You almost had to feel sorry for the ushers wielding chimes and dimming the lights.
At the Real Estate Board of New York’s 124th annual gala, the biggest names in real estate converged on the Hilton in Midtown to nurse wounds from a year of bruising political fights and a lackluster market.
“This year, it’s the remorseful ball,” said real estate attorney Adam Leitman Bailey, who recently finished a roughly five-month suspension from practicing law. He said the industry missed an opportunity to be “better activists” when it came to pushing back against anti-real estate sentiment.
True to form, the boisterous crowd was also eager to schmooze and do deals during the banquet’s cocktail hour — and they didn’t stop during the main event.
Ever since organizers made black ties optional in 2017, attendees have taken license with the dress code and this year was no different.
Extell Development’s Gary Barnett arrived in a black turtleneck sweater — he was going for the “incognito” look, he said — while Related’s Bruce Beal wore a tailored, velvet tuxedo jacket. Terra Holdings’ co-owner Kent Swig donned a blue-and-black suit with skulls.
Board members and honorees on stage sported white scarves, Jay Kriegel’s favorite accessory, to commemorate the late Related executive, who died in December. Kriegel posthumously received REBNY’s John E. Zuccotti Public Service Award. Other honorees included the late Héctor Figueroa, president of the Local 32BJ of the Service Employees International Union, as well as Vornado Realty Trust’s David Greenbaum and JRT Realty Group’s Jodi Pulice.
“The greatest lesson in real estate is never take no for an answer,” Pulice said, while encouraging more women and people of color to join the industry. Asked if the industry has made progress on becoming more diverse, she said, “It’s a slow process.” But she said she’s heartened by REBNY’s first-ever diversity committee. “I think there’s going to be a lot of true initiatives to have the board reflect what the world is — which is diverse,” she said.
For newly-minted REBNY President Jim Whelan, the banquet was his first at the helm of the influential trade group, where he spent years working behind the scenes on policy issues.
During the cocktail hour, Whelan was spotted catching up with his predecessor, John Banks, who stepped down in July after navigating issues including the renewal of the 421a tax law, rezoning of Midtown East and passage of tenant-friendly rent reform. At the same time, REBNY’s been grappling with its own diminished influence in Albany.
In a sign of real estate’s shifting political fortune, U.S. Sen. Chuck Schumer took the stage amid applause and some boos. “We will get Gateway built, and we will get the full deduction of state and local taxes,” he said, referring to a plan to expand the train tunnels between New York and New Jersey. Although the two states agreed to split the local portion of the cost, the Trump administration didn’t allocate funds for the project in the 2020 federal budget.
Several developers lamented the industry’s diminished political clout.
Charles Bendit, co-CEO of Taconic Investment Partners, said that there are “strong headwinds” for developers, with increasing anti-development sentiment in the city going into 2020. Bendit recently said his firm may reconsider plans for an affordable housing development after a judge nixed the Inwood rezoning.
TF Cornerstone’s Tom Elghanayan, whose firm is behind the Hunter’s Point South development in Long Island City, said Amazon’s decision to scrap HQ2 didn’t diminish prospects for the area. “We never expected Amazon, you know? We were going to do that development out there and so Amazon came along and it was like Manna from the Heavens,” he said. “As abruptly as they came, they left abruptly, too.”
But Elghanayan said that in order to better its political prospects, real estate needs to improve its “ground game.” In the meantime, his company is looking to “extricate” itself from New York, where the political climate has been hostile to real estate.
At a time when some politicians have turned down donations from developers, New York state Sen. Brian Kavanaugh, chairman of the Committee on Housing, Construction and Community, said that he was not concerned about the optics of showing up at the industry event. “It’s important to talk to everyone our policies affect, and real estate is a big part of that,” he said.
Eric Anton, co-chairman of Marcus and Millichap’s Global Capital Group, said that he is seeing less interest from Chinese investors, but strong interest from Korean and Japanese investors. Institutional investors are feeling less bullish about multifamily.
On the residential front, Warburg’s Jason Haber said an uptick in activity since Thanksgiving has given him reason to be “cautiously optimistic.”
Silverstein Properties’ Larry Silverstein said affordable housing remains the most pressing issue for the industry. “We have to solve the affordable housing crisis for people who really need it,” he said. When asked how Silverstein Properties could move the needle, he replied: “That’s a longer conversation.”
With reporting by Rich Bockmann, Kathryn Brenzel, Erin Hudson and Georgia Kromrei
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REBNY’s James Whelan: “We have to do things differently”