Welcome to the February 2023 issue of The Real Deal, your source for the latest news and trends in the world of real estate. As we kick off a new year, it’s a great time to reflect on the exciting developments and challenges that lie ahead in the industry.
OK, OK. That wasn’t me. That was ChatGPT. I’ve been busy putting out fires here at work and didn’t have time to come up with a catchy lede. I’ll spare you the rest of the 500-word Editor’s Note it came up with, which was actually pretty passable.
Bots haven’t taken over the real estate industry just yet, so we can save the marvels of AI for another day and talk about real-life flesh and blood. Namely, the “nepo babies” on this month’s cover.
The vaguely disparaging term was coined to describe the offspring of the rich and famous who have benefited from their Hollywood lineage (think Kate Hudson or Maude Apatow), but it fits perfectly with real estate too.
Real estate rewards self-starters, but it also has plenty of dynasties. As reporter Isabella Farr writes, the industry is full of second-, third- and fourth-generation executives, from Jared Kushner to Rob Speyer to Billy Macklowe. Some have proven their mettle and carried their family businesses forward, while others “were born on third base and think they hit a triple,” as the saying goes.
This month, we take stock of some of the legacy kids setting up shop and building towers across New York, Los Angeles and Miami.
Keeping it in the family also applies to Compass broker Nina Hatvany, whose Team Hatvany is made up of her and her three children. It’s the top brokerage team in San Francisco, with nearly $450 million in annual sales, according to TRD’s latest ranking.
In our profile, Hatvany said the family-only team makes accountability a lot easier, recalling how she used to get anxious if she couldn’t reach a former assistant.
“I would have bad thoughts,” she said. “What’s she doing? Did she clock out early? Whereas with them I’m like, I know she’s at the orthodontist with my grandson. I’m so happy his teeth are getting straight.”
Meanwhile, some young guns haven’t benefited from a direct family connection.
Harry Sitomer, a 33-year-old former intern who rose to chief investment officer of SL Green Realty, has been at the center of some of the company’s biggest deals over the past year, including its acquisition of 245 Park Avenue, its next major development project after mega office towers One Vanderbilt and One Madison.
Fortunately, for those putting up towers, politicians today are growing more receptive to development. As reporter Kathryn Brenzel writes, New York is now following the lead of California, where pro-housing sentiment and so-called YIMBY groups have gained considerable traction. Even the most exclusionary towns are finding they can’t stand in the way of new projects.
That’s also playing out in the Los Angeles County enclave of Redondo Beach, where Leo Pustilnikov aims to put up 2,700 apartments in a Barcelona-like commercial and residential village. What’s notable is he’s doing it by ignoring local zoning, using a controversial “builder’s remedy” provision that allows developers to circumvent local governments that fail to plan for enough affordable housing.
The big question, as always, is whether the market will cooperate. There are some ominous signs.
Even South Florida — which had been bucking the national slowdown — is not immune. Billions of CMBS debt is due to mature there this year amid a slowing market, causing investors to hunt for distressed assets.
Investor David Gordon said his phone is ringing with calls from lenders in the process of foreclosing or simply fearing their borrowers won’t make looming maturity deadlines..
OK, ChatGPT, can you give me an ending for my Editor’s Note? Something catchy?
Turn the page and start a new chapter with us.
Not bad. Enjoy the issue!