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Paydirt: Trouble for tech bros, Mayor Massey, Extell dials Shanghai, Lorber’s labors … & more
The industry news you need to know to start your week
(Paydirt is a new weekly column that riffs on the biggest NYC real estate news of the moment, providing analysis and historical context on the deals and players that make this town tick.)
New York real estate has always had a rich cast of characters: the street hustler, the entitled scion, the finance whiz, the double-crossing mogul. But since 2011, a new character’s entered the fray: the tech bro.
Fueled by a rush of venture funding, tech bros took up trendy loft space, introduced the industry to terms such as “acqui-hire” and “pre-revenue,” and targeted all aspects of commercial real estate. But five years after it began, the CRE tech boom appears over.
There have certainly been some successes, but very few local CRE tech firms have really blown up. One reason is an unwillingness by industry overlords to bet big on technology; another is that real estate innovation seems to be more about base hits than home runs. As Richard Sarkis, CEO of Reonomy, put it: venture capitalists are no longer looking for unicorns, but “cockroach startups.”
Highest BIDders: The New York Times had a great piece over the weekend on how think tanks, those arbiters of policy that line the Beltway, are often heavily shaped by their corporate donors. New York real estate’s answer to think tanks could be Business Improvement Districts.
BIDs have amassed a lot of clout over the years, and have done much good for the areas they operate in. But because they’re funded in large part through taxes paid by property owners, the agenda they put forward in their reports and public statements often reflects developers’ wishes — it’s a lot of “build, baby, build.” One wonky but important example is how the Downtown Brooklyn Partnership, which oversees three BIDs, touts the area’s vacancy rate as desperately low. The issue: vacancy rate is somewhat of a meaningless metric — unlike availability rate, it does not paint a fair picture of demand vs. supply.
Mayor Massey/Trump/Kushner: Paul Massey is now officially in the race for City Hall. “This is not a tale of two cities,” Massey said Thursday, challenging Mayor Bill de Blasio’s characterization of New York. “This is the world’s greatest city and diversity is our strength.”
The Cushman & Wakefield exec has been talking about getting into the race for a while. In May, he told me he’s looking to raise “boatloads of money” from the business community and mobilize voters using lessons learned from the Massey Knakal territory system.
Massey’s campaign website notes he is an amateur boxer and that he moved to New York City in 1983, but makes no mention of the fact that he lives in Larchmont, NY. That fact wasn’t lost on Hizzoner, however.
In a statement, de Blasio poked at Massey’s status as an outsider, saying he’d be happy to match his record “against any resident of New York City or Larchmont.”
Other industry figures vying for the city’s top job include Don Peebles and Abyssinian’s Calvin Butts. But last week, two wild cards emerged: Donald Trump, Jr. and Jonathan Kushner, cousin to Jared and head of the Kushner Real Estate Group.
Barnett’s puzzle palace: TRD reported that Gary Barnett looks to have brought in SMI USA, a subsidiary of giant Chinese developer Shanghai Municipal Investment, as an equity partner in Central Park Tower. The tower would be his most ambitious project since One57, with a projected sellout of $4.4 billion. Remember, Barnett just scored a major construction loan for One Manhattan Square and is trying to sell off a NoMad site he assembled on the quiet. This much activity all at once, from a guy who still reportedly gets his emails printed out.
Messrs Roth and Lorber, economic consiglieres-in-chief: Donald Trump has important jobs for his boys from the Bronx. On Friday, Trump named Vector Group’s Howard Lorber and Vornado Realty Trust’s Steve Roth to his economic policy team. We’ll get more details Monday, when Trump speaks before the Detroit Economic Club. If Trump does win, might Lorber have to give up his Cipriani corner table for power lunch at the Occidental Grill?