It’s a season of change for CRE, again

Change is one constant you can count on, and real estate certainly proved that this week.

In New York, the announcement that the Flatiron Building is going residential was met with mixed emotions.

The iconic triangular building had been office space for 120 years. But the Brodsky Organization has teamed up with its owners the Sorgente Group for the conversion of the vacant icon. 

It’s the latest turn for the beloved building that had fallen on such hard times that it went through two auctions. The first winner of the first auction, a virtual unknown in New York real estate circles, failed to make the required down payment, requiring a second auction that was won by Jeffery Gural. 

Now that the matter has been sorted, the conversion is moving forward and expected to take about three years: one for the approval process, two for construction.

Speaking of big changes (and cue the “Succession” references), Silverstein Properties longtime CEO Marty Burger was replaced last week with Lisa Silverstein, who was the vice chairman. Company founder and Chairman Larry Silverstein made the call.

Burger had been with Silverstein since 2010 and its CEO since 2012, sharing the job with Larry Silverstein, the company’s 92-year-old founder and chairman, for a year before taking the reins on his own. Rumors of Burger’s departure had come in the past, but it has now become official.

Lisa Silverstein has worked for her father for nearly 30 years and is married to the firm’s president, Tal Kerret. They have three children.

The firm has more than 400 employees and a real estate portfolio valued at more than $10 billion, according to its website. It’s best known as the primary developer of the World Trade Center site.

Speaking of successions, developer Bill Rudin is turning the family firm over to two of his children at the start of next year, Bloomberg reported. Samantha Rudin Earls, 39, and Michael Rudin, 38, will each ascend to the role of co-CEO of Rudin Management. Samantha is the first woman to serve 

Chief investment officer Neil Gupta will retain that title while also taking on the role of president, the first time a non-family member in the role. Bill — who is chief executive officer — and president Eric Rudin will continue as co-chairs of the company.

The company, which was founded in the 1920s, has 600 employees and 14.7 million square feet in its real estate portfolio, including 15 commercial buildings and 17 residential buildings.

The coming leadership is already eyeing opportunities to shake things up, including office-to-residential conversions and diversifying outside of New York City.

Blackstone has changed its tune concerning the Playa District by completely writing off its stake in the 1.4 million-square-foot Playa District office campus in Los Angeles, a spokesperson for the firm confirmed to Bloomberg last week.

The private equity firm is now in talks with lenders about what to do with the property, Bloomberg reported. 

In 2016, Blackstone bought Playa District, located on a triangular piece of land wedged between Sepulveda Boulevard and the 405 Freeway near Los Angeles International Airport, for close to $600 million. Three years later, the company called it a “high-quality asset” — one it wanted to invest in significantly. 

But not anymore, as Playa District, located at 6060 Center Drive, has about $482 million in debt.