From left: UDR CEO Thomas Toomey, the Rivergate, 10 Hanover Square and 21 Chelsea (building credits: PropertyShark)
The recession helped deep-pocketed national real estate investment trusts find their way into the New York market, Crain’s reported, and they are now aggressively picking up existing properties and building new developments all over the city.
Previously inhibited by the high costs and hard-to-navigate public approval process for construction in the city, New York development used to be an almost an entirely private enterprise, ruled by local developers such as the Related Companies and the Rudins.
“Highly leveraged private guys got caught in the downturn and were forced to sell assets,” said Haendel St. Juste, an analyst at Keefe Bruyette & Woods. “Publicly traded REITs continued to have a competitive advantage.”
Denver-based UDR is just one example of a REIT finding its footing in New York. In March, it paid $261 million for 10 Hanover Square, and since then has spent close to $1 billion on residential properties in Manhattan, including Dwell95 in the Financial District, Rivergate in Murray Hill and 21 Chelsea.
“We perform best when the economy is wobbling,” said Tom Toomey, CEO of UDR. [Crain’s]