Commercial deals to be found in gateway markets: national real estate pros

New York /
Sep.September 21, 2011 11:59 AM

Economic uncertainty is not stopping commercial real estate industry heads from finding deals nationally, top executives at the International Council of Shopping Centers’ and NAIOP’s 2011 Real Estate Capital Marketplace Conference at Chelsea Piers agreed yesterday, GlobeSt.com reported. There are still key development opportunities to be found in hot gateway markets, they said.

Scott Rechler, CEO of RXR Realty, is focusing primarily on Class A assets, he told the audience. RXR recently acquired the Starrett-Lehigh Building at 601 West 26th Street and is in contract to purchase a controlling share of 620 Sixth Avenue

“What we’ve seen historically, and this goes back through the last 20 years of cycles, is that B quality assets are a value trap,” Rechler said. “People think they are getting good returns and people think they are getting good deals until you get down to the down cycle, where you have to invest almost as much as you spend to buy the building, re-build the building and get the same rent that you got 10 years ago.”

Rechler advised a large degree of caution for these acquisitions.

“These are very volatile times, and firstly, take nothing for granted. It is very difficult to know what is going to happen,” Rechler said.

Alex Klatskin, partner at Forsgate Industrial Partners, of Teterboro, NJ, said his company is being extra careful about the quality of the tenants it accepts.

“Rather than run for the highest rent we could get on the property, we are always focusing on the credit and viability of the customer,” he said. “The only thing you can’t change about a building is where it’s located. One opportunity we have as developers is finding what we consider a B building in an A location.” [GlobeSt]


Related Articles

arrow_forward_ios
RXR Realty head Scott Rechler and CBRE Tri-State CEO Mary Ann Tighe
Rechler, Tighe know which real estate players will go extinct
Rechler, Tighe know which real estate players will go extinct
RXR chief executive Scott Rechler and 5 Times Square (Getty Images, 5timessquare.com)
RXR seeking $1.5B refi for Times Square office tower
RXR seeking $1.5B refi for Times Square office tower
Anthony Wood, chief executive officer, Roku, and 5 Times Square in Manhattan (Getty Images, Wikipedia/Eden, Janine and Jim, iStock/Photo Illustration by Steven Dilakian for The Real Deal)
Roku racks up big lease at RXR’s 5 Times Square
Roku racks up big lease at RXR’s 5 Times Square
RXR Realty's Scott Rechler (Getty)
RXR, LBA Logistics lead filing flurry with $123M for massive Gowanus industrial portfolio
RXR, LBA Logistics lead filing flurry with $123M for massive Gowanus industrial portfolio
175 Park Avenue with RXR Realty's Scott Rechler and TF Cornerstone’s Frederick Elghanayan (SOM Architects, Getty, TF Cornerstone)
RXR, TF Cornerstone cleared for 1,500-foot tower at Grand Central
RXR, TF Cornerstone cleared for 1,500-foot tower at Grand Central
The ICSC conference entrance (ph: Sasha Jones)
Diminished return: What’s next for ICSC?
Diminished return: What’s next for ICSC?
RXR Realty's Scott Rechler and Commercial Observer's Max Gross 
RXR’s Rechler: Proptech adoption only in “second or third inning”
RXR’s Rechler: Proptech adoption only in “second or third inning”
ICSC’s Here, We Go event in Las Vegas
Fear and loathing at ICSC’s resurrected Vegas conference
Fear and loathing at ICSC’s resurrected Vegas conference
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...