Decision 2016: For the first time in history, a New York developer is heading to the White House. Real estate has always been at the nexus of money and power in New York City, but it’s been a bit player at best on the national stage. Some of Donald Trump’s compatriots believe now is the time to change that.
“We’re very, very high on what’s going to happen with New York real estate right now,” said Joe Cayre of Midtown Equities . “I think he’ll get rid of all these bureaucracies that hold back business and all these laws that were put in in the last administration. I think you’re going to see this country take off.”
Cayre, along with Howard Lorber, Steve Roth, Richard LeFrak and others, were at Trump’s viewing party at the New York Hilton Midtown Tuesday night. After Hillary Clinton called to concede, Trump took the stage.
“Sorry to keep you waiting,” he said. “Complicated business, complicated business.” He then proceeded to thank his whole family and the small cadre of operatives and surrogates that helped steer him to victory. His son-in-law, Jared Kushner, did not get a shout-out.
By many accounts, however, Kushner was one of the most influential voices in the campaign, and will remain so even after Trump takes power. He advised Trump to go with an uncontroversial pick for chief of staff in selecting Reince Priebus (alt-right firebrand Steve Bannon, who was being considered for the position, will instead be chief strategist), according to the New York Times. And though anti-nepotism policies would likely prevent him from taking a formal role in the administration, having the new president’s ear could add to Kushner’s influence in New York.
“When Trump has questions or wants to talk to someone who he really trusts and respects, I would imagine he’ll call Jared,” Robert Ivanhoe, Kushner’s attorney, told TRD Thursday. That added clout wouldn’t make a difference when it comes to acquiring properties — what matters is the price paid — but it could help improve Kushner’s already strong standing with the banks, Ivanhoe added.
Days after Trump’s surprise victory, many questions remain unanswered. Of particular interest to the industry is the fate of the Trump Organization.
“We’ll be in New York, and we’ll take care of the business,” Eric Trump, Trump’s younger son, told the Times. “I think we’re going to have lots of fun doing it. And we’re going to make him very proud.” But that approach would clash with decades of precedent in which a president puts his or her assets into a blind trust, so as to avoid any conflicts of interest.
“In the past 200 years, we have never had a president with such egregious conflicts of interest with family business holdings” Richard Painter, a White House ethics officer during the George W. Bush administration, told the Times.
For now, many in the industry are scrambling to declare how they loved Trump all along, or walk back on their previous criticisms of him. Jeff Greene, a Clinton supporter and fundraiser, told a tale of how Trump’s attention to shrimp cocktails at Mar-a-Lago could provide insight on how he’d run.
“I can tell you, when the shrimp cocktails are coming out for 500 people and there’s not enough cocktail sauce, he’s jumping right on it,” Greene said. “Is he in the kitchen making the shrimp cocktails? No. Is he yelling at waiters? Absolutely not. But he was paying attention to the details and making sure his team executed his vision, which was to get that shrimp cocktail right.”
REBNY wins big in Albany: Republicans retained control of the New York State Senate, which real estate figures celebrated as a victory for their interests. Jobs for New York, the political committee backed by REBNY and bankrolled by many of the city’s biggest landlords and developers, had spent more than $650,000 on four GOP Senate campaigns, and had a big night. At stake were issues such as the future of rent regulation and the 421a tax exemption.
“The Republicans have long protected the real estate industry against what the real estate community believes are noxious bills in the legislature,” Democratic political consultant George Arzt told the Commercial Observer.
421a entente: The GOP holding the Senate may have put more pressure on Gov. Andrew Cuomo to make a 421a deal come together. After months of a stalemate, REBNY and the Building Trades announced a tentative agreement on the popular tax exemption. It will require developers to pay construction workers an average of $60 an hour (including wages and benefits) for Manhattan projects with over 300 units that benefit from the tax cut. In Queens and Brooklyn, the average hourly rate, including wages and benefits, will be $45. In return, the full tax exemption period will be extended to 35 years from 21.
REBNY and the Building Trades issued a joint statement announcing the deal, in which they both praised Cuomo for making it happen. But what did each side actually get, and who came out on top? That’ll only become clear in the days and weeks to come. State lawmakers are in no big hurry to hurry through a deal, telling Politico they see no reason for a special legislative session before January.
Air rights trades way down: The sky is falling. As the market for Manhattan land sales slumps amid a general market slowdown, air rights trades plummeted, a new analysis by The Real Deal shows.
The dollar volume spent on Manhattan air rights through the end of September totaled $70.69 million, down nearly 74 percent from the $269.78 million spent on deals that closed through the first nine months of 2015.
That went along with the drop in land trades, which fell to $2.3 billion in the third quarter, a 55 percent year-over-year drop from about $5.2 billion, Cushman data show.
(Paydirt is a 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. Read more from Paydirt here.)