Mann Report November/December 2023

T H E F U T U R E O F R E A L E S TAT E I S S U E

N E W YO R K LOS ANGELES MIAMI HAMPTONS LAS VEGAS ASPEN

TRANSFORMATIVE TRANSITIONS: EIGHT EXIT ARCHETYPES EVERY REAL ESTATE COMPANY FOUNDER MUST KNOW

FINDING NEW TECHNOLOGY AT BLUEPRINT

DEFINING THE FUTURE OF COMMERCIAL REAL ESTATE: RESILIENCE, REUSE AND REINVENTION

An Optimist Shares His Outlook for Commercial Property in 2024 Dan Vitulli, Marcum LLP

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NATIONAL JEWISH HEALTH 55th Annual

A Winter’s Evening Celebrating the New York Real Estate & Construction Industries HONORING PETER G. RIGUARDI

Chairman and President, New York Tri-State Region Jones Lang LaSalle Brokerage, Inc.

Saturday, December 9, 2023

Pier Sixty, Chelsea Piers, New York | 6:30p.m. | Black Tie

HONORARY CHAIR Larry A. Silverstein Silverstein Properties, Inc. DINNER CHAIRS Marty Burger Silverstein Properties, Inc.

Mitchell L. Konsker Jones Lang LaSalle Brokerage, Inc.

Stephen B. Siegel CBRE

Paul N. Glickman Jones Lang LaSalle Brokerage, Inc.

Jonathan L. Mechanic Fried, Frank, Harris, Shriver & Jacobson LLP

Hilary Spann BXP

EXECUTIVE CHAIR

Glen J. Weiss Vornado Realty Trust

Wendy M. Siegel

EVENT CONTACT INFORMATION:

Claudia Shapiro 212.297.0857 ShapiroC@njhealth.org

Scan Now to Register or Donate njhealth.org/WintersEve

Funds raised will support research and care of lung, heart, immune and related conditions at the leading respiratory hospital in the nation.

They said it couldn’t be done.

We didn’t listen.

We’ve done hard things before, we do them all the time.

For most cancer patients, the usual options are surgery, chemotherapy, or radiation. So we’re working on ways to get the immune system to deploy billions of cancer-killing cells and help more patients survive.

When some people experienced mysterious COVID symptoms and had nowhere to go, our team created the first Center for Post-COVID Care.

It wasn’t that long ago we had to open up your whole chest for heart surgery.

Now we’re pioneering a bypass that goes through a few tiny incisions. With this surgery, we can get you back on your feet in weeks instead of months.

So if anyone ever tells you there’s no other way—don’t listen.

A NEW VIEW As we enter New York’s next chapter, our commitment to the City’s vitality, to our community, to our partners, to our tenants, and to our portfolio remains steadfast. We look forward to a bright and shared future.

Ownership/Management/Leasing • Tenant Representation Agency Representation • Co-GP and LP Real Estate Investments Scott Galin, Principal/CEO | 212.398.1888 | Handler-re.com

HANDRO PROPERTIES LLC

|

ESSH INVESTMENTS LLC

TODAY’S MARKETS MOVE MORE QUICKLY THAN EVER.

Meridian’s national dominance in multifamily financing gives us a unique vantage point from which to approach markets on our clients’ behalf. By leveraging our 30+ year relationships and depth of experience, we are able to see what others can’t and produce exceptional outcomes — especially in turbulent markets.

Remain informed and be agile with Meridian.

President & CEO Jeff Mann

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art

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Debra Hazel

Krystal Peguero

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Distribution

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Mitchell’s Delivery Service

Laurie Melchionne

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Copy Editor

Cover Photography

Geraldine Melchionne

Marcum LLP

Director of Communications and Marketing

digital media Editors Alexandra Baumbusch

Penelope Herrera

contributors

Director of Newsletter

Dan Colombini

Penelope Herrera

Division

Frank DeLucia

Laurie Melchionne

Cheri Phillips

Stan Eckstut

Cheri Phillips

Director of Special Events

Ken Gentert

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Mirusha Damiani

Merilee Kern

CS DesignWorks

Debra Hazel

Kris Kiser Ira Meister Vinod Palal James Philbin Heather Philip O’Neal Kyle E. Scheiner Del Williams Brad Zackson

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110 E. 9th Street CMC,

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The opinions expressed by our columnists are not reflective of the views and opinions of the publisher or editorial staff of Mann Report. Publication of such views and opinions does not constitute endorsement by Mann Report. Any reproduction, including but not limited to internet usage, is prohibited without the express written permission of the publisher.

mannpublications.com

No sacrifice short of the sacrifice of individual liberty, individual self-respect and individual enterprise is too great a price to pay for permanent peace.

– Clark H. Minor

It’s not easy being a real estate owner these days, which is why advisory firms like Marcum LLP exist. In an ever-changing and always confusing landscape, Marcum’s Real Estate Group provides financial, tax and accounting services to every major facet of real estate, from REITs to institutional managers to developers and more. With our focus this month on the Future of Real Estate, there’s no better group than Dan Vitulli and his team to offer perspective. We’re thrilled to have him and Marcum on the cover.

Next year will be one of growth for our company as well, as we expand our office space to offer more services to you, our readers and a bit more elbow room for our team. We’re fully

back in the office and are looking forward to seeing evem more of our neighbors.

I’d be remiss if I didn’t acknowledge the events in the Middle East that are still unfolding as I write. Like everyone, I was horrified by the unconscionable terrorist attack against Israel and pray for the innocent on all sides.

We from the Mann family and the Mann Publications family wish you a holiday season of peace, prosperity and joy. May we have a better world in 2024.

See you next year.

C

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Events

16

16 National Realty Club Foundation Hosts Annual Golf Outing

18 Lincoln Land Services VP Honored at JNF 15th Annual Long Island Golf Classic

20 S t a t e w i d e A b s t r a c t H e l p s S t . J u d e

News Briefs

Children’s Research Hospital with Fifth Annual Golf Outing

24 Commercial News 28 Residential News 32 Management News

44

36 Tech Talk 40 Breaking News

COVER FEATURE 44

An Optimist Shares His Outlook for Commercial Property in 2024

56

Features 50 Transformative Transitions: Eight Exit Archetypes Every Real Estate Company Founder Must Know

54

Finding New Technology at Blueprint

56 R e t a i l Tr e n d s i n U r b a n M i x e d - U s e Developments: A Vision for the Future

62 Defining The Future of Commercial Real Estate: Resilience, Reuse and Reinvention

64 S o u n d p r o o f i n g , W i t h o u t W i n d o w Replacement

66 Preventing E-Bike Fires in New York City’s Commercial Buildings

84

Colleges 82 New Members Join Fordham Real Estate Institute Executive Advisory Council

AEC 84 Skanska Deploys Zero-Emission Construction Machinery on Active Los Angeles Project

86 54D Opens Manhattan Flagship

Departments 9 One Mann’s Opinion 14 Editor’s Letter 68 Columns 90 Executive Changes 94 Commercial Corner: Ian Bell, Managing Principal and CEO, Olive Tree Holdings

96 By the Numbers: The Highs and Lows of the First Half

86

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John Kowalski Managing Director, Relationship Manager Office: 212.661.2307 Cell: 646.629.9586 jkowalski@websterbank.com

Mark Reid Managing Director, Relationship Manager Office: 215.900.1874 mreid@websterbank.com

Trevor Hintzen Director, Relationship Manager Office: 212.661.0739 Cell: 917.727.5272 thintzen@websterbank.com

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The information contained herein has been obtained from sources believed reliable. While we do not doubt its accuracy, we make no guarantee, warranty or representation about it. The prospective tenant should carefully verify each item, and all other information herein.

Editor’s Letter Welcome to the last issue of 2023, our annual year-end double issue.

But instead of looking back, we’re looking ahead — a challenging prospect, I know, in a world that can turn on a dime. But real estate is always in the state of evolving, and our contributors, as you’ll see, have stepped up to the challenge. This year, our feature writers have taken a decidedly practical view of the future, from soundproofing windows to make our lives a touch quieter, to how construction managers can work with the supply chain to keep projects on track.

Even my visit to the Blueprint proptech conference reveals that, increasingly, solution developers and their investors are looking to make tech easier and more intuitive to use.

Our friend Merilee Kern shows us how individual real estate owners can be planning for their own futures as they perhaps leave this industry behind.

In the meantime, whatever holidays you observe at year-end, I hope they’re filled with love and warmth. May 2024 bring us all health, happiness, prosperity and peace.

VISIT US AT mannpublications.com FOLLOW US ON INSTAGRAM @mannpublications

MEET THE TRI-STATE’S MOST ACTIVE UNDERLYING COOPERATIVE FINANCE TEAM Meridian negotiates and closes more than $1 billion in underlying cooperative loans and lines of credit annually

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PHOTO STORIES

National Realty Club Foundation Hosts Annual Golf Outing P H OTO S BY J AC K M I L L E R

Honorees Michael Kerr and Zachary Kerr, M&R Management

Don Gelestino, Champion Elevator Corp.; Guest; Jordan Witler, Vensure Employer Services and Guest

Brownette Cooke, Evans Electrical Services and Marvin E. Cooke Jr.

Dennis Graham, Thomas Mazzini and Steven Hobbs, Metropolitan Commercial Bank

The National Realty Club Foundation Annual Golf Outing was held on a beautiful October day at the luxurious Fresh Meadow Country Club. An overflow crowd of 110 golfers and 50 dinner guests played and attended the cocktail party and the festivities of the fundraiser.

Fabulous gifts were given to all players at the outing

and trophies to the honorees Michael and Zachary Kerr of M&R management. Substantial gift certificates for the Danny Balin Pro Shop were also given to winners of the golf tournament.

The National Realty Club (NRC) was founded in 1947 as a place for senior real estate principals and professionals to do business. The National Realty

16 MANN REPORT | NOVEMBER / DECEMBER 2023

Club Foundation was created as a branch of the NRC to raise monies for nonprofit charities that make New York a better place to live and work.

“Now more than ever, this is a critical problem,” said Jeffrey Mann, NRC president and son of Irving Mann, one of the NRC’s founders.

“New York has been facing tremendous challenges,

and we’re honored to come together and support the organizations that work day after day to improve the lives of all New Yorkers.

"I personally thank everyone who attended and our amazing committee who organized this great day. A great time was had by all and we look forward to seeing the same and new faces next year.”

PHOTO STORIES

Aaron Boyajian, Goetz Fitzpatrick LLP and Frank DeLucia, Hub International

Anthony De Ingeniis, Jaimee Nardiello, Maria Kefalas and Frank Soler, Zetlin & De Chiara LLP

Jared Paioff, Jarrett Roth and Steven Sladkus, SSRGA

Lou Switzer, The Switzer Group (second from left) and guests

Zachary Kerr, M&R Management and Darin Goldstein, SDG Management

Jacob Kravel, Cara Faske, Pace Advertising and Danny Mashal

Jeffrey Mann, Mann Publications; Dean Palin, Palin Enterprises; Frank DeLucia, Hub International and Neil Garfinkel, Abrams Garfinkel Margolis Bergson LLP

Dan Vitulli, Marcum LLP; Frank Niccio, O’Connor Capital Partners; Guest and Fred Berk and Steven Fischer, Marcum LLP

NOVEMBER / DECEMBER 2023 | MANN REPORT 17

PHOTO STORIES

Jerry Herz and Golf Chair Mark Engel

James Slattery and honoree Michael Karger

David and Lyn Buzen

Michael Karger and Alan Steinberg

Lincoln Land Services VP Honored at JNF Annual Long Island Golf Classic Over 100 philanthropists and corporate executives in the real

Funds raised by Jewish National Fund-USA’s (JNF-USA) part-

estate and finance industries attended Jewish National Fund-

ners (donors) and event sponsors support the organization’s

USA’s 15th Annual Long Island Golf Classic at Fresh Meadow

bold and visionary initiatives that are strengthening commu-

Country Club. Since 2008, the charity event has raised over

nities and improving the quality of life for residents in Israel’s

$4 million in support of the land and people of Israel.

Negev Desert and Galilee regions.

18 MANN REPORT | NOVEMBER / DECEMBER 2023

PHOTO STORIES

The exclusive event honored Michael Karger, vice president

tree had been planted in Israel to celebrate his birth.

of Lincoln Land Services, for his philanthropic leadership, as evidenced by his support of numerous charities including: The

“If you believe in fate, 52 years ago, this was sent to my par-

Fresh Air Fund, the Gregory Boff Charitable Foundation, the

ents, and 52 years later I’m once again being honored by this

ALS Association and the National Kidney Foundation.

incredible organization,” he said.

Being honored by JNF-USA was particularly meaningful to

The event was chaired by Mark F. Engel, Langsam Property Ser-

Karger, who showed attendees a JNF tree certificate stating a

vices Corp. and Josh Goldman, Bargold Storage Systems.

Steve Hazelkorn and Bruce Azus

Steve Cohen and David Levine

Long Island Golf Classic champions

The Steinberg Family

Mark Engel, Michael Kesselman and Michael Kessler

Golf Chair Mark Engel, Michael Karger and Jewish National Fund-USA Long Island Board President Lyn Buzen

Photos by Ben Gabbe Photography

NOVEMBER / DECEMBER 2023 | MANN REPORT 19

PHOTO STORIES

Matt McAllister, Charlie Stark and Ken Meccia

Corey Moeller, Bobby Harris, Larry Charles and Keith Foisset

Statewide Abstract Helps St. Jude Children’s Research Hospital with Fifth Annual Golf Outing Statewide Abstract Corporation raised $75,200 at its Fifth Annual St. Jude Scramble Charity Golf Outing held at Westchester Hills Golf Club in White Plains, New York. This brings the total raised to date to $335,200.

president of Statewide Abstract. “St. Jude is an incredible organization that has done so much for so many children and their families and we are proud to support their efforts.”

“We are incredibly proud of the amount of money we have raised for St. Jude. Each year we bring together over 150 golfers for this event and they always step up to support this important cause,” said Ken Meccia,

Matt McAllister, chief operating officer of Statewide, spearheaded many of the efforts behind the scenes. Mark Okamoto, Statewide Foundation board member, was the overall money raiser and Golf Committee Chair,.

Richard Klein, Robert Withers and Rich Flahive

Kathy Meccia, Connie Alimena, Ken Meccia and Tracy McMahon

Tom Sialiano, Mark Zarick, Mark Okamoto, John O’Brien and Frank Cop

Mark Okamoto, Richard Sarcone and Kevin Vlad, First American PHOTOS COURTESY OF STATEWIDE ABSTRACT

20 MANN REPORT | NOVEMBER / DECEMBER 2023

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COMMERCIAL NEWS

AVERY HALL SECURES $72.5M FOR GOWANUS MULTIFAMILY DEVELOPMENT JLL Capital Markets has arranged

and its joint venture partners, Decla-

$72.5 million in construction financ-

ration Partners and Bridge Invest-

ing for 544 Carroll St., a 17-story,

ment Group through their Qualified

ground-up, Class A multi-housing

Opportunity Zone vehicle. The loan

development in Brooklyn’s Gowanus

was secured through TD Bank.

neighborhood.

Scheduled for completion in Q4 of JLL worked on behalf of the borrow-

2025, the mid-rise project will com-

er, Brooklyn developer Avery Hall,

prise 133 units.

Photo courtesy of JLL

READYSPACES SIGNS FOR ENTIRE BUILDING AT 250 EAST SANDFORD BLVD.

Simone Development Companies

counsel Patrick Doyle represented

announced that ReadySpaces,

Simone Development in the lease.

a warehouse storage provider for small businesses, has signed

ReadySpaces provides flexible ware-

a long-term lease for the entire

house space for small and mid-size

110,300-square-foot building at

businesses, operating 32 warehouse

250 East Sandford Blvd. in Mount

facilities nationwide with a customer

Vernon, New York. Josh Gopan, vice

base of over 2,000 businesses, and

president of leasing, and in-house

more upcoming launches.

Photo courtesy of Simone Development Companies

SPIN OPENS MIDTOWN FLAGSHIP

Ping pong social club Spin opened

audience, Spin Midtown offers an es-

Spin Midtown, a flagship location at

cape and an immersive social experi-

1626 Broadway. Spin Midtown has

ence. Guests are transported into the

evolved its offerings to the public,

underground venue following a trail

while remaining true to the mission

of neon lights to a wall of art and

of connecting people around the

10 ping pong tables surrounded by

ping pong table, the company said.

inviting lounge seating and a magnetizing wrap-around bar featuring

Catering to an eclectic New York City Photo courtesy of Spin 24 MANN REPORT | NOVEMBER / DECEMBER 2023

a customizable ticker screen.

# 4 Manhattan Medium Team at Douglas Elliman* Frances Katzen LICENSED ASSOCIATE REAL ESTATE BROKER FKATZEN@ELLIMAN.COM | M: 917.705.8575 | O: 212.350.8575 @FRANCESKATZEN | @THEKATZENTEAM

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THE EVENTS

COMMERCIAL NEWS

20

22

23

ARIEL PROPERTY ADVISORS ARRANGES $19.1M SALE OF BRONX MIXED-USE

The Jewish Museum 26th Annual Most Amazing New York Art & Design Tour

Corenet Women’s Golf Outing Partners Ariel Property Advisors (Ariel) has with Bees Trees Water announced the $19.1 million sale of

24

REBNY Hosts Annual Golf & Tennis Outing

30

26

a prime affordable multifamily and

UJA-Federation of New York’s Hospitality units.

It benefits from tax abateDivision Honors Ian Schrager

ments through ICIP and 421a.

28

commercial property at 950 West-

Ariel Founding Partner Victor Sozio

chester Ave. in the Bronx.

along with Senior Director Jason Gold, Director Howard Raber, Pres-

The 12-story building includes 111 CHIP’s 21st Annual Golf & Tennis Outing

ident Founder Shimon Shkury 15thand Annual Hamptons Happening

residential units, a community facility

Supports and DirectorSWCRF Daniel Mahfar repre-

with seven office units and two retail

sented the seller.

Photo courtesy of Ariel Property Advisors

COLLEGES

SJTA AND IRG AGREE ON NJ INDUSTRIAL DEVELOPMENT LEASE

Crohn’s & Colitis Foundation

DEPARTMENTS

68

Developer Industrial Realty Group

mixed-use development with the po-

LLC (IRG) has reached agreement

8

One Mann’s Opinion

80

tential for multi-modal infrastructure.

with the South Jersey Transporta-

10

tion Authority (SJTA) on a ground

In July 2022, SJTA authorized Execu-

Having a Voice: Student Input Aids Design of lease of approximately 400 acres in Pratttive Director Stephen F. Dougherty to Residence the northwest corner of the Atlantic

execute an agreement for the devel-

City International Airport (ACY). SJTA

opment. IRG has also been work-

Editor’s Letter and IRG agree to work cooperatively

ing with Atlantic County Economic

towards the construction of a new,

86

Alliance (ACEA) on the deal.

102

CLUB PILATES SIGNS FOR NEW MIDTOWN EAST LOCATION AT 850 SECOND AVENUE

Tech Talk

The Articles

Executive Changes

Club Pilates has opened a 3,500-

Delgorio and Brett Greenberg, along

square-foot location on the ground

with Ariel Schuster, Ross Berkowitz,

floor of The Delegate, a condo tower

Andrew Stern and Jake Siegel of

built by Jack Resnick & Sons.

Newmark.

110

112

Commercial Corner:

By The Numbers: Jack Resnick & Sons, which owns Club Pilates was represented by Bruce Schanzer, president and More than Warehouses and operates retail condominiRipco’s Emily Kripitz and Beth Rosen, CEO of Cedar Realtythe Trust um at the base of The Delegate,

who are the exclusive brokers for the

was represented in-house by Fran

franchise in Manhattan.

Photo courtesy of Jack Resnick & Sons Bruce Schanzer 26 MANN REPORT | NOVEMBER / DECEMBER 2023

Schulte Roth & Zabel’s Real Estate Group

TRUSTED ADVISERS ON DEALS THAT DEFINE THE MARKET COMPLETING BILLIONS OF DOLLARS IN TRANSACTIONS ANNUALLY FOR MANY OF THE MOST INFLUENTIAL PARTICIPANTS IN THE REAL ESTATE INDUSTRY

Schulte Roth & Zabel LLP New York | Washington DC | London www.srz.com The contents of these materials may constitute attorney advertising under the regulations of various jurisdictions.

RESIDENTIAL NEWS

SALES LAUNCH AT UES GIORGIO ARMANI RESIDENCES SL Green Realty Corp., in partnership

Manhattan flagship at the corner of

with Giorgio Armani, have com-

East 65th Street — where an Armani

menced sales at 760 Madison Ave.,

store has stood since 1996 — this

The Giorgio Armani Residences de-

is the first-ever residential offering

velopment condominium project. At

in Manhattan where Giorgio Armani

press time, five of the 10 residences

personally guided the interior design.

remain available for purchase.

The residences are expected to be Situated above Armani’s new

complete in summer 2024.

Photo courtesy of Dbox

CENTURY PLAZA'S TOWER RESIDENCES REBRAND AS PARK ELM AT CENTURY PLAZA

Century Plaza in Century City in

representing owner Reuben Broth-

Los Angeles has rebranded its twin

ers. “This name and the new brand-

44-story residential towers as Park

ing encapsulate the grandeur of the

Elm at Century Plaza, evolving from

location, the architectural innovation

the Century Plaza Tower Residences.

and the unparalleled lifestyle we’ve curated.”

“The transition to 'Park Elm' is more than a rebranding; it's a culmination

Park Elm is the core of Century Pla-

of the vision,” said David Reuben, Jr.,

za's $2.5 billion transformation.

Photo via PRNewswire

SOTHEBY'S INTERNATIONAL REALTY EXPANDS IN FLORIDA

Sotheby’s International Realty’s

Prieto, who brings more than two

independently owned and operated

decades of real estate experience to

affiliate, Premier Sotheby's Interna-

the firm. The company will service

tional Realty, continues to expand

the city of Ocala and Marion County.

in Florida, with a new office in Ocala,

The expansion builds upon Premier

its 80th affiliated office in the state.

Sotheby's International Realty’s existing locations in Florida and North

The new office will be led and man-

Carolina, which now consist of a

aged by Managing Broker Carrie

total of more than 40 offices.

28 MANN REPORT | NOVEMBER / DECEMBER 2023

RESIDENTIAL NEWS

SALES BEGIN AT ANDARE RESIDENCES BY PININFARINA IN FORT LAUDERDALE Related Group and Italian design

condominium set to rise above Las

house Pininfarina have launched

Olas Boulevard in nearly 20 years.

sales for Andare Residences by Pininfarina, a new boutique con-

Residences, which range from 1,800

dominium development on Fort

square feet to over 4,300 square

Lauderdale's Las Olas Boulevard,

feet, feature open-concept living

just two miles from Las Olas Beach.

areas, floor-to-ceiling windows and

Featuring 163 bespoke residences,

views of the New River and the

the 45-story tower is the first luxury

Atlantic Ocean.

Photo courtesy of Related Group

LENDLEASE, LMXD AND DAIWA HOUSE ANNOUNCE CLOSINGS AT CLAREMONT HALL

Photo courtesy of Lendlease

Lendlease, LMXD (an affiliate of L+M

building, designed by Robert A.M.

Development Partners) and Daiwa

Stern Architects, provides residents

House Texas Inc., announced that

with majestic views of the Hudson

closings have commenced at Clare-

River, Riverside Park, Central Park

mont Hall in Morningside Heights.

and Midtown Manhattan.

Situated within the campus of Union

Claremont Hall buyers can choose

Theological Seminary (UTS), the

from 165 condominiums for sale

41-story, mixed-use condominium

ranging from one to four bedrooms.

ZILLOW: HOME VALUES SLIP IN SEPTEMBER

Home values took an uncharacteristic

0.1% and 0.4%.

step down in September, albeit a small

affordable markets, led by Hartford, Connecticut (up 11.1%); Milwaukee,

one at 0.1%, according to the latest

The typical home value now stands

Wisconsin (8.5%); Providence, Rhode

Zillow market report. Competition is

at $350,091 nationally, up roughly

Island (6.4%) and Virginia Beach, Vir-

easing faster than normal this fall as

2% from this time last year. Of the

ginia (6.2%). The largest declines are

buyers contend with the highest mort-

50 largest major metropolitan areas,

in pandemic-era hot spots Austin, Tex-

gage rates in more than 22 years.

31 have home values higher than a

as (-10%); Las Vegas (-4.3%); Phoe-

Between 2015 and 2019, monthly

year ago. The strongest annual home

nix (-4.2%) and San Antonio (-2.5%),

growth in September hovered between

value appreciation is in relatively

as well as New Orleans (-8.8%).

30 MANN REPORT | NOVEMBER / DECEMBER 2023

MANAGEMENT NEWS

DESIMONE CONSULTING ENGINEERING ACQUIRES DECIPHER Full-service engineering and con-

offices in London, Manchester and

struction consulting firm DeSimone

Dubai, Decipher offers bespoke con-

Consulting Engineering has acquired

struction consulting services, includ-

construction consultancy firm Deci-

ing quantum and project advisory,

pher. Decipher amplifies DeSimone’s

quantity surveying, project planning,

Construction Consulting Services

dispute resolution, expert testimony

arm in the United Kingdom.

and training. The acquisition of Decipher follows the addition of structur-

Based in Cheshire, England, with

al engineering firm DP Squared.

Photo courtesy of DeSimone

PEGASUS RESIDENTIAL TO MANAGE ARMADA HOFFLER'S CHANDLER RESIDENCES

Pegasus Residential, a third-party

passes 95,000 square feet of cre-

property management firm, has

ative loft office space, 40,000 square

formed a strategic collaboration

feet of retail and structured parking.

with Armada Hoffler to manage

Pegasus Residential will take the

The Chandler Residences, a new

helm of property management.

luxury development comprising 123 apartments, nine townhomes and

Amenities including a clubroom, a

five high-end lofts in Roswell, Geor-

scenic sky lounge and a rooftop sky

gia. The development also encom-

deck with a pool.

Photo via PRNewswire

SKANSKA TO BUILD CANCER CENTER IN LIVINGSTON, NJ

Skanska has signed an additional,

meters (approximately 140,000

$85 million contract with RWJBarn-

square feet), will provide outpatient

abas Health to build an ambulatory

cancer treatment. The plans call for a

care cancer center in Livingston,

parking garage also to be construct-

New Jersey.

ed on the site.

The five-story building on the

Construction started in September

Cooperman Barnabas Medical Cen-

2022 and completion is scheduled

ter campus, totaling 13,000 square

toward the end of 2025.

Photo courtesy of Skanska 32 MANN REPORT | NOVEMBER / DECEMBER 2023

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MANAGEMENT NEWS

TENNANT COMPANY ADDS TWO MORE SCRUBBERS TO FLEET Tennant Company has unveiled

when maneuvering in tight spaces

two additional products to its line of

and is suited to retail, healthcare, ed-

walk-behind floor scrubbers — the

ucation and hospitality applications.

T260 and the T391.

The T391 is a mid-size, walk-behind scrubber that comes in two differ-

Photo via Business Wire

The T260 is a small, 20-inch

ent scrub path sizes (28-inch and

walk-behind floor scrubber designed

32-inch). It is well-suited to clean

for quick, straightforward operation.

in healthcare, education, retail and

Its compact size allows high visibility

public environments.

TOPCON EXPANDS CONSTRUCTION LAYOUT PORTFOLIO WITH LN-50

Photo via Business Wire

Topcon Positioning Systems has

50 is designed specific to homebuild-

launched the LN-50 3D laser, the

ers, mechanical, electrical, plumbing

latest addition to the LN layout navi-

(MEP) trades, concrete contractors

gator family of instruments. Intended

and others — regardless of their

to be an affordable and easy-to-use

digital technology experience — to

solution for digital layout, the LN-50

achieve high-speed precision in their

has a 50-meter (164-foot) range

measuring and layout work, mitigat-

as compared to the longer-range,

ing the risk of errors that can lead to

full-featured LN-150. The new LN-

costly rework.

F.W. WEBB OPENS NEW LOCATION IN SCHENECTADY, NY

F.W. Webb Company, a wholesale

In addition to being a convenient,

distributor of plumbing, heating,

one-stop source for an extensive

HVAC, LP gas, refrigeration, pipe,

inventory of high-quality products,

valves and fittings in the Northeast,

expert advice and customer service,

opened its newest wholesale loca-

the Schenectady store features a

tion at 586 Broadway in Schenect-

training center that will offer live

ady, New York. The 20,500-square-

demonstrations, hands-on training

foot store is F.W. Webb’s fifth in the

and certifications. F.W. Webb Com-

Capital Region.

pany was founded in 1866.

34 MANN REPORT | NOVEMBER / DECEMBER 2023

Bringing Innovation to

property management Matthew Adam Properties is a long-time leader in bringing innovative ideas and programs to the properties we manage.

Contact us to find out how we can innovate your building to a new level.

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T E C H TA L K

COMPSTAK UNVEILS COMPSTAK ONE SUITE Commercial real estate data plat-

comprehensive platform.

form CompStak has launched

Photo via PRNewswire

CompStak One, a suite of products

Using verified CompStak data, com-

designed to provide insights and

bined with new datasets and meth-

analytics for industry profession-

odologies, CompStak One provides

als. CompStak One will combine its

users with extensive tools for making

vast database of lease comps, sale

investment decisions, valuing prop-

comps, property information, loan

erties and understanding market

data and analytics into a singular,

trends, the company said.

MYTRACK HELPS CUSTOMERS TAKE ADVANTAGE OF TAX CREDITS

Management Controls Inc. (MCI),

prenticeship requirements to qualify

is helping its customer base utilize

for the 48C(e) tax credit.

the Inflation Reduction Act’s 48C(e) tax credit with its MyTrack Platform.

Using existing Track data, customers

MyTrack automates time tracking

can request MCI assistance with

and can show the percentage of ap-

providing the data that contains

prentices companies have on hand,

wage-rate benchmarking to simplify

helping companies confirm they

the process of applying for

meet initial prevailing time and ap-

the program.

REAL ESTATE BUSINESS ANALYTICS UNVEILS REBA RENT

Real Estate Business Analytics

needs of today’s rental housing pro-

(REBA) has introduced REBA Rent,

fessionals, REBA Rent supports the

a pricing and revenue manage-

intricate demands of the multifamily

ment (PRM) system that leverages

sector that leads not only to a more

advanced analytics and strategic

efficient and more effective PRM

insights to empower multifamily

strategy, but also to one that builds

revenue managers.

trust with operators and asset managers. REBA Rent is in beta testing

Developed to address the evolving

36 MANN REPORT | NOVEMBER / DECEMBER 2023

with select clients.

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T E C H TA L K

ENTRATA LAUNCHES HOMEBODY, GIVING RESIDENTS EASY ACCESS TO SERVICES Multifamily industry operating sys-

affordability of the current housing

tem Entrata announced Homebody,

and rental markets. They are now

a fully integrated resident financial

integrated directly into Entrata.

services offering. Homebody will initially consist of three core prod-

Property managers will maintain a

ucts including rent reporting, deposit

single login for their residents and

alternatives and renters insurance to

their teams for a seamless experi-

help address common barriers to en-

ence. Site teams will now be able to

try for many residents, including the

point residents to a single source.

HOUSE ANALYTICS UNVEILS BRAND EVOLUTION AND EXPANDED SOLUTIONS

House Analytics, known for College

of data-driven solutions tailored to

House, a provider of data coverage

various real estate segments. From

and analytics across 270-plus colle-

student housing property analysis

giate markets, has rebranded to en-

to senior housing market insights,

compass College House and Senior

House Analytics partners gain ac-

House, expanding data solutions for

cess to sector-specific real-time data

commercial real estate.

and actionable insights, enabling timely and well-informed decisions

It now offers a comprehensive range

in the dynamic real estate market.

TITLELOOK EXPANDS TO OFFER LENDERS AUTOMATED TITLE REVIEW

TitleLook by Mainspring Services is

on to other programs and processes.

offering automated title review to lenders, GSEs and other organi-

TitleLook extracts previously inac-

zations in mortgage banking. The

cessible information and converts it

Software as a Service (SaaS) solu-

into standardized digital data. Once

tion reviews title reports from any

digitized and organized, title infor-

underwriter or title agent to provide

mation is examined against Title-

automatic and consistent analysis,

Look’s knowledge library as well as

as well as digital data that can flow

customizable factors.

38 MANN REPORT | NOVEMBER / DECEMBER 2023

Fried Frank Where major real estate transactions happen “An extremely talented real estate group with an impressively deep bench: the team is ideal for handling the most complex matters.”

— Chambers USA

HUDSON YARDS Counsel to Related Companies and Oxford Properties Group in connection with the development of and all leasing activities at the 26-acre Hudson Yards on the West Side, the largest private development in Manhattan since Rockefeller Center.

CHELSEA MARKET Counsel to Google in connection with its US$2.4 billion acquisition of Chelsea Market in New York City.

BLACKROCK HEADQUARTERS Counsel to BlackRock in its 850,000square-foot lease for its planned headquarters relocation to 50 Hudson Yards.

MANHATTAN WEST Counsel to Brookfield Property Partners on all aspects of the development of Manhattan West in the Hudson Yards District, including its recent lease to the National Hockey League.

PENN STATION Counsel to Vornado Realty Trust and Related Companies on the redevelopment of Penn Station, including the redevelopment of the James A. Farley building and construction of Moynihan Train Hall.

CENTRAL PARK TOWER Counsel to J.P. Morgan, as lead lender, in its US$900 million construction loan syndication to Extell Development for the development of Central Park Tower.

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ONE VANDERBILT Counsel to SL Green Realty Corp., including all zoning approvals, in connection with the development and leasing of One Vanderbilt Avenue, an iconic 1,401-foot tall, 1.7 million square foot office tower being constructed on the full block to the west of Grand Central Terminal.

20 TIMES SQUARE Counsel to Maefield Development in its approximately US$1.5 billion acquisition of the EDITION hotel, retail, and signage project known as 20 Times Square.

JP MORGAN CHASE HEADQUARTERS Counsel to JP Morgan Chase in connection with various aspects of its planned 2.5-million-square-foot headquarters redevelopment at its 270 Park Avenue location.

BREAKING NEWS

ABS SIGNS HIGH-END FASHION TENANTS AT 210 11TH AVE. ABS Partners Real Estate has

the designer and fragrance brand,

signed leases with two high-fashion

leased 3,740 square feet of head-

tenants at 210 11th Ave., newly re-

quarters showroom and office space

branded as The Chelsea Arts Center.

on the second floor for five years.

Designer Gabriela Hearst has ex-

The ABS brokers were Audrey

panded its space to 11,741 square

Novoa, Benjamin Waller and Gregg

feet, comprising the full floor at the

Schenker. Allyson Bowen of Savills

building, while Narciso Rodriguez,

represented Narciso Rodriguez.

Photo courtesy of ABS Partners

GLOBAL CEMENT AND CONCRETE ASSOCIATION ELECTS GONZÁLEZ PRESIDENT Fernando A. González, CEO of

His priorities during his two-year

Cemex, has been elected as the new

term include encouraging regulation

president of the Global Cement and

that diverts municipal and industrial

Concrete Association (GCCA). The

waste from landfills to energy solu-

GCCA’s members account for 80% of

tions including substitution of fossil

global cement production capacity

fuels in cement kilns, promoting

outside of China and have commit-

building codes and norms that allow

ted to achieving net zero CO2 emis-

the extensive adoption of lower-car-

sions by 2050.

bon cement and concrete products.

Photo via Business Wire

JPAR PARTNERS WITH CUBICASA

In one of its first partnerships with

OneStop Hub.

a residential real estate brand, JPAR

Photo via PRNewswire

has announced a partnership with

The CubiCasa app can scan the

CubiCasa, a creator of floor plan

property using almost any mobile

technology to bring a floor plan to

device. Agents can then upload the

every listing. Effective immediate-

scan on-site or at their convenience.

ly, agents may now register for a

CubiCasa transforms the scan into a

JPAR-sponsored CubiCasa ac-

professional-grade floor plan, which

count, accessible through the JPAR

is delivered within six to 24 hours.

40 MANN REPORT | NOVEMBER / DECEMBER 2023

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BREAKING NEWS

NELSON WORLDWIDE PARTNERS WITH BANGALORE-BASED STUDIO CHINTALA Architecture, design and strategy

team in Bangalore and build greater

firm Nelson Worldwide announced

efficiency into the overall firm.

a strategic partnership with Studio Chintala, an architecture firm that

In addition to the overlap of time

will operate as Nelson’s Bangalore

zones in both countries, creating a

studio, growing its footprint in India.

24-hour work cycle, Studio Chin-

Studio Chintala will mirror the firm’s

tala leadership and staff possess

practice areas, allowing all members

extensive experience working in the

to collaborate with the extended

United States.

REDFIN: HOMEBUYERS MUST EARN $115,000 TO AFFORD THE TYPICAL U.S. HOME

A homebuyer must earn $114,627 to

“Although new listings are ticking up

than a year ago to afford the typical

afford the median-priced U.S. home,

slightly, inventory is still near record

home, the biggest percent increase of

up 15% ($15,285) from a year ago

lows as homeowners hang onto their

the major U.S. metros. Homebuyers in

and up more than 50% since the

low mortgage rates—and that’s prop-

Miami need to earn $143,000 annually

start of the pandemic, according to

ping up prices,” said Redfin Economics

to afford the area’s typical monthly

tech-powered brokerage Redfin. The

Research Lead Chen Zhao.

mortgage payment of $3,580, and

median household income was roughly

Newark buyers need to earn approxi-

$75,000 in 2022 (the most recent year

In both Miami and Newark, New Jer-

mately $160,000 to afford that area’s

for which income data is available).

sey, homebuyers must earn 33% more

$3,989 payment.

NORTH BRIDGE ANNOUNCES $50M C-PACE FINANCING FOR BERKELEY HOTEL

North Bridge announced a $50 mil-

hotel financing to date.

lion commercial property-assessed clean energy (C-PACE) refinancing

The LEED Gold was developed by

for the Residence Inn Berkeley, a

the founders of Pyramid Global Hos-

331-key, full-service hotel in Berke-

pitality. The financing was arranged

ley, California. This closing rep-

by Lantern Real Estate Advisors.

resents the largest C-PACE trans-

Prime Finance provided a mezzanine

action for the hospitality industry in

loan alongside a senior loan from a

2023 and the fourth largest C-PACE

debt fund.

Photo courtesy of North Bridge 42 MANN REPORT | NOVEMBER / DECEMBER 2023

RSA is the largest real estate trade association in New York. We’re a non-profit that has one priority: Housing New York Since 1983, the Rent Stabilization Association has worked for property owners in good times and bad. Now, during a public health crisis that is straining the economics of our industry, we are working hard to keep tenants in their homes and ensure that owners can continue providing safe and adequate housing.

RSA represents over 25,000 members with more than one million apartments. We provide cost effective and practical solutions to help owners run their buildings. In Albany and at City Hall, we are a forceful and consistent voice for the common sense needs of property owners. Our membership is deeply diverse and in every neighborhood. Though government and policy is unbalanced now, we’ve fought back through tough times before. And we’re doing it now.

We advocate for programs and funding.

We provide services to help our members comply with all laws and regulations.

We fight against reckless policies that unfairly target the industry.

Our counselors help members with any problems or government agency issues that come up.

Our monthly RSA Reporter is an industry must-read, always providing information necessary to keep owners up to date on compliance issues and other policies. We have weekly email blasts, policy action alerts, and updates on political and legal issues.

We are constantly fighting for policy that provides a fair balance to the needs of both building owners and their tenants.

123 William Street, New York, NY 10038 · 212-214-9200 · WWW.RSANYC.ORG

C O V E R S T O RY

An Optimist

Shares Their Outlook For Commercial Property In 2024

As partner-in-charge of accounting and advisory services firm Marcum’s national real estate practice, Dan Vitulli relies on more than two decades of experience in the industry to deliver his clients actionable advice on everything from audits to acquisitions. His diversified practice covers all asset classes including residential, commercial, hotels and industrial properties. No stranger to forecasting, Vitulli counsels clients on what they can anticipate as they wrap up a tough 2023 and look toward what they hope to be brighter horizons.

With one eye on the difficulties introduced and stemming from the pandemic and another on what’s to come, Vitulli’s outlook for the year ahead balances a healthy optimism with the caution and patience of a practically minded realist.

Looking Back: Closing the Book on a Difficult Period With the poise of an industry veteran, Vitulli lists the industry’s challenges over the past few years: rising rates, falling demand, mortgage obligations coming due and the emergence of a remote workforce.

DAN VITULLI V I T U L L I P H OTO CO U RT ESY O F M A RC U M L L P

44 MANN REPORT | NOVEMBER / DECEMBER 2023

C O V E R S T O RY

“In the short term,” he said, “all of these issues will continue to affect the industry, particularly in gateway and tertiary markets, and for property owners with bills coming due.”

Vitulli was relatively early in his career during the Great Recession. He saw first-hand the consequences of that broad economic recalibration, as well as a strong and unexpectedly swift recovery. With that experience in mind, he is among the industry’s senior career professionals who can recognize the unique troubles of an industry in flux without losing sight of the opportunities in a troubled market. From his early instructive experience, he has internalized the importance of facing challenges without getting bogged down by them.

“To serve clients, you need to be able to help them through their immediate concerns and recognize the gravity of the difficult circumstances they may be facing.

But it’s just as important, or maybe more so, to keep an eye on the horizon, see what’s coming, and help identify opportunities that might be easy to miss,” Vitulli said. “A client mired in challenges can miss the forest for the trees.

Offering a counterpoint isn’t just about morale; it’s a great way to deliver value in a challenging environment. Be the extra pair of eyes they need to see what they may not be able to. It’s the same principle in more favorable

circumstances. In those cases, you

— offer the best product. In

negative implications when it

might say be saying the opposite,

most cases, that means investing

comes to the future of interest

‘Plan for the rainy days.’”

in modernization or expanding

rates, I think it’s a promising sign

the amenities available.”

for commercial property. A lot of

What Vitulli sees ahead in 2024

businesses and executives have

is, if not a complete course cor-

Vitulli’s optimistic outlook centers

had a few years to experiment

rection, at least the prospect of

on the hope that interest rates

and now know what they’re miss-

significant positive changes within

will stabilize in 2024 and indica-

ing with a remote workforce,” he

the industry.

tors suggesting that hybrid work

noted. “No matter what the fu-

arrangements are bringing em-

ture of work looks like, there will

The Long Term: Inflection Point

ployees and employers alike back

be a need for the shared space

According to Vitulli, 2024 could

into commercial office buildings.

offices offer. We may not see a

prove to be a turning point for

return to the standard five-day

commercial office property — par-

“While we have seen rents com-

workweek across the board, but

ticularly for owners and developers

ing down in terms of cost per

there’s less appetite for fully re-

with enough accessible capital to

square foot and vacancies increas-

mote work arrangements.”

build out the amenities renters seek

ing, revitalization efforts will ena-

in a more favorable market.

ble B & C class buildings to com-

Analyzing the Silver Lining

pete for those corporate tenants

He pointed to one of America’s

“Renters of office space know

that are just starting up, relocat-

most resilient post-pandemic mar-

the position they’re in. From that

ing, expanding, and experiencing

kets as indicative of where the glob-

perspective, it’s easy to prior-

growth,” he observed.

al market may be headed.

efforts because we’re back to the

Furthermore, “while high employ-

“In Miami, values aren’t just hold-

first rule in competitive business

ment may have some potential

ing; they arere, in some cases,

itize your business development

NOVEMBER / DECEMBER 2023 | MANN REPORT 45

C O V E R S T O RY

actually rising,” he said. “A lot of

But there can be too much of a

companies found it appealing

good thing.

to uproot and move to Miami

building is a marvel that’s hard For owners and developers

to replicate without a complete

outside of South Florida, he

rebuild. Still, renovated Class-

and South Florida, particularly

“Miami itself is losing some of

offered tried-and-true advice

B and -C buildings can deliver

those in private equity. They’re

its luster with the influx of ar-

that has held up over the ag-

the advantages that small and

attracted by the tax laws and

rivals,” Vitulli continued. “Low

es, namely, to tempt renters

medium-sized businesses will

the weather. The knock-on

living costs were part of the

through revitalization and ren-

find very attractive,” he said. “I

effect is that the real estate

initial attraction, but more

ovation. But what exactly does

worry most for the properties

industry there is insulated from

people have arrived, leading to

revitalization mean to him?

that can’t afford to compete in

the pain other markets are fac-

higher prices on standard ex-

ing. Not every city can be as ap-

penses. That’s caused renters to

“From my perspective, the

are cautious to a fault. I expect

pealing as Miami, but Miami is

look outside of Miami, allowing

term covers everything from

that those who are content to

on the crest of a wave that will

other Florida communities to

improving on-site amenities

stand still right now will be at

eventually arrive elsewhere.”

get some of the benefits that

to a complete re-zoning or

the greatest risk of being left

Miami has enjoyed.”

rebuild. The modern Class-A

behind.”

46 MANN REPORT | NOVEMBER / DECEMBER 2023

this way, as well as those that

C O V E R S T O RY

had relied on it for years to reach

Despite a relatively rosy outlook of

predictions can be worth, but we

Companies that don’t have capital

consumers. The concern was

what’s ahead, Vitulli is realistic about

do know that before rates can

to invest can still attract tenants

borne out and realized in some

the short term. More pain is coming

come down, they’ll need to stop

in their own ways.

ways, but in others, it was mas-

over the next several months.

rising. And for the market to feel

sively over-exaggerated,” he said.

confident in expansion, we will

“The new way of working is all

“These sprawling properties may

“A lot of the market is underwa-

need to feel that rates are stable

about accommodation and com-

not be home to the same stores,

ter, with mortgages coming or

and advantageous to investors, so

promise. Developers that can’t

but they didn’t go anywhere,

past due. There are workouts be-

that’s something concrete to look

invest in large-scale or costly ren-

and they’re still bringing people

ing hashed out, and lenders and

out for.”

ovations can give tenants what

out in large numbers. They didn’t

banks reclaiming properties. For

they want in other ways,” Vitulli

die out as predicted by so many.

example, we are seeing buildings

Having found so much silver lin-

suggested. “Maybe by being more

They just became something else

move for deep discounts in San

ing, though, does Vitulli lose sleep

flexible with their agreements or

— and in the new forms they’ve

Francisco and Chicago,” he said.

over a worst-case scenario?

incorporating shared spaces that

taken, they’re successful.”

“Those that aren’t selling may be

tenants can use for events. Being

the subject of conversations be-

“Certain sectors are strong, par-

creative and accommodating

Office properties may not ulti-

tween lenders and borrowers, but

ticularly the industrial and rental

can help close deals in this super

mately transform into spaces for

certainly there are some positive

markets, which are doing well.

competitive market — and those

entertainment centers, multifamily,

outcomes there as well. In most

When you consider repurposing,

are major selling points that come

or industrial properties like malls,

cases, I think banks and lenders

and the success smaller buildings

at no cost.”

but Vitulli sees a similar trajectory

would much rather figure out

have had transforming into resi-

for distressed office space.

workable extension and restruc-

dential conversions, there will be

It’s a comforting thought that the

turing plans than assume owner-

use cases for virtually everything.

old rules still apply. Despite tight

“Retail was in a slump for years

ship of commercial property, so

It might be tougher with larg-

lending and less demand, the

just as [other] commercial real

there’s a lot on the table for those

er buildings, but those conver-

secret to success remains offer-

estate is now. In periods of dis-

with flexible lenders. With that

sions are underway in places like

ing the best option. Is it wishful

tress, firms with foresight acquire

said, special servicers and real es-

Chicago, so we will wait and see

thinking? Vitulli doesn’t think so.

properties they feel are underval-

tate attorneys are certainly busy

how they turn out,” he said.

He’s seen the same story play

ued. When things look bleakest

now and will continue to be.”

out in another sector, albeit on a

for a sector, there are still folks

smaller scale.

out there with a vision for what

Like just about everyone, Vitulli

be seeing more buildings going

is possible,” he said. “Bold strat-

is watching the actions of the

through the bankruptcy process,

“The parallel I like to draw is to

egies don’t always succeed, but

Federal Reseve closely.

he noted.

the American mall. For years, it

in countless cases, companies

was a cultural touchstone and

that take risks on new ideas have

“If they don’t raise rates at the

“Even in those cases, while dev-

home to local branches of some

been proven right. It just takes

next several opportunities, there

astating for one party, someone

of the world’s premier brands.

ingenuity to see the opportuni-

will be more comfort that we’ve

is on the other side of the bank-

Then things changed with the

ty and capital to take the project

found a steady state for the mar-

ruptcy,” he added. “Beyond that,

internet, and it wasn’t long until

on. I have no doubt that there

ket, prices will have reached their

it’s also true that even the most

the mall was declared a product

are many such visionaries with

natural bottom, and we will see

troubled infrastructure asset can

of a bygone era. Between e-com-

designs on how commercial prop-

deal activity kick on. We’ve heard

have huge value in land costs.

merce platforms, efficient global

erty will evolve.”

a lot about how we’ll land eco-

That’s one of the great things

shipping, and other modern con-

The absolute worst case might

nomically, soft, hard, or some-

about the real estate industry:

veniences, the mall was less and

The Short Term: Transition

where in between,” he said. “That

there is fundamental, tangible val-

less appealing to the retailers that

Period

ongoing conversation shows what

ue almost anywhere you look.”

NOVEMBER / DECEMBER 2023 | MANN REPORT 47

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F E AT U R E S | M A N A G E M E N T

Transformative Transitions: Eight Exit Archetypes Every Real Estate Company Founder Must Know

By Merilee Kern

A real estate founder can have an entirely new career after departing

Business transitions are important for several reasons. They enable real estate company founders to navigate the opportunities and challenges that come with change, often fostering continued innovation and success in an ever-evolving marketplace. In the daunting, yet exhilarating, journey of real estate sector entrepreneurship, founders traverse various roles that evolve with their venture. Today’s thriving U.S. economy, marked by accelerated growth, is providing a favorable environment for founders to move on to the next phase of their professional lives. For those traversing the entrepreneurial world, in particular, these transitions mark a time of great change — and the unknown that lies ahead can spur tremendous stress. The key is understanding how an exit will operate so that you elegantly navigate the situation.

A real estate founder’s exit protocol is a crucial consideration as he or she, and investors, plan to exit their investments while maximizing returns. For real estate companies, the exit paradigm should be intentional and proactive, not reactive to the unforeseen, which can undermine a seamless transition that maximizes value for all stakeholders involved.

“Whether you are leaving corporate America to start on your own enterprise or leaving a company you’ve built from scratch to focus on the next part of your impact journey, many face the same challenges,” noted

50 MANN REPORT | NOVEMBER / DECEMBER 2023

business exit strategist and coach Jerome Myers, PE, MBA, PMP. “While the circumstances of each person’s exit differ, most if not all can be summed up in a few specific exit scenarios that every founder in today’s economy faces.”

While they might look, feel and function differently, understanding the quintessential exit archetypes can prove critical in helping the founder perform at his or her best. Here is Myers’ breakdown of the primary eight: Exiting The Traditional Career Path The first phase of this transformative transition is leaving a traditional corporate role or life path. This step involves wrestling with questions of purpose and ambition and requires introspection and careful planning.

The robust U.S. economic growth, represented by a 2.4% annualized rate of GDP growth in the first half of 2023, provides a favorable tailwind for individuals making this transition.

This stage probably will feel like the biggest transition for those doing it. It’s where all that you once knew is gone and everything feels foreign and new. This should not be something that you run away from but embrace. Given the stats above, right now might be the best time to take this leap.

F E AT U R E S | M A N A G E M E N T

CEO 1.0 (Chief Everything Officer) In the next phase, founders embody the role of “CEO 1.0” or the “Chief Everything Officer.” They are at the helm of their venture, crafting business plans, securing initial funding and birthing their entrepreneurial dream. The thriving economic conditions, marked by increased consumer and government spending and a rise in business inventory investment, further fuel the growth potential at this stage.

This is the beginning of your next journey, the start of what you hope

on stakeholder relationships. The rise in personal savings recorded in the second quarter provides financial flexibility for strategic growth and succession planning.

Exit The exit phase involves founders selling their businesses or stepping down from their operational roles. In the current economic environment, with recession fears diminishing due to falling inflation and a robust jobs market, this phase can offer potentially significant financial returns.

Building Your Post-Exit Portfolio Post-exit, founders diversify their wealth by building an investment portfolio in the "Building Your Post Exit Portfolio" phase. The recent interest rate hike by the Federal Reserve, aiming to curb inflation, provides a favorable environment for investment in real estate, stocks, bonds or other startups.

Philanthropy and Legacy The final phase, Philanthropy and Legacy, provides founders the opportunity to leave a lasting impact by contributing to causes they deeply care about. Despite the ongoing economic recovery, the role of philanthropy remains crucial, offering founders the chance to leverage their wealth for societal betterment.

to accomplish. It is here where you visualize your dreams and begin to make them a reality. It’s time to embrace the unknown and make it seen.

Product Manager/Thought Leader Founders then transition into a dual role of Product Manager/Thought Leader, intertwining strategic product management and thought leadership. They refine their business’ value proposition and engage with customers while sharing unique insights and ideas publicly. This role, critical in a growth-oriented economy, helps shape public opinion and add credibility to their venture. This is when your company enters the public eye, which leads to scale and widened adoption of the company’s solution.

CEO 2.0 (Chief Executive Officer) Upon establishing their business, founders assume the CEO 2.0 role, overseeing the bigger picture, managing the team and setting strategic directions. The presence of a solid jobs market, as evidenced by the addition of 209,000 jobs in June 2023, aids in attracting talent and scaling operations during this phase.

Board Chair As board chair, the founder steps back from daily operations to guide the company’s strategic direction, ensure its financial health and focus

“During each of these eight exits, it’s imperative to note that the founder will experience a phenomenon that will test their mental resilience, which is known as the ‘Founder’s Exit Paradox,’” Myers said.

“The Founder’s Exit Paradox refers to the comprehensive psychological disengagement experienced by founders, which encompasses behavioral, emotional and cognitive aspects. This involves understanding how these processes occur before and after physical exits, and how the experience impacts the way individuals move forward. The Exit Paradox often produces similar feelings as an existential crisis where Newly Exited Operators — or NEOs — begin questioning the meaning and purpose of their life, although the trigger in this instance is due to a major accomplishment.”

According to Myers, when a founder or NEO experiences the Exit Paradox, they will wrestle with what he calls “6 Centers of Doubt,” which are: Self-image Clarify your guiding principles and what’s holding you back and adopt a new outlook on life that empowers. Founders who are in this stage of the Paradox will ask questions such as: • Who am I now that I’ve “won the game?”

• What do I do without the hyper-focused routine I’ve had for years?

• Do I even deserve this?

Relationships.

Identify relationships that are not mutually beneficial and rebalance or eliminate them, increase access to resources and reposition yourself as a person of tremendous value. Founders who are in this stage of the Paradox will ask questions such as: • What are the people in my life really after?

• Why don’t my family and friends understand I need time to figure this all out?

NOVEMBER / DECEMBER 2023 | MANN REPORT 51

F E AT U R E S | C O M M E R C I A L

•

Does my marriage make sense anymore?

Work Cultivate inspired work by finding the connection between income, influence, impact and interest. Founders who are in this stage of the Paradox will ask questions such as: • What does work mean now that I have exited?

• Were all the sacrifices I made to get here worth it?

• What’s next?

Health Create more energy, reduce mind fog and increase your quality of life.

Founders who are in this stage of the Paradox will ask questions such as: • Did I give away too many years to my business?

• Am I going to use all the wealth I built to earn back the health I lost?

• Can I make adjustments to live with fewer health risks?

Prosperity Improve your financial position to increase your time and location freedom. Founders who are in this stage of the Paradox will ask questions such as: • I can afford it. Why should I even give it a second thought?

• Why shouldn’t I enjoy all the money I earned?

• Who are you to give me advice about money?

Significance Make meaningful and positive contributions outside of your home.

Founders who are in this stage of the Paradox will ask questions such as: • If I died today, who would carry my casket?

• Who do I trust to honor my memory after I’m gone?

• What’s the best way for me to use my wealth to help others and do good?

“I’ve found that most people undergoing an exit transition are seeking a deeper and more meaningful state of fulfillment,” Myers said. “They are also in a new place where they are struggling with the Six Centers of

Jerome Myers (Photo courtesy of Merilee Kern) Doubt. But it’s not their fault. The ‘American dream’ is all about creating financial freedom and we have been collectively programmed to chase it. All too often, when we ultimately find that financial success, we realize it probably isn’t what we should have been chasing as the ultimate end-game. Many in transition desire the kind of gratification that comes with self-actualization.”

The eight exit strategies detailed above represent the cyclical journey of a founder from their initial foray into entrepreneurship, through their venture’s growth and eventual exit, to their legacy-building activities.

The current economic landscape in the U.S., as characterized by its promising growth, a robust jobs market and increasing control over inflationary conditions, creates a conducive environment for a founder to flourish amid these transition strategies, highlighting his or her relevance and maximizing profitability in today’s dynamic economic scenario.

Merilee Kern is an internationally regarded brand strategist and analyst who reports on noteworthy industry change makers, movers, shakers and innovators across all B2B and B2C categories. This includes field experts and thought leaders, brands, products, services, destinations and events. She is the founder, executive editor and producer of “The Luxe List” as well as the Host of the “Savvy Ventures” business TV show that airs nationally on Fox Business TV and Bloomberg TV and the “Savvy Living” lifestyle TV show that airs in New York, Los Angeles, San Francisco, Miami, Atlanta and other major markets on CBS, Fox and other networks.

52 MANN REPORT | NOVEMBER / DECEMBER 2023

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F E AT U R E S | T E C H N O L O GY

FINDING NEW TECHNOLOGY AT BLUEPRINT

BY D E B R A H A Z E L

Blueprint, the proptech conference held

is global,” Sroka said. “Real estate is local

“Money isn’t free anymore,” Martino ob-

annually in Las Vegas, has seen its share of

and regional.”

served. “Capital is going to people who are

changes over the last three years. In 2021,

focused on driving value solutions. First

the show seemed all about venture capital,

His experience also allowed him to “see

with potential investors looking for “that next

under the hood” of payment systems and find

big thing,” and tossing money around to

out what was missing. That was a one-stop

Constrained capital means fewer compet-

see what would stick. Last year, the show’s

software that can track deals from beginning

itors, but it also means fewer transactions,

speakers and exhibitors seemed much more

to end, can organize files and historical data

as residential volume has declined in light of

practical, focusing on real world problems,

in a central location to ease decision-making

higher mortgage rates.

with investors seemingly much more cau-

and manage teams.

tious about their monies.

American Financial takes a long view.”

“You have to have a good business plan, “We’re where the real world transacts the

with basic fundamental business metrics,”

This year saw an even more conservative

internet,” Sroka noted. “A lot of very important

Martino said.

landscape for investors.

info is trapped in documents and in people’s heads. We allow the buy side to evaluate and

“The market and world have changed quite

execute deals by automating steps along

a bit. It’s true in real estate and in proptech,”

the way.”

said Mike Sroka, co-founder and CEO of

Flexibility is also important.

“When we launched in 2018, we focused on real estate agents. We wanted the purchase

Dealpath, a commercial real estate (CRE)

With headquarters in both San Francisco and

business because we understand the nuance

investment platform supporting acquisitions,

New York City, Dealpath has expanded to

of that transaction,” Martino recalled. “First

dispositions, development and financing.

Austin, Texas and Toronto, Canada and now

American has tons of experience.”

“Simply put, the cost of capital has gone

supports hundreds of institutional clients. The

up dramatically and the value of capital has

company is focusing on machine learning to

Now, it has expanded to focus on enterprise

gone up dramatically. We’re very fortunate

eliminate duplication of manual data entry.

customers, and is licensed in 38 states. The

that we booked our capital last year and are continuing to build out our platform.”

company takes a standardized approach, of“We’re proving there’s a big under-

fering its customers a single point of contact

served market,” Sroka said. “We see

so it can be “consistent from Washington to

enormous opportunity.”

California to Texas.

companies including Fanhood, Zynga and

At the other end of the deal, technology is

“We take the lessons we learn from the local

OneSeason after an early career at a large

also improving title insurance and closing

real estate agent and apply them to compa-

private equity firm. It gives him a unique

for residential buyers, said Scott Martino,

nies,” Martino said.

insight into the minds of investors, and the

co-founder and CEO of digital title and settle-

differing viewpoint between the financiers

ment company Endpoint. For Endpoint, ven-

With its customer base proprietary clos-

and the financed.

ture capital wasn’t a problem — the company

ing platform established, Endpoint is now

is backed by First American Financial.

focusing on the back end, with a new release

Prior to Dealpath, Sroka spent over a decade growing venture capital-backed software

“Capital, particularly institutional capital

54 MANN REPORT | NOVEMBER / DECEMBER 2023

coming by year-end to make home closing

F E AT U R E S | T E C H N O L O GY

"Capital, particularly institutional capital, is global. Real estate is local and regional."

M I K E S R O K A , D E A L PAT H

easier, and remove friction for its clients’

“Our focus is on operations management,

internal closing teams, Martino said.

and how to make that easier,” she said.

But AI clearly is the way of the future.

“You can remove the friction, letting the

A particular interest was safety technology,

AI,” Sroka said. “Generative AI allows for indi-

technology drive the process,” removing the

especially robotics. But there’s a lot of need

viduals and people who are less technically

re-entry of data and bringing transparency to

for prioritization, she said.

savvy to engage with AI.”

“We’re trying to make everyone comfortable

Future enhancements to Dealpath will be

This can be done by machine learning

on the job site,” O’Connell explained, adding

“under the hood,” to enhance ease of use,

and AI, enabling faster responses and

that “Venture capitalists have invested in

using visualization to encourage its sub-

greater accuracy.

so many solutions. We looked at the prob-

scribers to be more data-driven in their

lems we hear about consistently and focus

decision-making.

“Some of the new innovation is in generative

the deal.

“This makes sure we don’t miss anything,”

on those.”

Martino said. “A human could miss some-

AI, he noted, will be able to summarize doc-

thing; the machine can make sure nothing is.

In the future, AI will become more of a focus.

uments and identify anomalies quickly. What

That’s what I’m excited about.”

O’Connell shared that she gets ideas from

would take a team weeks to find can be done

Skanska staff about how AI can be used

in minutes.

The construction side also is looking to

several weekly.

technology to improve safety and efficiency,

“The end user doesn’t really care about the

said Danielle O’Connell, senior director of

“And there are an overwhelming number of

data structure. They just want it to work,”

emerging technology for construction giant

problems that AI can solve,” she noted. “The

Sroka said. “Whether they’re using AI or not,

Skanska USA.

question is, which ones?”

they just want it to work.”

NOVEMBER / DECEMBER 2023 | MANN REPORT 55

F E AT U R E S | C O M M E R C I A L

Retail Trends in Urban Mixed-Use Developments:

A Vision for the Future

BY B R A D Z A C K S O N A N D S TA N E C K S T U T

FORDHAM LANDING

RENDERING VIA PRNEWSWIRE 56 MANN REPORT | NOVEMBER / DECEMBER 2023

F E AT U R E S | C O M M E R C I A L

BRAD ZACKSON

In the rapidly evolving realm of urban development, mixed-use developments have emerged as a transformative force. These dynamic, integrated spaces have, over the years, altered how individuals live, work and shop. Over the years, we have been fortunate to witness the evolution of mixed-use developments and believe that the future holds even more exciting changes.

As we explore forthcoming trends in retail within urban mixed-use developments, these developments offer a myriad of benefits, and opportunities for developers to reinvent and enhance them. Additionally, sustainability and how it shapes the future of commercial real estate is paramount for the future.

Changing Retail Landscape in Mixed-Use Over the past decade, the retail landscape within mixed-use developments has experienced a significant shift. According to a report by the National Retail Federation (NRF), retail trends for 2023 include an emphasis on experiential shopping, personalized customer experiences and technology integration. Gone are the days when people visited mixed-use developments solely for their everyday needs.

Today, these developments are expected to provide an immersive, holistic experience.

Shoppers now seek out unique, memorable

S TA N E C K S T U T

experiences that transcend mere transactions.

They want to connect with brands and establishments on a personal level. As a result, retailers are rethinking their strategies, focusing on creating spaces that are not just places to buy things but destinations in themselves.

Virtual and augmented reality (VR/AR) technologies are playing an increasingly significant role in this shift. These technologies enable retailers to offer immersive shopping experiences, from virtual try-ons for fashion enthusiasts to interactive product demonstrations. Moreover, they allow customers to explore mixed-use developments and discover hidden gems, encouraging longer stays and increased spending.

Another pivotal factor reshaping retail in mixed-use developments is the rise of ecommerce. While some might argue that online shopping threatens brick-and-mortar stores, we believe it presents an opportunity for reinvention. Physical retailers are adopting an omnichannel approach, blending in-person and online shopping seamlessly. This integration allows for more personalized shopping experiences, with AI-driven recommendations and the convenience of ordering online and picking up in-store.

The Benefits of Mixed-Use Developments Mixed-use developments have always held a

NOVEMBER / DECEMBER 2023 | MANN REPORT 57

F E AT U R E S | C O M M E R C I A L

unique allure, offering a combination of residential, commercial and recreational spaces within a single location. As we peer into the future, we are confident that these benefits will become even more pronounced.

First and foremost, mixed-use developments enhance the quality of life for residents. The proximity of homes to workplaces, shops and recreational areas reduces commute times and fosters a sense of community. Moreover, the diverse array of amenities within these developments caters to the needs and preferences of a wide range of individuals and families.

From a sustainability perspective, mixed-use developments are inherently more environmentally friendly than their sprawling, single-purpose counterparts. They promote walkability, reduce the need for long commutes and encourage the use of public transportation. These factors not only reduce greenhouse gas emissions but also contribute to the overall well-being of the community.

Economically, mixed-use developments provide a robust platform for businesses to thrive. The coexistence of residential and commercial spaces ensures a consistent customer base for retailers. Moreover, the integrated nature of these developments creates a synergistic effect, where the success of one element feeds into the success of others.

Opportunities for Developers to Reinvent and Improve Developers are at the forefront of shaping mixed-use developments, and they are well-positioned to harness the opportunities the future holds. Here are some strategies for developers to reinvent and improve these spaces: 1.

Embrace Technology: Incorporate cutting-edge technologies, such as IoT (Internet of Things) for smart buildings and data analytics for predictive maintenance. These technologies not only enhance the efficiency of operations but also improve the overall user experience.

2.

Flexible Design: Design spaces that can adapt to changing needs. The COVID-19 pandemic highlighted the importance of flexibility in design. Retail spaces that can easily convert to accommodate pop-up shops or outdoor dining, for example, can better weather unexpected challenges.

Sustainability: Integrate sustainable design principles from the outset. Green roofs, energy-efficient lighting and rainwater harvesting systems are just a few examples. Sustainable features not only reduce environmental impact but also appeal to environmentally conscious consumers.

Community Engagement: Foster a sense of community within mixed-use developments. Organize events, create public spaces and encourage local artists and entrepreneurs to showcase their talents.

Community engagement will enhance the overall atmosphere and attract more visitors.

Diverse Tenant Mix: Curate a diverse mix of tenants. A variety of retail offerings ensures that mixed-use developments remain vibrant and appealing to a broad audience. Consider a blend of established brands, local artisans and experiential offerings.

integral to the future of mixed-use developments. Healthy buildings not only benefit the well-being of occupants but also provide economic advantages. They can command higher rental rates and attract tenants who prioritize employee health and productivity. Additionally, they align with the growing expectations of consumers who want to patronize businesses that prioritize sustainability and comfort.

Creating "Healthy" Buildings As we look to the future, the concept of "healthy" buildings is gaining prominence.

Healthy buildings are designed with a focus on the well-being of their occupants, prioritizing factors such as indoor air quality, natural lighting and ergonomic design. The COVID-19 pandemic accelerated this trend, with people becoming more conscious of the indoor environments they inhabit.

As we navigate the evolving landscape of urban mixed-use developments, we believe that the future holds endless possibilities for creating vibrant, sustainable and peoplecentric spaces that enrich the lives of those who inhabit them. With innovation, collaboration and a commitment to the greater good, we can look forward to building a future where urban mixed-use developments truly reflect the aspirations and needs of our ever-evolving society.

3.

4.

5.

Sustainable commercial real estate is at the forefront of this movement. Green building certifications, such as LEED (Leadership in Energy and Environmental Design) and Well Building Standard are becoming increasingly important in commercial real estate. These certifications emphasize sustainable and health-centric design principles, making them

58 MANN REPORT | NOVEMBER / DECEMBER 2023

Conclusion The future of retail in urban mixed-use developments is promising and brimming with opportunities for innovation and positive change. We anticipate a continued shift toward experience-based retail, driven by technology and a desire for unique, immersive shopping experiences. Mixed-use developments will remain a vital part of urban living, offering an array of benefits to residents, businesses and the environment.

Developers have a pivotal role to play in shaping the future of these spaces by embracing technology, sustainable design, flexibility and community engagement. Moreover, the rise of "healthy" buildings underscores the importance of focusing on the well-being of occupants and aligning with the growing demand for sustainable, health-centric spaces.

Brad Zackson is the co-founder and director of development at Dynamic Star LLC, and Stan Eckstut is a principal and board director of Perkins Eastman. They are collaborating on the master-planned design of Fordham Landing, a transit-oriented waterfront mixed-use project in New York City.

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F E AT U R E S | M A N A G E M E N T

Defining the Future of Commercial Real Estate:

Resilience, Reuse and Reinvention

BY K E N G E N T E RT, M B A , V I C E P R E S I D E N T O F M AT E R I A L S , K O VA

The commercial real estate industry has been impacted worldwide by pandemic-fueled lifestyle changes, supply chain disruptions, economic hardship and the escalation from global warming to global boiling. Despite this, by 2050, the commercial building floor space in the U.S. is expected to see a 33% increase from 2021, according to the U.S. Energy Information Administration.

Showing no signs of slowing down, the commercial real estate industry needs a major rebrand. Driven to think differently about the highest and best use of property, commercial real estate brokers, developers, building solutions manufacturers, architects and facility managers must reimagine the core of the industry to sync with the rapidly changing world and be prepared to pivot, sometimes unexpectedly. A focus on resilience, reuse and reinvention will define the future of commercial real estate, replacing band-aid solutions with concrete, future-proof practices.

Supply Chain Resiliency Effective, high-functioning supply chains are vital to any commercial real estate development to ensure a steady and manageable flow of required materials. Recent pandemic-laden

years have made it painfully apparent that existing domestic and global supply chains must be more resilient and stable during crises, especially seeing how heavily construction de-accelerated due to pre-existing issues.

As an industry laser-focused on outsourcing, commercial real estate must recalibrate its current practices. Zeroing in on geographic diversification and switching mindsets from the lowest first cost to the lowest total cost of ownership model will offer long-term supply chain resiliency.

performance is crucial in any business model to establish continued performance and longterm viability. However, traditional methods of measuring supply chain success by a cost bill of materials (BOM) and landed cost have excluded vital factors such as total cost of quality (TCQ) for poorly made or damaged products, cost lost to expedited freight methods and concessions to customers to counteract delays/penalties. Thus, it fails to capture the true total cost of the supply chain.

Considering these factors in developing resilient supply chains will be key going forward.

Offshore, near-shore and onshore –– this geographic diversification approach provides a level of insulation against geopolitical, social and economic issues. Creating leverage across multiple regions allows procurement teams to instill flexibility, security and resiliency.

While variation in unique cost structure when procuring from different parts of the country or abroad may pose a challenge, the time and effort behind strategically integrating product sources into a blended total product cost pays off in the long run. This guarantees a resilient and steady supply flow to support commercial construction.

Adaptive Reuse Moving from the drawing board to the construction site, adaptive reuse has seen and will continue to see a resurgence. On a purely business-oriented level, starting from scratch can be more expensive than working with what is readily available, especially as lots for development continue to run scarce. New builds will likely take significantly longer to complete as additional planning, construction, materials, labor and permits are required. Adaptive reuse, therefore, offers a highly efficient workaround to extended development processes.

Additionally, transparency in financial

The future of commercial real estate,

62 MANN REPORT | NOVEMBER / DECEMBER 2023

F E AT U R E S | M A N A G E M E N T

however, relies on far more than cost and profit-oriented factors.

Cultural and societal shifts have just as much of an impact, if not greater. As employees spend less time on site with work-fromhome and hybrid schedules, existing corporate spaces remain empty, carrying the potential to be repurposed for other commercial uses. Additionally, existing structures often carry historic local roots with them.

Upkeep, however, is costly and the cultural values that define surrounding communities often need to be recovered.

Adaptive reuse allows for the simultaneous reinvention of underused spaces and preservation of local history and culture characteristic of today’s social landscape, which can potentially increase the property value.

The industry’s environmental impact is another consideration. Currently, demolition in the U.S. alone contributes to more than 90% of construction debris, according to the U.S. Environmental Protection Agency. Repurposing and reusing existing structures significantly reduce harmful construction waste, lowering a development’s large carbon footprint. Adaptive reuse paves the way for a more sustainable, resilient future for commercial real estate.

Offsite Construction Economic demands, a need for resilient and sustainable alternatives and technological improvements in the commercial real estate industry are attracting a new wave of interest in prefabrication and offsite construction.

It is faster, more cost-effective, safer and greener than traditional construction practices. While

prefabricated construction is not a new concept, it is ready to be reinvented to steer the industry away from less efficient practices. Containing a myriad of benefits, prefabrication and offsite construction accelerate and improve construction processes.

K E N G E N T E RT

Working onsite while simultaneously constructing needed additional building materials offsite speeds up the construction timeline while reducing overall waste and noise pollution. This practice is highly significant in densely populated cities. As less machinery, materials and energy are needed for offsite construction, the practice establishes a safer, more sustainable work environment. Additionally, offsite construction tends to focus on permanent construction. With more space, less pressure and more materials at hand, building elements can be perfected each time they’re built offsite.

Strategic coordination and consistent communication are required across different trades and stakeholders to ensure a successful prefabrication implementation. Initial conversations, hopefully leading to extended collaboration and the streamlining of future commercial real estate processes, will encourage contractors, developers and product suppliers to work together (while being physically separated via the job site) as partners while also reaching diverse stakeholders, including but not limited to architects, building owners and workplace design teams.

While the future will likely hold some surprises, it is clear that resilience, reuse and reinvention will be top of mind for the

commercial real estate industry.

Current predictions suggest that enhancing supply chain resiliency, implementing adaptive reuse and embracing offsite construction and prefabrication offer tangible, safe stepping stones toward that uncertain future.

These solutions will encompass all angles of the commercial real estate industry, permeating it from the drawing board to the final built structure. Resilient supply chains will ensure the timely completion of commercial spaces that are more prepared to take on unprecedented global challenges and emerge as unscathed as possible. Adaptive reuse is an

invaluable tool in reducing the industry’s harmful impact on the environment, promoting reuse over disruptive demolition and new construction. Finally, the resurgence of offsite construction and prefabrication carries the potential to improve the construction process on a wider scale, focusing on longevity, sustainability and safety.

The solutions, in addition to other developed or upcoming operational practices, are designed to improve the current state of commercial construction and ultimately transform today’s commercial real estate industry to meet an unpredictable future.

NOVEMBER / DECEMBER 2023 | MANN REPORT 63

F E AT U R E S | R E S I D E N T I A L

Wall of windows

Soundproof windows inside kitchen Soundproof corner windows

Soundproofing

Without Window Replacement

BY D E L W I L L I A M S For many homeowners, soundproofing their home to eliminate the cacophony of nearby traffic, loud neighbors, leaf blowers, barking dogs and sirens can be critical to maintaining their sanity and keeping peace in the neighborhood. Although most external noise passes through windows, many feel that replacing existing windows is not feasible due to the cost, demolition and disruption involved.

The good news is that window replacement is

not necessary to resolve the issue. Soundproof windows eliminate up to 95% of outside noise and can be quickly installed without window replacement at roughly the same cost.

“When people think of soundproof windows, they immediately assume that the existing windows will all have to be replaced, but there is no need to remove or replace the existing windows to eliminate outside noise,” said Randy Brown, president of Soundproof

64 MANN REPORT | NOVEMBER / DECEMBER 2023

Windows Inc., a national manufacturer of window and patio door soundproofing products.

“A soundproof window is a second professionally engineered window placed inside the existing window, with an appropriate air gap and long-lasting seals, that can open and close just like the existing one.”

A soundproof window can dramatically reduce the intrusion of outside noise, effectively doubling a single-pane window Sound

F E AT U R E S | R E S I D E N T I A L

Transmission Class (STC) rating from 26-28 to 48-54, Brown observed. This far surpasses a double-pane window’s STC Rating of 26-32.

Soundproof windows inside a home

Because no replacement is required, the installation can take less than one hour per window while minimizing mess and disruption. Qualified contractors and even handy DIYers can install soundproof windows where necessary, providing considerable savings versus traditional window replacement. The soundproof windows also enhance comfort and energy savings with extra thermal insulation and can even increase home value.

Contractors advise many homeowners looking to reduce external noise to install doublepane windows. A double-paned window, constructed with two panes of glass in a frame, contains air space filled with gas such as argon, xenon or krypton. However, the purpose of this gas is to enhance insulation capabilities, not block noise. Although separating two panes of glass and filling the gap with gas can reduce noise, the reduction is only from 0% to 20%, which is slightly more than traditional single-pane windows.

When replacing windows for noise reduction, contractors typically change out all the existing single-pane windows throughout the house. The challenge is that the window replacement process can be disruptive and messy. Window replacement also sometimes requires patching and repainting any exterior wood or stucco damaged during installation, as well as installing and painting new casing and trim molding.

On the other hand, soundproof windows are specifically designed to reduce intrusive noise from entering on three fronts: the type of materials used to make the pane, the ideal air space between the original window and insert and the use of improved, long-lasting seals. The combination can reduce external noise by up to 95%.

The first noise barrier is laminated glass, which dampens sound vibration much like a finger on a wine glass stops it from ringing when struck. An inner PVB layer of plastic further dampens sound vibrations. An air gap

of two to four inches between the existing window and the soundproof window also significantly improves noise reduction because it isolates the window frame from external sound vibrations. Finally, spring-loaded seals put a constant squeeze on the glass panels, which prevents sound leaks and helps to stop noise from vibrating through the glass.

Designers created the spring-loaded seals to stay acoustically sound for 15 years.

bedroom facing a street, can also save a considerable amount compared to window replacement,” he said.

“Installation can take as little as 30 minutes per window without the complexity, disruption, mess and cleanup of traditional window replacement,” said Brown.

A quieter home environment can increase focus and productivity for those working at home or telecommuting. Those pursuing online learning or homeschooling can benefit.

He added that the approach can also end up costing much less than window replacement.

While contractors and homeowners have traditionally thought of window replacement to quiet noise, adding soundproof windows is a much faster, simpler and less disruptive option to cost-effectively resolve the issue.

“Selectively adding a soundproof window to only areas exposed to noise, such as a

Whether the noise problem is due to intrusive street traffic, planes, trains, construction, rowdy neighbors, nightlife or special events, the soundproofing technology quiets the clamor, which enables more restful sleep and more peaceful conversation at home.

P H OTO S CO U RT E SY O F S O U N D P RO O F W I N D OW S

NOVEMBER / DECEMBER 2023 | MANN REPORT 65

F E AT U R E S | M A N A G E M E N T

PREVENTING E-BIKE FIRES IN NEW YORK CITY’S COMMERCIAL BUILDINGS

BY D A N I E L C O LO M B I N I A N D V I N O D PA L A L

The challenge is only growing, as the number of micromobility devices increases. Research estimates that while 608,000 electric cars and trucks were sold in the United States in 2021, more than 880,000 e-bikes were purchased.

The fire hazard posed by micromobility devices is completely different from electric cars and trucks, which are far less likely to have fires than traditional vehicles. The difference arises from the following conditions: the cars and trucks must be parked in designated settings, separate from office and residential spaces; they must be charged on specialized equipment; their batteries cannot easily be removed and their safety and use are heavily regulated.

The lack of regulation is especially important. The New York Times stated, “Victoria Hutchison, a senior research project manager at the Fire Protection Research Foundation, said the

DAN COLOMBINI

V I N O D PA L A L

E

-bikes and e-scooters can play an important role in reducing carbon emissions in New York City and other major urban areas, but they pose a growing fire hazard that must be addressed. Commercial property owners should take six steps to reduce those hazards.

The New York Times recently described how sudden and intense these fires can be, by reporting on a fire in the third-floor Queens apartment that Alfonso Villa Muñoz shared with his girlfriend.

He had been charging an extra-large lithium-ion battery for a secondhand e-scooter.

The danger of fires from e-bikes and e-scooters is significant and growing. It is significant because of the frequency, suddenness and intensity of the fires. More than 200 fires in New York City last year were caused by batteries from ebikes, e-scooters and similar devices, according to NPR.

“The battery exploded in the living room, unleashing flames that engulfed the apartment. Mr. Muñoz screamed for their eight-year-old daughter, Stephanie, who was asleep. He could not breach the wall of black smoke to get to her.

Stephanie died from smoke inhalation,” the report said.

66 MANN REPORT | NOVEMBER / DECEMBER 2023

F E AT U R E S | M A N A G E M E N T

lack of safety regulations and testing requirements has allowed cheaper, low-quality devices and batteries of questionable safety to enter the market. ‘That’s really the root of the problem,’ she said.”

New York City is taking action on that front.

In March, Mayor Eric Adams signed legislation that prohibits the sale, lease or rental of e-bikes, e-scooters and batteries that fail to meet safety standards; prohibits the assembly or reconditioning of used lithium batteries; develops a public information campaign on lithium battery fire risks and requires the FDNY to submit annual reports on lithium battery-related fires.

That still leaves commercial property owners in a precarious position, because e-bikes and e-scooters can easily be stored in office and residential settings. Even more challenging, the batteries can be removed and charged using standard electrical outlets, often near flammable personal belongings.

Even when regulation occurs, there will still be too many e-bikes and e-scooters stored – and batteries charged — inappropriately unless incentives are offered to alter behavior.

They should include the following: First, a designated space for storage of micromobility devices should be provided where devices can be stored and charged for free. The space can be created much like traditional bike storage.

Second, that space should be reinforced from a fire prevention standpoint, making it fire-resistant and separated from flammable objects. This will ensure that, if a fire breaks out, it is contained. This would be achieved with a combination of strategies, including fire-rated walls, fast-acting sprinkler heads and fire detection devices. Self-closing doors will ensure that fire and smoke cannot spread to other areas of the building.

Third, sufficient electrical outlets should be provided so that each device can be charged while in the designated storage space. This will avoid the dangerously informal and often haphazard battery charging that too often results in fires in highly flammable settings. The design of these outlets must take into account the volume of load that would be on at a single time in order to reduce the risk of fire from circuit overloading.

Fourth, ongoing monitoring of the space should occur, with cameras displaying images at the security desk. Security officials can then monitor the devices’ safety and be alerted if a fire occurs. Having events reported to a 24-hour monitored site would ensure that coverage is continuous.

Fifth, the monitoring should ensure that batteries are properly charged and not overcharged. Batteries for micromobility devices typically do not have a battery management system that can detect and arrest battery issues before Thermal Runaway. As a result, it’s important to keep an eye on the batteries and how long they are being charged.

Sixth, security personnel should be trained in how to deal with a lithium-ion battery fire in any micromobility device. They should know precisely what to do if a fire occurs.

Training and fire action plans for personnel to respond to this type of event are crucial.

Daniel Colombini, PE, LEED AP and Vinod Palal, PE are principals at the New York City-based consulting engineering firm Goldman Copeland.

NOVEMBER / DECEMBER 2023 | MANN REPORT 67

COLUMNS

DIVERSITY, EQUITY AND INCLUSION IN ARCHITECTURE The impact of Diversity, Equity and Inclusion

to removing roadblocks by engaging middle

(DEI) in architecture has affected the built

and high-school students.

environment beyond its physical, technical or aesthetic qualities. How architects practice

DEI for Architecture

and the intended excellence in the products of

DEI for the practice of architecture is about

architecture imply a future of increasing DEI.

working with clients to use innovative design to transform and strengthen communities and

Historically, an American architect was a

enhance the quality of life for all.

socially affluent white male with access to education abroad. That profile has progressed

Diversity in design is a deliberate focus on the

since the mid-19th century to include men

impact of the architect’s work product or use

and women of multiple ethnicities from vary-

of space that is either appropriate or respect-

ing social strata. However, there is still work

ful to the needs of a multicultural population.

to do to address issues of diversity.

Heather Philip-O’Neal CEO and Founder

HPP International LLC 155 East 38th St. New York, NY

Equity in design is sometimes facilitated According to the National Council of Archi-

through the development of healthy communi-

tectural Registration Boards (NCARB), there

ties and resilient public spaces.

are over 140,000 architects employed in the United States. The most common ethnicity of

The social impact of belonging is felt in design

architects is white (71.3%); 13.8% are Asian,

through the implication of access to basic

9.9% Hispanic and 2.8% African American

resources that are also sustainable.

or Black. Notably, African American women architects comprise 0.04%. In 1997, I was the

DEI Priorities

98th African American woman to be regis-

DEI in the practice of architecture is a core

tered as a licensed architect in the country.

value. The COVID-19 pandemic prompted the architecture community through the

One reason for the under-representation of

AIA to “re-emphasize their commitment to

women and minorities has been barriers to

Equity, Diversity and Inclusion” as “an ethical

entering the profession. The most notable is

and moral obligation.” Education and Career

access to education. State licensing require-

Development was identified by the AIA Equity

ments based on education, lack of role models

in Architecture Commission for recommenda-

and a perceived low return for the expense of

tions to be implemented over three years.

educating architects, are additional obstacles.

The American Institute of Architects (AIA) has

The desired outcome for architects is to realize

pledged to provide a more accessible path

professional goals together with an underly-

to higher education and engaging children in

ing objective for the products of architecture

K-12 programs. The National Organization of

to result in a more diverse, equitable and

Minority Architects (NOMA) is also committed

inclusive future in the profession.

68 MANN REPORT | NOVEMBER / DECEMBER 2023

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COLUMNS

FIVE PROACTIVE MEASURES BUILDING OWNERS CAN TAKE TO HEAD OFF MAJOR STRUCTURAL ISSUES Modern building codes and structural engi-

major structural issues or minor things

neering have made our buildings extremely

like blocked drains which can lead to

safe. However, buildings do require main-

significant property damage.

tenance, and if signs of structural damage

2.

In high-rise towers, regular inspections

become apparent, immediate action should be

should include the identification of con-

taken. Continual maintenance and inspections

crete spalling. Corrective action should be

are critical to the operations of any building

taken in places where concrete has fallen

and the safety of all inhabitants.

off or detached, especially in structural columns. If there is deterioration of rein-

Frank DeLucia Senior Vice President

Hub International Northeast frank.delucia@ hubinternational.com (212)338-2395

The following are five primary actions that

forcing steel, immediately have a struc-

building owners should take to prevent major

tural engineer determine the damage.

structural issues in their buildings:

Identify and carefully monitor wall cracks.

1.

Third-party professionals should con-

New buildings may settle, and this

duct annual inspections to identify any

should be monitored. Cracks that grow,

issues that could lead to deficiencies or

spread or otherwise show deterioration

damages. For example, major structur-

should be addressed immediately.

al components should be assessed by

3.

Institute financial planning for major

structural engineers with experience per-

improvements and capital expenditures

forming such inspections. When issues

in all building maintenance plans.

are identified, corrective actions should

4.

Identify risks early. Building management

be taken and documentation made for

should perform regular assessments.

maintenance or repairs.

Training maintenance staff and leadership to recognize potential risks may

Inspectors conducting building as-

identify issues prior to formal inspections.

sessments should review any changes

Documenting such assessments may

following renovations, additions or other

help to record actions taken to reduce

changes which may affect the building’s

both property and liability risk for the

structure. Adding loading to a roof, mov-

buildings and their residents.

ing walls or other changes can adversely

5.

Owners should not reduce coverage to

affect a building. Inspectors (including

cut costs. Have a formal review of your

structural engineers) need to be familiar

insurance policies and coverage complet-

with building design changes and proper

ed by a trusted insurance professional.

authorities must sign off on all renovations or upgrades.

Taking these five measures does not guarantee a building will not experience a cata-

It's important to conduct post-event

strophic event but they will reduce risk to all

inspections following major weather

buildings — they have been proven to prevent

events to identify any damage, including

both minor and major loss events.

70 MANN REPORT | NOVEMBER / DECEMBER 2023

LEASING | MANAGEMENT | INVESTMENTS

A MODERN APPROACH TO COMMERCIAL REAL ESTATE, POWERED BY A CENTURY'S WORTH OF EXPERIENCE.

We would like to take this opportunity to thank the following people: Our team & staff for their endless dedication and support Our tenants for their cooperation to keep our buildings safe Our partners for their trust and confidence in these challenging times All New Yorkers working tirelessly to keep our city moving We hope everyone continues to be healthy and safe in 2021.

KAUFMANORGANIZATION.COM

COLUMNS

BACKYARDING ON A BUDGET:

SIX MONEY-SAVING HACKS With tight budgets and high interest rates,

the task. New mulch holds weeds at bay

homeowners are looking for inexpensive

and helps retain moisture around plants,

ways to set up their backyards for year-round

trees and shrubs.

success. After all, the backyard is an extension

2.

Prune bushes and trees. Trimming

of the family home, providing a place to work,

bushes, shrubs and trees is another

relax, entertain and even exercise. It’s called

inexpensive way to make a big impact

backyarding, and it’s here to stay.

on your yard’s aesthetic. Use a chainsaw, trimmer or hedger to remove dead or

According to a recent poll commissioned by

dying branches and stems. This pre-

the TurfMutt Foundation and conducted online

serves the health of the main branch and

by The Harris Poll, more than three-quarters

improves the shape of the plant. Pruning

of Americans who have a yard (76%) say the

also encourages plants to flower later.

family yard space is one of the most important

Kris Kiser

President and CEO Outdoor Power Equipment Institute 1605 King St. Alexandria, VA 22314 turfmutt.com

3.

parts of their home. The yard has also become

lar mowing helps your grass stay healthy

a place to de-stress, with more than two-

and improves the overall appearance of

thirds of Americans who have a yard (69%)

your yardscape.

saying doing yard work, such as mowing,

4.

Pick perennials when planting. Peren-

trimming or planting, is one of the ways they

nials — those cold-hardy plant species

like to de-stress these days. This is especially

that will return again in the spring — are

true among parents of kids under 18 as they

a smart money choice because you only

are more likely than their counterparts without

have to buy them once.

kids under 18 to cite this (76% vs. 65%).

5.

opei.org (703)549-7600

Keep grass mowed and weeded. Regu-

Plant climate-appropriate species. Native plants — those that occur naturally

Spending time in nature helps reduce stress,

in your region — are more likely to thrive

improve mood, lower heart rate and much

in your micro-climate without much

more. The green space around us is also an

maintenance or watering. They are also

environmental superhero. Providing oxygen,

better for local wildlife and pollinators

reducing runoff and capturing carbon are just

and help preserve the balance of the

a few of its superpowers. The good news is

natural ecosystem.

homeowners don’t have to break the bank to

6.

Look for deals. Many nurseries and

create a backyard that will serve many pur-

home improvement stores offer off-

poses for family and the environment.

season sales on landscaping essentials.

Here are six money-saving hacks for creating

For more information, sign up for Mutt Mail, a

the backyard of your dreams from the Turf-

monthly e-newsletter with backyarding tips

Mutt Foundation:

and all the news from the TurfMutt Founda-

1.

Clean out flower beds and add mulch.

tion. To learn more about creating the yard of

Use a leaf blower to make quick work of

your dreams, visit turfmutt.com.

72 MANN REPORT | NOVEMBER / DECEMBER 2023

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Mark Engel, CEO Mark Engel, CEO

www.langsampropertyservices.com www.langsampropertyservices.com

Matt Engel, Matt President Engel, President

COLUMNS

DEB’S RETAIL DISH AND DEALS: THE FUTURE OF ENTERTAINMENT? In October, I may have seen the future of live

But the real show is The Sphere itself. The

entertainment and retailtainment, if live enter-

hallways look more like a starship and the

tainers are up to it.

screens are engaging (I missed the talking robot somehow). There are plenty of shops

I’ve lived in the Las Vegas area for the past

inside too, and the theater itself (taller than

two-plus years and on occasional excursions

the Statue of Liberty) is overwhelming. Take a

to the Strip, I’ve seen The Sphere at the Ve-

second to acclimate yourself before climbing

netian Resort being built, layer by layer, into

the stairs to avoid a case of – yes — vertigo.

a huge orb. Most locals looked at it with a bit

Before the show, the “screen” (160,00 more

of curiosity and a bit of skepticism. And then

LEDs) looked more like a planetarium than

came July 4, 2023, when the 580,000 square

anything else. Just a really tall one.

feet of LEDs on the outside lit up for the first

Debra Hazel

Debra Hazel Communications North Las Vegas, NV (201)618-5247

time — we all looked, and said, “Okay, now

Then the show starts, and the screen comes

I get it.” Friends who’ve visited the area now

alive, with graphics that twist, turn and com-

consider the $2.3 billion a landmark, and I get

plement but never overwhelm the band, and

a kick out of seeing what humorous image it

immerse the audience in the performance.

depicts, especially its face waking up in the

The sound system is extraordinary. This isn’t

morning and going to sleep each night.

a music review, but U2 (and I’ve seen them a lot) were their normal terrific selves.

But an engaging exterior is one thing — all of us in marketing and communications know it’s

This is where the question begins, however.

the content that counts. So, my first visit in-

U2 has always been BIG — big concepts,

side, to the third-ever U2 concert at the venue,

big presence. How many other performers

was the real test. And it delivered, first with

wouldn’t be overwhelmed by the technology

a visit to the U2 pop-up shop at the Venetian

while still being an ongoing draw? I can think

retail complex, and then at the concert venue.

of a handful, and there are rumors around town about Harry Styles in 2024, but it’s

The store/experience was fun and gave a

going to be a challenge. And will they be able

taste of what was to come at the perfor-

to sell the same amount of merchandise?

mance, with great branding for U2 and the

Leaving The Sphere, an outdoor official shop

venue. Video screens featuring members of

had a lengthy line, too.

the band, a Trabant car to pose in — the show focuses on U2’s "Achtung Baby" album — a

Still, The Sphere is a testament to the impor-

photo booth and stand to pose with instru-

tance of innovation in live entertainment —

ments led to the merchandise shop (with the

and the basic need for people to gather for it.

usual hats, mugs and shirts, which needed

But like with any entertainment facility, it will

restocking, one of the retail basics).

be the programming that matters.

74 MANN REPORT | NOVEMBER / DECEMBER 2023

COLUMNS

TAX BREAKS FOR HOMEOWNERS:

ENERGY EFFICIENCY UPGRADES GET A BOOST The Inflation Reduction Act of 2022 has

To qualify for the energy-efficient home

provided an expansive collection of tax law

improvement credit, residential energy prop-

changes, with most provisions starting in

erty must be installed on or in a home in the

2023 and enacted through the next decade.

United States that is used as a residence.

For homeowners, included are the Energy

The residence does not have to be a taxpay-

Efficient Home Improvement Credit and the

er’s principal residence. In contrast, energy

Residential Clean Energy Credit

efficiency improvements (energy-efficient building envelope components, such as walls,

Beginning in 2023, the Energy Efficient Home

exterior doors, exterior windows, skylights

Improvement Credit jumps to 30% (up from

and insulation) must be installed on or in the

10%) of the sum of the following:

principal residence to qualify for the credit.

•

James Philbin CPA, PFS, MST, CFP

•

Partner, Tax & Business Services Marcum Boston, MA james.philbin@marcumllp.com •

Expenditures for energy-efficient components in the building envelope, such as

The Residential Clean Energy Credit amount

windows, doors, skylights and insulation,

is also 30% of the amount paid for qualifying

which meet stated standards.

property placed in service during the taxable

Other expenditures that increase energy

year after 2022, up from 26%. The credit rate

efficiency, such as an electric or natural

decreases back to 26% for property installed

gas heat pump water heater; an electric

in 2033 and to 22% for property installed in

or natural gas heat pump; a central air

2034. A residential clean energy credit may be

conditioner; a natural gas, propane or oil

claimed if a qualifying property is installed on

water heater or a natural gas, propane or

or connected to an existing or newly con-

oil furnace or hot water boiler.

structed home.

Expenditures for a home energy audit.

Several special rules apply to the credit. Labor

There are dollar limitations on the specific

costs for on-site preparation, assembly or

amount of energy-efficient property and im-

original installation of qualified property and

provement expenditures that can be claimed

piping or wiring to interconnect the property

as a credit. A $1,200 annual limit replaces

to the home qualify for the credit.

the previous $500 lifetime limit on credit-eligible property and the credit will be available

Expenditures relating to a solar panel or other

through 2032, allowing improvements to be

property installed as a roof that is a struc-

spread out over multiple years.

tural component of the house on which it is installed may also be qualifying property.

A $2,000 annual credit limit applies to electric or natural gas heat pump water heaters, elec-

Barring changes to the Inflation Reduction

tric or natural gas heat pumps and biomass

Act, these increased residential energy tax

stoves and boilers with a thermal efficiency

incentives provide meaningful tax-saving

rating of at least 75%.

opportunities for years to come.

76 MANN REPORT | NOVEMBER / DECEMBER 2023

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COLUMNS

THE STORY BEHIND SKYROCKETING INSURANCE COSTS What do wildfires, a New York State law and

erty can’t obtain insurance from one of the

inflation share? They’re behind the rapidly ris-

top-tier companies, it falls back to the second

ing cost of insurance for co-ops and condos.

tier where coverage is reduced, and it can be

Insurance, historically, has been subject to

more challenging to recover. Top-tier compa-

swings in premiums. The latest uptick sees no

nies that remain in New York are more selec-

quick end, according to Robert Owens, presi-

tive in insuring buildings, putting increased

dent of The Owens Group, and there are few

pressure on boards to get solid coverage.

areas where boards can minimize increases.

Owens emphasized that boards and property

Ira Meister

Why is this happening now? A major problem

managers should review their risk man-

in New York State, Owens said, is a law

agement procedures and make necessary

unique to us that holds a co-op or condo

upgrades. Buildings with a good track record

liable when a worker is injured, regardless of

are desirable for better companies. Some

whether employed by the building. Claims can

buildings require the shareholder/unit owner

President and CEO

be expensive. This one law has caused many

to have homeowners insurance. This is im-

Matthew Adam Properties, Inc.

insurance companies to flee the market. The

portant when prime insurers vet a building.

375 Pearl St. – 14th Floor

second driver is inflation, resulting in higher

New York, NY 10038

costs for materials. Though inflation is down,

Many residents, Owens pointed out, try to

(212)699-8900

costs have not decreased.

save on their premiums by underinsuring or having too high a deductible. In addition,

imeister@matthewadam.com Numerous natural disasters have devastated

many fail to insure for replacement cost and

parts of the country. The costs are spread

obtain only the initial value less depreciation

out in premiums nationwide. We’re paying

which, depending on the age of the item, can

for damage from wildfires in California and

be a significant difference.

tornadoes in Mississippi. Conversely, when New York was struck by Superstorm Sandy

Many also assume that the party at fault will

and Hurricane Irene, the rest of the country

be responsible for repair costs. Not so in many

assumed some of the burden.

properties, especially those at the high end.

Many co-ops and condos have subrogation

Increasing pressure on insurance companies

clauses preventing the injured party from

was a 37% percent rise in reinsurance (insur-

suing the responsible neighbor for accidents.

ance for insurance companies) rates instituted in January.

So, what about suing the building? Not viable.

The condo or co-op association is responsible

Current conditions have reduced the number

for occurrences outside the walls of the apart-

of top-tier insurance companies operating

ment in the public areas. It is not responsible

in New York, limiting choices for co-op and

for damage in the units unless the building

condos and decreasing competition. If a prop-

was a direct cause of the problems.

78 MANN REPORT | NOVEMBER / DECEMBER 2023

SERVING COMMUNITIES AND HONORING THE VALUE OF THEIR INVESTMENTS SINCE 1955 We serve a large community of luxury multifamily, residential and mixed-use cooperatives, condominiums and rental properties throughout New York City. Our services include: • Comprehensive Residential Property Management • Back Office Accounting Services • Risk Management

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COLUMNS

WASHED OUT: NEW YORK FORCES SELLERS TO DISCLOSE FLOODING New York Governor Kathy Hochul has signed

ever been a claim for flood damage to the

a bill into law amending Sections 462 and

property. The new disclosure will also change

465 of the Real Property Law. Notably, these

the question to ask whether the home has

sections provide the statutory requirement

experienced any water penetration or dam-

for sellers of residential real property — de-

age due to seepage or a natural flood event

fined as "one- to four-family dwelling used or

(heavy rainfall). Fresh off the large rain storm

occupied or intended to be used or occupied

our area took on September 29, this question

wholly or partly, as the home or residence

will resonate with many homeowners.

of one or more persons …” (RPL 462) — to provide a disclosure statement regarding the

Most consequential for sellers is that the new

property or a $500 credit at closing in lieu of

law eliminates the option of the seller provid-

such a completed statement.

ing the buyer with a $500 credit at closing in lieu of completing the statement. Since this

Kyle E. Scheiner Romer Debbas LLP

275 Madison Ave., 8th Floor New York, New York 10016 (212)888–3100

Unimproved parcels, condominium and coop-

disclosure is to be delivered prior to entering

erative units or property on a homeowners’

a contract, realtors and agents will need to

association that is not owned in fee simple by

carefully guide their sellers on completing this

the seller (RPL 462) are excluded from this re-

statement. RPL 465 eliminates limits on liabil-

quirement. Under this new bill (A1967/S5400),

ity on the seller. In the past, the buyer’s sole

sellers will now be required to complete the

remedy for the seller’s failure to comply with

disclosure statement with no $500 credit op-

the Property Condition Disclosure Statement

tion and include items regarding flooding and

was the $500 credit at closing. Under this

“water penetration” into the home.

new law, no existing legal cause of action or remedy is limited, and all options are available

New York Real Property Law 462 codifies the

to a buyer who was deceived on the condition

actual statement that sellers must complete to

disclosure form.

disclose the history of the property to buyers prior to signing a contract of sale. Under the

New York has long viewed real estate with a

prior version, there were 48 total questions

caveat emptor approach. This new law sig-

ranging from “How long have you owned the

nals the burden is now shifting. Sellers must

property?” to “Are there any known material

be careful as to how they proceed or face

defects in … structural systems?”

potential litigation long after closing.

This new law will add eight more questions to

This new law is scheduled to take effect on

the statement, asking water-related ques-

March 20, 2024. It is not yet known whether

tions such as whether the property is in any

a transaction must close by then or if that will

FEMA-designated flood zone; whether the

be the cutoff for new contracts to avoid the

seller ever received flood-related assistance

requirement. As the rules start to be formulat-

from FEMA for the property or if there had

ed, we will keep you updated.

80 MANN REPORT | NOVEMBER / DECEMBER 2023

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COLLEGES

New Members Join Fordham Real Estate Institute Executive Advisory Council Ryan Severino, chief economist and head of U.S. research at Bentall Green Oak, and Kenneth Morrison, managing member of Lemor Development Group, have been named to the Fordham Real Estate Institute (REI)’s Executive Advisory Council (EAC) of prestigious real estate industry and business leaders.

Morrison and Severino will collaborate with the EAC on enhancing the student experience, increasing awareness of the expanding program offerings and growing enrollment on REI’s campuses at Lincoln Center in Manhattan and West Harrison, New York. They join council members from such firms and associations as UBS, JLL, Brown Harris Stevens, Douglaston Cos., the Real Estate Board of New York, Simone Management Group and Related Cos. (For a full list, see sidebar.)

“We’re delighted to have Ryan and Kenneth join our Executive Advisory Council,” said Ryan O’Connor, chair of the EAC and CEO of Clinton Management. “Ryan’s extensive knowledge of economics and forecasting, and Kenneth’s vast experience in housing development and collaborating with municipal agencies will complement our council as we design new programs reflective of the evolving real estate industry.”

Ryan Severino

“From student to professor to professional, I have been a beneficiary and proponent of education,” said Severino. “I am always eager to help further and improve education, and joining the EAC provides me with an unparalleled opportunity to accomplish that.”

“It is an honor and privilege to join this prestigious council of real estate thought leaders,” said Morrison. “As a Fordham graduate school alum, I have been able to intimately experience the learning culture and values of the institution. I look forward to sharing my industry experience and my recent experience as a student with the EAC as the program continues to grow.”

Severino is responsible for global and regional economic research, analysis and forecasting as well as property market research at Bentall Green Oak (BGO). Prior to joining BGO in May 2023, he was chief economist at JLL, where he managed the economics team and performed global and regional economic research and forecasting, as well as property market forecasting. Severino also has held senior research positions at Reis, MetLife Real Estate Investments, Starwood Capital Group, Prudential Real Estate Investors and UBS.

82 MANN REPORT | NOVEMBER / DECEMBER 2023

Kenneth Morrison

COLLEGES

Severino is an adjunct professor of finance and economics at Columbia University and New York University and is also a chartered financial analyst. He earned a master’s degree from Columbia University and a bachelor’s degree from Georgetown University. He is a member of the CFA Institute, the American Economic Association, the National Association for Business Economics, the Urban Land Institute and the National Council of Real Estate Investment Fiduciaries.

Morrison, a licensed New York State real estate broker, oversees Lemor Development Group, which focuses on real estate investments, consulting and development. Morrison is active in promoting affordable housing and has worked with municipal agencies in New York and New Jersey to develop projects including The Robeson, a 10story building in Central Harlem, and Balton Commons, a seven-story mixed-use development in New York City.

Morrison earned a bachelor’s degree in business and entrepreneurship from the University of Phoenix, and recently completed a Master of Science degree in real estate at Fordham University. He is on the boards of Bradhurst Merchants Association, New York City Habitat for Humanity and New York Real Estate Chamber and is chairman of the Greater Harlem Real Estate Board.

“We are thrilled to welcome Ryan and Kenneth to our Executive Advisory Council,” said Anthony R. Davidson, dean, of the Fordham School of Professional and Continuing Studies. “We look forward to collaborating with our new council members as we continue to develop our curriculum to prepare future leaders of the real estate industry.”

Morrison and Severino join the following on the Executive Advisory Council Ryan O’Connor President and CEO Clinton Management Chair of the EAC MaryAnne Gilmartin Founder and CEO MAG Partners LP Special Advisor to the EAC Anthony R. Davidson Ph.D., MBA Dean Fordham School of Professional and Continuing Studies (PCS) Scott Avram Senior Vice President of Development Lightstone Nicole Bryan Associate Dean Fordham PCS Stacey Cohen CEO and President Co-Communications

Yasmin Cornelius Senior Vice President, Community Affairs L+M Development Partners

Neil Madsen Principal Madsen Advisors LLC

Patricia Simone President Simone Management Group

Kathleen Donovan Managing Director, Real Estate Finance Group UBS

Caren Maio President Moved

Peter Tzelios Attorney and Investor

Bess Freedman CEO Brown Harris Stevens

James Whelan President Real Estate Board of New York

Christopher Mills CEO and President Electra USA

Guthrie Garvin Managing Director JLL

Louis Mirando Founder and Principal Streamline Realty Funding, LLC Former Chairman of EAC

Martin Gilligan Senior Director Guardian Life

Robert Morgenstern Director Fordham Real Estate Institute

Lonny Hendry, Jr. Senior Vice President Trepp

Carlos Olivieri Senior Vice President Edward J. Minskoff Equities LLC

Harvey Luk, Fordham REI MSRE CFO Vision and Beyond Capital Investments

Rob Willis Head of Construction MAG Partners Heidi Winslow Partner DelBello Donnellan Weingarten Wise & Wiederkehr LLP Gabriela Petrova, Fordham REI MSRE Executive Associate Mega Contracting Group Genevieve Spuhler, Fordham REI MSRE Analyst, Construction Risk Management Related Companies

NOVEMBER / DECEMBER 2023 | MANN REPORT 83

ARCHITECTURE • ENGINEERING • CONSTRUCTION

Skanska Deploys Zero-Emissions Construction Machinery on Active Los Angeles Project Skanska is piloting a zero-emissions electric excavator on Los Angeles Metro’s Purple (D Line) Extension Transit Project. The Volvo EC230 is the largest electric excavator of its kind, designed to have the same capabilities as a diesel excavator. Because it is powered by batteries, not an engine, using the Volvo EC230 will lower emissions on the job site and reduce noise during construction.

Skanska is replacing the current diesel-powered Komatsu PC228 excavator with the Volvo EC230 to load trucks of export material from a stockpile at the South Yard of the La Brea Station.

The EC230 is the largest of its kind

84 MANN REPORT | NOVEMBER / DECEMBER 2023

“The construction industry is responsible for 40% of energy-related carbon emissions,” said James Bailey, executive vice president of Skanska USA Civil.

“Our goal at Skanska is to continue to be a thought leader in sustainable solutions for the construction industry. We have worked with innovation leaders and partners — like LA Metro, Sunbelt and Volvo — to share knowledge and resources as we work toward net-zero solutions. Participating in this pilot allows us to continue to be a part of the transition to low-carbon, zero-emissions construction. Doing so on a large-scale project like the Purple (D Line) Extension Transit Project will provide a unique insight to inform sustainable innovation moving forward.”

AEC

The trial is for 90 days

The goal of the 90-day trial — one of four pilot programs in North America — is to test the success of an electric excavator of this size on a significant megaproject like the Purple (D Line) Extension Transit Project, while further advancing Skanska’s mission of reducing embodied carbon emissions.

towards a higher set of green standards,” said Mason Ford, director of sustainability and equipment services Skanska USA Civil. “The use of this large electric excavator on a public transit megaproject adds to our continued implementation of green technologies, moving Skanska toward our global climate targets of net-zero carbon emissions by 2045.”

“Skanska has a strong track record of incorporating green practices and green products into our projects. By piloting the use of the Volvo EC230, Skanska is continuing to take steps to minimize carbon emissions on our job sites, allowing us to work with LA Metro and other clients to build

The Volvo EC230 excavator has been launched in Europe, where Skanska has utilized the EC230 on its Slakthusområdet project, and separately in China. The equipment is expected to be available in North America in 2024.

Photos courtesy of Skanska

Electricity replaces diesel

NOVEMBER / DECEMBER 2023 | MANN REPORT 85

F E AT U R E S | C O M M E R C I A L

A large steel cardio ramp that features yellow risers and sidewalls and a black ramp is the key feature of the training room.

54D studio’s 850-square-foot lobby area includes a reception desk, a small merchandising area and a social section.

54D Opens Manhattan Flagship Wesbuilt Construction Managers and Miami Beach, Florida-based architectural firm Thirlwall have completed a $2.2 million renovation and fit-out of the ground floor of 125 West 25th St., a 12-story commercial building, as the location of the New York flagship fitness club of 54D, the international fitness brand headquartered in Mexico City.

54D owner Rodrigo Garduño and his U.S. team worked closely with Wesbuilt and the design team to ensure that the new project reflects the corporate aesthetic that immediately makes each 54D studio recognizable.

With original locations in Mexico City and Bogotá, Colombia, 54D recently expanded to Miami and Coral Gables, Florida and is developing plans for an additional site in New York City as well as in Los Angeles, California. The third Florida location, in Hallandale, is scheduled to open in early 2024.

“We are a global fitness brand dedicated to human transformation through physical, mental and emotional changes in every participant. This new space will enable us to expand the program to include new members in New York City,” said Rodrigo Garduño, the founder and creator of 54D. “Wesbuilt is very familiar with the construction challenges inherent in building training and fitness facilities in urban locations,” explained Mark Galway, Wesbuilt principal. “Completing this new 7,000-square foot studio, our first project for this

86 MANN REPORT | NOVEMBER / DECEMBER 2023

brand, required specialized skills from the design and construction team, including designing and installing extensive noise mitigation solutions. We are proud to have delivered this project four weeks ahead of schedule to help 54D successfully launch its New York City flagship location.”

In addition to Wesbuilt and design architect Thirlwall, the project team included executive architect Mija Architecture, acoustical consultant Criterion Acoustics, MEP engineer NY Engineers and owner’s representative Stys Hospitality Initiative.

Intense stimulating music provides an essential backdrop to 54D’s exercise sessions. The potential for loud noise drove the Manhattan site selection process.

The new space is narrow at the street front and extends deep into the building and is not easy to fill with tenants. Sound attenuation requirements were incorporated into the lease terms.

“The configuration of the Chelsea space allowed for proper sound isolation,” shared Omar Yunes, 54D’s CEO. Thirlwall created a design palette that still uses industrial materials, but of a high-quality finish grade that includes powder-coated corrugated and diamond plate metal panels, painted OSB boards and polished concrete. Black wall and floor finishes highlighted with signage and accents in yellow and white provide striking visual interest.

F E AT U R E S | C O M M E R C I A L The new West 25th Street studio represents the brand’s first location in a multi-story building and a high-density urban area, and the design was developed as a prototype for future similar sites. The landlord did not permit façade work, so the architect maintained the existing full-height glazed storefront exterior wall to permit passersby to have clear views into the space and allow the studio to claim its place in the neighborhood.

Second, the design included two new air handling units that were a long lead item at 30 weeks. Wesbuilt consulted with MEP engineer NY Engineers to identify an alternate unit that was available in 24 weeks. While the team waited for the delivery, Wesbuilt installed a temporary rental unit and connected it to the new ductwork to allow the gym to open, and then changed out the system when the permanent unit was delivered.

The high visibility approach had to consider the high noise level in the training rooms combining the sounds from sub-woofers that play stimulating music and vibrations from the exercise equipment. In order to minimize ambient noise, the studio layout was altered to place the fitness room at the rear and the community area at the front of the space. In addition, Thirlwall and Mija worked closely with acoustical consultant Criterion Acoustics to develop construction details that would contain the noise within the studio.

Mitigation of noise generated from music, jumping and exercise equipment was an important consideration throughout the project duration. David Kotch, principal of Criterion Acoustics, teamed with 54D early in the design process to assist in

The industrial warehouse design vernacular that represents the 54D brand identity is reflected in the finishes used throughout the studio. Gypsum board walls, open ceilings, and exposed ductwork are painted in Benjamin Moore Racoon Fur 2126-20, a light black shaded with violet. Flooring in the lobby and treatment rooms is light gray painted polished concrete.

All 54D lobbies contain two large yellow and white logos, laser cut from PVC and mounted on black powder-coated steel mesh panels. In the New York location, the first logo is positioned directly in line with the entrance door and is clearly visible from the street. The second is located in the social area and hung above a low bench of yellow laminate and backlit with LED lighting. Social media is very important for brand marketing and members use this second logo as a backdrop for selfies that they can post on social media to promote their fitness progress.

The reception desk is faced with Nero Marquina black marble slabs and the adjacent yellow and black laminate shelving in the merchandise area has built-in LED highlight strips. A feature wall of subway tile surrounds a beverage center in the social area. Furniture in the social areas of each studio has been chosen to reflect regional trends. For example, in Coral Gables, plastic Knoll chairs with bright yellow seating cushions were chosen to reflect the local design community.

In New York, the social area is furnished with a large table from Restoration Hardware, Magis Design’s Spun chairs in wood finish and bright yellow metal mesh accent chairs from Bluedot.

The training room contains several features that are emblematic of the training program and interior branding. A large steel cardio ramp that features yellow risers and sidewalls and a black ramp is the key feature of the space. Barbells are stored on custom-designed millwork faced with black powder-coated diamond plate steel. Inspirational messages cut in oversized vinyl letters are applied to oriented strand board (OSB) panels that have been painted to retain the appearance of the underlying grain. Black Sof Surfaces Dura Sound rubber tiles with embedded yellow striping carry the branding across the floor. Punching bag rigging that was fabricated and assembled onsite has a raw steel look with intentional rusting.

Punching bags are lined up along one studio wall that is paneled in light gray painted corrugated metal. An array of LeMonde exercise bikes was customdesigned in black and yellow finishes to coordinate with the color scheme.

Fluxwerx Profile linear LED lighting fixtures of varying lengths are used throughout the training room. Three-spoke Profile fixtures are featured in the lobby.

54D had a strict 16-week schedule for the opening, but the construction of the specialized sound attenuation components of the project strained its limits.

Punching bag rigging that was fabricated and assembled onsite has a raw steel look with intentional rusting.

site selection. The landlord retained an acoustical consultant as well, and the two parties negotiated allowable decibel levels and wrote constraints into the lease.

Criterion developed a custom sound isolation system to surround the training room. The walls are double framed, with two metal stud support structures separated by an air space. On each side of the air space are four layers of 5/8inch Type X gypsum board panels. Head and floor tracks are isolated from the surrounding structure by rubber gaskets to reduce vibration. The team engineered rubber isolation washer plates to be used in conjunction with steel fasteners to attach the wall framing to the building structure.

The design of the ceiling presented a particular challenge as office space is located directly above the studio and sound attenuation was critical. The training room has four 18-inch Meyer Sound 900-LFC subwoofers located directly below the ceiling. Criterion designed a cardioid subwoofer array that directs the sound down toward the floor, and with input from Wesbuilt developed a kinetic spring system to isolate the woofers from the ceiling.

The ceiling is designed as an acoustic lid system consisting of three layers of gypsum board hung on kinetic springs with batt insulation above to absorb cavity resonance. Existing building ductwork and piping serving the tenant space above run directly below the ceiling slab, and Wesbuilt wrapped those elements with Soundseal B10 Lag vinyl seal noise barrier to prevent sound from being transmitted to the office space above. The Lag was also used to mitigate sound transmission to an existing air-handling unit that is located in the basement below the studio and serves other areas of the building.

To mitigate vibration and impact noise generated by members using the cardio ramp and the punching bag rack, Wesbuilt installed a one-inch-thick custom elastomer base directly between the concrete floor and these two elements and fastened them with the same custom washer isolation system that was used in the wall construction.

Photo credit: Ola Wilk Photography

NOVEMBER / DECEMBER 2023 | MANN REPORT 87

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EXECUTIVE CHANGES

Kris Broder

Wyett Baker

VOCON EXPANDS NEW YORK LEADERSHIP TEAM WITH BAKER National strategy, architecture and design firm Vocon announced that Wyett Baker has joined as workplace leader in its New York office. He will work with leadership to foster business and professional development initiatives across the business.

Baker brings more than 25 years of experience in the design and construction of corporate, educational and cultural projects nationally. Prior to joining Vocon, he served as an account leader and design manager specializing in large and complex projects at Gensler.

His work spans the United States, and he has spent the last 10 years working with large professional and financial service firms on corporate headquarters projects in the New York Metropolitan Area.

“The immense skill Wyett brings to Vocon, and his long-standing partnerships within the industry, will bolster our firm’s growth,” said Debbie Donley, founder and principal at Vocon. “Relationships are the foundation of our firm, and talented leaders like Wyett are crucial to our continued growth as we create innovative workplace solutions for our clients.”

Baker received a bachelor’s degree in architecture from Pratt Institute and is a member of the American Institute of Architects.

Photo courtesy of Vocon 90 MANN REPORT | NOVEMBER / DECEMBER 2023

RCKRBX NAMES BRODER EXECUTIVE VP, BUSINESS DEVELOPMENT Rckrbx, a real estate data intelligence platform designed to deliver real-time, demand-side customer insights based on comprehensive responses from thousands of current and prospective renters within specific markets, has named Kris Broder as executive vice president of business development. She will lead the company’s business development strategies to accelerate Rckrbx’s expansion into new markets, growth of its subscriber base and development of key industry partnerships in current and future markets.

“Broder’s illustrious career across the commercial real estate sector and aptitude for nurturing genuine, long-lasting professional relationships with essential industry players will be instrumental to Rckrbx’s growth and success as we enter new markets and fortify our subscriber base,” said James Moore, co-founder and COO of Rckrbx.

Broder joins Rckrbx from BECO Management, where she most recently served as executive vice president, brand and workplace experience.

Throughout Broder’s 28-year tenure at BECO, she was widely recognized for her ability to establish connections that drove value and as a catalyst of growth for the company and the customer alike. She also brings a deep knowledge of various commercial real estate verticals, including brokerage/leasing, marketing, development, property management and construction. She attended the University of Maryland, where she received her bachelor’s degree in communication.

EXECUTIVE CHANGES

Alejandro Gala Anton D. Nikodemus

GALA NAMED CREATIVE DIRECTOR AT TPG ARCHITECTURE TPG Architecture LLP, a New York City-based architecture and design firm, announced that Alejandro Gala has joined the firm as creative director. Gala brings nearly 20 years of industry experience to the role, including a global portfolio spanning the retail, hotel, commercial and building repositioning market sectors.

“Alejandro excels in translating clients’ visions into tangible designs that exceed expectations,” said Jim Phillips, founding partner of TPG. “His time working and living in several countries will provide TPG and our projects with an extra layer of creativity and influence, weaving his cultural experiences into concepts.”

Having worked and traveled to over 65 countries, Gala's design and international background has greatly influenced his completed projects found around the world for Adidas, Simon Property Group, Brookfield Properties, Delta Airlines, Microsoft Corporation, Royal Caribbean Cruises and others. Gala also played a role in the design of a number of properties for New York City-based owners and landlords including ESRT, Vornado, SL Green and Hines.

HOWARD HUGHES HOLDINGS NAMES NIKODEMUS CEO OF NEW ENTERTAINMENT DIVISION Anton D. Nikodemus has been appointed chief executive officer of Seaport Entertainment, a newly formed division comprising Howard Hughes Holdings’ (HHH) entertainment-related assets in New York and Las Vegas — including the Seaport in Lower Manhattan and the Las Vegas Aviators Triple-A Minor League Baseball team, as well as the company’s ownership stake in Jean-Georges Restaurants and its 80% interest in the air rights above the Fashion Show Mall, which are intended to be used to create a new casino on the Las Vegas Strip.

Nikodemus, a veteran of the entertainment and hospitality industries, will focus on delivering a world-class guest experience, accelerating growth and operating performance and exploring new strategic opportunities for expansion. HHH is establishing Seaport Entertainment with the intention of completing its spinoff as a publicly traded company by year-end 2024.

Before joining TPG, Gala worked as an associate at Gensler and Vocon in New York City and held positions at firms across Spain, Belgium, The Netherlands and China.

He most recently served as president and COO of CityCenter for MGM Resorts International, where he oversaw operations for The Cosmopolitan of Las Vegas, Vdara Hotel & Spa and Aria Resort & Casino. He was also responsible for creating and developing the MGM National Harbor Hotel & Casino in Maryland and the MGM Springfield in Massachusetts. Prior to MGM, Nikodemus oversaw the redevelopment and management of the Boca Raton Resort & Club.

Photo courtesy of TPG Architecture

Photo via PRNewswire NOVEMBER / DECEMBER 2023 | MANN REPORT 91

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COMMERCIAL CORNER

Ian Bel Ian Bel Managing Principal and CEO Olive Tree Holdings

A

t Olive Tree, Ian Bel oversees the

including Olive Tree Affordable Housing,

the Low Income Housing Tax Credit (LIHTC)

company and all affiliate platforms

Olive Tree Ventures and The Life Properties.

program, to be able to complete extensive

— including Olive Tree Affordable Housing and Olive Tree Ventures,

renovations, lowering operating costs and Who has influenced you?

guaranteeing affordable rent restrictions .

the proptech venture investment arm of Olive

I have had many mentors throughout my life

Tree Holdings. Under Bel’s leadership, Ol-

that I am grateful for. One stands out as some-

Are some areas easier than others?

ive Tree has acquired and transformed over

one who had an outsized impact on my life.

Some 73% of extremely low-income renter

16,000 units of workforce and affordable

Jerry Nelson, a serial entrepreneur and major

households are severely housing cost-bur-

housing communities across eight states

philanthropist. Jerry is responsible for the

dened, spending more than half of their limit-

and has deployed over $250 million in capital

development of 9,000 North Scottsdale, Ari-

ed incomes on housing. With such a dramatic

expenditures. Prior to forming Olive Tree, Bel

zona acres, 8,000 homesites and some of the

shortage of affordable housing nationwide,

was a principal at One Wall Partners, where

world’s best golf destinations. He funded the

finding residents for our units has been an area

he spearheaded the partnership’s multifamily

creation and startup of numerous companies,

of operation that has proved simpler. These

acquisitions and capital raising.

including Ticketmaster. He established envi-

units are both desired and needed, and we

ronmentally friendly business codes to pre-

are dedicated to increasing that supply across

Bel also serves as a strategic advisor to Stake,

serve Scottsdale’s Sonoran Desert landscape

the markets that we operate within for up to 30

the first fintech platform built to create tenant

and educated over 6,000 children annually

years through our long-term hold strategy.

wealth through carewards, and a board ob-

through his Desert Center programs.

What is the effect of rising interest rates?

server to Moved, a disruptive logistics platWhat is the biggest challenge facing

Rising rates will result in greater default pro-

affordable housing?

pensity, stricter lending requirements, de-

How long have you been in the industry?

Transaction volume is down across the board

creases in available supply due to projects not

Over 17 years.

as a result of the tighter capital markets envi-

penciling and reduced new supply.

form and marketplace.

ronment, which limits the ability to improve the How did you join the industry?

existing affordable housing stock or add to the

We are starting to see evidence that the in-

When I was a student at Binghamton Uni-

stock through new development. In addition,

creased interest rate environment is having a

versity, I noticed a significant lack of quality,

high inflation has put tremendous pressure

lagging effect on wage growth and unemploy-

affordable housing options for students.

on our naturally occurring affordable housing.

ment. It is possible, and perhaps likely, that if

I began investing in homes near campus,

Rising operating costs are forcing rents to

rates stay elevated in a sufficiently restrictive

renovating them and renting them to my

increase in order to cover debt service, further

territory, that we will see more recessionary

peers. Over time, I cultivated that passion

restricting access to housing. To combat this,

headwinds which will put pressure on margins

into what is now Olive Tree Holdings, along

we have focused on pushing many of our nat-

and wages, thus making rent and home own-

with our supporting affiliate companies,

urally occurring affordable housing deals into

ership as a percentage of income even higher.

94 MANN REPORT | NOVEMBER / DECEMBER 2023

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BY THE NUMBERS

THE HIGHS AND LOWS OF THE FIRST HALF Your parents were right — discipline pays off. After decades of speculation that e-commerce, then lockdowns, would kill in-person shopping, the retail sector has emerged as the steadiest in commercial real estate, with little new supply leading to historically low vacancy rates. The industrial sector is cooling off 2022 highs, though still healthy and life sciences investment is slowing, while the multifamily sector soars as homeownership stalls. What this will bode for the future remains to be seen, but so far, so good, as we can see by the numbers.

82%

4.1%

The percentage of consumers who have

Current industrial real estate vacancy rate,

paused home-buying plans as of August

up marginally year-over-year. (Cushman &

(Fannie Mae Home Purchase Sentiment

Wakefield, U.S. Industrial Marketbeat, Q2

Index)

2023)

24.3%

4.2%

Renewals as a percentage of office leasing

The national retail vacancy rate for the first

activity year-to-date in 2023 (Avison Young,

half of 2023, its lowest rate in 15 years and

Q3 U.S. Office Market Overview)

unchanged for the last four quarters (Colliers)

98,429

742

The number of multifamily units absorbed in

The number of life sciences investment deals

the first half of 2023, quadruple the amount

in the first half of 2023, down from 1,133 for

absorbed in 2022 (Newmark, 2023 US Multi-

the same period of 2022 (JLL, 2023 Life Sci-

family Capital Markets Report)

ences Industry and Real Estate Perspective)

96 MANN REPORT | NOVEMBER / DECEMBER 2023

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