Most everyone agreed that 2020 was, broadly speaking, one of the worst years ever. Now that we’re at the end, how should we consider 2021?
The rollout of vaccines revitalized our private lives just as it did business sectors across the nation, including real estate. The omnipresent climate crisis caused floods and fires of Biblical proportions. The reign of Cuomo came to an abrupt end. Elon Musk dumped Grimes and moved to a 400-square-foot, tiny home in Texas.
2021 can’t be encompassed in a single adjective. I’ve been sitting here trying to think of one for 15 minutes. “Buckwild” comes pretty close, but even more thorough are the stories in the December issue that not only look at the past year, but show us what dreams (or disasters) may befall us in 2022, like these:
Our cover story on KKR & Co., the storied private equity firm that has had a real estate arm for a decade, but truly burst onto the scene in October when it threw down half a billion dollars for the observation deck at Hudson Yards. The move signaled to the world that KKR is ready to bring the same energy to real estate that it has to its famed leveraged buyouts. We’ll see what rival Blackstone Group has to say about that.
Speaking of Blackstone, it’s one of two commercial behemoths diving into the residential market, where we set our scene. The investment firm, which made a killing on the homes it scooped up after the foreclosure crisis a decade ago, is now betting $6 billion that rent-to-own programs will be the next big thing. Will Home Partners of America deliver? Or will the tech-focused CoStar, already a giant of commercial real estate data, prevail in challenging Zillow’s Streeteasy as the city’s top residential listing service?
Meanwhile, Douglas Elliman is stepping out from Vector Group for its own spot on the trading floor. After netting over $70 million in losses during the first half of 2020, the company has profited consistently during the resi market’s resurgence. The ticker says “DOUG,” but the writing on the wall suggests the future of brokerages is uncertain, and selling could make Howard Lorber and his fellow investors a lot of money.
Between supply chain disruptions bottlenecking construction and energy shortages driving up landlords’ bills, it’s shaping up to be a brutal winter. A delayed shipment here or slight backlog there is surmountable. But the delicate equilibrium of the free market can only handle so much until localized issues start to have macroeconomic effects.
“The fox knows many things, but the hedgehog knows one big thing,” wrote Archilochus. Attorney, polymath and hedgehog of New York real estate Bruce Stachenfeld can quote Greek poets in casual conversation and has no tolerance for “sleazeballs, assholes and morons.” In this month’s Closing interview, Stachenfeld waxes poetic on collecting pigs and scotch, forging his own path and how he gets deals done.