said in a statement.

Liff represented Jonathan Adler along with Baker New York’s David Baker and Charlotte Sardet. Owles brokered it for landlord 382 West Broadway LLC.—N.R.

Investment bank LUMA Partners will keep its 7,080-squarefoot office at The Eretz Group’s 101 Fifth Avenue.

The bank, which also has an office in Palo Alto, Calif., will remain on the entire ninth floor of the 11-story building with the renewal. A spokesperson for the tenant broker did not immediately respond to a request for the terms of the deal.

OPEN Impact Real Estate’s Lindsay Ornstein and Transwestern Real Estate Service’s Rory Murphy brokered the deal for LUMA. Nicholas Mok handled it in-house for the landlord.

“We have been working with LUMA Partners for many years and it’s rewarding to continue to support them in their latest transaction,” Ornstein said in a statement. “Eretz Group has been very accommodating and flexible throughout the process.”

In renewing its lease, LUMA Partners will remain in the Flatiron District, an area that includes 27 million square feet of office space, according to Transwestern research. Of that property, 19.2 percent was available as of mid-year.

A spokesperson for the landlord did not respond to a request for comment.—Anna Staropoli

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Bluestar BioAdvisors 6,725 Relocation Life science consultant firm Bluestar BioAdvisors signed a 6,725-square-foot lease to relocate to 521 Fifth Avenue.

Bluestar inked a 10-year deal for part of the 25th floor of the 39-story Midtown tower, according to landlord Savanna. Asking rents in the building range from the high $70s to the low $80s per square foot.

Bluestar BioAdvisors, which advises life science companies on their products and investments, currently has its offices nearby at 555 Madison Avenue, according to its website. It will move into its new digs by the first quarter of 2022.

After Savanna purchased the building from a joint venture of SL Green Realty Corp. and Plaza Global Real Estate Partners for $381 million in 2019, it spent $4 million renovating the entrance and lobby, adding new signage, and making systems upgrades and other redesigns throughout the property, according to the landlord.

CBRE’s Peter Turchin, David Hollander, Tim Freydberg and Ben Joseph handled the deal for Savanna. Cushman & Wakefield’s Caroline Collins and Ethan Silverstein brokered it for Bluestar.

Representatives for C&W did not respond to a request for comment.

“Given its ideal location near Grand Central Station and new capital improvements, we anticipate continued strong leasing activity at the building,” Turchin said in a statement.—C.Y.

COMMERCIALOBSERVER.COM | SEPTEMBER 28, 2021 | 11

FINANCE

Debt Deals of the Week COURTESY OF GETTY IMAGES

Naples pier.

Madison Realty Capital Lends $30M for MixedUse Project in Downtown Naples Colorado-based M Development has landed a $30 million loan from Madison Realty Capital to redevelop a site at the main entrance to Old Naples, Commercial Observer has learned.

M Development, an Aspen-based residential and retail real estate owner and developer, will use the loan to acquire a 4.27-acre, mixeduse development site at 900-1100 Fifth Avenue South in Naples, Fla., the Gulf Coast town that has seen an influx of interest during the coronavirus pandemic.

This early in the development process, the exact use of the site has not been finalized, but it will likely include a residential component.

The project will fill a need for high-end apartments in Downtown Naples, Josh Zegen, managing principal and co-founder of Madison Realty Capital, said in a written statement. The historic district has a limited supply of Class A apartments, he said.

New York-based Madison Realty Capital is a vertically integrated, real estate private equity firm that manages $6.6 billion in assets.

—Jeff Ostrowski

Bank OZK closed on a deal to provide construction financing for a joint venture’s redevelopment of a 475,000-square-foot, mixed-use office project just outside of Boston, Commercial Observer has learned.

The Little Rock, Ark.-based bank provided a roughly $300 million loan to Leggat McCall Properties and Granite Properties for their planned 20-story development at 40 Thorndike Street in East Cambridge, Mass., which is scheduled for completion in 2023.

“Bank OZK is proud to be a part of this incredible project in East Cambridge,” Chris Lawton, executive vice president of originations for Bank OZK’s real estate specialties group, said in a statement. “The Leggat McCall and Granite teams are creating state-of-the-art office space that is much needed in this market. This project will offer companies and their employees a fantastic place to work, and it will be transformative for the neighborhood and community.”

JLL arranged the debt package, which was announced last week

by Legatt McCall and Granite without giving the loan amount. The developers also announced that CBRE Global Investors has joined the project as an equity partner on behalf of one of its investment funds.

“Our partnership with CBRE Global Investors and Bank OZK enables us to deliver truly exceptional, modern office space to the most innovative companies in this global hub of ingenuity,” Rob Dickey, executive vice president and partner at Leggat McCall, said in a statement. “The building’s new terracotta and glass facade along with unencumbered 360-degree views will set the tone for a thriving block that also includes 48 new housing units, onsite childcare, retail and outdoor space.”

Construction first began in 2020 with a cleanup of the building interior, followed by a new facade that

12 | SEPTEMBER 28, 2021 | COMMERCIAL OBSERVER

COURTESY OF LEGGAT MCCALL PROPERTIES

Bank OZK Lends $300M on East Cambridge Courthouse Redevelopment

OLD NAPLES, NEW DOLLARS

A rendering of a 20-story development at 40 Thorndike Street in East Cambridge, Mass. was recently installed. The property, which comprises a city block, was formerly home to the Edward J. Sullivan Courthouse.

Leggatt McCall and Granite said they are hoping to attract a major company to house its headquarters in the property’s Class A office space. The building is designed

by Elkus Manfredi Architects and is being constructed by John Moriarty & Associates.

Development of 40 Thorndike has been a lengthy struggle for Leggatt McCall, which paid the State of Massachusetts $33 million for the state-owned property and then fought neighborhood opposition in the courts. Opponents requested a doubling of the affordable housing units from 24 to 48 and less parking spaces.

“Securing this capital allows us to offer a sustainable,

wellness-focused, people-centric work environment designed for collaboration and innovation,” Granite Chief Investment Officer Bill Brown said in a statement.

“Located just a few blocks from Kendall Square, 40 Thorndike’s one-of-a-kind, Class-A office space will be attractive to top talent and businesses serving the area’s most prominent global tech and life science companies.”—Andrew Coen

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FINANCE

Community Three Secures $60M for Condos in DC’s Mount Vernon Triangle Community Three Development has secured $60 million in construction financing for a 12-story condo development in the Mount Vernon Triangle neighborhood of Washington, D.C., Commercial Observer has learned.

The financing was provided by FVCbank and Stonehill PACE, and arranged by Clearwater Capital Management. It is the first condominium development to be financed using Property Assessed Clean Energy (PACE) funding, a green financing tool that is repaid through a special tax assessment on the property.

The 122,500-square-foot development, located at 950 3rd Street NW, is located within the Mount Vernon Triangle master-planned development, which comprises nine buildings and approximately 2 million square feet of office, residential and retail space. The site for the condo project is one of the last available in the neighborhood.

The financing will go towards acquiring the site and constructing the property. The project is expected to break ground sometime in Q2 2022 with a projected completion date in Q4 2023.

Community Three, which bills itself as a sustainable developer, is a frequent boutique condo builder in D.C. and its suburbs, with projects such as 10Eleven in Logan Circle and Bonéval in Capitol Hill.

—Keith Loria

COURTESY OF

950 3rd Street NW.

RREAF Holdings and investment partners DLP Capital and 3650 REIT have nabbed $534 million of acquisition financing for a threephase multifamily portfolio totaling 21 properties in the Southern U.S., the joint venture announced Tuesday.

Berkadia originated the Freddie Mac loan for the deal, which launched with a 13-asset multifamily portfolio totaling more than 2,000 units across the Sun Belt region from Carter Funds. Berkadia arranged the debt package for the entire transaction and Cushman & Wakefield represented Carter Funds.

“We began working on this portfolio with RREAF day one and explored all financing avenues available including SASBY executions and structured products from many of the largest investment banks in the space,” Nathan Stone, a managing director in Berkadia’s Dallas office, said in a statement. “After weighing all options, Freddie Mac emerged as the ideal partner for RREAF in this transaction and we are pleased that RREAF trusted Berkadia’s experience and ability to execute on a transaction of this magnitude.”

Stone added that Berkadia has now closed 34 loans with RREAF in a 14-month period with loan balances exceeding $647 million. Dallasbased RREAF has acquired roughly $1 billion of real estate assets in the last 12 months and is planning two other tranches of its three-phase multifamily acquisition through November that will total in excess of 4,000 units. The

Falls at Spring Creek on 1900 Wesleyan Drive in Macon, Ga. apartment complexes are located in Florida, Georgia, Alabama, North Carolina, Louisiana and Texas.

“This large acquisition is a culmination of months of negotiations, due diligence, research and financial structuring,”

Kip Sowden, RREAF’s CEO, said in a statement. “This is one of the largest real estate transactions in the country since the COVID outbreak.”

Freddie Mac did not respond for comment.—A.C.

Guardian Lends $73M on Florida State, UArk Student Housing Acquisitions Student Quarters and GFH Financial Group nabbed a $73 million debt package to acquire two southern student housing assets, Commercial Observer has learned.

Guardian Life Insurance supplied the fixed-rate loan for the joint venture’s acquisition of Vox Tallahassee at Florida State University and The Avenue at University of Arkansas. A Cushman & Wakefield team of Gideon Gil, Alex Lapidus, Meredith Donovan and Sebastian Sanchez represented the borrower.

“Student Quarters and GFH Financial Group are excited to launch our new venture with acquisitions of these high-quality pedestrian assets in exceptional power five markets,” Stephanie J. Lynch, chief investment officer at Student

COURTESY OF CUSHMAN && WAKEFIELD

COURTESY OF COMMUNITY THREE DEVELOPMENT

Berkadia Originates $534M for Sun Belt Multifamily Portfolio Acquisition

The Avenue at University of Arkansas.

Quarters, said in a statement.

Atlanta-based Student Quarters is the sixth-largest purchaser of student housing assets in the U.S, and

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has completed transactions in the space with a total value in excess of $1.4 billion.

Located at 1800 West Pensacola

Street in Tallahassee, Fla., Vox is a 602-bed student housing facility completed in 2020 that comprises a mix of one- through five-bedroom units. Its amenities include an outdoor training center, twostory indoor fitness center, social lounge, outdoor courtyard, fire pit and a covered parking garage.

The Avenue, located at 1223 Haven Drive in Fayetteville, Ark., within walking distance of the University of Arkansas’ football stadium, is a 652-bed complex delivered in the fall of 2019, featuring two- and four-bedroom units with 507 parking spaces. The property’s amenities include 507 parking spaces, a fitness center and swimming pool with cabanas.

Representatives for Guardian Life Insurance did not respond to requests for comment.—A.C.

COMMERCIALOBSERVER.COM | SEPTEMBER 28, 2021 | 13

FINANCE

ChartFinance Bank CRE Loan Performance Is Trending Up, Recovery Seems Around the Corner “Overall commercial real estate delinquency rates are declining after a modest rise in 2020, but individual property sectors — like lodging and retail — are experiencing much higher delinquency rates as a result of the intense recession during 2020,” wrote Matt Anderson, a managing director of applied data and research at Trepp.

“Furthermore, banks’ risk ratings indicate regional and property type concerns that are not uniform. The 2020 recession is also being felt in the lower volume of new commercial mortgage originations.

“The analysis here is mainly built on examination of trends in Trepp’s T-ALLR data set. The T-ALLR data is comprised of bank balance sheet loan data, a diverse set of loans totaling over $160 billion sourced from multiple banks.

Delinquency rates — improving, but still elevated in lodging and retail “Commercial real estate mortgage delinquencies hit a recent peak of 1.3 percent in the fourth quarter of 2020, as the pandemic disrupted economic activity across a broad range of geographies and industries. Since year-end 2020, the economic recovery that began in the second half of last year has helped bring mortgage delinquency rates down, with modest improvements in both the first and second quarters of 2021. As of the second quarter of 2021, the overall commercial real estate delinquency rate stood at 1.1 percent, while the non-current (more serious delinquencies) rate stood at 0.9 percent, both still above their pre-pandemic levels.

“The highest delinquency rates are in the lodging and retail property types, the two hardest-hit sectors within commercial real estate. Delinquency rates for both lodging and retail — at 11.9 percent and 4.9 percent, respectively — edged up slightly in the second quarter, after showing noticeable improvement in the first quarter.

The uptick in the second quarter is a reminder that the path to recovery may be protracted over a longer period.

“Delinquency rates for the other major property types are below 1 percent. However, the office delinquency rate has risen to 0.9 percent, up from its pre-pandemic 0.1 percent rate. Similarly, the multifamily delinquency rate has risen to 0.6 percent, from 0.2 percent before COVID-19 hit in early 2020. The industrial delinquency rate is a very low 0.1 percent, reflecting the strength of the sector through both the recession and recovery.

Risk ratings — more telling than delinquencies?

“Criticized loan rates show significant variation across geographies and property types. When the pandemic hit in the first quarter of 2020, lenders were allowed to offer forbearance to pandemic-impacted borrowers. If a borrower received forbearance, the loan would not be marked as delinquent. However, the lender was expected to update its risk rating on the loan, to reflect the lender’s expectations for ultimate re-payment of the loan.

So, while delinquency rates have shown a more muted response to the economic disruption of 2020, risk ratings

14 | SEPTEMBER 28, 2021 | COMMERCIAL OBSERVER

started to adjust immediately.

“Lenders in the mid-Atlantic have elevated concerns about risk across all three of the largest loan types. More than 30 percent of loans — by loan balance — in the multifamily, office and retail property types carry risk ratings of 6 or higher. Pandemic-related concerns are still evident in the higher risk ratings.

“Risk ratings for office loans have increased, as the long-term prospects for the sector have become less certain. The large and commute-dependent New York office market is the source of the mid-Atlantic’s high 31 percent proportion of criticized loans. The other large metro areas with large central business district office markets are also driving double-digit proportions of criticized loans in other regions of the East, Midwest and West.

“Multifamily generally has a low proportion of criticized loans. However, multifamily loans in areas that have been relative hot spots for the delta variant of COVID-19 — namely the West North Central, West South Central, East South Central and South Atlantic areas — have approximately 15 percent to 20 percent of multifamily loans in the criticized category.

“Retail loans are widely perceived to be at higher risk, especially in the Pacific, Mountain, East North Central and mid-Atlantic areas. Retail has shown higher delinquency rates through the pandemic.

their risk ratings, although the pace of that improvement could be protracted due to delays in a broad return to office occupancy.

“New loan production should also increase. Rates are set to rise but are still low and banks are sitting on large amounts of cash. Industrial will continue to benefit, as will multifamily as volume returns. Office and retail might not grow as quickly, and lodging is likely to lag until business and tourist travel volumes return to pre-pandemic levels.”

Source:

Origination volume — inching toward recovery “New commercial real estate loan originations increased in the second quarter but remain about 40 percent below the pace in 2019. With economic growth, currently low interest rates and the prospect for higher rates ahead, there is plenty of capacity for more borrowing.

“Industrial volumes are up almost 1.5x compared to pre-pandemic levels, as lenders and investors cannot get enough of this hot property type. The shift to online shopping and delivery has given a boost to a sector that was already growing rapidly.

“Multifamily and office origination volumes are at about half of pre-pandemic levels. Lenders have become more cautious about the office sector. Competition for product in the multifamily sector has been fierce, with the government-sponsored entities — led by Fannie Mae and Freddie Mac — emerging as the dominant source of financing.

“Retail loan originations increased in the second quarter but remain about 30 percent below 2019 levels. As one of the hardest-hit real estate sectors in the 2020 downturn, lenders are treading cautiously.

“Lodging is still an unloved sector, with loan originations off by nearly 80 percent from the pace in 2019. The loans that are getting made have higher debt service coverage ratios and lower loan-to-values than pre-pandemic loans.

Looking ahead — more improvement, more growth “Economic growth will support continued improvement in commercial real estate markets, including the still-impacted retail and lodging sectors. Office markets will likely also strengthen and allow lenders to reduce

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NEW JERSEY

COURTESY OF L+M

Residential developers and a bullish City Hall spur a building boom in the Brick City

ENCORE: L+M Development’s mixed-use development on the campus of the New Jersey Performing Arts Center will include 350 rental apartments — 20 percent of which will be affordable — along with 15 condos and townhomes.

By Rebecca Baird-Remba he past 18 months haven’t been kind to Newark, which lost more than 1,000 residents to the coronavirus, experienced flooding in September during Hurricane Ida, and saw foot traffic downtown slow to a trickle as commuting office workers and students stayed in the suburbs. But New Jersey’s largest city is slowly returning to normal, and its nascent revitalization is continuing with a slew of large residential projects — most with affordable housing — inching forward in downtown and outlying wards.

There are other bright spots, too. The city now boasts a population of 311,000, up from 277,000 in 2010 and 274,000 in 2000.

Many parts of the city that hadn’t seen population growth in decades have added thousands of new residents. The growing stock of new apartments downtown attracts a combination of locals and transplants from more expensive areas, including nearby suburban towns, New York City, Jersey City and Hoboken.

Of course, the city still struggles with huge, systemic issues.

More than a quarter of its population lives below the federal 16 | SEPTEMBER 28, 2021 | COMMERCIAL OBSERVER

poverty line, and the unemployment rate currently sits at 12 percent, which is more than double what it was pre-pandemic. The Brick City is also pockmarked by some 2,000 vacant and abandoned properties, which led to the creation of a citywide land bank earlier this year, in an effort to sell off more empty land.

And Newark has slowly recovered from a 2016 lead contamination crisis that affected drinking water for tens of thousands of residents and forced city officials to replace 23,000 lead water lines.

However, the city seems to be turning a corner. For example, the struggles of the pandemic helped encourage a little retail innovation. Outdoor arts and crafts markets have become a regular feature downtown and in Branch Brook Park, a large public park in Newark’s North Ward.

“We had 50 vendors say they wanted to come last Saturday in Branch Brook Park,” said Linda Morgan, an executive vice president at real estate firm RBH Group, who helped organize the event, Branch Brook Park Fest. “It was an amazing experience. We never had these pop-up markets that emerged during COVID. There’s a huge demand for people who make products at home to sell their stuff, but with COVID, people can’t afford retail leases.”

She pointed out that with few office commuters downtown

for the past 18 months, “a lot of the retail got hit hard during COVID and hasn’t reopened.”

Siree Morris, a Newark native who runs a small development firm, MCI Property Management and Construction, saw the pandemic as an opportunity for a retail side project. He and his wife, Ayana Stafford-Morris, decided to launch a drive-in movie theater — Newark’s first since the 1980s — on the site of the former Newark Bears baseball stadium last year. They moved the theater, Newark Moonlight Cinema, to a new location at 220 Orange Street over the summer.

It screens a mix of new releases and classics — with a focus on Black directors and actors — and hosts a regular night market for local vendors to sell their wares. Morris also put his construction know-how to work and built the screen and concession stands out of shipping containers.

“We’re very proud we were able to do it in our hometown of Newark,” said Morris. “There’s no other drive-in movie theaters within an hour’s drive.”

When the couple launched the theater last summer, they had originally planned for it to be temporary.

“Thirty thousand people visited in 4 1/2 months, so we decided we gotta do it. We repositioned ourselves to find some land and

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“

We put these murals in to welcome people back and to remind everyone that we all have to work together. That’s how you get through something like a pandemic.

WELCOME BACK NEW YORK

The right thing was to work with our tenants and help them get through this.

- Jeffrey Gural

”

Chairman & Principal of GFPRE All of us in the GFPRE family love our city and will continue doing all that we can to help the people and businesses that make up our great city to get back on their feet. #GFPRECARES

To find out more about GFP Real Estate or #GFPRECARES visit GFPRE.com Illustrations by Anthony Russo Wamest Regards.

@gfprealestate

@russoillustration

“

We put these murals in to welcome people back and to remind everyone that we all have to work together. That’s how you get through something like a pandemic.

WELCOME BACK NEW YORK

The right thing was to work with our tenants and help them get through this.

- Jeffrey Gural

”

Chairman & Principal of GFPRE All of us in the GFPRE family love our city and will continue doing all that we can to help the people and businesses that make up our great city to get back on their feet. #GFPRECARES

To find out more about GFP Real Estate or #GFPRECARES visit GFPRE.com Illustrations by Anthony Russo Wamest Regards.

@gfprealestate

@russoillustration

GFPRE has sponsored a series of art installations around New York featuring illustrations by Anthony Russo, celebrating the city’s resiliency and ongoing recovery. Russo’s illustrations are meant to inspire positivity, energy and optimism, and provide an opportunity to reflect on this emotional and challenging time for New York’s residents and businesses.

The GFPRE family has always worked tirelessly to support its tenants, employees and the communities in which it resides. Throughout the pandemic, GFPRE has assisted businesses and organizations whenever possible, and has continued to offer ongoing support to its tenants and neighbors as needed.

The #GFPRECARES campaign is our way of helping to keep New Yorkers feeling positive about the city—and its future—as we carefully make our way past the pandemic towards a brighter and more positive future for all.

Scan the QR code or visit GFPRE.com to learn more about the campaign:

GFPRE has sponsored a series of art installations around New York featuring illustrations by Anthony Russo, celebrating the city’s resiliency and ongoing recovery. Russo’s illustrations are meant to inspire positivity, energy and optimism, and provide an opportunity to reflect on this emotional and challenging time for New York’s residents and businesses.

The GFPRE family has always worked tirelessly to support its tenants, employees and the communities in which it resides. Throughout the pandemic, GFPRE has assisted businesses and organizations whenever possible, and has continued to offer ongoing support to its tenants and neighbors as needed.

The #GFPRECARES campaign is our way of helping to keep New Yorkers feeling positive about the city—and its future—as we carefully make our way past the pandemic towards a brighter and more positive future for all.

Scan the QR code or visit GFPRE.com to learn more about the campaign:

NEW JERSEY

CONVERSION VERSION: L+M is also turning a former parking garage at 155 Washington Street into a high-end Urby rental building with 249 apartments. It’s expected to be complete in June of 2022.

COURTESY OF L+M

we have a permanent location right now.”

The current site, he explained, was formerly home to Baxter Terrace, a derelict public housing project that was torn down in 2012.

Although 90 affordable apartments were constructed on part of the lot, a large swath of the property at Orange and Nesbitt streets had been vacant.

Morris is also working on a number of new construction projects. At 41-47 Astor Street, on the block where he grew up, Morris is developing a five-story, 20-unit building named for his late brother, Michael. The development will include laundry rooms, a terrace, family rooms, an elevator and parking.

And, over in the West Ward, he purchased six vacant lots from the city of Newark to construct two buildings, consisting of 33 and 36 units, at 528 and 538 South 16th Street. The project, dubbed West Side Village, “will cater to families and single moms, and have all of the amenities of some of the nicer buildings here in the city for a more affordable price.”

Both projects will include affordable housing, with at least 20 percent of their units renting at 80 percent of the city’s area median income (AMI), or $85,920 for a family of four.

Finally, Morris is realizing a longtime dream of building a development out of shipping containers at 393 Halsey Street, near Downtown Newark. The three-family project will include two- and three-bedroom condos of about 1,200 square feet each for families making 80 percent AMI or less. MCI recently began site work for the project, which will consist of 18 containers sourced from the nearby Port Newark Container Terminal.

A few blocks from Morris’ shipping container building is Teachers Village, which was one of the first new construction projects to rise in Downtown Newark in half a century.

Ron Beit, CEO of RBH Group, bought up 77 lots near the Prudential Center in 2007, and then spent several years planning the project with architect Richard Meier. RBH broke ground on the eight-building, 400,000-square-foot project in 2012 and completed it in 2017.

The complex includes three charter schools, a day care, 203 apartments (20 percent of which are affordable for people making up to 80 percent AMI) and 65,000 square feet of retail space. Seventy percent of the apartments are occupied by teachers, who receive a 7 to 15 percent discount on rent.

RBH also recently completed 212 Rome Street in the Ironbound neighborhood, which is occupied by the world’s largest aeroponic farm. AeroFarms, which grows its produce without soil or pesticides, sells dozens of varieties of greens to large supermarket chains like ShopRite and Whole Foods.

Last fall, the firm also wrapped up construction on the Honors Living-Learning Community at Rutgers University-Newark, a 400-bed dormitory located on Washington Street between Linden and Halsey streets.

And, earlier this month, the local planning board greenlighted RBH’s “Four Corners Millennium Project,” which includes two 14-story rental buildings with 470 units. One 244-unit building will rise behind the facade

of the old Paramount Theater at 193 Market Street, and a second building will include 226 apartments at 101 Market Street. The facade of the landmarked theater will be restored, while the flood-damaged interior will be renovated into a performing arts venue, according to RBH Group’s Morgan. Twenty percent of the apartments will rent to families earning up to 60 percent AMI, or $64,440 for a family of four. Construction is expected to begin next year and finish in 2023.

“I feel that the future for Newark is bright,” said Morgan. “The challenge has always been in getting the financing to do projects. I’m glad that our New Jersey Economic Development Authority has come up with new programs to encourage urban development, like the Aspire Program, which helps create incentives for developers to build in distressed areas. There really is an excellent opportunity to develop in Newark, because it’s so close to New York City and there’s a tremendous transportation network here.”

New York City mega-developer L+M Development Partners has also done several projects in Newark, including the redevelopment, in 2016, of the historic Hahne’s department store building downtown into 160 affordable apartments, a Whole Foods and a Marcus Samuelsson-owned restaurant.

Now, the company is turning a former highrise parking garage at 155 Washington Street — about a block from Prudential’s Newark headquarters — into a high-end Urby rental building with 249 apartments. The groundfloor retail will include an Urby cafe and a Rutgers admissions office. The building is expected to be complete in June of 2022.

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About a mile west of Urby, L+M is getting ready to start construction on a 77-unit affordable building at 4-22 Littleton Avenue, on the site of a parking lot at the Georgia King Village apartment complex. The development, which L+M is building in partnership with nearby University Hospital, will include an 8,000-square-foot clinic on the ground floor.

L+M is also working on the planning and design process for a large, mixed-use development on the campus of the New Jersey Performing Arts Center. The $150 million project will include 350 rental apartments — 20 percent of which will be affordable — along with 15 condos and townhomes.

Despite the pandemic-induced economic decline, L+M’s Sam Chapin felt optimistic about Newark’s future.

“There’s often been this story about Newark being on the edge of a big wave of development happening,” said Chapin. “And nobody predicted COVID and the impacts of the pandemic in a downtown that’s so dependent on office workers. But now, schools are open and the office population is back on the street. It feels like the Newark of two summers ago.”

In addition, former New York City Deputy Mayor Alicia Glen is co-developing two projects in Newark with L+M via her real estate firm, MSquared. The first is the Georgia King Village project — which includes another female-owned development firm, TypeAProjects — and the other is a planned 10-story, 71-unit residential building at 31-39 Central Avenue, by the Rutgers UniversityNewark campus. Dubbed Halsey Central, the project is expected to be 50 percent market-rate and 50 percent affordable.

“At Halsey Central, we’re trying to shift the development paradigm,” said Glen. “The 50/50 [split] is symbolically important. If you’re talking about equitable growth, you have to look at things differently. Can Newark come back in a way that’s different from other cities?

Can it be a place that’s a model for more truly mixed-income projects?”

Ultimately, many local developers feel that the city is ripe for opportunity, both because of its excellent transportation connections to New York City, its airport and its pro-development mayor, Ras Baraka. The city is even working on its own 100 percent affordable development downtown — a 16-story, 66-unit building known as Kawaida Towers, with developers Omni America, Mid-Atlantic Alliance and National Action Network.

“We have an administration that understands the power that real estate has from a wealth creation and economic standpoint,” said MCI’s Morris. “They are here to help the owners and developers of this city. During the pandemic, when people were losing their houses [and] renters weren’t able to pay their rent, Newark was one of the cities that put in renter assistance programs so we can all weather the storm together.”

He added that Newark has many of the attributes of more prosperous cities.

“If we look at thriving cities — they’ve got an airport, a seaport, they’re along major train lines,” Morris explained. “We’re right next door to New York City, which is a big draw around the country and the world. I think it’s a huge market; once we get past this market correction, home values will increase even more.”

COMMERCIALOBSERVER.COM | SEPTEMBER 28, 2021 | 21

NEW JERSEY

Betting on Diversification Atlantic City has nothing left to lose after the pandemic sucker punches a gambling destination that was already staggering

By Andrew Coen | Illustration by Adria Fruitos n Atlantic City casino industry that was already facing headwinds from increased competition in the 2010s is confronting new pandemic-related challenges this decade that underscore the need for more economic diversification.

While casino volume has begun to rebound of late, revenue from in-person visits was down 9.7 percent during the first eight months of the year, compared to the same period in 2019, according to recent data from the New Jersey Division of Gaming Enforcement (DGE).

Employment at Atlantic City’s nine casinos is also down nearly 6,000 jobs from summer 2019 levels, based on the latest DGE employee report from July.

It gets worse, too, once you zoom out.

Jane Bokunewicz, institute coordinator of Stockton University’s Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism, noted that despite recent gains in casino traffic, non-gaming resort amenities like lodging, dining, shopping and entertainment have been far slower to regain strength. The casino hotels have been largely hampered by losses in live conferences, meetings and trade shows, which Bokunewicz said will likely be the last to fully recover from the health crisis.

“As health concerns ease, efforts to expand the Atlantic City resort product beyond gambling should pay off as visitors seek in-person experiences and resume group gatherings,” Bokunewicz said. “However, to reap the benefit of a truly diversified economy — one even more resilient to impacts on the gaming, hospitality and tourism industry — Atlantic City will need to cultivate businesses that are wholly independent of seasonal visitors.”

The COVID-19 pandemic struck as Atlantic City was in the midst of a five-year state takeover that took effect in November 2016 under the Municipal Stabilization and Recovery Act signed by then-Gov. Chris Christie following a near default of the city’s debt. Under state intervention, Atlantic City successfully settled 22 | SEPTEMBER 28, 2021 | COMMERCIAL OBSERVER

$137 million of casino tax appeals that were owed to Bally’s Corp., Caesars Entertainment, Golden Nugget Hotels & Casinos, Harrah’s Entertainment and the Tropicana, along with the Trump Taj Mahal and Trump Plaza, through $72 million of municipal bonds issued under New Jersey’s credit enhancement program.

In brighter times, a dozen thriving casinos fueled Atlantic City’s economy. Then, new competitors in the surrounding Northeast, such as Sands Casino Resort Bethlehem in Pennsylvania, began to chip away at the Jersey Shore gambling destination.

The 2008 financial crisis didn’t help. Five casinos closed between 2014 and 2016 before the seaside city brought its gaming property total back up to nine in June 2018, with the opening of Hard Rock Hotel & Casino Atlantic City and Ocean Casino Resort.

Ben Dworkin, director of the Rowan Institute for Public Policy and Citizenship at Rowan University, said it will take time for Atlantic City to regain its pre-pandemic footing with casino and hospitality business. He said the city should get a boost, however, from the New Jersey League of Municipalities opting to hold its annual conference back at the Atlantic City Convention Center and Jim Whelan Boardwalk Hall in November after running a virtual event last year.

“It’s significant that the League of Municipalities, which puts together one of the biggest conventions of the year, is heading back down to Atlantic City,” Dworkin said. “We will see whether attendance is the same as pre-pandemic and the league is establishing its own COVID protocols, but they’re going to be able to go to restaurants and spend money, and this is part of building back.”

Just last week, too, the New Jersey Cannabis Convention, for those in the growing cannabis niche, announced it would run for two days in October at Atlantic City’s Showboat Hotel.

Prior to the pandemic, Atlantic City had begun efforts to expand its business activities beyond traditional gambling, which included welcoming an 85,450-square-foot

Bass Pro Shops outpost and a 16,000-squarefoot, mixed-use development from BET Investments next to the Boardwalk Hall.

South Jersey Gas also built corporate offices adjacent to a new Stockton University satellite campus that debuted in 2018 and is home to the school’s hospitality program.

Stockton’s main campus, located in nearby Galloway Township, has proactively tried to improve Atlantic City’s economy since arriving three years ago. That included signing an agreement in June with the New Jersey Economic

Development Authority (NJEDA) to establish an esports innovation center on its new beachfront campus with the aim of making Atlantic City a hub for the growing industry.

Joshua Garay, a real estate broker and founding principal of JSG Realty in Manhattan, who represents owners of the shuttered Atlantic Club Casino hotel property, said Stockton’s $500 million investment in its campus next door has been a positive factor in driving demand for new development opportunities.

He said the property he is marketing now at

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NEW JERSEY

3400 Pacific Avenue, which was originally developed by Steve Wynn in 1980, is generating major interest from multifamily developers looking to create new condos or luxury senior housing.

“We have fielded calls from luxury living companies, senior housing and residential developers all looking to purchase the property,” Garay said. “There is also a strong demand for condo developments on the Jersey Shore, as buyers are looking to escape the cities and spend more time working remotely

from a beachside location.”

Garay added that Atlantic City should not look to add any more casinos, given the increased online options now available for gambling and sports betting.

Another bid to boost Atlantic City’s non-casino economy is developer Bart Blatstein’s plans for a $100 million indoor water park on a lot adjacent to the Showboat, which he acquired in 2016 for $23 million. The Atlantic County Improvement Authority is planning to issue $95 million in municipal bonds to

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jumpstart the project, which has been plagued by delays during the pandemic.

Bokunewicz said attracting more business development in fields, such as health care, education and green energy, would help attract more full-time residents to Atlantic City, which saw its population drop 2.7 percent in the 2020 U.S. Census, compared with 2010, to 38,497.

She noted new business investments near the boardwalk prior to the pandemic, coupled with the city’s popular concert series and debut of the American Basketball

Association’s Atlantic City Seagulls franchise, provide hope for sunnier economic times that, in turn, lead to future real estate development.

“While the pandemic has in some ways slowed this momentum, it has not stopped it,” Bokunewicz said. “This progress has the potential to further perpetuate a cycle of development for the city — a cycle the city is uniquely positioned to take advantage of as one of the few shore towns in the Northeast with an inventory of vacant and underutilized property ripe for redevelopment.”

COMMERCIALOBSERVER.COM | SEPTEMBER 28, 2021 | 23

COVER

Jamie Hodari.

24 | SEPTEMBER 28, 2021 | COMMERCIAL OBSERVER

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COVER

Industrious CEO Jamie Hodari calls the next big thing in the office market ‘core-flex leasing’ — he’ll also thank you not to focus on the IPO

By David M. Levitt | Photographs by Emily Assiran or the many companies that have emerged to satisfy the demand for coworking, or places where folks can come to work without their bosses having to commit to the space for years and years, it’s been a strangely lucrative time.

Shared office space firms, such as WeWork and Industrious, have been capitalizing on businesses losing their sense of long-term direction as they grapple with the multiple meanings of the pandemic. WeWork had one of its best sales months in July. And Industrious had its best sales week ever in its nine-year history during the last week in July. And it came in at 489 on Inc. magazine’s 2020 list of the 5,000 fastest-growing companies.

Commercial Observer caught up with Industrious CEO Jamie Hodari earlier this month to help explain what’s going on. We met at the firm’s Equinox/Hudson Yards location, at 31 Hudson Yards, across a courtyard from the supertall 30 Hudson Yards, a courtyard partially filled with a tent under which outdoor spin classes were being conducted.

It seems the uniform for Manhattan workers these days is not a suit and a tie; it’s yoga pants and a top to sweat in.

His comments have been edited for clarity and brevity.

Give me a short history of Industrious.

I co-founded the company with my best friend and nextdoor neighbor growing up [Justin Stewart, the company’s president, who oversees its real estate team]. He was an only child, so it was almost like brothers.

And, almost a decade in, we still really, I think, love working together. It helps calm some of the ups and downs of being entrepreneurs. I know the typical experience in high-growth startups is you have a lot of co-founder friction over time, but I feel very lucky that that’s not the case here. It’s part of what makes the company what it is.

It was just us, and now we have 500 employees. It’s wonderful that we still have each other. The founding of Industrious is something that me and Justin have reminisced a lot about, and draw a lot of energy from.

I was running an educational organization called Kepler that runs affordable universities in East Africa using a kind of hybrid model, where you do online lectures at night, and you do your homework and stuff in-person during the day. And our largest funder was Ikea. I had a meeting with the president of the Ikea Foundation in New York, and we had very few New York employees. Our New York offices were only three people, so it was in a shared workplace.

This was the most important meeting of my life.

When you run a nonprofit, your biggest funder is kind of your boss. I went to prepare and the table was sticky, there were lightbulbs out, it was very loud in the hallway, and the acoustics were bad. And, at the last second, I had to email him and say, ‘Can we do this at a coffee shop across the street?’

I was just so embarrassed, and also so frustrated, that I was paying for a workplace and the quality was so low, I couldn’t hold the most important meeting in my life. I had to hold it in a coffee shop.

And, Justin, he was working in real estate and had a similar experience with some Chinese investors.

And we just said, if we want to take advantage of a flexible workplace, but need something more professional and more elegant, there must be 50,000 companies that feel the same way.

I very firmly believe that if you have under 200 employees, companies should be buying their employees workspace as a product. They should not be ripping workspaces to the studs, building it out from scratch, signing a 10-year lease for 71 employees. Only in the last three to four years have conservative companies found that providers like Industrious could meet that demand.

So what kind of agreements are you doing instead of leases?

Instead of signing a lease with a landlord, and you owe them $70 a square foot every year, it’s much more like a hotel. We call them either management or partnership agreements, and you basically work with the landlord, creating a shared workplace in their building. And, then, you pay the management fee and an incentive fee if the

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unit does well. It’s a complete transformation of the business model.

We’ve done 100 management agreements, and they’re the gold standard, but they’re extraordinarily rare still, outside of Industrious. Justin’s done a very good job.

What do you think gives Industrious an edge over WeWork, Knotel, Convene and the other companies that are in your space?

There are two things: No. 1 is that the DNA of the company from very early on is built around saying, ‘Can you deliver a workplace experience to employees that’s on par, or better, than when customers do it themselves?’

There’s a clarity of focus that a company is solving for.

We weren’t solving for the highest possible revenue growth. We weren’t solving for the lowest possible cost base. We weren’t solving for how to build for a quick exit.

And we’ve been doing that for 10 years or so. Over time, there began to be big, positive differences for people who worked out of Industrious vis-a-vis other providers.

No. 2 is, because of those outcomes, it enabled us three years ago to transition our business model from signing leases with landlords to signing management agreements. There are trade-offs to doing those agreements. Despite those tradeoffs, that difference in business model has been a real source of advantage for the company, because it’s a much less risky business; the management agreement business is much steadier than leases; and you sit down with the landlord and work together for the best possible outcome, rather than have an adversarial relationship with the landlord.

So, obviously, you’re in partnership with Equinox, but you are also in partnership with Related. This is Related space we’re sitting in. If they find someone who’ll pay considerably more than you’re paying, they’ll kick you out.

And that does add a layer of complexity. Your customer is the occupier and the landlord, and you’re trying to fulfill both their needs simultaneously. That’s an advantage in the sense that you can bring everyone to the table and figure out what’s best for everyone. But it COMMERCIALOBSERVER.COM | SEPTEMBER 28, 2021 | 25

COVER

There are all sorts of additional benefits, one of which is it makes you a much more nimble company. You are sitting with Vornado, you are sitting with Brookfield or Blackstone, or a family-owned building, and you are figuring out together how to respond to what comes next.

also means you have more masters you’re trying to service.

What do you think the COVID crisis has taught the coworking industry? And what are you doing to address the concerns that are out there? I saw on your website that you updated your layouts and reduced capacity.

The general consensus in the real estate world was that the pandemic would hurt the flex industry in the short run, but it would accelerate adoption of what we do in the long run. That sounded nice on paper, and was nice to hear and to think, but it was all prospective last year.

Every month now, we’re selling somewhere around the pre-COVID sales record. Maybe at the high level, I would say the changes in workplace strategy and individual people’s preferences wrought by the pandemic have, by and large, favored our industry. From what I know about our competitors and what I know about our numbers, the data bears that out.

People want the right to decide where they want to work and when. Almost every company in the country right now is moving toward allowing their employees more flexibility, which means greater variability on who’s in the office and when. All of that stuff is really hard to accomplish in a company’s own real estate. It almost invariably requires a partner to accomplish: a workplace-as-a-service provider.

So, basically, you partner up with companies and they tell you, ‘We want this in our spaces?’

Yes. This might be too wonky for the article, you can decide. But I think the other thing is the next frontier of where this industry is headed. For anyone that works in real estate, I think they will be surprised that two years from now, they will be seeing an enormous amount of this, a new type of leasing in an individual building. There isn’t a generally accepted term for it. The closest thing would be core-flex leasing, where a company signs a lease for a portion of a building, with a right to grow into flex space in the building.

For companies right now, who don’t know if they’re going to have 200 people in the office, or 500, they can’t go sign 100,000 square feet.

But they can find 50,000 with the right to grow into more space, if they end up growing or they end up with more people having the appetite for coming into the office than they thought they would. For the last 20 years, most customers would have either signed a long-term lease or go with the flex market.

What you’re seeing for the very first time right now is a set of customers saying, ‘I want both in a single building.’

We have a big project, for example, with Vornado [Realty Trust] at One Penn Plaza. And I suspect you will see a lot of that at that building.

In an Aug. 24 Wall Street Journal article, they quote somebody from WeWork saying that in a time of uncertainty, companies are looking at flex as a way station while trying 26 | SEPTEMBER 28, 2021 | COMMERCIAL OBSERVER

CAUTIOUSLY OPTIMISTIC: Jamie Hodari sees great potential for growth in demand for flex and coworking space coming out of the pandemic. Operators should still be cautious. “You need to build a business that doesn’t just assume everything is going to go up and to the right.” to figure out what their employees want.

I think that was underselling what’s happening right now. The implication of that quote was that companies are stuffing their employees in a shared workspace while they figure out their plan. And, by implication, the eventual landing spot would be to go back to the traditional leasing market. What I see is a much more durable shift in companies’ workplace strategies.

In none of these meetings with Industrious are they saying, ‘I’m just looking for swing space.’ They wouldn’t be paying Industrious for that anyway. There are more low-cost options for that. From everything I see — from the CBRE deal [the real estate services firm announced in February that it had invested more than $200 million in Industrious, taking a 35 percent stake in the company] and meeting with most occupiers, saying, ‘How do we move to a nimble, more employee-centric workplace strategy?’ — that can accommodate work from anywhere in an ongoing way, not as a temporary way station.

That same article said that the last week in July was Industrious’ strongest in its history, so I’m curious about the weeks that followed.

That has held up. If anything, I am surprised by that. The airline and hotel industries had very strong Junes and Julys, but then the delta variant caused pretty material dips in August and now September. If you were an outside observer, you would suspect the same would happen in the flex workplace industry.

What about your own flexibility? How prepared are you to go from the post-COVID environment to whatever the new normal is?

That’s a great question. The genesis of the shift to management agreements was that I was speaking at a conference, and, at every conference I ever spoke at, someone would say, ‘Hey, what do you think about the biggest problem in your industry, which is the mishmash of assets and liabilities, long-term obligations with your landlords, and short-term contracts with your customers?’

And I had a prepared speech I would always give about why it wasn’t as bad as it seemed, and I just felt that my heart was not in it. It just felt a little bullshitty. Why am I trying to explain away what is obviously the biggest problem with this industry, instead of trying to solve the biggest problem with this industry?

The shift to management agreements was primarily predicated on resolving that issue.

It seems that up to this point, people figured that demand was always going to rise, though the degree and the velocity may vary. But, now, real estate folks aren’t so sure. The five-day workweek has become the three-day workweek. Can you maintain under those circumstances your own velocity?

Everyone assumed prices would go up, up, up, up, up. A lease you signed in 2015 could be above water, but, if they signed in 2018 or 2019, below water. With the partnership-based model, there’s a little more ability together with the landlord to ride the ups and downs of the market.

I am biased here, but all day, every day I’m in meetings with the companies that are trying to figure out what their future-facing plans are. I can’t say for certain what is going to happen with commercial real estate more broadly, what’s going to happen with pricing, what’s going to happen with demand.

Our industry is still such a tiny fraction of commercial real estate more broadly — it’s 1.5 percent, it’s 2 percent. The vast majority of businesses are saying that flex is going to comprise, say, 20 to 30 percent. You need to build a business that can withstand ups and downs. You need to build a business that doesn’t just assume everything is going to go up and to the right.

I think you’re going to see continued compounding growth in demand for flex office, even if demand for long-term, traditional leasing stagnates.

Weren’t you guys thinking about going public before COVID, and what are your thoughts about the WeWork misadventure?

We were in high-growth mode and we added 1 million square feet last year, and we’ll probably add 1 million square feet this year and launch about 50 locations next year.

What often happens with these late-stage, high-growth companies is that they consume an enormous amount of capital. So, they have to IPO simply to find the capital to meet their burn rate.

I think we’ve chosen a slightly more conservative business model that doesn’t quite have those dynamics. As a result, our hands aren’t forced by having to IPO by a certain date or else. On the other hand, it could raise some inertia. It’s more a strategic decision about when our investors would want liquidity. I think that would be some time next year.

It’s something the press writes about a lot. Every time I give an interview, if the IPO comes up, it ends up in the headline. It would be disingenuous to say it plays a front-andcenter role within the company. It is probably an important strategic decision. We have to set a date and move toward it. But it’s a top 15 decision at the company, not a top five decision.

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Playing With COVID Deaths are up in Florida — and so are profits

By Chava Gourarie | Illustration by Luisa Sirvent lorida’s COVID case count is finally down after a summer surge that dwarfed previous outbreaks, causing close to 10,000 deaths in the state in August alone. And the death toll is not yet over, as deaths tend to lag case count by several weeks.

But, while its toll in human life is still ticking up, COVID’s impact on Florida’s economy, and on its real estate sector, has been minimal, and possibly non-existent, according to numerous Floridians in the industry.

“I’m seeing zero change from the recent uptick in COVID cases,” J.C. de Ona, division president for southeast Florida at Centennial Bank, said this summer. “People already know what to expect, [and] we know our governor is not going to shut everything down.”

“For better or worse, most of Florida has been treating [COVID] like it’s over since June 2020,” said Justin Oates, a vice president at investment firm Cain International.

In fact, the summer surge — fueled by the highly infectious delta variant — only intensified the same factors that had made Florida attractive to outsiders throughout the pandemic. The Sunshine State offers both the ability to do more outdoors, due to its weather, and the laissez-faire attitude of its policymakers, which have eschewed restrictions since last summer.

“Delta does nothing more than perpetuate the decisions people originally made,” said Todd Rosenberg, managing principal of investment firm Pebb Capital, because it reinforced “the idea that it may be something that never actually goes away.”

Those decisions have led to a wave of activity in Florida, and South Florida in particular, across practically every sector of real estate.

Florida hotels rebounded to pre-pandemic levels in early 2021, then shot past that benchmark. Multifamily rents are up 20 percent in just a year, condo supertalls are selling out before shovels get anywhere close to the ground, new-to-market tenants from New York and California are signing office leases, and retailers have been open without restriction since the summer of 2020.

With much of that activity fueled by pandemic-related factors, the delta surge appears to have solidified those trends.

John Osborne, a senior vice president at CP Group, the largest office landlord in Florida, said he hasn’t seen a real impact from the summer surge. “In terms of leasing velocity, the amount 28 | SEPTEMBER 28, 2021 | COMMERCIAL OBSERVER

of new-to-market activity in South Florida continues to be through the roof,” he said.

He did see hesitancy from national firms, which were looking to roll out a uniform, return-to-office plan nationally and had their plans upset by the renewed COVID spread over the summer, but no hesitation from smaller, new-to-market firms, or from local ones.

“Thankfully, I think South Florida has done relatively well.

People want to be here,” Osborne said. “It hasn’t seemed to impact decision making with signing leases.”

Of course, it’s not all rainbows and roses, and COVID has certainly left its mark.

Labor shortages and supply chain issues have troubled the retail industry. Skyrocketing rents and home prices are exacerbating existing inequalities. And while New York firms make headlines for moving to Miami, office occupancy is still below pre-pandemic levels, as remote work continues to take hold.

Additionally, both companies and individuals are taking steps to protect themselves from COVID, and landlords like CP Group have mask and distancing mandates at their buildings.

In fact, CP Group instituted a vaccine mandate for its employees beginning in June, providing educational resources about the vaccines, as well as a generous timeline for getting one.

To accommodate the vaccine-hesitant among its staff, CP Group allowed employees to sign a pledge that they would get vaccinated within 10 weeks of when the Food and Drug Administration gave it full authorization, rather than the emergency approval each COVID vaccine in circulation received last year.

While 50 percent were vaccinated at the beginning, that number has risen to 85 percent, said Elena Daniels, CP Group’s director of environmental, social and governance (ESG), who oversaw the program. Additionally, about 15 percent signed the pledge, which gives them until early November to get a vaccine — now that the FDA has indeed given full approval to the Pfizer vaccine. As of mid-September, CP Group expected to fire only five or six employees because of vaccine refusals.

CP Group may not be an outlier. Despite Florida’s reputation for COVID complacency, the vaccination rate in South Florida is fairly high, and is, in fact, higher in Miami-Dade County than in New York City. As of Sept. 23, the vaccination rate for people 12 and older was 82 percent in Miami-Dade, 70 percent in Broward, and 65 percent in Palm Beach, compared

with 72 percent in New York City.

The comparison only highlights the difference, however: The vaccination rate in Florida shot way up over the summer, following the increase in cases, whereas New York’s residents were largely vaccinated prior to the delta surge.

Pebb Capital’s Rosenberg pointed out that in Florida, protection from COVID is largely up to individual choice, which might be why it hasn’t affected the market more broadly.

“The people who are migrating here are people who have the option, and they’re electing to be more careful,” Rosenberg said.

“The spreading had more to do with people who weren’t being careful to begin with.”

For people who feel that they can protect themselves, because their job allows them to work from home, for example,

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FEATURE

Florida’s laissez-faire attitude is a boon.

“I think the fact that Florida is keeping things open, I think that’s going to be attractive to people who don’t want to be controlled,” said Centennial Bank’s de Ona. Rosenberg is betting on those transplants, and on the shift to hybrid work taking a more permanent hold. His firm, along with two partners, are planning to transform a historic hotel in Miami Beach to Class A office space, something that’s not very common in a city known for spring break revelry.

The company is converting the Bancroft Hotel, on the famed Collins Avenue, to an office building with 30,000 square feet of indoor and outdoor amenities, targeting tenants who are rejecting nine-to-five in a Midtown cubicle.

“I’m building a product for exactly that — what office users

coming to Florida from around the country are really looking for, coming out of lockdowns,” Rosenberg said. “This is a dedicated place to work, but work has now expanded into social work: drinks, lunches, or sitting on the beach with a banker who came from Chicago.”

It’s supposed to be a place where the lines between office and hotel, between work and play, between a lunch meeting and beach party blur. And Rosenberg picked Miami Beach for one reason: “We got plenty of condos, plenty apartments, plenty hotel keys, but not a lot of office.”

On the financing side, de Ona said the bank has seen nonstop activity in hotel, multifamily, and even retail. Hotel deals have picked up, as many players who were sitting on the sidelines jumped back in. And with the multifamily market as hot

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as it is, Centennial has been doing a lot of construction deals, especially for affordable, workforce and senior housing.

And it doesn’t appear to be stopping.

“I anticipate the flow of migration to continue as we head into the fall and approach the winter season,” said Eduardo Pruna, a residential broker with ONE Sotheby International, who’s been working with homebuyers from out of state, all of whom work remotely some, or all, of the time.

“This COVID thing is terrible, but the upside is that real estate is just booming,” he said.

And that’s the deal with the devil that Florida has made, one that isn’t over yet.

“If there is another COVID wave in winter,” de Ona said, “ultimately, Florida will benefit again.”

COMMERCIALOBSERVER.COM | SEPTEMBER 28, 2021 | 29

FEATURE

Real estate scion Robert Durst, now a convicted murderer, proved morbidly fascinating for decades

f you Google the name Robert, Robert Durst is the third celebrity Robert to come up in search results, behind Pattison and Downey Jr. He’s a smidge ahead of DeNiro.

Robert Durst, 78, is best known for two things: the trail of violent deaths he’s left behind, and being a scion of one of the wealthiest real estate families in the U.S. If he had played his cards right, he’d have been a multimillionaire, maybe a billionaire. Instead, he’s looking at the rest of his life behind bars.

While it’s not totally clear why Durst stood out amongst the thousands of people accused of murder every year, it appears to have something to do with his apparently limitless access to money. Even with 39 years of being under suspicion, and having been long disowned by the Durst family, he is worth $65 million, according to the website Celebrity Net Worth.

Or, it may have to do with his penchant for cross-dressing and his habit of urinating in strange places, like wastebaskets and convenience store displays. And there’s his rumpled, disheveled, Everyman shtick — his way of looking and acting disorganized and vulnerable.

And, of course, there’s the three unsolved murders that he was long suspected of and could never quite be proven to have committed. Make that two.

On Friday, Sept. 17, the day after Yom Kippur — the day of atonement — a Los Angeles jury convicted Robert Durst of the murder of Susan Berman in 2000.

Berman was supposedly Durst’s best friend, who helped him when he was suspected in New York of murdering his first wife, Kathie McCormack Durst, whose body has never been found. Berman, prosecutors said, called detectives pretending to be Kathie after her disappearance, helping to throw them off the trail.

The trial had been delayed 14 months due to the COVID pandemic. Durst watched his trial from a wheelchair, having been diagnosed with bladder cancer.

In the end, Durst’s hunger for fame might have gotten the best of him.

It was his idea to sit down with the person most obsessed with his story, Andrew Jarecki, for video-recorded interviews that appeared in Jarecki’s six-part documentary on the murder cases, “The Jinx: The Life and Deaths of Robert Durst,” which HBO televised in 2015, according to that documentary.

Jarecki also was the director of a 2010 movie, “All Good Things,” a fictionalized telling of Durst’s marriage to Kathie, starring 30 | SEPTEMBER 28, 2021 | COMMERCIAL OBSERVER

ALEX GALLARDO-POOL/GETTY IMAGES

By David M. Levitt

VERDICT RENDERED: Robert Durst, seen here in March 2020 just before COVID interrupted his murder trial, was convicted Sept. 17 by a Los Angeles jury for the killing of Susan Berman more than 20 years ago.

Ryan Gosling and Kirsten Dunst as the tragic couple.

Jarecki, who said in the documentary that he has a thing for “monsters” and what made them that way, could not be reached, despite voicemails and emails sent to his agent and lawyer.

On “Good Morning America” shortly after the conviction, he told George Stephanopoulos that he feared Durst, and that he hired security officers for protection just before filming the final episode of “The Jinx,” during which he confronted his subject with a letter only Berman’s killer could have written, identifying where authorities could find her body.

It was after that interview that Durst went to the restroom and, talking to himself and unaware that he was being recorded, said he had “killed them all” — the three victims whose deaths he had spent years evading responsibility for. This “confession” was played for the Los Angeles jury which found

him guilty of Berman’s murder.

One of his defense lawyers, David Chesnoff, told the Associated Press that Durst plans to pursue all avenues of appeal. He said the prosecution case left “substantial reasonable doubt.”

Shortly after Berman was killed, Durst was arrested in Galveston, Texas, accused of the death and dismemberment of an elderly neighbor, Morris Black, who lived in the same apartment house as him. Durst was acquitted of the murder, saying the killing was in self-defense, but admitted that he “panicked” and dismembered the body, parts of which ended up floating in Galveston Bay. (Durst had pretended to be a mute woman named Dorothy Ciner when he rented the apartment.)

After failing to show up at his arraignment in Galveston, Durst became a fugitive, until he was arrested for trying to steal a hoagie at a Wegmans in Pennsylvania, according to the HBO documentary.

Douglas Durst, Robert’s younger brother and head of the family real estate empire, had little to say about the conviction.

The Durst Organization that Douglas Durst chairs has been prominent in New York real estate for three generations and counting.

The family has interests in One World Trade Center, the tallest building in the Western Hemisphere; One Bryant Park, the New York home of Bank of America; and One Five One, a tower once known as Four Times Square and the Condé Nast Building; among many other New York buildings.

“Our thoughts are with the victims of Robert’s crimes,” Douglas Durst said in a brief statement emailed by his spokesman (it was their father, the late Seymour Durst, who picked Douglas to take over the family business, rather than the older Robert). “The jury’s conviction holds him accountable and, hopefully, brings a measure of closure to the families and friends of the people Robert has hurt.”

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FEATURE

What the tech giant’s $2.1 billion St. John’s Terminal buy says about the Manhattan office market

n a move that surprised absolutely no one in the know, Google announced via a Sept.

21 blog post from CFO Ruth Porat that it had bought the St. John’s Terminal project for $2.1 billion. Still, the move underscored in red a lot of what’s driving the Manhattan office market now.

Why is it not a surprise? A few reasons.

One was that Google has been leasing the 1.3 million-square-foot building at 550 Washington Street in Hudson Square since 2019. It has spent or is planning to spend hundreds of millions of dollars fitting it out to make it part of Google’s East Coast hub in Manhattan.

What’s more, according to a source with knowledge of Google’s real estate decision-making, it did not need to finance the St. John’s Terminal buy, of which CBRE brokered both sides. Google is also foregoing tax breaks for which it’s eligible for undertaking a renovation in Hudson Square, according to The City news site. It had the money on hand, in other words, and it could spend it.

That’s something that Google likes to do when it comes to property. The tech godzilla is known for preferring to own rather than rent.

And the lease it signed with Oxford Properties and the Canada Pension Plan Investment Board, the project’s sellers, included an option to purchase.

“Google is very deliberate about their real estate decisions, and I think they were extremely committed to the building,” Dean Shapiro, Oxford’s head of U.S. development, told Commercial Observer a few hours after the deal’s announcement. “They worked very closely with us; they bought into the design; it’s going to be completely on target with what they’re trying to do in terms of the workplace.

So it’s not surprising to us that they chose to add this as a permanent fixture in their real estate portfolio.”

Also a reason for real estate’s collective shrug at the news of Google’s big buy — the biggest office building purchase in the U.S., in fact, since The 601W Companies bought 410 10th Avenue from SL Green Realty Corp. for $952.5 million in December — is that the company has been hoovering up space in the vicinity of St. John’s Terminal for years.

It all started in 2010 with the $1.8 billion purchase of 111 Eighth Avenue, a nearly 3 million-square-foot building. Other gargantuan purchases in West Chelsea, the Meatpacking 32 | SEPTEMBER 28, 2021 | COMMERCIAL OBSERVER

COURTESY OF COOKFOX ARCHITECTS

By Tom Acitelli

SEEING GREEN: The St. John’s Terminal redevelopment, which will include outdoor terraces, will serve as the headquarters of Google’s Global Business Organization, which includes the company’s sales and partnership teams, along with nearby buildings at 315 and 345 Hudson Square.

District and Hudson Square include the $2.4 billion buy in 2018 of Chelsea Market at 75 Ninth Avenue and the approximately $600 million acquisition of the Milk Building at 450 West 15th Street a year later.

The moves, especially the 111 Eighth buy, signaled Google’s intention to build New York into its East Coast hub. The St. John’s Terminal deal solidifies those plans. It and Google’s other Hudson Square properties at 315 and 345 Hudson Square will serve as the headquarters of the company’s Global Business Organization, which includes Google’s sales and partnership teams. The company plans to grow its New York employee count to 14,000, about double what it was just three years ago.

Nos. 315 and 345 are already fitted out.

“Google has been fortunate to call New York City home for more than 20 years, during which time we have grown to 12,000 employees,” the company said in its announcement

of the St. John’s Terminal deal. “New York’s vitality, creativity and world-class talent are what keep us rooted here.”

Also likely keeping the company here: a leasing and sales market that increasingly favors, and relies on, technology companies.

The likes of Amazon, Facebook and Google have signed some of the biggest deals of the past 24 months. Facebook’s 730,000-squarefoot lease at Vornado Realty Trust’s under-development Farley Post Office project remains the city’s biggest office lease since the pandemic started.

Amazon, though it abandoned plans to open its second headquarters in Long Island City, Queens, a couple of years ago, has taken huge chunks of the five boroughs.

This includes the entire former Lord & Taylor building at 424 Fifth Avenue, where it plans to have 2,000 employees work, and numerous warehouse sites for deliveries. It also includes

anchoring that 410 10th Avenue that sold for $952.5 billion in December.

The moves reflect a perhaps generational shift in who does what in Manhattan. The number of office-using finance jobs in the borough declined 12 percent from 1990 through summer 2020, and the number of jobs in law dropped 6 percent, according to data from brokerage JLL. So there’s fewer bankers and lawyers in need of office space.

Meanwhile, during the same 30-year period, up and away went the number of office-using jobs in the technology industry by 112 percent.

Much of the demand among these burgeoning tech firms, too, is for top-shelf Class A. Hence conversions of older space like that which Google is undertaking in Hudson Square as well as Facebook at the Farley Post Office and Amazon at the Lord & Taylor site.

The recent leasing and sales, too, are all the more notable because some of these tech firms have committed to hybrid work models that will see a lot fewer employees coming into the office regularly post-pandemic.

Google, in fact, has said that about one-fifth of its staff will permanently work remotely, with the rest coming in a few days a week. Google reiterated its shift toward hybrid in its St. John’s Terminal announcement. (The acquisition is expected to close in the first quarter of 2022, and the revamped terminal to open in mid-2023.)

“As Google moves toward a more flexible hybrid approach to work, coming together in person to collaborate and build community will remain an important part of our future,” the announcement said. “It is why we continue investing in our offices around the world.”

Hybrid or not, the commercial real estate industry in New York will count Google’s buy as a win. The industry has struggled, including during the pandemic, with lackluster investment sales, a spike in sublease space that has driven office asking rents to historic lows, and that wobbling in the jobs count for traditional office drivers like finance and law.

If tech wants to fill the void, wonderful.

“The announcement by Google today reinforces what we’ve known all along: that New York is a great home for the tech industry,” Rudin Management CEO and co-chairman Bill Rudin said in a statement Sept. 21. “Google has been a great partner to this city, and their continual investment and growth here is a strong demonstration of their commitment to New York and of the strength of our economic future.”

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Keynote Speaker Larry Silverstein

Chairman Silverstein Properties, Inc

Speakers Wednesday, September 29, 2021 6:30 pm - 8:30 pm In-Person Honoree Cocktail Reception (Invite Only)

Thursday, September 30, 2021 4:00 pm - 6:00 pm

Melissa Burch

Executive General Manager, Development Lendlease

Ken Caplan

Tommy Craig

Global Co-Head Blackstone Real Estate

Regional Officer & Partners Hines

Ania Jastrzebska

Matt Kelly

Industry-Wide Virual Gala

Announcing a Special Two-day Celebration of the Power Honorees The last year has tested the limits of power; some of the mightiest people in the world were helpless in the path of an out-of-control virus. But with challenge comes opportunity. With business disruption comes innovation.

And with adversity comes leadership and resilience.

Please mark your calendars for the 2021 Commercial Observer Power Gala: Paragons of Resilience. This year’s gala will honor the bold, innovative, daring and unstoppable leaders who rose to the top by thinking differently, by challenging the status quo, and by rewriting the definition of excellence.

Host Sponsor

Jarett Fein

Co-Chief Executive Officer Kensington Vanguard

Managing Director - Commercial Real Estate Services - Accenture Operations Accenture

Kathleen McCarthy

Bruce Mosler

Global Co-Head Blackstone Real Estate

Chairman Global Brokerage

CEO JBG SMITH

Onay Payne

Managing Director Clarion Partners

Sponsors Scott Rechler

CEO & Chairman RXR Realty

Vince Toye

Association Partner

Managing Director, Head of Agency & Off-Balance Sheet Lending JPMorgan Chase

Peter Riguardi

Mary Ann Tighe

Chairman and President of the New York Region JLL

Chief Executive Officer, New York Tri-State Region CBRE

Peter Weiss

Simon Ziff

Chief Real Estate Officer Latch

President Ackman-Ziff

HURLEY HOUSE

KINGSTON, N.Y.

The Plan WHO’S WHO FOR HURLEY HOUSE

PHOTOGRAPHS BY DAVID MITCHELL

DESIGN AND DEVELOPMENT: MOLIVING CONSTRUCTION: SG BLOCKS

NOTHING LIKE THE WHEEL THING: Moliving is developing a modular hotel in the Hudson Valley consisting of separate, prefabricated cabins manufactured by Brooklyn builder SG Blocks that are... on wheels. Known collectively as “Hurley House” and branded a luxury eco-resort, each unit is 400 square feet and includes two outdoor decks on either end.

By Rebecca Baird-Remba The pandemic has put a damper on traveling and the hotel market, but it’s clear that Americans still want to roam. As coronavirus caseloads shift around the country and the world, travel preferences change, too — and often within a matter of days or weeks.

Developer Jordan Bem thinks he can address the unpredictable world of post-pandemic travel by creating a hotel that can be picked up and moved in a matter of hours. His company, Moliving, is developing a modular hotel in the Hudson Valley where the rooms consist of separate, prefabricated pods on wheels.

Those rooms — manufactured by 34 | SEPTEMBER 28, 2021 | COMMERCIAL OBSERVER

Brooklyn-based modular builder SG Blocks — will operate as standalone cabins, clustered around a central restaurant and reception building constructed using typical brick-andmortar methods. Known as Hurley House, the development is being marketed as a “luxury eco-resort” in Kingston, N.Y., which is about 90 miles north of New York City in Ulster County.

Each unit is about 45 feet long and includes about 400 square feet of interior space and two, 120-square-foot outdoor decks on either end. There is a small terrace in front of the front door, and then guests walk into a combined kitchen and living space with white walls, a minimalist gray couch and coffee

table, windows with electronically controlled shades, blonde wood cabinetry with built-in shelves, a small counter with a coffee maker, and a little fridge. The area overlooking the rear deck includes a king-sized bed, and is clad in dark wood and has floor-to-ceiling windows.

“The units are very neat in the sense that we created a five-star hotel room that can actually move,” explained Bem, Moliving’s CEO, who added that the pods had to be built to the standards of recreational vehicles (RVs) in order to be mobile. The units are also heavily insulated “almost like a bunker,” and can be run either on or off the grid, using power generated by solar panels on the roof, holding tanks and greywater recycling.

Essentially, Moliving owns the rooms; brings in its own hotel managers, restaurant operators and chefs; and works with existing land owners in places with more seasonal hotel demand.

They can also build the main lodge building for the restaurant and reception.

For example, “We operate 100 rooms in the summertime in the Hamptons,” Bem noted.

“We only have demand for 20 keys in the winter, and we’ll take the excess rooms and move them to some other location — Aspen or Wyndham.”

Besides the Hudson Valley outpost, the company is looking for hotel locations in Joshua Tree, Calif., Lake Tahoe, Nev., Sonoma, Calif., and Vail, Colo.

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FEATURED SPEAKERS

ADAPTING FOR A FLUID MARKET

Tommy Craig

Craig M. Deitelzweig

Peter Duncan

Regional Officer & Partner Hines

President & CEO Marx Realty

President & CEO George Comfort & Sons

Douglas Durst

David Falk

David Goldstein

Chairman The Durst Organization

President New York TriState Region Newmark

Vice Chairman, Director, New York Savills

HOST SPONSOR

WEDNESDAY, OCTOBER 6 8:30 AM ET From millions of square feet of new Class-A office towers coming to market to a national shutdown, reopening, and now the rise of tech tenants — the New York leasing market has been upended, restored and revamped all in just a year. Landlords and leasing experts alike are packaging their strategies to account for generational shifts and high-growth industries that are taking the front seat in driving new corporate real estate trends. Pair these shifting paradigms with a large-scale return to office this fall and it’s a perfect recipe for innovation and change. Will 2021 mark the beginning of a new era in real estate?

Callie Haines

Leslie Himmel

Brian Klansky

Executive Vice President and Head of the New York Region Brookfield Properties

Founder & Co-Managing Partner Himmel + Meringoff Properties

Regional Vice President View, Inc.

Mitti Liebersohn

Stefan Martinovic

Jonathan Mechanic

President & Managing Director, NYC Operations Avison Young

VP of Data Partnerships Placer.ai

Partner and Chairman of the Real Estate Department Fried Frank

The 2021 State of the Leasing Market Forum will deliver a real-time report and forecast on office leasing activity, and will highlight the leasing drivers and trends that are shaking up the industry.

HOST SPONSOR

Nelson Mills President, Chief Executive Officer, and Director Columbia Property Trust

Bruce Mosler

Jay A. Neveloff

Chairman, Global Brokerage Cushman & Wakefield

Partner, Chair, Real Estate Kramer Levin Naftalis & Frankel LLP

SPONSORS Mark Rosenthal

Chris Schlank

Chief Operating Officer HqO

Managing Partner Savanna

Nadir Settles

Colleen Wenke

Managing Director, New York Regional Head, Office, Americas Nuveen

President & Chief Operating Officer Taconic Partners

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