From left: Area Property Partners founder William Mack and Equity Investments Chairman Sam Zell
Real estate investment trusts are better off focusing on a single expertise than they are growing to all-encompassing behemoths. That was the consensus among a whole host of industry experts speaking today at the annual New York University Schack Institute of Real Estate REIT Symposium held at the Pierre hotel. [more]
From left: Robert Knakal and Jeff Sutton From the December issue: Sometimes, the Penn is mightier than the sword — at least when it comes to New York City’s real estate elite. The roster of “Wharton Mafia” — those who have graduated from the real estate program at the Wharton Business School at the University of Pennsylvania — is long and illustrious.
The school — which now has a center named for billionaire investor Sam Zell and his late business partner — has churned out heavyweight grads like Donald Trump, Ivanka Trump, William Mack, Richard Mack, Jeff Sutton, Andrew Isikoff, Jeff Blau, Robert Knakal, Andrew Mathias, David Brause and Ara Hovnanian.
The schooling can prove professionally transformative. For every heir like Trump or Mack who gains some polish, there are others with fewer — if any — connections who gain the New York real estate world partly through Wharton. [more]
Starwood Capital is raising money for a new investment fund, CEO Barry Sternlicht said yesterday at NYU Schack’s capital markets conference at the Waldorf Astoria Hotel, and may also choose to sell a key portfolio as the government discourages the fund from leveraging its assets (see photos from the day-long event above).
“We want to leverage the portfolio and the government doesn’t want us to,” he said. “We’re going to have to sell it because it’s stupid to own it unleveraged. Our leverage levels are less than 30 percent. It’s crazy.”
Starwood previously raised $2.8 billion through two funds in 2010 — the Starwood Global Opportunity Fund VIII, which raised more than $1.8 billion, and the Starwood Capital Global Hospitality Fund II, which raised $965 million, The Real Deal previously reported. [more]
Major residential landlord Vantage Properties is turning over most of its ownership position in nearly 80 heavily rent-regulated apartment buildings in Queens to joint venture partner Area Property Partners, sources familiar with the deal said.
Area Property, led by chairman William Mack, will take control of the apartment buildings from Vantage, headed by CEO Neil Rubler, by the end of December, and transfer management to two well-known firms, the sources said. However Vantage would retain some ownership stake, but it was not clear what it would be, another source said.
Manhattan-based Cooper Square Realty and Forest Hills-based Bronstein Properties, will manage the buildings once the change happens, several sources said. [more]
The global private real estate firm Harbor Group International partnered with Great Neck, L.I.-based Jadam Equities to take control of a four-building, rent-regulated portfolio in Hamilton Heights from owners Vantage Properties and equity partner Area Property Partners.
Harbor Group International, based in Norfolk, Va. and led by Chairman and CEO Jordan Slone, won control after buying the mezzanine loan secured by an ownership interest in the 214-unit portfolio and holding a nonjudicial foreclosure. Vantage, run by President and CEO Neil Rubler, and the William Mack-led Area bought the four-building Esquire Portfolio in 2007 for $31 million.
It was Harbor Group’s first acquisition of a multi-family building in Manhattan, even as it owns about 9.8 million in commercial property and approximately 20,000 apartment units internationally. The company owns an interest in 4 New York Plaza in Lower Manhattan and 1412 Broadway in Midtown. [more]
Some of the industry’s biggest names, William Mack, Steve Roth and Sam Zell, said the real estate markets in
New York City and Washington, D.C. have essentially recovered. The problem is the rest of the United
States.
During the NYU Schack Institute of Real Estate’s annual REIT symposium at the
Pierre Hotel on Fifth Avenue yesterday, the industry giants gathered to share concern over America’s
future, particularly in terms of real estate.
In the past, Zell and Roth, the chairmen of Equity Investments Group and Vornado Realty Trust, respectively, said smaller markets roughly
followed the central ones, but that’s not the case in the current recovery. And that’s hurting the U.S. [more]
In a move intended to raise funds for investments abroad, William Mack’s Area Property Partners has sold a 35 percent, non-controlling stake in the company to National Australia Bank, according to Bloomberg News. New York-based Area, which counts the Time Warner Center among its New York investments, is looking to expand its real estate portfolio and plans to spend upwards of $1 billion in equity this year, with $500 million of that going to Europe and India and the rest being invested domestically. [more]
“Sometimes being a REIT felt like being between a dog and a fire hydrant,” Vornado Realty Trust CEO Michael Fascitelli said this afternoon, reflecting on the past couple of years in the industry before a packed ballroom at the Waldorf-Astoria hotel, and pausing for effect.
But no longer.
While public real estate investment trusts suffered significant losses in the immediate aftermath of the real estate crash, they’ve bounced back with impressive vigor, Fascitelli said. Plus, he offered as proof, there were very few bankruptcies.
Speaking on a panel at NYU Schack Institute of Real Estate’s annual conference on capital markets, Fascitelli was joined by Marc Holliday, who said that life is pretty good over at SL Green right now, too. [more]
From the October issue: New York City is at a peculiar crossroads. For months, investors have
marshaled unprecedented amounts of capital, salivating at the prospect
of snapping up distressed properties. “We’re fortunate this cycle to
have the most dry powder in our
history,” Blackstone Group president Tony James said last month at the
Barclays Capital Global Financial Services Conference, which was held
in Manhattan. The firm has about $28 billion in unspent capital, he
said. About $12 billion of that is earmarked for real estate. “We’re
just beginning what will be the best period in decades for private
investing,” he said. Dan Fasulo, a managing director at Real Capital
Analytics, estimated
that $50 billion has been raised and is ready to be deployed into
distressed real estate. Paradoxically, investors have found very little
worth buying so far, in large part because banks continue to hold
troubled loans on their books, hoping conditions will improve. [more]
