In the wake of Artem Tepler and Brandon Miller’s suicides, I pitched a story to our staff about how real estate developers deal with disaster.
It was a challenging assignment, because in this industry, rarely does anyone acknowledge professional failures and their struggle to cope.
But two incredibly brave ones did: Josh Schuster and Eric Brody. The result was an intense, compelling article by reporters Elizabath Cryan and Jess Hardin that is already giving others in the industry courage to do the same.
One scene from the story could have been pulled right out of an HBO drama. At a networking event, the developers at Schuster’s table were boasting about their projects.
“My jaw dropped as we’re going around the table, probably like 10 people before me explaining how great life is,” he recalled.
Schuster’s projects were going south, prompting him to get a second phone to avoid angry calls to the first one. Yet he had kept up the appearance of success, including a fancy Upper East Side apartment, country club memberships and a driver to shuttle him to nightclubs and events. But on this occasion, he dropped all pretenses.
“It gets to my turn and I’m just like, ‘Well, I must be doing something wrong because I have condos that aren’t selling, tenants that aren’t paying rent, I have defaulting loans and two cell phones with people trying to reach me. And so that’s what’s going on with me.’”
The table fell silent.
But it turned out that Schuster wasn’t alone. Back at his office, he received several emails and phone calls from colleagues who wanted to discuss problems at their own projects. One of them, Brody, showed up in person.
“I knew he was someone who was looking at reality,” Brody said, “and I could have that conversation with him.”
Schuster, who has quietly made a comeback in the solar business, told TRD that his biggest regret is not reaching out for help sooner. But he is living proof that it is never too late.
What we’re thinking about: Which of the potential successors to Mayor Eric Adams would be best, or least bad, for real estate? Email me at eengquist@therealdeal.com.
A thing we’ve learned: LCOR, working with architectural firm Studio V and geothermal engineers at EcoSave, spent about a year doing feasibility and cost-benefit analyses before installing geothermal wells to heat and cool LCOR’s just-opened luxury apartment complex at 1515 Surf Avenue, according to Fast Company. The system is expected to generate 60 percent fewer carbon emissions and save 30 percent on energy costs compared with a fossil fuel–based system.
Elsewhere…
— The City Council has carved out two days for public hearings on the City of Yes for Housing Opportunity, the Adams administration’s proposal to allow a little more housing in every neighborhood. The zoning text amendment would add at most 109,000 units — a modest 2.9 percent of the city’s current total. Yet it has drawn strong reactions from the Nimby and Yimby camps.
On the anti-housing side, rabble-rouser Curtis Sliwa tweeted, falsely, that City of Yes would allow Marx Development’s two-tower, 850-unit project at 71-12 Park Avenue in Kew Gardens, Queens. (The project, which uses air rights from adjacent land, is already legal.) Sliwa, ignoring what housing experts call “filtering,” also claimed the project would not help middle-class New Yorkers. The Council hearings are Oct. 21 and 22. Written testimony can be sent through Oct. 25 to landusetestimony@council.nyc.gov.
— The Real Deal received a pitch from a public relations person offering a client who could talk about how oversupply of apartments is pushing rents down. But the client was an Arizona multifamily operator whose website says “Build your wealth, invest in multifamily” and advertises a fund with 16 percent to 20 percent internal rate of return. For more on how syndicators target investors, read this TRD feature by Suzannah Cavanaugh and Bella Farr.
Closing time
Residential: The priciest residential sale Thursday was $16.75 million for a 5,622-square-foot condominium unit at 505 West 19th Street in Chelsea. Leonard Steinberg of Compass had the listing.
Commercial: The largest commercial sale of the day was $12.5 million for a 17,000-square-foot, 40-unit walkup at 233 East 10th Street in the East Village.
New to the Market: The highest price for a residential property hitting the market was $27.8 million for an 8,034-square-foot condominium unit at 180 East 88th Street in Carnegie Hill. Michael Gordon of the Corcoran Group has the listing.
Breaking Ground: The largest new building application filed was for a proposed 24,282-square-foot apartment building at 954 Leggett Avenue in Woodstock. Mohammad Badaly of Badaly Architects filed the permit. — Matthew Elo