Editor’s note: Battling the old guard

May.May 17, 2021 07:00 AM

Stuart Elliott

The old guard has to be stopped.”

That quote may sound like it came from a progressive politician in Albany, but it actually came from a real estate broker in Manhattan.

One of our main stories this month looks at the lingering specter of discrimination in New York City co-ops.

We interviewed more than 40 brokers, lawyers, co-op owners and activists, and we found a consensus: Although boards have evolved, discrimination remains in many of the city’s tony co-op buildings, which cling to opaque systems of power and control in selecting who can move in.

Now, a national wake-up around race and social justice has brought the issue back into the spotlight, bolstered by a progressive shift in New York politics. That’s given a boost to co-op disclosure bills proposed in the state legislature this year. But will there actually be change among these deeply entrenched institutions? What’s fair and how far should change go? 

Meanwhile, it’s shaping up to be a summer on steroids for the Hamptons.

In a special section, we take a deep dive off of Long Island’s East End, exploring one of the hottest markets in the country.

The wealthy enclave, which saw tons of real estate activity during the pandemic as residents fled the city, is poised to benefit further from the normal summer influx now that more and more people will be vaccinated.

Hamptons sellers are clearly looking for big numbers as buyers open their checkbooks, a phenomenon that’s spread to the less fancy North Fork as well. And with demand high, material shortages are making homebuilding more expensive than ever.

On the commercial real estate front, there’s a mad rush for retail space, as restaurateurs and luxury brands are hustling to find available locations.

Stay tuned for special Hamptons sections in our upcoming June and July issues as well.

Beyond the strong residential market, disruption and uncertainty persist across the country. The pandemic may be receding, but now the prospect of inflation is rearing its head for the first time in decades. There is probably an economic boom ahead, with new federal spending on infrastructure and the climate economy, but so far, job gains have been disappointing nationally, suggesting that it’s not all smooth sailing ahead.

Of course, the savviest investors are always going to capitalize on change. Our cover story this month looks at commercial real estate behemoth Colony Capital. After Trump pal Tom Barrack stepped down from the over-leveraged company last year, new CEO Marc Ganzi has effectively moved the portfolio from 80 percent hotel, office, warehouse and retail to about 70 percent digital-related assets such as data centers, cell towers, small cells and fiber-network properties. That’s a lightning-quick pivot — shifting $48 billion in assets last year — and as forward-looking a plan as you’re likely to see. 

Some sectors of real estate have simply stayed focused and plowed ahead. New York’s biggest general contractors kept building during the pandemic, and we rank the most active GCs. As reporter Kevin Sun notes, the challenges have included suppliers scrambling to secure construction materials and rapidly shifting regulations that shut down projects for months. New construction starts were lower, but firms adapted and jobs got done.

Finally, as always in real estate, when there’s a lot of money at stake, there’s the possibility that things can get weird. We have the story of a top real estate attorney who allegedly absconded with millions in escrow funds under his control. In what reporter Rich Bockmann noted was probably the worst Mother’s Day present ever, the attorney allegedly forged his 94-year-old mother’s signature to take out more than $2 million in loans before he went AWOL.

In happier news, our magazine recently won a general excellence award from the Society for Advancing Business Editing and Writing — our third such honor.

Enjoy the issue.


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