MANN REPORT JANUARY 2024 by Mann Publications

THE URBAN ISSUE

ADAPTIVE REUSE AND THE BIRTH OF A NEW SPACE NEW YORK LOS ANGELES MIAMI HAMPTONS LAS VEGAS ASPEN

THE SWEET LIFE: 100 YEARS OF LI-LAC CHOCOLATES

WHAT NEW YORK RENTERS ARE LOOKING FOR IN THEIR NEXT HOME: TOP FEATURES AND MUST-HAVE AMENITIES

Upending Urban Living: Six Trends Reinventing and Modernizing American Cities Weina Zhang, Founder and CEO of The Z Life Company

Navigate turbulent times with confidence. With our deep insight and experience, where others see challenges, we see opportunities.

THE SWITZER GROUP IS A GLOBAL DESIGN FIRM FOR INTERIOR DESIGN, PLANNING, AND WORKPLACE STRATEGY. WE DESIGN ENVIRONMENTS THAT REFLECT OUR CLIENTS’ BUSINESS VALUES AND CONTRIBUTE DIRECTLY TO ONE’S HAPPINESS AND PRODUCTIVITY. THE SWITZER GROUP HAS BEEN RECOGNIZED AS ONE OF THE “TOP 100 GIANTS” BY INTERIOR DESIGN MAGAZINE SINCE 1977, CONFIRMING OUR CONTINUED EXCELLENCE AND INFLUENCE IN THE FIELD.

WWW.THESWITZERGROUP.COM PHOTOGRAPHER GARRETT ROWLAND

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JANUARY 2024

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46TH ANNUAL

HONORING DOROTHY M. KILLEEN THURSDAY MARCH 7, 2024

Wells Fargo

DINNER COCHAIRS

5:30 p.m. Cocktail Reception 7 p.m. Dinner

Kevin Gillespie

Cipriani 42nd Street

Wells Fargo

Lynn Whitmore

New York City

Benefiting National Jewish Health Funds raised will help support groundbreaking medical research and treatment for patients with lung, heart, immune and related conditions.

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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.

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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

EDITORIAL

ART

BUSINESS

Editor Debra Hazel

Art Director Serena Bhullar

Technology Consultant Joshua Fried

Associate Editor Alex Baumbusch Laurie Melchionne

Graphic Designer Laura Chousa

Distribution Mitchell’s Delivery Service

Graphic Designer Madi McCreesh

DIGITAL MEDIA

Copy Editor Geraldine Melchionne Director of Communications and Marketing Penelope Herrera Director of Newsletter Division Cheri Phillips Director of Special Events Mirusha Damiani

Cover Photography Killer Imaging

CONTRIBUTORS Frank DeLucia Louise Phillips Forbes Catherine Ginsburg Merilee A. Kern Tyler Jensen Kris Kiser Wayne Lambert Mike Lee Steven Matz Ira Meister Carol A. Sigmond Steven Tishco Curtis Williams Sarah Yaussi

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Editors Alexandra Baumbusch Debra Hazel Penelope Herrera Laurie Melchionne Cheri Phillips Web Developer CS Designworks

East Coast Ofﬁce: 450 7th Ave, Suite 2306 New York, NY 10123 212-840-MANN (6266)

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

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ONE MANN’S OPINION Welcome to 2024! Whatever holiday you celebrate, I hope you had a happy and healthy one. And now it’s back to work. All of us New Yorkers know we live in the greatest city in the world, so I’m thrilled we’re starting the year with Merilee Kern’s focus on six trends shaping urban areas worldwide. Merilee is a contributor to our Fashion Mannuscript magazine as well as Mann Report, and has a finger on the pulses of style and trends everywhere. It’s a delight to look forward with her and her subject Weina Zhang, who’s building amazing projects in Las Vegas. On our events page, you’ll also see how some of you spent the holiday season — helping others through fundraisers, holiday parties and more. I’m proud to be part of an industry that believes you can’t do well without doing good for others. As always, we’ll keep highlighting your charitable efforts in the issues ahead. On a personal note, you may also see a few style changes in all of our magazines and a greater interaction on social media as we’ve expanded our staff with amazing talent. Let’s look forward to a 2024 of growth and success.

“Life is like riding a bicycle. To keep your balance, you must keep moving.” -Albert Einstein

TABLE OF CONTENTS

JANUARY 2024

NEWS BRIEFS 24

Commercial News

Residential News

Management News

Tech Talk

Breaking News

EVENTS 16

Children’s Happy Faces Foundation Raises $600K at Annual Golf and Tennis Event

New York Institute of Credit Celebrates 12th Future Leaders Awards

American Friends of Rabin Medical Center Hosts 23rd Annual Gala

FEATURES 38

The Sweet Life: 100 Years of Li-Lac Chocolates

Adaptive Reuse and the Birth of a New Space

AI and Proptech: Five Thought Leaders to Follow into the Future of Real Estate

Home Sweet Home: Tips for Navigating New York City’s Condo Conversion Market

What New York Renters are Looking for in Their Next Home: Top Features and Must-Have Amenities

How Marketing a Firm’s DEI Initiatives Can Help Attract/Retain New Business

Photo by Eric Laignel

TOC

JANUARY 2024

COVER FEATURE

DEPARTMENTS 9

One Mann’s Opinion

Editor’s Letter

Columns

Executive Changes

Commercial Corner: Ben Berman, President of Berman CRE

By the Numbers: Real Estate: Steady as She Goes

UPENDING URBAN LIVING: SIX TRENDS REINVENTING AND MODERNIZING AMERICAN CITIES

Photo courtesy of Z Life Company

COLLEGES 82

Shawmut and Brown University Complete The Lindemann Performing Arts Center

AEC 84

Big at the Beach: Malibu High School Expands

Matern Professional Engineering Helps Build Brightline Train Station at Orlando International Airport

Photo by Iwan Baan

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JANUARY 2024 | MANN REPORT 11

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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

12 MANN REPORT | JANUARY 2024 mannpublications.com guarantee, warranty or representation about it. The prospective tenant should carefully verify each item, and all other information herein.

KNOW GREATER VALUE From financing considerations, to property performance metrics, today’s real estate business is inundated with both challenges and opportunities. PKF O’Connor Davies has decades of experience working with a variety of assets including industrial, office and residential sites. Our experience in this complex field gives us the expertise to deliver strategic advice that drives real value. With the PKF O’Connor Davies Real Estate Team, our clients know greater service, know greater insights, Know Greater Value.

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EDITOR’S Happy New Year! In addition to our cover feature on Weina Zhang’s view of the new urban environment, this month sees some other predictions and trends, including the National Multifamily Housing Council’s view of must-have residential amenities, and how to navigate the condo conversion market. Start 2024 by learning from SMPS’ Wayne Lambert on how to market your diversity, equity and inclusion initiatives (you have them, right?). And check out National Land Realty’s Curtis Williams’ suggestions on social media leaders to follow and learn from. I’ve loved Li-Lac Chocolates since my teen years, when I interned at a theater around the corner from its Christopher Street location, so it was a real treat (pun intended) to learn more about its centennial and plans for the future. As always, it’s a joy to look ahead, and we look forward to hearing from you about what you’d like to see this year to help you do business better. Let’s look forward to a busy 2024. -Debra Hazel

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LETTER

14 MANN REPORT | JANUARY 2024

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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

Steve Geller Managing Director 212.612.0222

Nicoletta M. Pagnotta Senior Vice President 212.612.0219

Avi Geller Vice President 212.612.0249

Dawn Conforti Vice President 212.612.0227

Jordan Hill Associate 646.502.3425

NO OTHER FIRM IS MORE EFFECTIVE, HAS BETTER RELATIONSHIPS OR UNDERSTANDS THE NEEDS OF COOPERATIVES BETTER THAN MERIDIAN Learn how our unique vantage point and proprietary products can help your cooperative plan for 2023 and beyond!

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JANUARY 2024 | MANN REPORT 15

EVENTS

Children’s Happy Faces Foundation Raises $600K at Annual Golf and Tennis Event Photos By Jill Lotenberg and Howard Wechsler

Jacob Sirotkin, Century Management; Andrew May, Hercules Corp.; Justin Veret and Mike Zerka, Bluewoods

The Children’s Happy Faces Foundation once again knocked the ball out of the park with its charity golf and tennis experience, held at Sleepy Hollow Country Club and Trump National Golf Club. The event attracted 230 golfers and tennis players and an additional 200 donors for dinner for its Networking Experience at the Mansion of Sleepy Hollow Country Club. Live music by the Parker Reilly Band and the American Bombshells was provided to benefit Ronald McDonald House New York. “The incredible support from the New York real estate industry directly benefiting Ronald McDonald House New York is truly amazing,” said David Lipson, CEO and founding member of Chil-

Rick Martin and Ruth Browne, Ronald McDonald House New York

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AJ Rexepi, Century Management; Matt Durnan, Durnan Group; Eugene Donnelly; Mike Zerka, Bluewoods and Brian Sullivan, Rimkus

dren’s Happy Faces Foundation and senior managing director of Century Management Services Inc., the event’s chairman. “The children and families of Ronald McDonald House New York continue their daily battle for survival. So, it is wonderful to see such an outpouring of love and support from so many.” “We are grateful to the Children’s Happy Faces Foundation and all who have partnered with us to bring this year’s golf outing to life. The funds raised for this event are critically important in supporting our families as they experience the most difficult fight of their lives,” said Ruth C. Browne, president and CEO of Ronald McDonald House New York.

Jared Paioff and Jeffrey Schwartz, SSRGA (Cigar Sponsor); Dave Lipson, Century Management and Steven Sladkus and Brian Ray, SSRGA (Cigar Sponsor)

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EVENTS Doug Fenniman, Gallagher; Ed Curry, Duxiana; Jim Fenniman, Gallagher and Rygo Foss, Skyline Restoration

Cristina Rosario, Happy Faces; Marta Peralta, Dave Lipson and Adam Zerka, Century Management; Joey Dussich, JAD; Lydia Zerka and Susan Pryce and Yahaira Barrera, Century Management

Mariachi Band

Vinny Migliore, Retired NYPD; Rick Martin, Ronald McDonald House New York and Jimmy Murtagh, Retired NYPD

The fundraiser was supported by several notable organizations. Title Sponsor: Century Management Services; Platinum Sponsor: Andrew & Abby May Family Foundation and The Barry Family Foundation; Gold Sponsors: Efficient Combustion & Cooling Corp., Morgan Stanley, National Cooperative Bank and Spring Scaffolding LLC; Silver Sponsors: Bargold Storage Systems, C.A.C. Industries and Gallagher; Bronze Sponsors: Daniels Norelli Cecere & Tavel PC, Dial-A-Bug Pest Control and M & R Management and Brass Sponsors: Perennial Roofing & Restoration, Mann Publications and Schwartz Sladkus Reich Greenberg & Atlas.

Parker Reilly Band

Oasis Day Spa Beat the Pro Hole

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Children’s Happy Faces Foundation Live Auctioneer Howie Schwartz, GSS

JANUARY 2024 | MANN REPORT 17

EVENTS

New York Institute of Credit Celebrates 12th Future LeadersAwards Photography by GMW

The New York Institute of Credit (NYIC) held its 12th Future Leaders Awards at Arno Ristorante. Each year NYIC, which has been educating the credit industry for 105 years, presents two awards. The Future Leader of the Year Award is given to an individual who has demonstrated personal growth in the industry and supported NYIC with efforts to help build the Future Leaders Division. This year’s honoree, Tim Wise from Aurous Financial, serves on the Future Leaders committee and has been very active in the promotion of Education and Networking Activities in the marketplace. His award was presented by Jeff Sirchio of Aurous Financial. The Honorable Burton R Lifland Mentor of the Year Award, presented to an industry leader who has provided guidance and direction to future leaders and others and developed a reputation as a mentor, was given to Richard Simon of Mandelbaum Barrett. Simon, an attorney representing bankers and lenders, has served his clients and the industry for many years through running a factoring firm along with closing numerous financial transactions. His award was presented by Bob Grbic from White Oak.

Guest, Tim Wise, Elizabeth Wise, Anas Sawaihin and Guest

Cliff Katz, Bill Henrich and Michael Amato

David Huber, William Ezzo and Paul Rome

Harvey Topitz and Bill Ezzo

Harvey Gross, Tim Wise and Guest

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Stu Rosenthal, Alan Eliasof, Rob Martucci and Paul Shur

EVENTS

Alex Lurye, Kristina Salvo, Jerry D’Amato and Guest

Steven Sedereas, Peter Tanella, Joseph Peters and Guest

Jeff Sirchio and Tim Wise Lou Barone, Harvey Gross, Essa Thiry and Denise Albanese

Tim Wise and Richard Simon

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EVENTS

AMERICAN FRIENDS OF RABIN MEDICAL CENTER HOSTS

23RD ANNUAL GALA Photos by Bascom

Over 350 leaders of New York and America’s real estate, finance, technology and pharmaceutical industries joined together at The Plaza Hotel in New York City for the American Friends of Rabin Medical Center (AFRMC) 23rd Annual Gala to support saving lives in Israel at Rabin Medical Center, the country’s premier hospital. AFRMC Gala Chairs Michael Glatt, Robert Ivanhoe, Gary S. Jacob, A. Mitti Liebersohn, Jonathan Mechanic, Mitchell Moinian, Stephen Siegel, Harrison Sitomer and Robert J. Sorin helped make the event a huge success in raising much-needed emergency medical equipment and supplies for Israel’s Rabin Medical Center. The hospital is currently treating countless victims and casualties from the October 7 Hamas attack and subsequent Hamas missile attacks around Israel in both its Greater Tel Aviv main campus, and its emergency Annex campus in Eilat, Southern Israel. Gala Master of Ceremonies Magalie Laguerre-Wilkinson, vice president of news programming at Nickelodeon News, opened the evening on a solemn note, holding a moment of silence for the kidnapped and

missing Israelis. The evening featured a fireside chat with Laguerre-Wilkinson and the 13th Prime Minister of Israel, Naftali Bennett, about the current situation in Israel and the importance of emergency readiness at the hospital. The Prime Minister was awarded the Yitzhak Rabin Award of Gratitude for his leadership of Israel and service to the Jewish people. Mitchell E. Rudin was honored with the Yitzhak Rabin Lifetime Real Estate Leadership Award, Scott Rechler was honored with the Yitzhak Rabin Visionary Business & Civic Leadership Award and Shari Redstone was honored with the Yitzhak Rabin Entertainment & Media Leadership Award which recognize Rudin, Rechler and Redstone for their “outstanding and expert leadership in their fields and for being trusted partners, loyal friends and exemplary philanthropists.” AFRMC Board Chair A. Mitti Liebersohn presented Abe Foxman, (Anti-Defamation League, National Director Emeritus) with the Yitzhak Rabin Special Lifetime Achievement Award.

Top row: Philip Altheim, Ron Cohen, Mitti Liebersohn, Melissa Liebersohn, Arthur Mirante and Elizabeth Mirante Bottom row: Abraham Foxman and Dalia Jarashow

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Gary Jacob, Cathy Jacob and Richard Born

EVENTS

Dennis Serrette, Mitchell Rudin, Martin Geller and Mark Levenson

SL Green Table with AFRMC Board Member and Gala Chair Harrison Sitomer (top row, right)

Gala Guest, Stephen Siegel, Wendy Siegel and Scott Rechler

Joshua Plaut, Scott Rechler, Shari Redstone and Magalie Laguerre-Wilkinson

Robert Sorin, David Schwartz, Jonathan Mechanic, Shari Redstone, Beth Miller-Eidman, Robert Scheinman, Joshua Plaut, Magalie Laguerre-Wilkinson and Ron Cohen

Randy Ketive, Bonnie Rudin, Mitchell Rudin, Naftali Bennett, Jessie Rudin and Scott Rudin

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Scott Rechler

JANUARY 2024 | MANN REPORT 21

22 MANN REPORT | JANUARY 2024

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COMMERCIAL NEWS

Amtrak, Vornado Complete Penn Station 32nd Street Entrance Just in time for holiday travel, Amtrak and Vornado Realty Trust completed the transformation of New York Penn Station’s busiest entrance at Seventh Avenue and 32nd Street. The enlarged and fully rebuilt entrance expands its width by 50% at the nation’s busiest train station, provides natural light and air down into the concourse and features a fully ADA-accessible and safer experience.

Photo via PRNewswire

“We are proud to roll out the welcome mat to our new, modern entrance for the 600,000 daily New York Penn Station visitors,” said Amtrak CEO Stephen Gardner. “Having a direct, accessible entrance at 32nd and Seventh will improve the customer experience for all passengers as they can now take an elevator, walk down wider stairs and have an added, third escalator to help them enter or exit the station.” The completely renovated entrance features: a new ADA-compliant elevator; three new transit-grade escalators, replacing the original two escalators; wider sidewalks along the west side of Seventh Avenue between West 31st and West 33rd Streets; a new glass canopy allowing natural light into the station and monumental illuminated Penn Station signage that allows travelers to locate entrances more easily. “Together, we have reimagined and transformed one of the world’s busiest transit entrances. Our collaborative effort with Amtrak has delivered something every New Yorker and every visitor to our city deserves,” said Steven Roth, CEO of Vornado Realty Trust. “The new entrance is safer, more accessible, more spacious and far more inviting for the hundreds of thousands of people who travel through Penn Station every day. Intentionally and systematically, we are transforming

the Penn District into the new epicenter of Manhattan — a remarkable place to live, work and experience the best that New York has to offer.” Vornado led the overall design and construction of street-level improvements and the canopy above, while Amtrak constructed the improvements from the street to its concourse including the new ADA elevator. Foster + Partners designed the dramatic new glass canopy and interior lighting feature, which creates a more inviting, open and brighter environment linking the station below to the street.

Bogner Opens New York City, Los Angeles Flagships German outerwear brand Bogner has established a long-term presence in the United States with the opening of permanent flagship stores on Madison Avenue in New York City and Sunset Boulevard in Los Angeles.

Photo via PRNewswire

Building on the success of its short-term and pop-up locations on both coasts, Bogner has strategically determined that the U.S. represents a key growth opportunity, accounting for approximately 25% of the company’s revenue. “This exciting milestone underscores our unwavering commitment to the U.S. market, even amidst the prevailing trend of brick-andmortar stores closing. It is a testament to our belief in the power of physical retail and our dedication to providing an exceptional inperson experience for our customers. We are confident that these new spaces will not only captivate and inspire, but also reaffirm our brand’s enduring presence in the hearts of our valued U.S. customers,” said Linda Ashman, executive vice president at Bogner of America. The New York City location, located at 755 Madison Ave. just north of the corner of East 65th Street, spans 3,400 square feet and draws inspiration from a modern chalet, embracing a subdued color palette and natural materials to create a fitting backdrop for the company’s collections. Raw white oak lines the walls while the flooring seamlessly combines white oak and concrete. Illuminated fixtures in matte black steel tastefully accentuate the perimeter for clothing and accessory displays, and Austrian blue stone accented throughout the store in various forms adds tactile richness to the space.

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Simultaneously, the 2,500-square-foot space at 8500 Sunset Blvd. on the Sunset Strip is a sleek and modern tribute to the city’s architectural style, with simplicity at the core of the design. A central element, known as The Pod, coated in black lacquer, houses the inner workings of the store and mirrors its surroundings, with a windowed wall offering views of La Cienega Boulevard. Custom Bogner video content on a digital billboard facing both inside the store as well as Sunset Boulevard is enhanced by an abundance of natural light from a glass wall. Minimal illuminated fixtures on the walls highlight the collections, and the exclusive use of concrete, steel and lacquer materials throughout the space maintains a cohesive and contemporary aesthetic.

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JANUARY 2024 | MANN REPORT 25

COMMERCIAL NEWS

Long Beach to See First New Full-Service Hotel in 30 Years Hard Rock International, in partnership with Steinhauer Properties, announced development plans to open the Hard Rock Hotel Long Beach, the first new-build full-service hotel built in Long Beach, California in 30 years and the first new Hard Rock Hotel property in Southern California in almost a decade. Set to begin construction in Summer 2024 with plans to open in Spring 2027, the upscale property will be located in the heart of downtown Long Beach, adjacent to the convention center.

Photo by Hard Rock International

“We’re grateful to Mayor Rex Richardson, the City Council and our partners for welcoming Hard Rock’s unique brand of hospitality and entertainment to the City of Long Beach,” said Jon Lucas, chief operating officer for Hard Rock International. “We are really excited about expanding our award-winning hotel portfolio on the West Coast.” The new Hard Rock Hotel Long Beach is set to stand at 31 stories and feature approximately 427 rooms and suites, including a Rock Star Suite, along with what will be the tallest open rooftop bar on the southern California coast featuring 360-degree views. Amenities will include an outdoor swimming pool with an amenities deck offering sweeping views of the Pacific Ocean, a Body Rock Fitness Studio, two on-site restaurant options and a Rock Shop, featuring Hard Rock merchandise and other unique items. The new property will also feature a unique “speakeasy” with an intimate concert hall offering seating for approximately 250 patrons.

“With the Hard Rock brand consistently elevating and expanding its upscale entertainment offerings, we’re thrilled to be a part of this amazing venture in Long Beach,” said Greg Steinhauer, president of Steinhauer Properties. “We’re proud to have the opportunity to create a unique and dynamic asset in this beautiful coastal city that reflects the incredible energy of this diverse community that is sure to attract visitors from around the world.”

Sands Investment Group Launches Capital Markets Division Sands Investment Group (SIG), a commercial real estate brokerage firm, announced the launch of its capital markets division led by newly hired Managing Director Miguel Jauregui.

Photo courtesy of Sands Investment Group

The capital markets division offers a complete range of financial services, from debt and equity counsel and execution to the structuring of investment deals from beginning to end, to help investors make informed decisions and achieve their investment goals through commercial real estate across all asset classes and geographies. “When SIG was created, the vision was always to expand into new verticals and offer end-to-end financial solutions for clients,” said Chris Sands, founder and CEO of SIG. “The launch of the capital markets division, and the hiring of a seasoned expert like Miguel, furthers that goal to better serve our current and future clients in private equity, family office, institutions, development and tenant ownership and management.” Jauregui will work out of SIG’s Los Angeles office to lend his expertise of 10 years in the commercial real estate industry, with a specialization in comprehensive debt analysis. Before joining SIG, he served as the director of capital markets at SAB Capital and led the debt advisory division from its founding in 2020. Jauregui also worked at Wells Fargo as a commercial real estate banker in New York City and held director positions at two boutique investment sales brokerages.

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JANUARY 2024 | MANN REPORT 27

RESIDENTIAL NEWS

Leasing Launches at Pearl House Vanbarton Group, a privately owned, vertically integrated real estate development, investment and advisory firm, launched the leasing of Pearl House in the Seaport district, the largest office-to-residential conversion in the New York City’s history to date.

Photo by Williams New York

Featuring over an acre of indoor and outdoor private, club-inspired amenities, paired with intelligently appointed rental apartments, Pearl House’s residences are designed by award-winning architecture, design and planning firm Gensler. Custom art and sculptural installations in the lobby and the amenity spaces are curated by designer BHDM. “Our transformation of this legacy office building harnesses the strengths of the existing architecture to create unique and elegant homes catering to the aspirations of Pearl House residents,” said Robert Fuller, principal at Gensler. “Through strategic architectural interventions — including altering building cores, retrofitting operable windows and adding new floors with an overbuild atop the original structure — the team has catalyzed a metamorphosis that enhances the livability of the building and the greater Seaport neighborhood.” The residences include spacious studios, and one- and two-bedroom apartments, including select penthouses with private terraces. The homes feature oversized 9’6” ceiling heights and large double-pane windows to provide ample natural light. The condominium-quality finishes include Greenguard gold-certified flooring, solid wood core doors, custom kitchens with stone countertops and integrated appliances, spa-inspired bathrooms with Italian porcelain tile and

intelligent in-home extras like keyless entry, smartphone-controlled lighting, Ecobee thermostats, Bosch washer-dryers and solar/blackout dual roll-down shades. Three floors of amenities include SocialHouse on the lobby level, with lounge and social spaces, a 24-hour reception desk and residentexclusive coffee bar; ClubHouse on the concourse level, with a Technogym Performance house, bowling alley, game room, children’s playroom and more and SkyHouse on level 28, with lounges, coworking space and a full-size bar and chef’s kitchen. Pricing starts at $3,500 and rises to $10,000 for the penthouse homes.

BEO Investments LLC Announces $200M Capital Allocation for U.S. Residential Condo Development Miami-based real estate investment firm BEO Investments LLC, an alternative asset management firm specializing in innovative real estate investment strategies, announced a new capital allocation of $200 million dedicated to residential condominium developments across the United States. This initiative is set to provide developers with up to 50% of their capital requirements, marking a significant boost in support for high-potential real estate projects. This new allocation is a direct response to the specific needs of one of BEO’s partners, the firm said. It represents a tailored solution, offering more than just financial support but also strategic partnerships in bringing projects to fruition. The structure of this allocation is an innovative departure from traditional straight equity contributions, according to the firm. It was designed to enhance developers’ equity, thereby offering better returns to their investors, and aligning with BEO’s commitment to generating sustainable and profitable growth. “By supporting developers in this way, we’re not only contributing to the growth of their projects but also enhancing the value we deliver to our LPs,” said a BEO spokesperson. “This approach reflects our firm’s deep understanding of market dynamics and its capability to adapt its investment strategies to meet evolving market demands.”

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The firm’s latest move is aligned with its broader strategy of capital appreciation and sustainable growth, focusing on quality investments and long-term value creation.

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JANUARY 2024 | MANN REPORT 29

RESIDENTIAL NEWS

Related Group Breaks Ground on Ritz-Carlton Residences, Tampa Tower II Related Group has broken ground on Tower II of The Ritz-Carlton Residences, a Tampa, Florida condominium development on Bayshore Drive. The Ritz-Carlton brand’s debut into the Bay Area, The Residences boasts architecture by Arquitectonica and interiors by design boutique Meyer Davis. “We set out to raise the bar for luxury living in Tampa Bay, delivering an indulgent lifestyle for residents that aligns with the Ritz-Carlton brand’s iconic reputation,” said Nick Pérez, president of Related’s condominium division. “We strive to exceed our buyers’ expectations and show them the kind of lifestyle they didn’t know they couldn’t live without. Tower II is the next step in that vision.” Tower II at The Residences will feature 94 condominium homes and six exclusive villas, with open floorplans spanning up to 5,700 square feet, giving buyers the sense of living in a “mansion in the sky.” Floorto-ceiling windows and wrap-around balconies blur the boundaries between indoor and outdoor spaces and highlight the sprawling vistas of Hillsborough Bay and Downtown Tampa. The kitchens and shared living spaces are equally impressive, crafted for entertaining with custom-designed Italian cabinetry, high-end finishes and Sub-Zero and Wolf appliances. A bespoke wellness amenity package includes on-demand spa service treatment rooms, alongside separate steam rooms and saunas catering to both men and women. Amenities include a gym and fitness studio, an on-site dog park, pickleball and regulation-size tennis courts, as well as a professional-grade golf simulator.

Rendering courtesy of Related Group

An oversized rooftop terrace with a fully stocked bar and expansive viewing deck offers breathtaking views and an abundance of space for outdoor relaxation and entertainment. Lush greenery by landscape architect Enzo Enea creates a serene oasis within the city. Pricing for The Residences Tower II starts at $1.7 million.

Cottonwood Group Lends $240M to St. Regis Residences, Boston Cottonwood Group, a private equity real estate investment firm, has lent $240 million in senior mortgage financing to the St. Regis Residences, a Boston luxury multifamily tower developed by Cronin Development in the city’s thriving Seaport District.

Photo via PRNewswire

“We are delighted to be part of the prestigious St. Regis Residences, Boston, as a capital partner alongside Cronin Development,” said Alexander Shing, chairman and CEO of Cottonwood Group. “Our optimism for Boston is fueled by the triumph of our Echelon Seaport project. The St. Regis Residences, Boston is just one of our many ongoing investments in the city, and we are excited to collaborate with Jon Cronin to sustain the positive momentum that has established the Seaport as one of Boston’s premier living destinations.” Simultaneously, in New York City, Cottonwood collaborated with Madison Realty Capital which provided senior financing while Cottonwood offered a $50 million mezzanine loan for Boris Kuzinez’s Five Points Development located at 262 Fifth Ave. This asset, renowned as the City’s skinniest supertall residential building, highlights Cottonwood’s ability to navigate and contribute to complex projects within its target markets.

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MANAGEMENT NEWS

Aro Homes Partners with Olson Kundig to Design Net-Zero Homes at Scale Aro Homes, which is seeking to engineer and build net-zero homes faster and more efficiently than conventional homes, unveiled its first completed residence designed by Olson Kundig, the collaborative global design practice.

Photo by Matthew Millman

Residential housing creates 23% of global emissions, with brand-new code-compliant homes emitting 10 tons of CO2 every year. As the U.S. faces an unprecedented housing shortage, cutting building times while raising the sustainability bar could make a significant difference, the companies said. “Olson Kundig was the ideal collaborator for a single-family home that is equally beautiful and good for the world and the environment,” said Carl Gish, co-CEO and co-founder of Aro Homes. “They understand the critical importance of maximizing resource efficiency to create homes that are sustainable and remarkable to live in. Home construction has been slow to evolve and meet the challenges of climate change. Together, we are transforming that paradigm.” Aro Homes has developed a hybrid off-site/on-site construction strategy, building volumetric components of its houses at its plant in Sacramento, California while doing construction onsite in parallel. This can shorten build times from 18-plus months, which is typical for a standard single-family residence, to just 90 days. “Aro Homes has a great mission that touches both high quality, humancentered design and super-efficient, streamlined delivery, and we could not be happier to partner with them on the design of their first homes,” said Tom Kundig, principal, owner and founder of Olson Kundig. “From affordability and expanded access for homebuyers to the speed of the construction, this is an exciting project on every level.” Each 3,000-square-foot Aro home includes four bedrooms and an office space to flexibly accommodate a wide range of family sizes. The

design fosters a high-quality architectural experience, including an emphasis on indoor/outdoor living, thoughtful adjacencies between interior program spaces and lines of sight that deliberately frame exterior views or areas for art. A steel entry canopy provides an understated yet design-forward signature for the homes. With a high-performing building envelope coupled with highefficiency HVAC and lighting systems, Aro homes are engineered to use 67% less energy than the American Institute of Architects 2030 Challenge Baseline for energy performance. Leveraging passive design approaches, the house is oriented to maximize sunlight for the roof-mounted photovoltaic solar array, which will produce more electricity than the house uses in a year. This is enough to offset its initial embodied carbon within 16 years. Aro homes additionally offer an option for gray water reclamation and reuse, which further reduces water use by as much as 45% as compared to a standard home. While the initial Aro Homes model is designed for the Bay Area, its versatile approach is intended for widespread adoption in other markets. As Aro Homes scales its build process, it intends to put more homes on the market more quickly and more affordably.

Peak Roofing Launches Solstice Solar Shingle System Solar installer Summit Energy’s Peak Roofing division has introduced the Solstice Solar Shingle System from CertainTeed. The system combines solar energy production into a low-profile roofing system that provides a sleek, uniform appearance integrating seamlessly with asphalt shingles. Peak Roofing is also one of a few in the nation that are CertainTeed Select Masters in both solar and shingles. “We are excited to be working with CertainTeed on this highly innovative breakthrough in the solar shingle class. Solstice combines the best in aesthetics and solar power production in the industry. Many manufacturers have tried but no one has been able to create the seamless integration with asphalt shingles we see with Solstice,” said Adam Graber, director of business development at Summit Energy. “The value of solar power to the customer in savings and to the world in helping to reduce climate change are well-known drivers for acceptance. However, some homeowners have been reluctant to adopt solar due to the aesthetics. This breakthrough design is addressing that perception head-on and is proving to be a real game-changer.” The Solstice Shingle boasts impact and wind resistance for solar shingles with a wind speed rating of 110 mph. They are also rated to be installed in any wind zone including Florida’s high-velocity hurricane

32 MANN REPORT | JANUARY 2024

Photo via Business Wire

zone. The Solstice Shingle is also watertight due to the water channel and raised fastener locations designed to provide added protection against water intrusion. Founded by solar veterans Eric Israelsen and Dallin Maw, Summit Energy has expanded its service area steadily and now offers solar and roofing solutions for homeowners and businesses in Massachusetts, New Hampshire, Maine, Vermont, Connecticut and Rhode Island.

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IT’S OUR BUSINESS TO KNOW YOUR BUSINESS. IDB Bank’s Commercial Lending offers your business the level of attention you deserve and the capital you need to grow.

Find out more about our unique relationships with our remarkable customers at IDBstories.com

IDB Bank® is a registered service mark of Israel Discount Bank of New York. Member FDIC.

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JANUARY 2024 | MANN REPORT 33

MANAGEMENT NEWS

Empire Valuation Consultants Launches Real Estate Services Empire Valuation Consultants, an independent valuation consulting firm, has launched a practice group offering real estate valuation services under the directorship of Roslyn Lo, a veteran valuation appraiser. The real estate valuation services practice will perform market analyses, consulting and appraisals for all varieties of commercial asset types in accordance with all federal and local market regulations.

Photo courtesy of Empire Valuation Consultants

“We are thrilled to welcome Roslyn to lead the launch of our new real estate valuation practice. Empire Valuation Consultants is now a onestop shop for your valuation needs. We do not just value businesses, we value all types of tangible and intangible assets, debt and complex securities,” said William A. Johnston, CEO, Empire Valuation Consultants. “We are confident that with Roslyn’s proven expertise and leadership, Empire Valuation Consultants will be able to successfully expand into the real estate valuation market and offer our clients the benefits of a full-service valuation firm.” Lo brings extensive real estate valuation expertise, including experience as an appraiser at New York’s largest independent real estate appraisal firm, as well as a consultant at a top 16 national public accounting firm, where she led the valuation team. Lo began her career in real estate as a reporter for “Real Estate Weekly” and is a designated member of the Appraisal Institute. She has valued numerous types of real estate assets across the nation including multifamily rental, office, retail, industrial, development sites and mixed-use properties. She has also valued complex properties

including low-income housing tax credit properties, container terminals, car washes, concert venues, air rights ownership and for-sale residential condominium units and subdivisions. She has performed these appraisals for purposes including financing, financial reporting, estate and gift tax planning, tax appeal, litigation, eminent domain and strategic planning. Lo is also experienced in performing purchase price allocations in accordance with Accounting Standards Codification 805, Business Combinations.

VIU by Hub Offers Landlord Insurance for Rental Properties VIU by Hub, an omnichannel insurance brokerage platform, has launched landlord insurance to protect investment rental properties and secondary homes. Landlord insurance typically includes two different types of coverage, property damage and liability protection, and offers financial protection from damage caused by fire and storms, lost rental income and personal liability. Landlord insurance enables individuals owning fewer than five homes to shop for, compare quotes and purchase a policy through VIU. This type of policy offers protection for homes that do not qualify for homeowners’ insurance, such as secondary residences, rental properties or vacant homes undergoing repairs. “About 70% of investment properties in the U.S. are owned by individuals. This represents a huge number of people who are in need of a different insurance solution to protect their rental homes,” said Bryan Davis, executive vice president and head of VIU. “By adding a landlord policy to our roster of products, we further cement VIU’s role as a one-stop shop for all personal insurance needs for individuals and allow our partners, particularly those in the property management space, to better serve their customers.”

protect their investments and receive unbiased advice through a licensed independent broker. This enables them to provide expanded services to their clients while simultaneously creating an alternative revenue opportunity for their business.

While VIU is available to all consumers, the platform can be embedded within the systems of partner businesses and organizations, such as property management companies, enabling them to offer additional value-added services like landlord insurance. Property management companies can provide small-scale clients with the opportunity to

Powered by Hub International Limited, a global insurance brokerage and financial services firm, VIU features a digital-first experience, supported by personalized live agent interactions and advice. VIU also provides the ability to shop for quotes, compare, purchase and manage policies across home, auto, condo, renters, life and pet insurance.

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TECHTALK

Cushman & Wakefield to Embed AI Across Commercial Real Estate Transaction Lifecycle To enhance client and employee outcomes, Cushman & Wakefield announced that it intends to embed artificial intelligence (AI) across its commercial real estate transaction lifecycle. As part of AI+ — the firm’s new, exclusive digital transformation strategy, powered by AI and underpinned by proprietary data and partnerships — Cushman & Wakefield said it is digitally advancing operations, client delivery and data stewardship to create a new industry standard for CRE while enhancing the firm’s productivity. An AI strategy centered on people and partners, AI+ encompasses a series of partnerships by Cushman & Wakefield with strategic technology providers, clients, proprietary data and the firm’s people. Designed to deliver digital transformation at scale, Cushman & Wakefield is deploying a combination of partner and proprietary AI products to increase access and speed-to-market for the firm’s enterprise expertise and insights. These advancements will empower brokers, services and research professionals to support client decisionmaking and other needs. AI+ will provide real-time, AI-powered information and automation, the firm said. “While generative AI is a phenomenal addition to our capabilities, the true power of transformation lies at the convergence of data, people, processes and technology,” said Salumeh Companieh, chief information and data officer, Cushman & Wakefield. “By seamlessly integrating these elements, we can magnify the impact of secure and well-planned digital transformations for our clients and colleagues. Through AI+, which unites our talented advisors, digital platforms and strategic technology partnerships, reinforced by the intersection of our proprietary and external data, Cushman & Wakefield is poised to enable our clients and firm to harness the full spectrum of emerging

technologies and set a new standard for CRE insights.” Cushman & Wakefield began its AI journey in 2018, with a focus on aligning business, data and operations. Results to date range from an 80% material reduction in operational cycle time, to a reduction of client supply chain costs via its proprietary supply chain network optimization capabilities, the firm reported. With AI+, the firm will unlock new insights and operational efficiencies through cutting-edge partner technologies, including AI marketing copilot Jasper, and proprietary large language models to bring to life the curated and optimized data sets across the enterprise.

Janover Acquires Groundbreaker, Establishing a Comprehensive CRE Marketplace Janover Inc., an artificial intelligence (AI)-enabled B2B fintech marketplace connecting commercial property borrowers and lenders, has acquired Groundbreaker Technologies Inc., a Software-as-a-Service (SaaS) platform for commercial property professionals to raise equity capital and manage investors through an easy-to-use fintech portal. Groundbreaker is a specialized SaaS platform designed to simplify capital fundraising and investment administration in the commercial real estate industry. By offering an intuitive portal, it enables real estate professionals to efficiently manage equity capital, investor relations and document sharing, fostering a seamless and professional investment experience, the company said. The platform also facilitates secure financial transactions and offers robust customer relationship management tools, aiming to enhance transparency and engagement between property developers and investors. “We are uniquely positioned to seamlessly insert Groundbreaker’s product directly into Janover’s ecosystem that benefits from our highly automated, AI-enhanced sales and marketing funnel, which is laser-focused on our joint core customers,” said Blake Janover, CEO of Janover. “It’s important to note that this is part of our longer-term strategy of enhancing the quality of our revenue. This acquisition transitions more than 10% of our revenue to predictable, recurring, contractual subscription revenue.” “We started Groundbreaker with the vision of providing a one-stop shop for commercial real estate investment management, services and

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access to capital. We had more than 13,000 investments and billions of dollars in transactions on the platform,” said Jake Marmulstein, CEO of Groundbreaker. “This acquisition by Janover gets us one step closer to providing the industry with a comprehensive technology-enabled solution that serves as the perfect partner for today’s commercial real estate operators.”

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Our newOur concierge new concierge programprogram offers anoffers outstanding an outstanding patient patient experience experience and access andaround accessthe around clock. the Our clock. members Our members receive comprehensive receive comprehensive primaryprimary care, cardiac care, cardiac and and dermatology dermatology assessments, assessments, and nutritional and nutritional counseling, counseling, as well as asamenities well as amenities you would younot would find in not a typical find in amedical typical medical practice,practice, such as home such asvisits, homeurgent visits,care, urgent coordination care, coordination of specialist of specialist care, travel care,medicine, travel medicine, and much andmore. much more. Members Members will also have will also access haveto access MounttoSinai’s MountHudson Sinai’s Hudson practicepractice in New York. in New York. Yards concierge Yards concierge Most importantly, Most importantly, you gainyou access gainto access the fulltoresources the full resources of the Mount of theSinai Mount Health SinaiSystem, Health System, for all of your for allhealth of yourcare health care needs. This needs. is the This health is thecare health experience care experience you haveyou been have been looking for. looking for.

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575 Fern 575 Street Fern Street West Palm WestBeach, PalmJANUARY Beach, FL 33401 FL 33401 2024 | MANN REPORT 37

TECHTALK

Welcome Homes Introduces AI-Powered Land Vetting and Online Offers In a continuation of its commitment to remove friction from the process of building a brand-new, customized home entirely online, Welcome Homes, a homebuilding tech startup, has introduced two new products – Make-an-Offer and AI-powered Land Vetting. Using Welcome’s artificial intelligence (AI)-based land vetting technology, customers can now view every buildable property within their desired area. With the surge of mortgage rates in 2023, the price points between existing homes and new ones are starting to converge. As such, consumers in the market for their next home are more frequently opting for new construction, driving Welcome Homes’ innovations to bring the entire home building process online, streamlining the journey from land selection to design to construction, the company said.

Photo via PRNewswire

of collection quotes from builders and architects. Welcome’s new offers simplifies this process down to a few clicks and puts the buyer in control from day one.

“The residential construction industry is missing crucial bridges between different stakeholders in the process,” said Alec Hartman, CEO and co-founder of Welcome Homes. “Homebuyers, contractors, civil engineers, municipal authorities — incentives across these groups are not aligned. Our technology can be the throughline that eliminates friction and improves collaboration throughout the new home construction process, making it a more fruitful and less stressful endeavor for all parties involved. This is why we’re aggressively adding innovations like our AI-powered land vetting and ability to make offers on new construction projects in seconds online. Technology is the key to eliminating the housing crunch.”

Once the offer is submitted, Welcome operates as a managed marketplace; the customer’s offer is distributed to Welcome’s network of local partner builders and matched to the most qualified builder for the job. Builders accept or reject offers online. Welcome has onboarded builders into its offer network for all 60-plus counties it operates in.

With Make-an-Offer, Welcome customers can submit an offer to purchase their land and construction directly within Welcome’s online platform, making it easier than ever to buy a new home. The traditional process for building a new home entails weeks, or sometimes months

Typically, without the support of Welcome’s technology, the property vetting process could take anywhere from three weeks to three months. Before the introduction of AI, Welcome’s vetting process took three hours. With AI, properties are now vetted in seconds.

AI Reviews are the next evolution of Welcome’s proprietary land vetting technology. Using predictive, AI-powered models, Welcome can now automatically determine the buildability and estimated build cost for any given property. Welcome’s AI models are trained on thousands of site assessments created by Welcome’s in-house team of civil engineers.

Kastle Launches First Universal Mobile Access Platform Proptech and managed security company Kastle have launched Kastle EverPresence, an interoperable physical access control system. The release of Kastle EverPresence coincides with the release of the Aliro connectivity standard by the Connectivity Standard Alliance (CSA). Aliro introduces a common standard — long championed by Kastle and led by companies including Apple, Google and Samsung — to ensure security and interoperability among certified smartphones, wearables and access control readers. Just as a credit card can be read and processed by a variety of hardware terminals, Kastle EverPresence will enable an access system to recognize mobile credentials from different systems that have previously been incompatible. It will provide real estate and facility owners and operators with the flexibility to manage disparate hardware and software systems and scale operations to administer multiple properties more effectively. The open platform ensures the access system will be future-compatible, the company said. “This solution has been the dream of real estate and the access industry for decades. Kastle EverPresence eliminates barriers due to manufacturer incompatibility between devices and systems and frees occupant movement between the lobby and office suite and even to use amenities in other buildings,” said Haniel Lynn, CEO of Kastle. Kastle EverPresence builds on the promise of Aliro to create reciprocity between readers and user devices, thereby giving the property managers and end users the flexibility of choosing among various

38 MANN REPORT | JANUARY 2024

Photo via PRNewswire

Aliro-enabled equipment and devices. This front-end capability complements Kastle’s managed platform with distinctive system capabilities tried and tested in almost 3,000 buildings and 50,000 businesses. The architecture of Kastle’s cloud-based, identity-centric technology stack, built and enhanced to be open and secure, enables interoperability across disparate underlying access control systems. The full platform improves the building occupant experience, giving users the convenience of moving effortlessly between spaces with the same mobile credential. Importantly, with widespread Aliro adoption, it will give operators the flexibility to accept a variety of access and mobile device vendors each tenant brings to their workplace.

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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.

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.

New York | Washington, DC | London | Frankfurt | friedfrank.com Attorney Advertising. Prior results do not guarantee a similar outcome.

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JANUARY 2024 | MANN REPORT 39

BREAKING NEWS

MGM Resorts Unveils Plan for Empire City in Yonkers MGM Resorts International has unveiled its vision to transition Empire City Casino by MGM Resorts into a world-class entertainment destination, MGM Empire City, if awarded a commercial casino license for its historic Yonkers, New York site. Key elements of the Phase One design include a comprehensive casino floor redevelopment and expansion, a 5,000-capacity entertainment venue, a state-of-the-art BetMGM sportsbook and food and beverage outlets. “MGM Resorts has a long and proud history of delivering world-class entertainment and gaming experiences, and we couldn’t be more excited to build on that track record at MGM Empire City,” said Bill Hornbuckle, president and chief executive officer, MGM Resorts. “A full-scale casino and entertainment destination will provide unparalleled experiences, create thousands of jobs, boost the state’s economy and be a game-changer for the entire region.” The plans feature a complete property redevelopment shifting from a video lottery terminal racino into a full-scale commercial casino with live-dealer table games, the newest slot machines and a high-limit gaming area for the most discerning casino guests. Empire City boasts the largest casino floor in the company’s domestic portfolio at 160,000 square feet and is also one of the largest gaming floors in the country. It has been operating since October 2006 with video lottery terminals and electronic table games under its current lottery license. The site is also home to the historic Yonkers Raceway, a world-renowned horse racing harness track that has been operating since 1899. MGM Resorts remains committed to continuing the racing operations and the company recently has made significant investments in track renovations.

Photo via PRNewswire

The design includes the addition of several new destination dining experiences, including a modern steakhouse, a casual quick-serve Italian American experience and an authentic Asian noodle bar and eatery. Existing venues Big Kitchen food court and The Pub sports bar will also transform into new, high-end food concepts. The plan also includes the development of a new parking garage to significantly enhance the guest arrival experience while also providing visitors with direct and convenient access to the casino and its amenities. The entertainment venue will host A-list performers and events in a 5,000-capacity setting with cutting-edge acoustics and dedicated amenities, the company said. A commercial casino license will also enable MGM Empire City to introduce The BetMGM Sportsbook & Lounge, offering guests lively game day experiences with a 112-foot wrap-around LED screen, stadium seating, VIP areas, multiple betting kiosks and food and beverage operations.

Jamestown Tops Out One Times Square Redevelopment Jamestown announced the topping out of the redevelopment of its home at One Times Square just in time for the 2023 New Year’s Eve Ball Drop. The $500 million redevelopment, projected to open to the public in 2025, will transform the 119-year-old building into a 21st century visitor center for New York City. The redevelopment includes the creation of a new viewing deck overlooking Times Square and a museum experience that tells the story of the New Year’s Eve celebration and the history of Times Square. The redevelopment plans an experience that will offer brands the ability to connect with their customers in Times Square through immersive, technology-enabled activations, including digital, virtual and augmented reality integrations. “The future of Times Square needs to build on its strengths — from Broadway to the digital billboards to New Year’s Eve — while also adding new and varied experiences that evolve and elevate its position as a global entertainment district,” said Michael Phillips, president of Jamestown. “The redevelopment of One Times Square is a reimagination of how Times Square can be experienced and how brands can create meaningful resonance with consumers.” “The opening of One Times Square in 1904 solidified the neighborhood’s history as the centerpiece of culture and entertainment and created one of the most iconic destinations in the world; linking it to one of the most global events — New Year’s Eve,” said Tom Harris,

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Photo courtesy of Jamestown

president of the Times Square Alliance. “This redevelopment will continue to challenge the world by creating a truly unique attraction providing a fresh look at an old classic and allowing the millions who have already been, to experience it anew.” Among the most significant enhancements currently under construction in One Times Square is the cantilevered viewing deck, which will offer an unparalleled perspective of Times Square and become the focal point of the museum experience. Additionally, The Countdown sign was installed and the 2024 numerals were atop the building in time for the year’s festivities. One Times Square is a 26-story building located at the intersection of 42nd Street, Seventh Avenue and Broadway. Jamestown has coordinated the New Year’s Eve Celebration in partnership with the City of New York and Times Square Alliance since it acquired One Times Square in 1997.

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BREAKING NEWS

Oxford Properties Breaks Ground on Expansion of Ionis Pharmaceuticals Campus Oxford Properties Group officially broke ground on a 165,000-squarefoot expansion of Ionis Pharmaceuticals’ main life sciences campus in Carlsbad, California, which already features approximately 250,000 square feet of lab and office space. The expansion builds on Oxford and Ionis’ established partnership, with Oxford completing a purchase and long-term leaseback of Ionis’ existing campus in October 2022.

Photo via PRNewswire

Located at 2830 Whiptail Loop in Carlsbad and slated for completion by the end of 2025, Ionis’ campus expansion will deliver a purpose-built lab and complimentary office space. Bringing Ionis’ overall campus to over 400,000 square feet of space across four buildings, the buildings feature chemistry labs, biology labs and R&D support systems, as well as modern office space. Oxford entered the San Diego life sciences market in February 2022 via a US$464 million acquisition of a 13-building portfolio. Oxford’s San Diego life sciences portfolio currently comprises more than 900,000 square feet, which will increase to over 1.3 million square feet upon completion of its development pipeline in the market. “We are very pleased to build on our significant partnership with Ionis, as we each write another chapter in our remarkable growth journeys through the expansion of their main campus,” said Tycho Suter, vice president of investments at Oxford. “Oxford is a long-term investor, committed to creating both economic and social value through real estate. Supporting the growth of a highly aligned partner in Ionis, which is deeply embedded in the Carlsbad community, delivers on both fronts as we help provide the infrastructure necessary to develop the lifesaving therapeutics of tomorrow.” Founded in 1989, Ionis is a publicly traded biotech company and a

leader in discovering and developing RNA-targeted therapeutics. The company currently has four marketed medicines and a premier late-stage pipeline highlighted by industry-leading cardiovascular and neurological franchises. The campus expansion supports Ionis’ strategic goals of prioritizing its wholly owned pipeline and advancing its drug discovery technology. “The state-of-the-art facility being built by our partner Oxford Properties is more than a building, it’s a testament to Ionis’ enduring commitment to discovering, developing and delivering novel medicines to patients who are living with serious diseases,” said Elizabeth L. Hougen, executive vice president and chief financial officer of Ionis. “In the same way that Ionis-discovered therapies like Spinraza, the first-ever approved medicine to treat spinal muscular atrophy and Qalsody, the first treatment targeting a genetic form of ALS, changed the lives of people battling these devastating diseases, we expect the science done within the walls of this building to have a positive impact on the lives of people with unmet medical needs in the years to come.”

Plentific Launches Planned Maintenance Solution for Multifamily Plentific, a real-time property operations platform, has launched Planned Maintenance, a solution within the Plentific platform that will enable multifamily owners and operators to shift operations from a responsive to a proactive maintenance approach, addressing resourcing issues to increase resident satisfaction, the company said. Planned maintenance helps with effective budgeting, planning, scheduling and execution of recurring repairs and maintenance tasks, focusing on preventative measures to maintain a property’s condition and safety standards. Process automation is fundamental to reducing pressures on operational teams through a reduction in manual work, meeting critical deadlines and enhancing overall service delivery through a proactive approach. “The industry is facing several critical challenges at once, which are having a direct impact on effective property management. Of paramount priority is bringing a property’s condition and safety in line with regulations and meeting resident expectations,” said Cem Savas, co-founder and CEO of Plentific. “This solution has the potential to reduce the volume of responsive repairs, help organizations meet regulatory requirements to safeguard residents and enhance overall operational resilience.” The Planned Maintenance solution will be added to Plentific’s offerings, which include work order management, resident engagement, supply chain management, inspections and compliance management. Plentific’s Planned Maintenance solution features automated work

42 MANN REPORT | JANUARY 2024

Photo via PRNewswire

order schedule creation, automated work order dispatch, built-in inspections and reporting and analytics. Planned maintenance not only ensures the structural integrity of buildings but helps to keep track of compliance assets including periodic checks on elements such as fire extinguishers, sprinkler systems and window guards. In addition, it helps to stay on top of planned maintenance schedules for in-unit appliances and amenities in communal areas such as AC units and elevators. Users of Plentific’s Planned Maintenance solution can expect to reduce the cost of a work order by 150% when applied to the cost of a responsive repair vs. maintaining the same asset, the company estimated.

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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 mannpublications.com JANUARY 2024 | MANN REPORT 43

COVER STORY

Weina Zhang (Photo by Killer Imaging)

Upending Urban Living: Six Trends Reinventing and Modernizing American Cities By Merilee A. Kern As our world rapidly evolves with seismic shifts converging across technological, economic, political, cultural, social and familial landscapes, our cities are in a race to not just keep up with these transformations, but actually pioneer innovation amid the metamorphosis. Urban environments are at the forefront of such innovation, taking proactive measures to adapt to the changing needs and desires of their inhabitants. While such metro modernization is being driven by a breadth of ever-evolving ideas, advancements and visionary solutions, there are a few standout catalysts that are foundational to revolutionizing cities of the future. According to Weina Zhang, founder and CEO of development firm Z Life — itself a trailblazing company pioneering sustainable and leading-edge real estate solutions prioritizing sustainability, efficiency and hyper-community-oriented living —six strategies in particular are playing a pivotal role in shaping flagship American cities like Downtown Las Vegas’ new Midtown initiative. Below is Zhang’s take on key trends, some new and some tried-andtrue, that serve as building blocks for creating vibrant, eco-conscious

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and modernized community-centric urban spaces.

1. A New Era in Residential Health As urban landscapes evolve, a pioneering urban innovation is taking root — the concept of biotech wellness communities. These cutting-edge residential areas are ushering in a new era of health and wellness within city living. Accessibility to health programming and wellness facilities is at the forefront of this urban transformation. Today, biotech wellness companies are providing world-class whole-body screening and diagnostic services for patients to explore potential risk factors and identify serious illnesses early on. Access to this advanced biotechnology is giving community residents the unique opportunity to engage in proactive health monitoring and management. Indeed, the fusion of residential living and biotech solutions creates an environment where health and wellness are seamlessly integrated into the daily routine. The emergence of biotech wellness communities heralds a promising future for urban living, where accessibility to health programming and wellness becomes

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COVER STORY not just a convenience but rather a way of life. These communities represent a significant stride toward healthier, more connected and forward-thinking cities.

2. Shared Cars Shared cars represent a promising future for urban mobility. In an era where cities are grappling with traffic congestion, limited parking and environmental concerns, the concept of shared cars is gaining traction as a sustainable solution. By pooling resources and sharing vehicles, residents reduce the overall number of cars on the road, alleviating traffic gridlock and decreasing the demand for parking spaces. This not only eases the daily commute but also leads to significant reductions in greenhouse gas emissions. Concerns about our country’s car usage have been heightened over the past few years as cars are a major source of greenhouse gas emissions. As reported in

individual carbon footprint. In addition to environmental benefits, shared car programs often provide economic advantages, reducing the financial burden of car ownership, including fuel, maintenance and insurance costs. This forward-thinking concept is being embraced as residents in certain communities enjoy access to shared Teslas — an exciting feature that enhances the convenience, eco-consciousness and interconnectedness of urban living.

3. Co-Working Spaces Co-working spaces have emerged as a transformative force in urban areas, redefining the traditional workplace concept. These communal workspaces offer a flexible and collaborative environment that has become a driving force behind innovation in our cities. The proximity of co-working spaces to residential areas has revolutionized the daily work routine,

Walkability is key

aging creativity and productivity while providing an opportunity for individuals to network, learn and grow in a dynamic urban setting. As we look to the future, co-working spaces are poised to cater to the needs of multiple industries, offering access to advanced technologies and creating an upscale urban core that supports the growing tech sector and other innovative enterprises.

4. Walkability Walkability is at the forefront of reshaping urban living, aligning with the concept of a 15-minute city. This transformative idea seeks to bring all essential amenities within a 15-minute walk or bike ride from one’s doorstep. It’s about redefining the urban landscape to minimize the reliance on personal vehicles and encourage sustainable mobility. Courtesy of Z Life Company

“Global Citizen,” in some cities like Houston and San Francisco, transportation accounted for nearly half of their total emissions in the past few years, as cars are a major source of greenhouse gas emissions. Shared cars promote a sense of community and collaboration, encouraging residents to share the ride and reduce their

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eliminating the need for lengthy commutes and creating a vibrant atmosphere where diverse professionals converge. It’s a place where freelancers, entrepreneurs and remote workers can thrive, fostering a sense of community and cross-industry collaboration. These spaces have disrupted the traditional office model, encour-

Cities worldwide are embracing a multi-modal approach to transportation, establishing well-connected public transit systems and comprehensive bike-sharing programs. One of the most noteworthy efforts to decrease car use is in Paris, which is leading the charge to increase walkability in their city and promote bicycling. Reports have indicated Paris hopes to

ban gas-powered cars in the city by 2030, and there are plans to spend two billion euros ($2.2 billion) through 2027 to improve cycle infrastructure and help people buy bikes in an effort to reduce car use and boost cycling. These kinds of shifts can create vibrant urban hubs where daily necessities and amenities are within a short walk or bike ride, fostering a greater sense of community and reducing traffic congestion. Walkability encompasses factors such as pedestrian infrastructure, sidewalk quality, street design, safety, accessibility to amenities and the overall pedestrian-friendliness of a neighborhood or city. Walkability is often associated with reduced reliance on cars, increased physical activity, decreased traffic congestion and a more vibrant and livable urban environment. Pioneering developers across the U.S. are striving to enhance walkability through urban planning and infrastructure improvements to create more pedestrian-friendly communities. Walkability is not just a step toward a greener and healthier urban future; it’s the foundation upon which our cities will be built for generations to come.

JANUARY 2024 | MANN REPORT 45

COVER STORY

5. Micro Retail Micro retail is a dynamic and innovative concept that is reshaping the retail landscape in urban areas. These small-format retail spaces, characterized by their compact storefronts or kiosks, offer a unique shopping experience to both entrepreneurs and customers. With a footprint typically ranging from a few square feet to a few hundred square feet, micro-retail spaces often feature flexible lease terms, making them an attractive option for local artisans, startups and entrepreneurs. They provide an accessible platform for these businesses to showcase their products without the hefty investment required for a full-scale store. Beyond serving as a launchpad for local talent, micro-retail contributes to the vitality of neighborhoods by diversifying the range of offerings available and encouraging foot traffic. In these intimate settings, businesses are challenged to be creative and efficient, fostering innovation as they maximize the use of limited space.

challenges and opportunities of urbanization, these elements guide us toward a future where cities are not just hubs of activity but also models of environmental sustainability and well-being for all their residents. Ultimately, these communities can transform into urban “blue zones” where residents can live exceedingly long lives, the next high-tech “Silicon Valley,” highly accessible biohacking wellness hubs ... or all of the above. The journey toward these future cities is a collective effort, one that holds immense promise for a brighter, more connected and more resilient urban world.

6. Eco-Luxe Living Eco-luxury living is the embodiment of a sustainable and harmonious urban lifestyle. It’s a visionary concept that focuses on reducing the

carbon footprint while enhancing the quality of life for urban dwellers. Imagine a city where residents can walk or bike within 15 minutes to meet their daily needs, minimizing the reliance on cars and reducing emissions. In this urban oasis, trees line the sidewalks, providing shade and reducing the temperature to create a pleasant climate. Responsible landscaping with water-smart designs creates a beautiful yet eco-conscious urban environment. Abundant natural light, streaming through strategically placed windows, not only illuminates every corner but also promotes energy efficiency and a warm, inviting atmosphere by reducing reliance on artificial lighting. This urban landscape doesn’t feel like the middle of a desert; instead, it’s an oasis of greenery and light. The result is a long-term-minded, health-conscious and community-centric urban environment that redefines the essence of luxury living while contributing to a greener and brighter future.

Midtown will offer luxury condos

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

Breaking barriers is something Zhang herself has done throughout her entire career. With a track record in some of the largest U.S. construction projects over the past decade, and a specialty in unitized construction and ground-breaking cost-saving methods, Zhang has shattered the proverbial glass ceiling in a highly competitive and male-dominant industry. Among her many accomplishments at the helm of Z Life was the unveiling of M8trix — a proprietary system that, drawing upon over 15 years of engineering expertise, “presents an innovative approach for the Midtown Vegas project is a proprietary system that allows us to achieve affordable buildings with high design and sustainable resources — bucking current norms amid an omnipresent ‘either-or’ paradigm. Our properties are uniquely designed to elevate the quality of living to enrich the typical urban environment,” she said. The six urban trends Zhang cites above are not only reshaping the physical landscape of our cities but also fostering a sense of community, inclusivity and sustainability. As we continue to grapple with the

46 MANN REPORT | JANUARY 2024

Merilee Kern

includes ﬁeld experts and thought leaders, brands, products, services, destinations and events. She is founder, executive editor and producer of “The Luxe List” as well as 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.

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FEATURES | COMMERCIAL

The Sweet Life:

100 Years

of Li-Lac Chocolates By Debra Hazel

Photos courtesy of Li-Lac Chocolates

The list of existing U.S. retailers that are 100 years old isn’t especially long: Macy’s, Saks Fifth Avenue, Bloomingdale’s, Brooks Brothers and Haverty Furniture are among a small list. Joining that list last year, however, was New York’s Li-Lac Chocolates, which has survived multiple owners, a move, a pandemic and more to offer New Yorkers artisanal handmade chocolates, from the original recipes created by its founder. Today, the stores continue that legacy — the 100th anniversary celebration at its 75 Greenwich Ave. store attracted hundreds of customers, who waited patiently in line, reported current Co-owner Anthony Cirone, who acquired Li-Lac with partners Anwar Khoder and Christopher Taylor in 2011. “We probably had 1,000 people that day,” Cirone said. “The West Village is where the roots

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of the company originated from. Our customers comprise generations of families, and we always get a great response from them. It was very endearing — a testament to the legacy of Li-Lac.” Li-Lac Chocolates was founded in 1923 by George Demetrious, a native of Greece who studied chocolate making in France, then emigrated to New York and opened a shop at 120 Christopher St., at the height of Greenwich Village’s arts scene. Demetrious created recipes for items including fudge, truffles, almond bark and butter crunch, all handmade in the back of the store using copper kettles and large marble-top tables. Dippers and packers worked in the back as well. The shop became a haven for artisanal chocolate, with Demetrious remaining loyal to his existing recipes even as other chocolate makers

emerged with mass production and trendier ingredients. Demetrious died in 1972 but had left his recipes and company to long-time employee Marguerite Watt, who upon her retirement in 1978 sold the company to devoted customer Edward Bond, who had long purchased the chocolates for his catering business. A Mississippi native, Bond added a few recipes of his own to the mix, including Mr. Bond’s Special Pralines. He also acquired a large selection of chocolate molds and designed Li-Lac’s first signature floral gift box packaging. When Bond’s sister Martha joined the company in 1981, she added even more items to the mix while retaining Demetrious’ classics, all still made by hand, often using the same copper kettles and cooking techniques Demetrious used a century ago. The selection

of chocolate (more than 120 items) is one of the largest selections of fresh gourmet chocolate in America. Every item is made by hand, locally in New York City, and guaranteed for freshness. Edward Bond died in 1990. Martha continued to run the store and more, expanding to a second location at Grand Central Market in 1999, moving the Christopher Street store a few blocks north in 2005 after a rent increase, and taking production to Sunset Park, Brooklyn. It was in the mid-1990s that Cirone, a West Village resident, found and began shopping at Li-Lac. By 2008, after a career in brand development for major corporations including Unilever, Cirone had been looking for a business of his own. “I always thought Lilac was a good fit for me. I reached out but didn’t get a response,” he

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FEATURES | COMMERCIAL recalled. “But I was persistent, and a year later got an invitation to meet. It did take three years, but it did happen.” Cirone said that he and his partners saw the brand’s potential. “The brand was always undeveloped except for the people who lived around the store,” he recalled. “I had a vision for what the brand could look like, the packaging and what the company could become.” Bit by bit, the trio upgraded the look and feel of the brand, updated packaging and began advertising, albeit with a tight budget. They also began a cautious expansion. In 2014, the company built a factory at Industry City in Sunset Park where customers can look in through oversized windows and see the chocolate-making in action. In 2015, it opened a store on Bleecker Street in Greenwich Village, in 2016 another store in Chelsea Market and in 2019 a sixth store in Hudson Yards. “We focused on big areas, with lots of tourists,” he said. “[For the factory], we thought this was a great location, not only for a factory but a retail store.” What hasn’t changed is the recipes, which George Demetrious would recognize even today, Cirone said, though a few new items such as peanut butter cups and salted caramel have made their way into the mix. “We do introduce some new items, but we’re not a trendy company. We’re not introducing something that’s just a one- or two-year shelf life. We’re very respectful of the recipes and brand; those don’t change,” he said. “We may bring in modern technologies, but we’re not a mass-produced model. What we’ve modernized is almost everything else — the brand, the look and feel of the packaging and the POS system.” Those systems helped a lot when the pandemic hit, closing the stores for months, beginning in March 2020, just before the all-important Easter season. “Within a few weeks, we were flooded with online orders we weren’t expecting. Our online business was crazy with orders for Easter products,” he said. Internet sales still remain higher than before COVID-19 and has expanded the customer base to other regions, even as in-store sales slowly return to normal. But that doesn’t mean that Li-Lac plans to expand beyond New York, at least for now. “Our real estate strategy hasn’t changed much,” Cirone said. “The city is big, but we have to find the right location and the right size store.” Meanwhile, Li-Lac’s team continues to celebrate an anniversary that few retailers get to see. “We’re incredibly lucky to be one of the few companies that’s survived 100 years,” CIrone said. “Look at the other companies in NYC that have been around for 100 years. There’s not that many of them and it’s incredibly special.”

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JANUARY 2024 | MANN REPORT 51

Photos courtesy of Li-Lac Chocolates

FEATURES | COMMERCIAL

Adaptive Reuse and the Birth of a New Space by Mike Lee, director, MGAC The most notable driver of commercial asset volatility is the COVID-19 pandemic, which saw vacancy rates skyrocket nationwide virtually overnight around the first quarter of 2020. While return-to-office strategies were tentatively rolled out months later, the regular emergence of new variants and the seemingly permanent impact of hybrid and work-from-anywhere models have made it difficult to estimate when commercial vacancy rates — now at roughly 16.4% — will return to their 2019 levels of approximately 9%. Dealmakers and investors are increasingly exploring these opportunities as they see the potential value in repurposing existing structures rather than constructing new buildings. Adaptive-reuse projects offer the advantage of utilizing existing infrastructure and historical character, while meeting the changing demands of the market.

Why Adapt? There are many benefits when it comes to adapting a building. As opposed to a ground-up project, there is an existing infrastructure and framework that provides contractors to build around. It is important to consider the quality of the original construction and the implementation of the original builder as opposed to the age of the building, as each has its downsides and opportunities.

Trends In Adaptive Reuse There has been a growing interest in converting different types of buildings. The most common recently has been office to residential, office to hotel or hotel to residential.

Hotels Former hotels experienced a record-breaking 2,954 new apartments resulting from conversion, a five-year high, according to recent reports. These conversions were seen as a potential solution to the increased demand for housing and the rejuvenation of deserted downtown areas. Office-to-hotel conversions, like most others, depend on location, but can often be less challenging due to the utilization of the size of the floor plates, which is not always the case in office-to-residential conversions. These projects offer greater economic potential and the ability to monetize spaces, making them an attractive option as an adaptive-reuse project.

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It is key to understand the operational aspects of the hotel during the design phase of this type of adaptive reuse, as this can affect the project’s outcome. It requires significant coordination beyond the standard reuse, starting from thoroughly understanding the as-built conditions.

Historical Buildings Historical buildings pose unique challenges when it comes to energy ratings and sustainability requirements. The question arises whether exceptions or exemptions should be made for these buildings. Adapting historical buildings can create new value and meaning for the areas they inhabit and residents of the surrounding communities, creating new opportunities for economic development. However, issues of balancing the preservation of historical value with the need for energy efficiency is a topic of discussion. It requires careful consideration of how to adapt older buildings to meet modern energy standards, while respecting their historical significance. While the Environmental Protection Agency states that “a new, green, energy-efficient office building that includes as much as 40% recycled materials would nevertheless take approximately 65 years to recover the energy lost in demolishing a comparable existing building,” some buildings can’t be saved. As the world moves toward a low-carbon future, the question is whether these buildings can sustain these goals.

Ongoing Challenges and Opportunities Adaptive-reuse projects come with various challenges. Structural enhancements may be necessary to ensure buildings meet current safety standards and functionality requirements. Supply chain challenges can arise, such as delays caused by shortages of equipment like chillers or other specialized components. Moreover, the quality of construction and implementation in these projects plays a significant role. It is crucial to ensure that the renovations are executed with high standards to meet not just energy efficiency goals, but that they deliver a safe and functional space. There is great opportunity to make formerly neglected spaces alive again by making them vibrant destinations and upgrading them with amenities and facilities. This includes incorpo-

rating amenities like restaurants, coffee shops, cycle rooms and other features that enhance the user experience. The objective is to create spaces that people want to visit, whether for work or leisure. By transforming buildings into lively environments, cities can revitalize downtown cores and make them more appealing to residents, workers and visitors.

Recent Project In summer 2022, MGAC was selected to manage the redevelopment of the former Class B office building located at 20 Massachusetts Ave. N.W. in Washington, D.C., originally built in 1973. The project reimagined services across the entirety of the asset’s eight stories, two below-grade parking levels and mechanical and utility systems. The building was turned into a new mixeduse destination, with the addition of three new stories, a 14,500-square-foot penthouse and a full height and depth bay added to the east end of the building. Openings in existing floor slabs were also added to accommodate two new atria. Also added were new stairs, elevators and other core elements to be outfitted for a range of future uses. The ground floor consists of expansive retail, a restaurant space, as well as a separate office and hotel lobby. A new, 274-room Royal Sonesta Hotel comprises six floors, while Class A trophy office space occupies the upper four floors. The top penthouse level houses shared amenities, including the grand ballroom, meeting rooms and a large lounge that captures exceptional views of the city. Additional amenities include a fitness center on the second floor, a conference center and a ballroom.

Final Factors Taking into consideration the many factors that inform an adaptive-reuse project, those who seek to pursue these projects must go into them clear-eyed about what the existing structures offer and what the potential drawbacks are in the project lifecycle. However, all factors considered, adaptive reuse provides an exciting transformational opportunity. MGAC is a global boutique project, cost and construction management consultancy.

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FEATURES | TECHNOLOGY

AI and Proptech:

Five Thought Leaders to Follow into the Future of Real Estate By Curtis Williams, Land Investment Professional at National Land Realty

54 MANN REPORT | JANUARY 2024

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FEATURES | TECHNOLOGY

No one can seem to agree on just what AI will mean for the future, but all can agree that the future will look very, very different from today. That uncertainty has been felt at the core of the real estate industry for a long while, largely because the change is happening right now. How are agents meant to prepare for such an incalculable future?

Curtis Williams

As always, the best course of action is to stay educated. Instead of dreading an unknown which lurks in the shadows, go ahead and cast a light on it. Agents should avoid the fearmongers — or anyone else making unsubstantiated claims — and instead come to understand first-hand the forces that will shape the industry’s future. Conferences and courses on new proptechs are abundant, and likely worth the investment. At the same time not all the voices in print and on the web are unfounded fearmongers, and finding the ones that know what they’re talking about offers a cost-free, real-time alternative to more traditional forms of education. Below is a starting list of five voices who say it as it is, and who will help clarify a cloudy future for real estate technology.

1. Mike DelPrete, Real Estate Strategist Executive Director of the Arizona Real Estate Investors Association (AZREIA), Mike DelPrete is one of the biggest names in real estate technology, and for good reason. DelPrete has worked and traveled extensively with the companies that have been developing, releasing and using major proptechs throughout recent years. That, combined with his continued research, teaching, investment and advisement, makes DelPrete’s insights well worth listening to — a stance corroborated by the major media outlets in which he so often features. Follow DelPrete online at linkedin.com/in/mdelprete/.

2. Maurice Conti, Futurist Founder of Applied Intelligence LLC, Maurice Conti is an all-around fascinating individual with a host of achievements and abilities, not least of which are the status, knowledge and skillset that come with being one of the world’s leading futurists. He is in many aspects the man to follow when it comes to AI generally, and his insights about the future are well-informed. If Nike, Tesla, Disney, Google and the Navy Seals, among others, are willing to trust his expertise, real estate agents have reason to do the same. Follow Conti online at linkedin.com/in/mauriceconti/ or twitter.com/ mauriceconti.

3. Marian Croak, Inventor Marian Croak is a titan in the field of technology. Currently working as a vice president of engineering at Google, and with 200 patents to her name, Croak’s voice is not one to be missed. Her particular focus on bettering urban life — she developed technologies to donate via text in response to Hurricane Katrina and created the VoIP system that allows for modern remote working — makes her especially relevant to agents keeping a pulse on the technologies of tomorrow. Follow Croak at linkedin.com/in/marian-croak-926361bb/.

4. RJ Pittman, Executive RJ Pittman is chairman and CEO of Matterport, which offers innovative 3D virtual tour technology for real estate professionals. With a rich background that includes pivotal roles at eBay, Apple and Google, and as the co-founder and CEO of Groxis, he has been at the forefront of developing transformative digital solutions. Pittman’s expertise in creating innovative products and Internet software companies offers valuable insights into how AI is reshaping the real estate industry. His perspective is crucial for agents seeking to understand and adapt to the evolving proptech landscape.

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Follow Pittman online at linkedin.com/in/rjpittman/ or twitter.com/rjpittman.

5. Nav Athwal, Land Use Attorney Today, Nav Athwal is managing director at Terra Ag Ventures, a major farmland investment manager, who also happens to invest in proptech startups. On his way there, Athwal founded RealtyShares, a platform that allows for “crowdfunded” real estate investment, and irreversibly reshaped the business. With over a decade of experience in hands-on real estate — as a proptech engineer, among other things — Athwal knows his way around real estate technology. Lending an ear to his insights would be worth any agent’s time. Follow Athwal online at linkedin.com/in/navathwal/ or twitter.com/navathwal.

In Conclusion While buzzwords like “AI” and “proptech” may induce real estate agents to run and hide, few can deny that the change is real, and that it’s happening today. In a world where the best guesses about tomorrow are only that, agents must know which voices to heed and which to disregard. Educating themselves thoroughly is the starting point, of course, and no single voice should ever be taken as gospel. But the five leaders listed above have the résumés to prove that they’ve seen a thing or two in the past, and in all likelihood, they know a thing or two about the future. To the vigilant real estate agent, standing on the shoulders of giants is a sure way to rise above the fog. Curtis Williams is a land investment professional with National Land Realty licensed in Virginia and based in Washington, D.C. The company’s proprietary 360-degree viewing technology, Land Tour 360, as well as its GIS land mapping system, LandBase, is offered for free to the public.

JANUARY 2024 | MANN REPORT 55

The size of our company is our ultimate strength. Simplifying your life as a board member is our purpose. “Being under the FirstService umbrella is more than building management. We’ve refinanced our mortgage through their financial team, completed major cap ex projects with the construction management team, and are now working on Local Law 97 compliance and an EV charging installation. The board has never had access to this level of expertise and I feel like we’re just getting started.” - Stephen V., NYC Board Member

Let’s talk. www.fsresidential.com/new-york 212.634.5410 56 MANN REPORT | JANUARY 2024

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More than 35 years of real estate, condominium & cooperative experience WilkinGuttenplan uses expert industry knowledge in accounting, audit, and tax services to assist New York City real estate owners, developers, and investors of commercial and residential properties identify opportunities and guide them on implementing strategies to stay ahead of changing times.

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New York | New Jersey 212.247.9000 | 732.846.3000 JANUARY 2024 |wgcpas.com MANN REPORT 57

393 West End Ave. is one of the last rental to condominium conversions in the city

Home Sweet Home: Tips for Navigating New York City’s Condo Conversion Market By Louise Phillips Forbes Photos by Michael Weinstein New York City remains a dream destination for many prospective homeowners. In our bustling urban landscape, buyers have a multitude of options when it comes to choosing their ideal home. Among these options are resale co-ops and condos, new construction and the conversion of iconic rental buildings to form a community of new owners, also referred to as “condo conversions.” Condo conversions present a wonderfully unique opportunity to own a piece of the past within some of Manhattan’s most sought-after historical neighborhoods. Take 393 West End Ave., for example. Due to changes in the law, 393 West End Ave. presents one of the last remaining opportunities to purchase a Manhattan home as part of a rental-to-condo conversion. Situated within the landmark West End Collegiate Historic District — a

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quiet enclave that exudes the cinematic charm of iconic New York films such as “When Harry Met Sally” and “You’ve Got Mail” — the 16-story building was designed by architects Goldner & Goldner and constructed in 1927. The building features Collegiate Gothic architecture and original 1920s details that have been skillfully preserved and thoughtfully honored by CetraRuddy Architecture, the award-winning architecture and interior design firm known for its sophisticated approach to modernizing historic properties. Today, 393 West End Ave.’s collection of residences, many with captivating views of the Hudson River, respect the provenance of the late 1920s with an eye toward the future, featuring graceful layouts ranging from one- to four-bedroom. Condo conversions like 393 West End Ave. represent a very nuanced sector of the real estate market and pursuing properties within this niche can be daunting. However, with a few pointers, buyers can successfully

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FEATURES | RESIDENTIAL navigate the process and call one of these captivating properties their new home.

Timing is Everything In the ever-competitive New York City real estate market, timing can make all the difference. Condo conversion properties can offer buyers access to a range of new units, some of which may not yet be on the market. As the saying goes, “Strike while the iron is hot.” A condo conversion may provide the chance to purchase in a desirable location or iconic building before others even have a chance to enter the race.

Know your Dance Partner Condo conversions require a unique set of skills and expertise different from those required of ground-up developments, as they involve working within the constraints of an existing building. Buyers should review the credentials of the key players involved in the conversion project including the sponsor, architect, engineers, construction team and brokers. In the case of 393 West End Ave., both the redevelopment and architecture and design teams have been deeply entrenched in condo conversions. While the project’s developer Rabina has acquired and developed more than 25 million square feet of real estate throughout its 60-plus-year history, the firm’s early years were dedicated to repositioning residential properties on Manhattan’s Upper West Side. On the architecture and design side, CetraRuddy is widely regarded for its sophisticated approach to modernizing historic properties. Rabina and CetraRuddy’s expertise is further complemented by input from a veteran sales and marketing team’s real-time interactions with buyers. The depth of experience of these experts is vital in ensuring that the conversion process is smooth and efficient and surpasses the highest standards. By conducting this due diligence, buyers can be assured that the conversion project will be executed with precision, from updating the infrastructure to reimagining common areas and private residences.

Amenities have been added

spacious floor plans and child-friendly amenity spaces. On the other hand, those in search of the perfect pied-à-terre may opt for a smaller footprint and bespoke concierge services that can make navigating life in the city a breeze. Just as important as understanding a property’s physical features is understanding the offering plan. This plan is a comprehensive document that serves as the playbook for the entire property and provides details surrounding the various aspects of the building’s operation, such as operating budgets, capital improvements and staffing and service offerings, all of which significantly impact the day-to-day experience of the property’s owners. When diving into the offering plan, it’s recommended that buyers enlist the help of a seasoned attorney to ensure they have a comprehensive understanding of the prospective property’s present and future.

For over three decades, Louise Phillips Forbes has been an industry leader in New York City’s residential real estate market, with career sales exceeding $5.5 billion. She was named Residential Agent of the Year by the Real Estate Board of New York in 2020 for her consistent achievements and leadership within the industry. Her experience in both luxury residential sales and development projects — over 30 to date — has equipped her with the unique ability to fully understand clients’ needs, navigate fluctuations in the market and negotiate complicated deals. Details from the 1920s have been preserved

Third-Party Relationships Matter Securing financing for a condo conversion property can be a complex and challenging endeavor. To ease this process, sponsors often establish relationships with banks to pre-approve the property, which then entails working closely with buyers within established parameters to meet their individual financing needs. These relationships are crucial in navigating the ever-fluctuating lending environment, especially in a competitive market like New York City. Building a strong relationship with a property’s sponsor and understanding their financial strategies can ultimately mean the difference between securing the financing needed to purchase.

Dig Into the Details Understanding the intricacies of a condo conversion building is paramount. From the layout and finishes within each residence to amenities, each property and its resident experience is unique. For example, buyers with families may gravitate toward properties with larger, more

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FEATURES | RESIDENTIAL

WHAT NEW YORK RENTERS SEEK IN THEIR NEXT HOME: Top Features and Must-Have Amentities By Sarah Yaussi, Vice President, Business Strategy at the National Multifamily Housing Council

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FEATURES | RESIDENTIAL Whether planning a new build or renovation, attracting and retaining renters means threading the needle between offering the newest, most exciting amenities and leaning into the features that make every day more comfortable and livable. The 2024 National Multifamily Housing Council (NMHC) and “Grace Hill Renter Preferences Survey Report” offer valuable insights to make more informed decisions about renters’ needs while keeping an eye on the most attractive new items on their wish lists.

Safety and Convenience When they come home, survey respondents want to feel safe and secure, and they want to ensure that they have ready access to everything they’ll need to make time away from the office count. Constant connectivity is a must, with 88% of renters citing reliable cell reception as their most-desired community amenity. An onsite fitness center was a top-ranking amenity with interest from 79% of respondents, suggesting that, for both workfrom-home renters and those who commute, the ability to fit in a workout close by is a must. For those who are tired of lifting weights or jogging or power walking on a treadmill, basketball (32%) and pickleball (28%) courts were interesting alternatives. However, for those who were looking for a bit of relaxation in their lives, saunas (49%) and hot tubs (42%) offered enticing options. Security — from guest access to Amazon deliveries — was also top of mind. Controlled access to the property and its amenities (77%) as well as secure self-service 24-7 package access (78%) scored near the top of renters’ interest levels. Controlledaccess parking wasn’t far behind, with 72% of respondents indicating that it was important or that they wouldn’t rent without it. Healthy lifestyles and healthy buildings were on the minds of many New York metro renters, with 79% of area respondents flagging water filtration systems as desired or essential, along with enhanced indoor air quality (77%), non-smoking buildings (74%) and community vegetable gardens (39%). Environmentally friendly options were also desirable, with property-wide recycling (66%),

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energy and water efficiency/green initiatives (60%) and on-site renewable energy (49%) on the list of appealing amenities.

All About Fun Of course, not all responses were focused on practical matters. New York metro renters also showed that they’re interested in having fun and socializing close to home. A rooftop space to take in iconic skyline views garnered high interest (72%), while swimming pools (72%), common area barbecue grills (65%) and clubhouses or party rooms (51%) were other enviable amenities. An outdoor playground (39%) and an on-site childcare center (21%) were cited as valueadded amenities for which parents would be willing to pay extra. For pet parents, an on-site dog park (36%), on-site pet services (33%) and a pet-washing station (29%) were

exciting options, with a few renters saying they wouldn’t rent without them. For those looking to commute or just get around in a way that’s convenient, environmentally friendly and fun, secure, covered bike storage (31%), a resident-only car-sharing service (29%), bike sharing (20%), a bike maintenance/repair area (18%) and scooter sharing (18%) were all desirable amenities.

Top Apartment Must-Haves When it comes to the apartment features renters won’t do without, they’re mostly geared toward comfort and efficiency. Air conditioning was the top nonnegotiable for 73% of New York metro survey respondents, with an in-unit washer/dryer (69%) or hookup (41%), dishwasher (57%) and high-speed internet access (40%) rounding out the top in-unit features. Regarding those upgraded features that aren’t exactly deal-breakers but are definitely

on their wish lists, 80% of renter respondents are looking for classic interior design elements like premium finishes such as quartz countertops and stainless steel appliances, along with hardwood flooring or wood-look laminates. Properties got bonus points if those appliances were Energy Star Certified as well (69% of respondents said they were interested or wouldn’t rent without these features). Seventy percent of renters are interested in high ceilings and 69% in counter seating for casual dining, while even more are looking for kitchen islands (75%). Smart home elements are popular as well, especially smart thermostats, which are desired by 74% of respondents. Keyless smart locks and smart security alarms, along with video doorbells at the unit, were of high interest to 67% of respondents, with dynamic glass and smart lighting close behind (64%). For those who are leaning into the latest smart home tech, biometric access to the home was on the wish list of 41% of renters surveyed. Many of the high-interest elements mentioned seem to be designed to facilitate a feeling of privacy, particularly for the 63% of respondents who work from home at least part of the time. This explains the popularity of elements like soundproof walls (90%) and noise-reducing windowpanes (84%). The survey results paint a picture of renters who aren’t waiting for homeownership to live their best life. They’re looking for comfort and community, health, flexibility and convenience, and a place they can share with pets, friends and family. Whether developing or marketing rental homes, it’s important to tune into the needs of renters for safe, healthy and modern spaces that are beautifully designed and eminently livable. Knowing what renters want and need, then crafting impactful messaging and conveying it with precision, enables multifamily owners and property managers to establish a strong connection with their ideal tenants, ensuring their satisfaction well beyond the initial lease signing and for years to come.

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FEATURES | MANAGEMENT

How Marketing a Firm’s DEI Initiatives Can Help Attract/Retain New Business By Wayne Lambert, Director of Diversity, Equity and Inclusion, SMPS-NY Integrating Diversity, Equity and Inclusion (DEI) into a firm’s core values is a moral and strategic necessity. When genuinely embedded in a firm’s mission and vision, these values serve as a guiding force for its entire operations. In this context, firms must ensure these values are not just stated but actively communicated and embodied in every aspect of the firm’s functioning, both internally among employees and externally to clients and stakeholders. Integrating DEI into a firm’s ethos requires a nuanced understanding of its own workforce and clientele. It involves crafting messages that resonate with a broad audience while being authentic and reflecting the firm’s genuine commitment to these values. When done successfully, this integrated approach with DEI reshapes internal dynamics and redefines externalEquity business Integrating Diversity, and relationships and communication Inclusion (DEI) into a firm’s core strategies. values is a moral and strategic necessity. When genuinely embedded DEI’s Impact on Business in a firm’s mission and vision, these Development values serve as a guiding force for The pursuit of DEI has its entire operations. Inevolved this context, beyond a “top-down” initiative to are firms must ensure these values become a collective endeavor. not just stated but actively comThis collective municated andapproach embodiedrecogin every nizes contributions of both aspectthe of vital the firm’s functioning, each individual in employees shaping theand exinternally among firm’s narrative, every ternally to clientsempowering and stakeholders. team member to use their unique perspectives andinto experiences to Integrating DEI a firm’s ethos enrich thea DEI journey. A diverse requires nuanced understanding team a firm’s comof its showcases own workforce and clientele. mitment to crafting social responsibility It involves messages that and its capability to understand resonate with a broad audience and the diverse of whileaddress being authentic andneeds reflecting clients. This alignment with modern the firm’s genuine commitment to society’s values around diversity these values. When done successand enhances a firm’swith fully,inclusion this integrated approach appeal to prospective whoand DEI reshapes internal clients dynamics are increasingly evaluating redefines external businessDEI relationas a critical determinant in strategies. their ships and communication decision-making process. DEI’s Impact on Business These DEI initiatives have become Development pivotal in client engagement and The pursuit of DEI has evolved business Clientsto beyond adevelopment. “top-down” initiative today seek more thanendeavor. technical This become a collective expertise; they are drawn towardthe collective approach recognizes firms that demonstrate a genuine vital contributions of each individcommitment tothe DEI, aligning with ual in shaping firm’s narrative,

their values and expectations. Through 2022, 75% of organizations with diverse and inclusive decision-making teams were projected to exceed their financial targets, as reported by Gartner. Companies with highly diverse teams have observed a significant increase in cash flow, amounting to 2.5 times higher cash flow per employee. Additionally, a study by Boston Consulting Group found that companies with diverse management teams enjoyed a 19% increase in revenue compared to their less diverse counterparts. By effectively communicating their DEI efforts, firms position themselves as leaders in DEI and align with clients who prioritize these values, fostering deeper business relationships and enhanced client loyalty. With this shift towards an inclusive internal it is equalempowering everymodel, team member ly important to consider how these to use their unique perspectives values are communicated and experiences to enrich to thethe DEI outside world. journey. A diverse team showcases a firm’s commitment to social Tailoring Communications for DEI responsibility and its capability to Building on this pursuit of understand and collective address the diverse DEI internally, it’sThis vitalalignment to consider needs of clients. with how these valuesvalues are communicatmodern society’s around ed externally as well. The shift in a diversity and inclusion enhances marketing communications firm’s appeal to prospectivetowards clients focusing on DEI initiatives reflects a who are increasingly evaluating broader in societal values. DEI as achange critical determinant in their As clients become more discerning decision-making process. and seek firms that align with their ethical DEI standards, communicating These initiatives have become a commitment DEI becomes pivotal in clientto engagement and increasingly important. Clients today business development. seek more than technical expertise; To effectively commuthey are drawnreevaluate toward firms that nication strategies, it’s essential to demonstrate a genuine commitment move repto DEI,beyond aligningmere withtokenistic their values and resentations of diversity. Marketing expectations. materials and outreach efforts should authentically showcase how Through 2022, 75% of organizations DEI is ingrained our operations with diverse and in inclusive deciand culture. Creating a narrative sion-making teams were projected that is not their only compelling but also to exceed financial targets, as credible is in demonstrating reported bycrucial Gartner. Companies our firm’s commitment to with highlyreal-world diverse teams have obthese values. served a significant increase in cash flow, amounting to 2.5 times higher For instance, than Additionsimcash flow per rather employee. ply stating, value diversity ally, a study“We by Boston Consulting and have a diverse workforce,” Group found that companies with di-

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the messaging would be more impactful as, “We are committed to fostering an inclusive environment where every employee feels valued and empowered. Our team, drawn from a range of backgrounds, contributes to our diverse perspectives and innovative solutions.” This language shift conveys the dedication to diversity and underscores how it is ingrained in the operational fabric. Similarly, instead of stating generic policies like, “Our firm does not discriminate on the basis of race, gender, or ethnicity,” change them to the more comprehensive, “We actively promote equity and inclusion at all levels of our firm, with policies and practices ensuring fair treatment and equal access to opportunities for all.” Updating communication about our DEI initiatives is crucial. Instead verse management teams enjoyed a of a broad statement like,compared “We 19% increase in revenue support DEIdiverse initiatives,” we should to their less counterparts. articulate the specific actions we take and theircommunicating impact. For example, By effectively their “Weefforts, are actively in DEI DEI firms engaged position theminitiatives, both within ourand firmalign and selves as leaders in DEI in our broader Here are with clients whocommunity. prioritize these specificfostering examples of the business programs values, deeper we support and measurable relationships andthe enhanced client impactsWith we’ve Then an loyalty. thismade.” shift towards include some of the workit the firm is inclusive internal model, is equally achieving.to consider how these important values are communicated to the As we refine outside world.our communication approach, the next step is translating these DEI commitments Tailoring Communications forinto DEI tangible on narratives that not only of Building this collective pursuit inform but alsoit’s engage clients DEI internally, vital toour consider and these the wider community. how values are communicated externally as well. The shift in Translatingcommunications DEI into Tangible marketing toward Narratives focusing on DEI initiatives reflects a The effective communication of a broader change in societal values. firm’s DEI become story is amore nuanced task. As clients discerning It requires morethat than justwith stating and seek firms align their policiesstandards, or intentions; it demands ethical communicating these Utilizademonstrating commitment to DEI values. becomes ing data effectively can help craft increasingly important. compelling narratives highlighting theeffectively firm’s progress and commitTo reevaluate commument to strategies, DEI. This approach informs nication it’s essential and engages clients staketo move beyond mereand tokenistic holders, showcasing the tangible representations of diversity. Marketimpacts of DEI initiatives. ing materials and outreach efforts

You can effectively incorporate DEI into not only the firm’s marketing but also its core values by hosting inclusive events and workshops; these can play a crucial role in educating and engaging both the team and clients in DEI conversations. Whether through guest speakers, panel discussions or training sessions, these events can foster a deeper understanding and commitment to DEI principles. Internally, we also implement DEI surveys to gather employee feedback, ensuring our strategies align with their needs and perspectives. Commitment to DEI extends beyond the firm’s walls. Actively engage in community outreach programs and build relationships with diverse suppliers and partners, demonstrating our dedication to supporting diverse businesses and communities. Furthermore, utilize social media platforms for storyshould authentically showcase how telling, sharing highlights from our DEI is ingrained in our operations DEIculture. events,Creating employee and a spotlights narrative andisdiscussions around DEI that not only compelling buttopics. also This multifaceted approach not only credible is crucial in demonstrating enhances internal culture but alsoto our firm’s real-world commitment resonates strongly with clients and these values. the broader community, contributing significantly the industry’s For instance, rathertothan simply progress toward diversity stating, “We valuegreater diversity and and inclusion. have a diverse workforce,” the messaging would be more impactful as, In conclusion, the marketing of an DEI “We are committed to fostering initiativesenvironment is a complexwhere yet essential inclusive every aspect of feels modern business strateemployee valued and empowgy. It’s about creating narrative ered. Our team, drawn afrom a range that resonates with employees and of backgrounds, contributes to our clients alike, one thatand is authendiverse perspectives innovatic and reflective of language a firm’s true tive solutions.” This shift commitment to diversity, and conveys the dedication to equity diversity inclusion. This approach with and underscores how it is aligns ingrained values and enhancincontemporary the operational fabric. es a firm’s market reputation and competitiveness. Similarly, instead of stating generic policies such as, “Our firm does not Wayne Lambert is the director discriminate on the basis of race, of supplier diversity at Turner gender, or ethnicity,” you could& Townsend where leads efforts change them to thehemore comto enhance “We the firm’s Supplier prehensive, actively promote Diversity expand equity andprogram inclusionand at all levelsthe of supply to createand contract and our firm,chain with policies practices capacity-building opportunities for ensuring fair treatment and equal diversetobusinesses. access opportunities for all.” Updating communication about

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our DEI initiatives is crucial. Instead of a broad statement like, “We support DEI initiatives,” we should articulate the specific actions we take and their impact. For example, “We are actively engaged in DEI initiatives, both within our firm and in our broader community. Here are specific examples of the programs we support and the measurable impacts we’ve made.” Then include some of the work the firm is achieving. As we continue to refine our communication approach, the next step is translating these DEI commitments into tangible narratives that not only inform but also engage our clients and the wider community. Translating DEI into Tangible Narratives The effective communication of a firm’s DEI story is a nuanced task. It requires more than just stating policies or intentions; it demands demonstrating these values. Utilizing data effectively can help craft compelling narratives highlighting the firm’s progress and commitment to DEI. This approach informs and engages clients and stakeholders, showcasing the tangible impacts of DEI initiatives. You can effectively incorporate DEI into not only the firm’s marketing but also its core values by hosting inclusive events and workshops; these can play a crucial role in educating and engaging both the team and clients in DEI conversations. Whether through guest speakers, panel discussions or training sessions, these events can foster a deeper understanding and commitment to DEI principles. Internally, we also implement DEI surveys to gather employee feedback, ensuring our strategies align with their needs and perspectives. Commitment to DEI extends beyond the firm’s walls. Actively engage in community outreach programs and build relationships with diverse suppliers and partners, demonstrating our dedication to supporting diverse businesses and communities. Furthermore, utilize social media platforms for storytelling, sharing highlights from our DEI events, employee spotlights and discussions around DEI topics. This multifaceted approach not only enhances internal culture but also resonates strongly with clients and the broader community, contributing significantly to the industry’s progress toward greater diversity and inclusion. In conclusion, the marketing of DEI initiatives is a complex yet essential aspect of modern business strategy. It’s about creating a narrative that resonates with employees and clients alike, one that is authentic and reflective of a firm’s true commitment to diversity, equity and inclusion. This approach aligns with contemporary values and enhances a firm’s market reputation and competitiveness. Wayne Lambert is the director of supplier diversity at Turner & Townsend where he leads efforts to enhance the firm’s Supplier Diversity program and expand the supply chain to create contract and capacity-building opportunities for diverse businesses.

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64 MANN REPORT | JANUARY 2024

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GINA SABIO

Licensed as Virginia Sabio | Licensed Associate Real Estate Broker

“Luxury Begins Here”

- GS

“

C: 917-325-8147 | O: 212-590-2473 GSabio@christiesrealestategroup.com | christiesrealestategroup.com Christie’s International Real Estate Group 1 Rockefeller Plaza #2402 | New York, NY 10020

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COLUMNS

Condo-Co-op Helpline: New York City Real Estate 2024 With the new year now here, we consider 2024 and the real estate trends that may impact cooperative and condominium buildings. There are three trends of interest for the upcoming year: the migrant crisis and the City’s (in)ability to address issues posed by the migrants; the profound housing shortage for moderate-income city residents and, lastly, the downward price pressure on cooperative and condominium units.

Migrant Crisis

Carol A. Sigmond Partner Greenspoon Marder LLP 590 Madison Avenue, Suite 1800 New York, NY 10022 carol.sigmond@gmlaw.com (212)-524-5074

More than 100,000 undocumented migrants have entered New York City’s welfare system seeking temporary housing. The city has been struggling to house them and in response is waiving zoning laws in order to ease repurposing commercial buildings into temporary housing in many neighborhoods. However, since the Fire and Sanitary Code requirements are not waivable, the City must comply with them. The primary issue for cooperative and condominium properties from these facilities is sanitation: the city is not providing sufficient trash pickups, among other services. Also, the migrants are not eligible for health care except in extreme emergencies, but are bringing a host of communicable illnesses, including gastrointestinal and respiratory viruses as well as antibiotic-resistant tuberculosis. Any public health issue should be reported to the city and state health departments. If necessary, building management may consult a certified industrial hygienist for additional information and support.

Housing Shortage Moderate-income housing has been in short supply in New

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York City for many years. As job growth has increased in the city, the need for additional housing has also grown. Various mayoral administrations have tried to address this issue, generally with no success. The present administration is looking at what it calls the “City of Yes” proposal, which seeks to create 100,000 new homes over 15 years by, among other things, lifting zoning restrictions on the conversion of commercial buildings to residential. Regular readers of this column know that zoning is only a small part of the conversion problem. The real issues relate to the requirements under the Multiple Dwelling Law that mandates operable windows in bedrooms, adequate numbers of bathrooms and other health and safety requirements. Because the city can’t waive health and safety requirements, these constraints continue to preclude these conversions. The “Yes” proposal includes types of housing that have not been considered desirable, such as dormitory-type housing and basement apartments. The former is less desirable than single-room occupancy (SROs), but may be useful as temporary housing for single homeless people, while the latter is prone to flooding, which may mean that they are dangerous in a storm. In addition, accessory housing (in addition to legalizing basement apartments) connected to existing one and two-family homes may be considered. Another element of the “Yes” proposal allows modest additional developments at transit sites in the outer boroughs. The idea is to allow modest-

ly larger, three- to five-story multiple dwelling units at bus and subway transit stops in the outer boroughs. Purportedly, this will increase ridership (at a time when it has fallen due to the long-term impacts of remote work following the pandemic) and provide additional housing. Some outer borough residents fear that the new housing located at transit stops will lead to gentrification, which will drive existing residents out of their homes and neighborhoods. Missing in all of this is a discussion of infrastructure, including water and sewer lines, schools and other essential elements required in neighborhoods. All of that aside, the quantity of additional housing from this proposal is modest.

Pricing Issues For owners of cooperative and condominium units, 2024 may be rocky. Local Law 97 fines will be coming online, so property taxes may be increasing. The flight of high-income residents from the city is reducing the income tax base at a time when the mayoral administration is looking for more revenue, not planning for less. The interest rate environment will make refinancing mortgages more expensive. Higher interest rates will also lower prices and reduce the number of buyers for certain units. High-end luxury apartments will remain popular, but possibly without income tax payments from high earners as they transfer their “official” residences to lower-cost states. This column presents a general discussion. This column does not provide legal advice. Please consult your attorney for specific legal advice.

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Welcome to

The Entrepreneurial Bank Helping Our Clients Build and Sustain Wealth, One Client at a Time.

For more than 20 years, our bankers have worked alongside middle-market and small business owners during the good times as well as the not-so-good – tailoring our traditional and innovative banking products and services to meet the challenges and seize opportunities in front of our clients.

Laura Capra Executive Vice President 212 659-0606 | LCapra@MCBankNY.com Metropolitan Commercial Bank Business • Commercial • Personal Banking | Global Payments 99 Park Avenue • 12th Floor • New York • NY • 10016 mannpublications.com

JANUARY 2024 | MANN REPORT 67

COLUMNS

The 2024 Winter Season: Real Estate Industry Preparedness & Protection

Frank DeLucia Senior Vice President Hub International Northeast frank.delucia@hubinternational.com (212)338-2395

While still dealing with loss of rent and other pandemicrelated challenges, this winter may bring an additional layer of unwelcomed obstacles and losses for the real estate industry. The best risk management practice for real estate owners and property managers to reduce costly accidents on their property caused by inclement weather is by taking proactive steps to control or eliminate losses from slips and falls and other incidents on the premises.

Plan Now for Later Boilers and roofs should be inspected for potential defects and leaks at least annually, preferably just before the winter season and again after a major storm. To prevent frozen pipes, keep thermostats at 55°F or higher, even in vacant areas. Flowing water often breaks up ice below freezing. When outside temperatures remain below freezing, it’s less expensive to run your faucet regularly than to repair a frozen or burst pipe later. Snow loading on a roof can cause deflection and sagging of the roof structure, damage and, in some cases, roof collapse. Ice damming, or the buildup of ice on the eave and soffit area of a roof, can cause chunks to break off and fall, or when melting, can cause water to seep into the building through the roof system. Depending on

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the amount of snowfall or other winter conditions, put preventive measures in place. These can include pre-arranged snow removal for heavy accumulations, and rakes on sloped roofs to reduce the likelihood of snow/ice from falling off and damaging property or injuring personnel. Block off access under areas where potentially dangerous situations exist. Backup the backup power. A generator will only work if it has been maintained properly. Make sure you store the appropriate amount of fuel required for backup power to function as needed. As we recently witnessed with the tragic deadly fire in the Bronx, portable heaters create a huge risk in the winter months; it’s vital to practice proper safety measures. The National Fire Protection Association (NFPA) reports that space heaters — whether portable or stationary — account for as much as a third of heating fires each year. Have a conversation about proper placement and care for the heater in the office and provide material to tenants on these safety measures in lease agreements and also throughout the building. Have an official winter advisory plan that specifies when early dismissal or office closure is appropriate and, should the need arise, who will make the

call and how the information will be disseminated to staff.

Understand Your Insurance Coverage Commercial property and casualty insurance policies almost always include “direct loss” insurance. In insurance policy language, “direct losses” refer to any damage immediately inflicted by a winter disaster, accident or other event, known in insurance language as “perils.” If a blizzard damages a roof, a direct loss will include damage to the structure, as well as to equipment, furniture, inventory or other items inside that could have been damaged as a result. Fire and smoke damage would count as a direct loss. However, oftentimes, “indirect losses” can be more damaging to a company, such as losing several months’ worth of income as a result of physical damage caused by a weather-related event. This is why it’s critical to review insurance policies to understand whether they include indirect loss insurance and, if not, to secure business interruption and additional types of necessary insurance coverage for your business. These include following contingent business income coverage, which can help bridge gaps if a supplier is impacted by a storm; flood coverage and cyber liability coverage, as cyberattacks are known to increase after a storm.

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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

The TurfMutt Foundation Shares 10 Backyarding Trends for 2024

Kris Kiser Outdoor Power Equipment Institute 1605 King St. Alexandria, VA 22314 turfmutt.com opei.org (703)549-7600

“Backyarding” — the act of taking activities typically associated with the indoors outside into the green space around us — will continue taking root in 2024, predicts the TurfMutt Foundation, which advocates for the care and use of green space, including our own backyards, community parks, green space, and schoolyards. But in 2024, we at the TurfMutt Foundation expect the practice of “backyarding” to further evolve into an ongoing sustainability practice. Now more than ever, homeowners are recognizing the power of their yards and parks to do the environment good, as well as their benefiting our own health and well-being. Homeowners are making improvements in their yards with many goals in mind, thinking about what’s good for their families, pets, and our planet.

The TurfMutt Foundation predicts these 10 backyarding trends for 2024: Improving existing space (rather than moving to a new one). High interest rates and low housing inventory mean more homeowners have chosen to renovate rather than move into a new home. With interior improvements complete, the focus turns to backyard improvements that customize the outdoor space and artfully merge indoor and outdoor living.

Seeking a home near a park or nature. Even homeowners looking to downsize still want to maintain a connection with

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nature. They know backyarding can happen in any size yard and seek additional connection to nature through community parks, school yards and other green spaces.

Return of neighborhood parties … in the backyard. Over the last several years, homeowners have invested in their outdoor living areas, and now they are using that space to bring back neighborhood block parties in their own backyards.

Creating a backyard oasis for fun. From parents looking for ways to lure their kids away from screens to neighbors wanting to connect with friends, homeowners are turning their backyards into a place for fun and games. Some go all out to install a pool or pickleball court while others take a simpler approach like designating a strip of grass for cornhole or a small soccer pitch.

Taking better care of living landscapes. Since homeowners have come to value their lawns, trees and plants more than ever, they are investing in their care like never before. This means investing in equipment for DIY work and calling in professionals, as needed, for pruning, rescuing diseased trees and revitalizing turfgrass, just to name a few.

Choosing real grass. The trend of ripping out real grass and replacing it with fake, plastic alternatives is fading as homeowners and communities recognize the limitations – and downsides – of plastic grass. Synthetic turf is hard to clean,

hot on feet and paws, and difficult to recycle.

Planting for pollinators. Once a niche practice, planting for pollinator support is omnipresent. Homeowners understand the importance of their backyards to provide food and shelter to pollinators like birds, butterflies and bats year-round. And they are selecting plants with pollinators in mind.

Adding drought-tolerant plants. Plants that are especially adapted to drier landscapes are better for water-stressed areas in our environment. Homeowners are doing their research and selecting plants that will thrive in their micro-climates.

Mixing materials. As outdoor living has become incorporated into daily life, homeowners are taking care to design cohesive outdoor spaces. They factor in landscaping, hardscaping (patios, outdoor kitchens, etc.) and natural aesthetics (trees, boulders, etc.). Backyard birding. The birdwatching craze really took flight during the pandemic, but it’s not a fleeting fad. Birdwatching is not only relaxing; it is a great way to connect with nature right outside our back doors. For more, sign up for Mutt Mail, a monthly e-newsletter with backyarding tips and all the news from the TurfMutt Foundation. To learn more about creating the yard of your dreams, visit turfmutt.com. Look for Mulligan the TurfMutt on the CBS “Lucky Dog” television show.

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LANGSAM PROPERTY LANGSAM PROPERTY SERVICES CORP., AMO SERVICES CORP., AMO Langsam Property Services Corp. is a Bronx-based real estate management company. These buildings areislocated in the Bronx, Manhattan, Queens, Langsam Property Services Corp. a Bronx-based real estate management Brooklyn, and buildings lower Westchester company. These are locatedCounty. in the Bronx, Manhattan, Queens, Brooklyn, and lower Westchester County. Langsam is designated as an Accredited Management Organization (AMO), a standard of excellence management conferred by the Institute of aReal Langsam is designated as an in Accredited Management Organization (AMO), EstateofManagement standard excellence (IREM). in management conferred by the Institute of Real Estate Management (IREM). 1601 Bronxdale Avenue New Avenue York 10462 1601Bronx, Bronxdale Tel: 718. 518. 8000 Bronx, New York 10462 Fax: 718.518. Tel: 718. 518. 80008585 Fax: 718.518. 8585

Mark Engel, CEO Mark Engel, CEO

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www.langsampropertyservices.com www.langsampropertyservices.com

Matt Engel, Matt President Engel, President

JANUARY 2024 | MANN REPORT 71

COLUMNS

Deb’s Retail Dish and Deals: Main Streets Across the World We’re Number One! We’re Number One! Once again, New York City’s Upper Fifth Avenue is the priciest retail street in the world, according to Cushman & Wakefield’s annual report “Main Streets Across the World 2023,” with annual rents of $2,000 per square foot per year, flat compared with 2022.

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

Following were Via Montenapoleone in Milan, Italy ($1,766 per square foot, up 20% YOY, year-over-year); Tsim Sha Tsui in Hong Kong, China ($1,493 per square foot, up 4% YOY); New Bond Street in London, U.K. ($1,462 per square foot, flat YOY) and the Avenues des Champs-Elysees in Paris, France ($1,120 per square foot, flat). Worldwide rents, which plunged with the onset of COVID-19, have slowly crept up, and are now just 0.1% below pre-pandemic levels, the report noted, with the U.S. showing the greatest strength. But among the top 10 cities, most YOY gains were 5% or less — Milan is a real outlier. Almost 60% of markets globally remain below pre-pandemic rental levels; despite Hong Kong’s gain this year, it’s still down 39% from before the pandemic. In Europe, 70% of markets are below pre-pandemic rents and a regional gain is largely the result of a 120% YOY rental increase in Istanbul, driven by a staggering inflation rate that had moderated to 60%

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by September 2023. In contrast, in the U.S., only 31% are below pre-pandemic levels; 69% are above. In the Americas, following upper Fifth Avenue was Madison Avenue from 57th to 72nd Streets at $1,250 per square foot, a 25% leap YOY, then Los Angeles’ Rodeo Drive at $825 per square foot, up 3% YOY; New York’s Soho at $860 per square foot (up 19%!) and Kalakaua Avenue in Honolulu at $500 per square foot, flat YOY. Not so lucky was Chicago’s North Michigan Avenue, which came in 10th in the Americas at $315 per square foot, down 26% year over year. Of course, these streets are headquarters for luxury, which remains somewhat immune to the volatilies of interest rates. The rich, thank heavens, are always with us and nearly always spending, albeit at a lower level. While many retailers in the luxury sector have been reporting weaker-than-expected sales, that’s largely because aspirational shoppers have stopped indulging themselves. “As central banks have undertaken one of the most aggressive interest rate hiking cycles in decades, consumers have shifted spending patterns and are reining in nondiscretionary expenditure. For the luxury sector, this represents a normalization in their customer base after a period of strong fiscal stimulus, but as noted, sales growth is slowing,” the report said.

Spaces on these high-end streets will remain tight, as global companies seek high-profile flagship locations, and all new stores should be focusing on experiences — look at the newly renovated Tiffany & Co., the new Crate & Barrel in Flatiron, RH’s resort-hotel showrooms and more. “Brands themselves are expanding into new sectors including hotels, residences, interior design and hospitality as they double down on experience. Such moves have seen the rise of Armani/Casa, Bulgari Hotels and Resorts as well as LVMH’s Cheval Blanc Hotel,” the report said. “Changes have been evident in the tenant mix on main streets, with beauty services and cosmetics, for example, becoming more prominent. Such growth highlights the level of nuance within the luxury sector. More widely, fashion, sports and athleisure brands have also become more focused on curating high-quality in-store experiences, having made significant investments into their flagship stores.” There will be a number of challenges this year, including ongoing real estate supply issues, the rising costs of labor — you have to pay the employees offering those experiences — and constrained capital during an election year. But retail time and again has proven its resilience. Strap in, all.

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COLUMNS

Decarbonizing Buildings One Step at a Time Building electrification in commercial properties is an increasingly important trend in the effort to fight climate change. While the process is easier in new construction projects, owners and operators of existing assets can also benefit from upgrading their facilities.

Tyler Jensen Studio Leader for High-Performance Buildings Environmental Systems Design 233 S Wacker Dr. Chicago, IL 60606

Upcoming Securities and Exchange Commission reporting requirements for large publicly traded companies are helping to accelerate the electrification trend. There is also a new emphasis on the so-called “greening of the grid.” The green power market, a subset of the larger electricity market in the U.S., is a complex system that delivers power as it is produced. As technology advances, especially in the development of large-capacity electricity storage systems, the grid will increasingly be powered by clean renewable sources, providing a lowcarbon power source for electrified buildings. As the carbon footprint of the electrical grid drops, developing an asset drawdown strategy becomes more critical when planning an asset’s future. While 100% building electrification may not be feasible, a significant climate impact can be achieved with hybrid electrification that balances capital expenditure and operating expenses while providing flexibility for the future. This should be the primary motivation for any building asset’s drawdown strategy. Electrification of existing assets in heating-dominant climates can be particularly challenging. A substantial inventory of buildings is imminently due for major

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infrastructure upgrades; many of these, particularly those designed before the mid-20th century, needed to be designed with electrification in mind.

significantly reduces operational carbon and enables future retrofits when heat pump technology presumably will be more cost- and space-efficient.

Once existing efficiency via passive design, engineering and construction approaches is optimized, strategies that use more costly technologies and retrofits, such as heat pumps, and dedicated outdoor air systems (DOAS) with heat recovery and on-site renewable energy can be considered. These strategies can be more efficiently deployed as part of the infrastructure upgrades in conjunction with existing capital improvement plans.

An effective asset drawdown strategy for an existing building can be phased and implemented over time. This allows an incremental shift toward electrification in line with tenant demand. However, it also requires a deep understanding of the hybrid plant’s configuration and operation so that a green lease can be successfully implemented, considering the operational costs for both new and current tenants.

Employing heat pumps for a significant majority of operating hours while gas-fired or electric resistance heating is activated during peak heating periods is a possible incremental “bridge solution.” This approach can be applied to both new and existing assets. In both cases, energy savings are realized by the efficient heat pump operation for most hours of operation while optimizing the heat pump plant installation, which is significantly more costly and space-intensive compared to gas-fired technology. Rather than devoting capital and operational expenditures to a fully electric project, building owners and operators should consider a bridge solution that optimizes high-efficiency (and high-cost) electric heating systems, notably heat pumps and heat recovery chillers, for the 75% of operating hours when temperatures are above freezing, combined with gasfired or electric boilers to target the balance. This approach

The Inflation Reduction Act of 2022 contains significant incentives to use renewable energy and efficient systems such as heat pumps and geothermal systems, which further defray the initial capital impact of this strategy. While building electrification can be a powerful tool in the fight against climate change, a full understanding of the costs, incentives, logistics and planning requirements must be achieved before proceeding. Although 100% electrification should be the goal, it is not always feasible, and positive climate benefits can still be achieved in a cost-effective manner. Development of a bespoke asset drawdown strategy for sites that include strategically deploying bridge solutions can prevent a property from becoming stranded while realizing significant operational carbon reductions, increasing its value and marketability and setting it up for long-term viability.

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Since 1979 we’ve brought a passion for the details to every facet of our business. As a multi-faceted real estate company and owner/ operator of more than one million square feet of commercial space, our decades of perspective ground our get it done approach.

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COLUMNS

Parapet Inspections Now Mandated Another required inspection has fallen into the laps of condominium and co-op boards and property managers. It’s Local Law 126, passed by the City Council in 2021 and effective on January 1, calling for the annual inspection of roof parapets on the right-of-way sides of all buildings with the exception of detached singleand two-family homes.

Ira Meister President and CEO Matthew Adam Properties, Inc. 375 Pearl St. – 14th Floor New York, NY 10038 imeister@matthewadam.com (212)699-8900

The law requires building owners to hire a qualified professional or other person capable of identifying hazards to inspect building parapets and record any dangerous conditions. A parapet is any portion of a wall extending above a roof. These portions of a building can deteriorate over time and create a public hazard. Upon finding an unsafe condition, the property owner must immediately inform the Department of Buildings (DOB) and the owner or board must promptly install public protection, such as sidewalk sheds, fences and/or safety netting, which must remain in place until the problem is remedied. Unsafe conditions must be corrected within 90 days. “New York City takes building safety seriously because, on multiple occasions, pedestrians have been killed by falling debris from buildings. This new rule aims to protect the public by requiring observations of parapets by qualified individuals and repair of unsafe conditions,” the DOB said online. No submission to the department is required; however, an observation report must be supplied to the owner who should maintain the reports for at least six years and make

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them available to the department upon request. Unlike the Façade Inspection Safety Program (FISP), known as Local 11, which excludes buildings under six stories, the parapet rule applies to all buildings regardless of height, with the exception of detached single- or two-family homes. While FISP inspections are conducted on a five-year cycle, the new parapet observation must be done annually. Inspections can be made by such persons as a bricklayer, building superintendent, handyman, mason or someone in a similar construction-related trade. Also included are an architect, engineer and inspector working for a New York State-authorized insurance company, a New York State-authorized building inspector or any other person capable of identifying hazards on the parapet. The report needs to include: ● Basic building information, including address and owner contact details. ● Name and contact details for the professional performing the observation. ● Date of the observation. ● Location plan and construction information for the parapets, including material, height and thickness. ● A description of general conditions. ● Unsafe conditions and actions taken to remedy them. ● Repairs since the previous report. ● Dated photos documenting conditions. If a mandated FISP inspection is scheduled for 2024, adding a separate parapet observation report to that program may

be a cost-effective strategy. Similarly, parapet observation can be incorporated into other planned exterior work, such as roof rehabilitation or façade cleaning. The rule makes no mention of fines or penalties for owners who fail to comply. Like many laws and regulations, the parapet regulation like Local Laws 10 and 11 was prompted by tragedy. Local Law 10 was passed and signed into law in 1980 by Mayor Ed Koch after a Barnard College student was killed in May 1979 by a piece of terracotta that fell from a building. Later, other accidents including the death of a 16-year-old student struck by a falling brick, a parapet collapsing in the back of a building and a shower of debris from an office building on Madison Avenue led to efforts to tighten up Local Law 10. The result was Local Law 11, passed in 1998, which extended inspections to all of the building’s walls except those 12 inches or less from an adjacent building. Another important difference between Local Laws 10 and 11 is that under Local Law 10, façade inspections didn’t even have to be done from a scaffold — they could have been done as a “visual inspection” from nearby, with binoculars or a telescope. Under Local Law 10, an engineer or architect could also opt to examine conditions from a building’s exterior fire escape. Under Local Law 11, that all changed. The physical inspection has to consist of at least one drop from a scaffold or other observation platform such as a drone.

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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

Where Will Property Tax Assessments Head In 2024/25?

Steven Tishco Esq. Partner

Catherine Ginsburg, Esq. Associate Ditchik & Ditchik PLLC 370 Lexington Ave., Suite 1611 New York, NY 10017 steve@ditchik.com catherine@ditchik.com (212)661-6400

On or around January 15, 2024, the New York City Department of Finance (DOF) will publish its tentative property tax assessment roll valuing all real estate in New York City as of the January 5, 2024 “taxable status date.” The final assessment roll will be published on May 25 and will affect property taxes due for the city’s 2024/25 fiscal year (July 1, 2024-June 30, 2025).

ing as homeless or migrant shelters. In the world that has emerged post-pandemic, each of these property types has diverged from others in their overall asset classes in terms of performance and, thus, market valuation. It remains to be seen whether and when the city will begin to recognize the unique market realities with respect to such assets in its valuations for tax purposes.

While it is not possible to predict the 2024/25 values, we think it likely that the values of most asset classes will continue to rise (on average) as has been the case in the past two tax years from pandemic lows in 2021/22, given improvements in the market and the economy since the recovery from pandemic began.

The post-pandemic trend toward remote and hybrid work has resulted in higher office vacancies overall (and lower revenue) and a “flight to quality” for tenants still looking for space. This has left Class “B” and lower office properties, typically older buildings with obsolete layouts many of which were geared toward smaller tenants, with quite a dilemma. Do they lower rents substantially to attract tenants? Do they live with higher vacancies in the hope of an eventual turnaround? Do they convert these properties to another more profitable use?

How much those values will change remains to be seen, as values for tax assessment purposes are affected by a number of factors such as trends in reported operating income and vacancy rates. What will likely not affect commercial and multifamily residential asset values are sale prices. The DOF does not typically look to sale prices in setting assessments for tax purposes. Of particular interest will be how DOF treats certain subsets of properties within broader asset classes that may have unique characteristics, namely Class “B” (or lower) office properties suffering from higher vacancies, and formerly transient hotels now serv-

Regardless of the answer, the fact remains that the city will continue to assess these properties as offices as long as they remain such. Historically, valuations for lower-class offices moved in tandem with trophy and Class “A” values, but given longer-term higher vacancy and lower rental income relative to higher-quality assets, we would expect to see such valuation trends diverge going

forward. Will 2024/25 be the year that it happens? With respect to hotels, since the pandemic, we have seen what amounts to a new asset subclass emerge — hotels that once catered primarily to tourist and business travelers now fully or partially rented on a contract basis, first to house homeless individuals and now primarily to house migrants from abroad with the city itself as the primary customer Whatever the specific reasons for such hotel owners to decide to permanently refocus their business, such contracts produce less revenue than those properties historically had generated pre-pandemic as traditional transient hotels, often lower on a per-key basis than DOF’s valuation guidelines typically would allow. As hotels that remained in regular transient operation recover from the pandemic, will DOF continue to treat these other shelter hotels as comparable properties with values moving upward in lockstep? Or will it treat these properties in line with new market realities, particularly when the city is providing its revenues? Property owners and others responsible for paying the property tax should be ready to review their January 2024 assessments, and to discuss with their property tax counsel the benefits of filing a challenge to these valuations. Such values will be published by DOF on or about January 15.

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COLUMNS

“GROUND LEASE” … “LEASE EXPIRATION” … “RENT ESCALATIONS”

Steven Matz, Esq. Partner Romer Debbas LLP 275 Madison Ave., 8th Floor New York, NY 10016 smatz@romerdebbas.com (646)930-7776

The phrases alone are enough to send people walking away from these buildings in New York City who do not own the land upon which the building sits. Rather, the land is leased, and each lease has its own set of terms and nuances. Some of the landowners are educational or religious institutions, others are on land owned by a governmental entity.

buildings.

First, let’s take some of the mystique out of land leases, which can be used interchangeably with “ground leases.” While friends, colleagues and family will all have opinions, an apartment for sale in a land lease building may be a golden opportunity. Usually, prices per square foot are lower in these buildings; thus, you are receiving some of your appreciation on the front end.

There are two main factors in analyzing a land lease and ascertaining if it’s right for a purchaser: terms/length of the lease and rent escalations (if applicable). As for the length of the lease, some have clauses permitting renewal or negotiation while others may not. A typical land lease can expire on its face in 50, 60 or even 99 years from now.

When you look to sell the apartment, there may be a pool of people who don’t want to proceed, or even view the unit or make an offer. However, the owner of a unit with a land lease is likely getting the opportunity to live in an apartment they could not otherwise afford. Some of New York City’s toniest neighborhoods are home to land lease

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One thing to note is that while a land lease building makes a “rent payment,” which directly comes from the monthly maintenance or common charges, a “conventional” cooperative will likely have an underlying mortgage, where the loan must be paid back also from the monthly maintenance.

All of Battery Park City is built on land that is leased from the State of New York, with a master ground lease that had been set to expire in 2069. Just recently, this was extended to 2119. However, the main issue surrounding land leases is not so much the expiration, but the schedule of rent escalations. With just a few exceptions, most ground leases have a

set schedule of how much rent shall be paid and when. Some have escalations at a flat percentage year over year. Others have rent tied to the fair market value of the land, analyzed every five to 20 years. It should be emphasized though that the rent is just one piece of the monthly maintenance, which covers insurance, labor, energy and building services as well. Thus, a percentage increase in rent does not translate to the same increase in overall maintenance. In recent years, several condos and coops, particularly in Battery Park City, have been successful in renegotiating their rent schedules, changing the formulas on which it’s calculated, resulting in lower rent payments. While there are no guarantees, public policy and opinion have played a prominent role, particularly in land leases backed by governmental agencies. An apartment in a land lease building may not be for everyone but given the wide range of terms and provisions in these leases, it may behoove a purchaser to take a closer look if they’re interested in a particular apartment.

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JANUARY 2024 | MANN REPORT 81

COLLEGES

The fluted aluminum façade is striking

Shawmut and Brown University Complete The Lindemann Performing Arts Center Photos by Iwan Baan Shawmut Design and Construction and leaders from Brown University celebrated the completion of The Lindemann Performing Arts Center (The Lindemann), a one-of-a-kind venue in Providence, Rhode Island that they said pushes the boundaries of innovation in performance space. Located centrally in Brown’s Perelman Arts District, the 101,000-square-foot building — designed by Rex/Joshua Ramus and managed by the Brown Arts Institute (BAI) — offers a radical approach to spatial, acoustic and technical flexibility. Interweaving innovative design, yearround arts programming and gathering and rehearsal spaces, The Lindemann aims to increase accessibility to cutting-edge artistic resources to further cultivate a community committed to the arts. “As we proudly unveil our latest project at Brown University with The Lindemann Performing Arts Center, we celebrate the culmination of a remarkable journey —

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one that underscores the team’s prowess in navigating the complexities of building at this scale,” said Ron Simoneau, executive vice president of education at Shawmut Design and Construction. “This project has successfully woven together architectural brilliance, cutting-edge technology and adaptability to bring forth a facility that not only meets the diverse needs of Brown’s creative community but sets a new standard for what is possible in performance venues. The Lindemann will serve as a dynamic hub, fostering creativity, collaboration and artistic exploration for generations to come.” A collaboratively curated, reconfigurable space, The Lindemann’s Main Performance Hall is unprecedented in its ability to transform. Incorporating a new performance typology, all six surfaces of the hall (floor, ceiling and four walls) modulate physically and/or acoustically through automated and manually assisted performance equipment to create five

radically different stage-audience configurations — experimental media, recital, end-stage, orchestra and flat floor — and an array of potential secondary modes. The equipment installed to make such transformations includes five suspended, four-tier seating gantries, 40 adjustable acoustic reflector panels, seven motorized utility battens, three lighting bridges, two stage lifts, three orchestra platform lifts, six telescoping orchestra risers, three seating wagon lifts, a three-unit retractable seating system, five seating wagons, a ring of deployable acoustic curtains and a complete technical gridiron 55 feet above the floor. “The transformational capabilities of The Lindemann respond to the student’s needs, as well as the University’s pedagogical structure, reflecting its commitment to excellence and adaptability to provide an architectural tool capable of expanding its artistic offerings,” said Rex Principal Architect Joshua Ramus.

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COLLEGES The Lindemann’s fluted aluminum façade is intersected by a stage-level clerestory that reveals the interior of the main floor in every direction, welcoming passersby to engage with the creation of art in the space and providing views of “Infinite Composition,” a site-specific, dynamic light installation by artist Leo Villareal. One story up from the street, the clerestory cantilevers on three sides of the building, creating sheltered outdoor spaces for events, performances and gatherings, while inside the building it houses the Nelson Atwater Lobby, a promenade with direct views to the main hall and an assembly area for performers that can serve as a more intimate lobby. Below street level, three spaces designed for music, theater and dance will enable students, faculty and visiting artists to create cutting-edge, original artwork in flexible, well-equipped studios. Each includes a control room and customizable

equipment, allowing the rooms to function as studios, classrooms, and performance spaces where artists and scholars can engage in experiments, fabrications, installations and speculative projects. Situated adjacent to other arts-centered academic facilities in the campus core, The Lindemann’s location will establish a hub of creative activity on campus, as it hosts year-round programming, rehearsals, research-focused courses, collaborations, community partnerships and BAI commissions.

arts groups and leading visiting artists and performing arts organizations that will be made available to them through our collaborative programming.” The cantilevered second floor provides shelter from the elements

“The opening of The Lindemann marks a moment of catalyzing potential for the future of the University, cementing its commitment to artistic practices on campus and in the broader Providence community,” said BAI Artistic Director Avery Willis Hoffman. “We are excited to welcome students into the space to engage with its leading technology and programming, and with each other, faculty, on-campus

Aoucstics can be modulated for orchestras

The building is located in the heart of Providence

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JANUARY 2024 | MANN REPORT 83

AEC

Big at the Beach: Malibu High School Expands The first phase of the long-awaited expansion of Malibu High School is now underway with the recent groundbreaking on its $100 million core building. The 70,000-square-foot building, scheduled for completion in the fall of 2025, will feature a library, visual and performing arts classrooms, project-based learning facilities, multipurpose spaces, special education classrooms, STEM classrooms, a campus cafeteria and administration offices.

pus, immediately adjacent to the existing high school. The new two-story building will embrace the school’s environmental ethos in its design, with an open breezeway between concrete and copper-clad walls inspired by the native landscape. Outdoor common space for the school’s students will be partially shaded by an overhead canopy with built-in photovoltaic panels that will generate power for the school and contribute to the campus’ energy conservation.

Located just a mile from the Pacific Ocean at 30215 Morning View Dr., the building will be built on the site of the former Juan Cabrillo Elementary School cam-

“C.W. Driver has the dedicated skill set and many years in school construction required for a project of this scope,” said Karl Kreutziger, president of

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Photosmannpublications.com courtesy of C.W. Driver Cos.

ARCHITECTURE | ENGINEERING | CONSTRUCTION Pasadena, California-based C.W. Driver Companies, which is completing the construction. “Our extensive experience spans over 150 K-12 projects for more than 23 different school districts, totaling close to $2.2 billion worth of construction over the past 30 years. Having the opportunity to work on this project for SMMUSD (Santa Monica-Malibu Unified School District) is a perfect fit for us and our capabilities.” The groundbreaking came after C.W. Driver’s extensive preconstruction, which involved the demolition and removal of nine buildings at the former elementary school (clearing approximately 38,853 square feet of older construction). As part of that process, C.W. Driver was able to scope the photovoltaic panels under a design-build method to ensure proper design coordination with the roof steel trellis. Also, the demolition and abatement scopes were executed while the plans were with the Division of the State Architect (DSA) to ensure the construction end date could be met. “We are excited to begin construction of the new Malibu High School,” said Santa Monica-Malibu Unified School District Superintendent Dr. Antonio Shelton. Our students will have classrooms

Solar panels will provide shade as well as energy

“This school will allow our students to have an educational experience that encourages exploration, project-based learning and the importance of collaboration.” that are safe, conducive to learning and large enough to facilitate instructional practices that are cutting edge.” C.W. Driver is working with NAC Architecture on the project, as well as Koning Eizenberg Architecture, demolition specialists AMPCO North, Pfeiler & Associates Engineers, California Solar Integrators Inc. and Hunsaker and Associates.

A multipurpose space

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The project is funded by Measure M, passed by Malibu voters in 2018.

JANUARY 2024 | MANN REPORT 85

ARCHITECTURE | ENGINEERING | CONSTRUCTION

Matern Professional Engineering Helps Build Brightline Train Station at Orlando International Airport An old-time look meets the latest eco-friendly technology at the Brightline Train Station at Orlando International Airport. Brightline is the only modern, eco-friendly intercity rail provider in the U.S. The Orlando Brightline station will serve as a blueprint for other states as it revolutionizes travel in car-dependent Florida by delivering the first high-speed train directly connected to an airport. The result links millions, and regionalizes the state. The three-story station features groundbreaking design elements and technological advancements, providing a state-of-the-art station. The station spans 37,350 square feet and is located in the heart of Orlando International Airport’s new 80,000-squarefoot Terminal C extension, directly connecting to the airport’s parking deck C. The design combines a historic train station feel with contemporary conveniences to create a streamlined, cohesive and efficient environment. Matern’s focus on space utilization, multi-functionality and seamless integration with design elements helped bring Brightline’s vision into reality.

Photos courtesy of Matern Professional Engineering

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“Brightline’s Orlando station is an ambitious and exciting project that challenged our team to think creatively and apply unique and complex engineering techniques in every phase,” said Brad Pascarella, PE, commercial department head and senior project manager at Matern Professional Engineering, which performed the engineering work at the Orlando station. “Incorporating new engineering systems into

Orlando International Airport’s existing infrastructure was a demanding but rewarding experience.” The project started in 2014, with Matern Professional Engineering joining in 2018. The firm learned Brightline’s pre-established technology and managed the installation of new, complex electrical systems while meeting Orlando International Airport’s requirements. This was done in collaboration with Borrelli + Partners, ensuring adherence to the fluid design scope established by Orlando International Airport and Brightline. Consistent communication was required with manufacturers to custom-make specific elements for the design and engineering components to augment the airport’s existing electrical, HVAC and sanitation systems. “Working on Brightline’s historic and innovative Orlando station is an architect’s dream,” said Jorge Borrelli, principal and owner of Borrelli + Partners. “It was an honor to collaborate with Matern Professional Engineering to bring every design element to life while maintaining our priority on quality. Our combined expertise and innovative solutions ensured we met every requirement Brightline had.” Matern Professional Engineering partnered with Brightline, Bigtime Design Studios, Borrelli + Partners, and the Gomez Construction Company to deliver a train station that will serve Florida residents and visitors for years to come.

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Photos courtesy of Matern Professional Engineering JANUARY 2024 | MANN REPORT 87

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JANUARY 2024 | MANN REPORT 89

EXECUTIVE CHANGES

Colacino Joins JLL to Lead Tri-State Brokerage Commercial real estate veteran Michael Colacino has joined JLL as president of Tri-State brokerage. Colacino will be based in Manhattan and will lead corporate brokerage and consulting services to further strengthen the firm’s role as a strategic real estate advisor. He will report to Peter Riguardi, chairman and president of the New York Region and work in partnership with Stephen Schlegel, chief operating officer for the New York Tri-State. A former president at Savills Studley, where he managed one of the largest tenant representation practices in the U.S., Colacino joined JLL from SquareFoot, a tech-driven real estate company where he served as CEO. “Michael is a highly regarded market expert who will play an essential role as we continue to focus JLL brokerage services to provide clients with sophisticated real estate solutions in an evolving market,” said Riguardi. “His deep experience and relationship-driven leadership will enhance our ability to work quickly and efficiently to achieve our clients’ goals.” Colacino has over 30 years of industry experience, starting at Studley in 1991 following a 10-year career as a systems designer. He led a management buyout of the firm from founder Julien Studley before it was acquired by London-based Savills in 2014. He founded proptech investment company Haiku Partners in 2019 before joining SquareFoot as president. “Michael’s deep understanding of owner and occupier priorities, complemented by his expertise in technology, further positions JLL as the leading provider of commercial real estate consulting services in the city,” said Schlegel. “He will be a tremendous resource to both our internal team and our clients.” As a broker, Colacino was responsible for securing multiple landmark deals, including Time Warner’s move to Time Warner Center and later to Hudson Yards, while directing the strategic growth of the Savills U.S. operations. He served as an advisor to major corporations such as NBC, Microsoft and Credit Agricole, and law firms including Pillsbury Winthrop, Cadwalader, Covington & Burling, Willkie Farr & Gallagher and Freshfields. He also completed multiple transactions across the country for corporate clients such as Microsoft, CNA Insurance and 24/7 Media. Colacino graduated cum laude from Harvard College. He has a master’s in real estate from New York University, where he graduated first in his class. He also studied operations research and statistics at NYU’s Stern School of Business.

Keller Williams Names Willis as CEO Keller Williams (KW), the world’s largest residential real estate franchise by agent count, has named Mark Willis CEO. “With a deep knowledge of our company and our culture, Mark is well-suited to lead us through our next growth phase,” said Gary Keller, co-founder and executive chairman of KW. “With so much uncertainty surrounding the real estate industry today, it’s never been more important to have a leader who thoroughly knows us and understands business at the highest level. That’s Mark Willis.” Willis, a former KW CEO, a current franchisee and a long-standing member of the KW ecosystem, initially rejoined the executive team as a strategic consultant in July 2023. Since 1991, Willis has served in various leadership roles within KW, including regional director, operating principal, team leader and as a KW market center and region investor. “We face headwinds and change, and that’s nothing new,” said Willis. “As an innovative force since 1983, we remain optimistically forward-thinking and focused on serving our agents and brokerage partners as they provide powerful customer and business experiences.” Willis served as president of KW from 2002 to 2005 and as CEO of KW from 2005 to 2015. KW now has more than 1,100 offices and 187,000 agents.

90 MANN REPORT | JANUARY 2024

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EXECUTIVE CHANGES

Measurabl Taps Maffey as Vice President of Sales Enablement Measurabl, the creator of an ESG (environmental, social, governance) technology platform for real estate, has appointed Sara Maffey as vice president of sales enablement. In her previous role as head of corporate development at Local Logic, a location intelligence company, Maffey was responsible for building the brand across the U.S. and Canada and driving growth in commercial real estate. Her career also includes positions at Cushman & Wakefield, Transwestern, the New Jersey Economic Development Authority and a Presidential Management Fellowship with the U.S. Department of Commerce during the Obama administration, as well as international experience in the United Kingdom, Germany, Tanzania, India and Brazil. Her hire follows the naming of former Metaprop Partner Maureen Waters as chief growth officer.

Newmark Names Karaffa as President, Multifamily Debt and Structured Finance Newmark Group Inc. announced the appointment of Sharon Karaffa as president, Multifamily Debt and Structured Finance. She will lead Multifamily Capital Markets in partnership with Chad Lavender, president of North America Capital Markets, who will serve as interim head of multifamily investment sales. In her new role, Karaffa will oversee all aspects of multifamily debt and structured finance, focusing on revenue growth, business development and client and lender relationships while also leading Newmark’s Fannie Mae, Freddie Mac and FHA lending platforms. Additionally, Karaffa is responsible for developing synergies, cross-collaboration and cross-selling among Newmark’s Multifamily Capital Markets’ Investment Sales and Debt & Structured Finance teams. She has over 20 years of experience, the majority of which has been in multifamily finance. Under her leadership, over the past three years, Newmark’s Multifamily Capital Markets platform experienced a 28-percentage point increase in the multifamily investment sales volume financed through its debt platform and a nearly 60% increase in multifamily debt production volume overall. Before joining the company in 2017, Karaffa was the director of priority borrower relationships and head of structured transactions for Fannie Mae Multifamily where, during her governance, credit facilities experienced triple-digit growth. Earlier in her career at Fannie Mae, Karaffa managed the acquisition of seasoned loan portfolios and various lender relationships and led the Financial Planning & Analysis division.

PGT Innovations Appoints Henderson as CFO PGT Innovations Inc., a national brand in the fenestration and garage door industries, has appointed Craig Henderson as senior vice president and chief financial officer. Henderson will lead the company’s finance strategy, budgeting and planning, accounting, financial reporting and investor relations functions. He joined PGT Innovations in 2021 as vice president of finance, with responsibilities for leading the company’s budgeting and planning and investor relations functions and has been serving as interim chief financial officer since February 2023. “Craig has demonstrated exceptional leadership and unwavering commitment to our company’s financial success as interim CFO,” said Jeff Jackson, president and chief executive officer of PGT Innovations. Henderson holds over 20 years of experience in finance leadership in both manufacturing and tech companies. Prior to joining PGT Innovations, he served in multiple financial leadership positions with Trex Company Inc., including director of financial planning and analysis, business development and treasurer.

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JANUARY 2024 | MANN REPORT 91

SM A RRT T MMA A NNA A GGEEMEN M E N TT S MA PP RR OOGR G R E ES S S SI VIVE E TTO O OOL L SS EX P E ER R T TT TEEAM AM EXP

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methods to save ourour clients time and money byby methods to save clients time and money delivering thethe most progressive services and tools in in delivering most progressive services and tools industry. thethe industry. Why? To always increase value buildings Why? To always increase thethe value of of ourour buildings enhance lifestyles residents. andand enhance thethe lifestyles forfor ourour residents. Large to small, tailor services meet Large to small, we we tailor all all ourour services to to meet unique needs of each clients. A total thethe unique needs of each of of ourour clients. A total

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VI SI T CE N T U RYN Y. C O M V I 92 S I T MANN C E N T UREPORT R Y N Y .|CJANUARY OM 2024

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COMMERCIAL CORNER

Benjamin Berman Benjamin Berman is the president of BermanCRE, a commercial real estate brokerage and advisory firm with offices in Washington, D.C., Miami and Atlanta. Berman spearheads the operational excellence of the firm, specializing in landlord representation and leasing operations. With over a decade of experience in the commercial real estate industry, Berman also serves as vice president and managing partner of Berman Enterprises, a multi-generational real estate and investment holding with a nearly 6.5 million square foot portfolio encompassing office, retail, industrial, flex, warehouse and multifamily.

Benjamin Berman President BermanCRE

Berman earned a Bachelor of Arts (B.A.) in economics from Yeshiva University and holds a Real Estate Sales Associate license from the Florida Department of Business and Professional Regulation. He currently serves on the board for Jewish Education Made Special (JEMS), an Orthodox school based in South Florida for children with special needs.

How long have you been in the industry? 13 years.

Who inspires you? My oldest daughter. Born with significant physical and developmental disabilities, she has overcome incredible odds in her young life, and her strength and determination are second to none.

Why did you create BermanCRE? I’ve spent my career primarily focused on managing my family’s book of business. About two years ago, we began contemplating the expansion of Berman Enterprises and exploring potential new avenues and opportunities. Following extensive discussions with family and friends over several months, we reached the consensus that establishing a third-party brokerage firm was the most logical and promising step. This decision was driven by our family’s wealth of expertise, strong relationships and in-depth market knowledge.

What differentiates it from other brokerages? Given our experience as property owners

94 MANN REPORT | JANUARY 2024

and developers, we have the know-how and nuanced ability to approach and solve clients’ needs from an owner’s perspective which is unique in the market. I also believe the core values we have ingrained that originate from our background as a multi-generational family office, such as honesty and integrity, differentiate us and allow us to exceed expectations and deliver enduring value.

Where are the hot leasing markets right now? For what sectors? Markets are dependent on neighborhood-by-neighborhood, and propertyby-property, so it’s not universal across every MSA. In terms of sectors, well-located retail, particularly second-generation restaurant spaces, continues to see robust activity. Small bay industrial leasing also maintains strength, particularly for in-fill product. In reference to office, the flight to quality that was relevant pre-COVID-19 has only gained steam since the pandemic. The nicest, best-located properties are filling out much more rapidly than their counterparts. However, even incredibly well-leased properties are seeing issues given the current capital market dislocation.

How long will the current CRE slump last? (Or are we even in one at this point?) We are definitely in a CRE slump, but most specifically, in two areas – interest rates and capital markets. The rapid rise of interest rates has crushed commercial real estate values, and you are seeing even extremely well-leased properties going up for sale REO and/or receivership. In terms of timing, I certainly do not have a crystal ball, but our gut is that the capital markets will continue to be rough for at least the next 12 months. Even if the Federal Reserve Board does announce that they are done raising rates, the most likely scenario is that they would maintain rates for at least two consecutive quarters to see how the markets react.

What keeps you up at night? Nothing. In order to be effective and have successful days, I need my beauty sleep!

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BHI IS THE FINANCIAL PARTNER YOU NEED TO HELP YOU GROW YOUR BUSINESS SECTOR EXPERTISE. TAILORED SOLUTIONS. The financial backing of a global bank, and the streamlined structure and agility of a boutique bank that will keep your business moving forward. BHI offers full commercial banking services that combine the personal attention of a prestigious boutique bank with the expertise and financial strength of Bank Hapoalim – the leading financial institution in Israel. With a footprint in the largest U.S. metropolitan areas, we are committed to creating innovative funding solutions for your short– and long-term needs and providing convenient banking and liquidity products for your everyday business needs.

www.bhiusa.com BHI is a registered service mark of Bank Hapoalim B.M. Member FDIC. Deposit accounts offered by the New York Branch are fully insured by the FDIC to the maximum extent permitted by law. Deposit accountsoffered by the Americas Tower Branch and Plaza Branch are not FDIC insured.

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JANUARY 2024 | MANN REPORT 95

BY THE NUMBERS

Real Estate: Steady as She Goes After a roller coaster ride from 2020 on, this year in residential real estate looks to be steadier, as the Federal Reserve has paused on rate increases and homeowners and buyers are adjusting to more normalized rates. On the commercial side, the new normal has settled in, and landlords are being cautious regarding growth and proﬁtability. Maybe a little peace and quiet is a good thing, as you can see by the numbers.

6.1% The predicted rate on a 30-year ﬁxed-rate mortgage in

the fourth quarter of 2024, down from 7.2% in the fourth quarter of 2023 (Mortgage Bankers Association Mortgage Finance Forecast, October 2023)

13%

The number of survey respondents who rated their ﬁrm’s proﬁt outlook as “abysmal” or “poor,” the highest rate in a decade (PwC and ULI, “Emerging Trends in Real Estate 2024”)

40% The percentage of responding commercial real estate

CFOs who said they plan to reduce spending in 2024 (Deloitte, “2024 Commercial Real Estate Outlook: Finding Terra Firma”)

2.1%

The expected increase in home prices from September 2023 to September 2024 (Zillow)

7.2 million The amount of new ofﬁce square footage to be delivered

each quarter in 2024, down from 9.0 million square feet on average over the past three years (JLL, U.S. Ofﬁce Outlook, Q3 2023)

5.0%

The predicted year-over-year increase in home sales in 2024 (Redﬁn)

96 MANN MANN REPORT REPORT | JANUARY JANUARY 2024 2024

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SOPHISTICATED COUNSEL FOR COMPLEX CONSTRUCTION. Zetlin & De Chiara LLP, one of the country’s leading law firms, has built a reputation on counseling clients through complex issues. Whether negotiating a contract, resolving a dispute, or providing guidance to navigate the construction process, Zetlin & De Chiara is recognized as a “go-to firm for construction.”

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