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Category ArchiveForest City Realty Trust

Brookfield Property Partners Strikes Deal to Acquire GGP

Brookfield Property Partners is set to become the 100-percent owner of GGP, according to a joint news release issued today by the companies, after agreeing a deal to pick up the remaining 66 percent of the real estate investment trust and mall owner it does not own.

Brookfield, which is the largest real estate arm of parent company Brookfield Asset Management, upped the cash consideration of its unsuccessful November 2017 offer for GGP to $23.50 per share, from $23 per share previously. That results in a $1.85 billion increase in Brookfield’s aggregate cash offering for the mall REIT, to $9.25 billion from $7.4 billion. (The $23.50 per share price is a premium for GGP stock, which closed at $21.21 a share today.)

“Since receiving Brookfield’s initial proposal in November, [GGP’s] special committee has conducted extensive due diligence, specifically evaluating the optimal consideration structure for GGP’s shareholders,” said Daniel Hurwitz, the lead director and chairman of the GGP special committee tasked with evaluating Brookfield’s bid to acquire the company.

“After careful consideration, assisted by our independent advisers, the special committee determined that Brookfield’s improved proposal, which includes an increase in the cash portion of the consideration and the ability to receive shares in a newly listed REIT entity, provides GGP shareholders with certainty of value, as well as upside potential through ownership in a globally diversified real estate company,” Hurwitz said.

Upon approval of the acquisition by GGP shareholders, the combined Brookfield and GGP companies will have $90 billion in total assets and net operating income of more than $4 billion, according to the release. Under the terms of the deal, GGP shareholders can choose to receive $23.50 per share in cash, one Brookfield share or one unit of a new “BPY U.S. REIT.”

Brookfield, which already owned 34 percent of GGP, played a major role in helping the Chicago-based mall operator emerge out of bankruptcy in 2010.

“This is a compelling transaction that enables GGP shareholders to receive premium value for their shares and gives them the ability to participate in the long-term upside of their investment,” Brian Kingston, the CEO of Brookfield, said in a prepared statement. “We are pleased to have reached an agreement and are excited about combining Brookfield’s access to large-scale capital and deep operating expertise across multiple real estate sectors with GGP’s portfolio of irreplaceable retail assets.”

GGP hasn’t been Brookfield’s only acquisition target as of late.

Brookfield was reportedly in talks to acquire Forest City Realty Trust in January, but last week Forest City announced that it would re-organize its board rather than go through with a sale.

Additional reporting provided by Rebecca Baird-Remba.

Source: commercial

Why Construction Firm McKissack Added Natural Disaster Relief to Its Repertoire

Superstorm Sandy woke a lot of people up to the dangers that natural disasters can have on an unprepared region like New York City.

One of those people was Cheryl McKissack Daniel.

McKissack Daniel is the CEO and president of the country’s oldest minority-owned construction services company McKissack & McKissack, which had not done any disaster relief work when the storm hit in October of 2012.

Since McKissack had an on-call contract with the Dormitory Authority of the State of New York, it was one of a number of firms the state called on for help with inspections in the wake of the disaster.

“And we stepped up,” McKissack Daniel told Commercial Observer from her 20th floor offices at 1001 Avenue of the Americas between West 37th and West 38th Streets. “We had to mobilize about 200 inspectors in about four days.”

McKissack’s inspectors conducted about 6,000 property inspections to assess the damage on homes on Long Island, Queens, Staten Island and upstate New York in the months after the storm, she said. That represented less than half the estimated 15,000 to 20,000 homes that needed inspection.

Thanks to that work her company—more than a century old—was able to win a request for proposals from the Governor’s Office of Storm Recovery to be the property manager for about 14,000 damaged lots that the state took over following the storm. (Today, McKissack is still being paid to maintain about 700 lots throughout Staten Island and Long Island.)

cherylmckissack 100 Why Construction Firm McKissack Added Natural Disaster Relief to Its Repertoire
McKissack Daniel seized an opportunity to expand the firm from just construction services to also disaster relief. Photo: Yvonne Albinowski/For Commercial Observer

“What’s always running through my mind is, how do I position McKissack to be a prime contractor in a profitable area of business,” said McKissack Daniel, 56, whose day-to-day functions include landing new business and building relationships. “And we can’t do it by being like everybody else. We have to take those chances. And that was a big chance.”

The chance, of course, was trying to work disaster relief without any prior experience.

But just like that, McKissack—which provides construction management, program management services and minority and women-owned business enterprise (MWBE) compliance work—added disaster recovery to its core competencies.

Since Sandy, the 100-person firm has completed case management services after major flooding in Louisiana (in August 2016) and debris removal from Miami-Dade County last September after Hurricane Irma struck.

Now McKissack has a bid in Texas with partner ICF to be a program manager and handle recovery efforts in Houston (which was devastated by Hurricane Harvey in August 2017). This would entail collecting data on the damage, and handling issues for home and business owners, among other things.

“For us,” she said, “it’s diversity in our markets and in our services, so if one goes down, the other one can keep going strong.”

In New York City, the firm has been working on a number of large-scale projects—which it landed in part because city and state projects need to include a minority- or woman-owned firm for public projects—including a role as a consultant on the redevelopment of the LaGuardia Airport for Skanska and its partners. Her firm is also providing architectural advisory and engineering consulting services to New York State’s Empire State Development for the Moynihan Train Hall project and acting as construction manager for a new 82,000-square-foot Studio Museum in Harlem at 144 West 125th Street. (A spokeswoman representing LaGuardia Gateway Partners—the consortium of companies redeveloping the airport—referred CO to Skanska, which did not immediately return a request seeking comment.)

In addition, McKissack is providing construction management services for various city-owned and leased sites operated by the New York City Economic Development Corporation, including at the Hunts Point Cooperative Market in the Bronx. There the city is planning to erect two new buildings—one of 115,000 square feet and the other of 133,000 square feet—and expand the main property by 40,000 square feet.

“Small- to medium-sized MWBE contractors often face significant barriers that prevent them from winning city contracts, such as high insurance requirements, limited access to networks and information and a lack of access to capital at affordable rates,” according to an EDC statement sent to CO. “By working with firms like McKissack & McKissack, we are helping to reduce some of those barriers while providing the opportunities for prequalified contractors to develop the experience they need to compete for future projects.”

McKissack estimates its annual revenue this year to be around $50 million, which would be a roughly 67 percent uptick from 2017 when the company took in $30 million. And both years are ahead of 2016’s $32.5 million in revenue.

The big financial jump in revenue is mostly attributed to McKissack’s work on an NBBJ-designed building on the campus of Coney Island Hospital in a joint venture partnership with Turner Construction this year in Coney Island, Brooklyn. The $700 million project includes constructing a new hospital tower, a 350-space parking structure and a flood mitigation system to protect the hospital from future storms. (The Brooklyn hospital suffered from major flooding during Superstorm Sandy and lost its power grid and emergency room.) The project is expected to be completed in 2020.

Representatives from NBBJ and Turner did not immediately respond to inquires seeking comment.

atlantic yards 3 Why Construction Firm McKissack Added Natural Disaster Relief to Its Repertoire
McKissack has nearly completed work to move the Vanderbilt Yards for the Pacific Park project. Photo: McKissack & McKissack

And McKissack has been working on the Vanderbilt Yard repositioning since 2009 and is almost done with that project. Greenland Forest City Partners (the partnership of Greenland Group and Forest City Realty Trust) is coming to the end of its nearly decade-long project to move the Long Island Railroad train tracks at the Vanderbilt Yard to make way for the foundation of Pacific Park and the Barclays Center. They’ve also rebuilt the Carlton Avenue Bridge. McKissack will complete the job later this year.

“McKissack & McKissack is known throughout the engineering and construction industries as being synonymous with skill, integrity and attention to detail,” Robert Sanna, an executive vice president with Forest City New York and the head of construction, said in a statement to CO. “Choosing them as the first contractor to work on Pacific Park was an easy decision, where they’ve been doing tremendous work in redeveloping and modernizing Vanderbilt Yard.”

The biggest change has been working more closely with Greenland since Forest City reduced its ownership in the project to just 5 percent in January. Greenland has more foreign executives, which require more translation.

“They are being cautious because they are not from here and they are not used to our regulations,” McKissack Daniel said. “They probably run their crews 24/7 [in China]. You can’t do that here. It’s an awakening, how we do business here. But we don’t have a problem with them.”

A native of Nashville, Tenn., McKissack Daniel has two grown children (ages 23 and 22) and four stepchildren (in their 30s) with her husband Dr. Samuel Daniel, a gastroenterologist at Mount Sinai.

She has engineering, architecture and construction running in her blood for generations: Her grandfather and his brother were among the first licensed black architects in the country (the licenses hang in the conference room of the firm’s main New York office at 1001 Avenue of the Americas), and they founded the company in 1905. Her father, William, led the firm from 1968 until 1983, when her mother, Leatrice, took over.

McKissack Daniel earned a bachelor’s degree from Howard University in civil engineering in 1983 and then a master’s degree in the same field two years afterward. Following graduate school she moved to New York City in 1985 to work as a civil engineer at Weidlinger Associates (which merged with Thornton Tomasetti in 2015), and then three years later she became an estimator for projects at Turner Construction. A year later she joined the family firm in Nashville, and the following year, in 1991, she launched the New York City office. Today, McKissack has two offices in Manhattan and one in Philadelphia.

In 2000, McKissack Daniel became the president and CEO of the entire company, succeeding her mother.

McKissack Daniel’s twin sister, Deryl, has her own architecture, engineering and construction firm McKissack McKissack in Washington D.C., which is unrelated to the family firm.

And McKissack Daniel’s younger daughter is studying engineering at Pratt Institute, although it’s far too early to forecast if she will end up running the family firm.

“We’ll see,” the proud mother said.

As a minority and a woman that leads a construction company, McKissack Daniel’s firm has its own database of trusted MWBE subcontractors that it hires to work on projects. McKissack also vets and meets with other firms and  mentors executives of smaller companies from time to time.

Conveniently, work has been growing for MWBE firms because in 2014 Gov. Andrew Cuomo upped the state’s goal to give contracts to MWBE firms to 30 percent from 20 percent annually. While that goal yet to be met, the rate of MWBEs that worked on state-contracted projects reached 27.2 percent in 2017, up from 25 percent in the prior year.

A large portion ($2.2 billion) of the 2017 figure included construction work, according to a recent press release from the governor’s office. Also, the state has newly certified more than 6,600 MWBEs since 2011 and now has a listing of more than 8,600 certified firms, including ones prior to that time.

Employing the new rules hasn’t always been easy. There have been instances where construction companies trying to use MWBE firms from the state list have found themselves employing small firms that can’t complete the work or those that don’t exist in business any more.

“You go to that list. You call contractors for days, and they don’t exist,” McKissack Daniel said. “[Because] you could be in business today in construction and doing well, and a year from now be out of business, but you are still on the database.”

To prevent that from happening, clients can hire McKissack to vet subcontractors.

For example, at LaGuardia Airport’s redevelopment McKissack’s only job is to find MWBE subcontractors.

But McKissack Daniel was a little let down at the size of the job her firm was given for the airport redevelopment; she said McKissack was only able to have four employees at the site.

“Our role to me [on this job] is minimal,” McKissack Daniel said. “I’m disappointed that we are not doing [construction management] work with them. But I’m happy to be a part of it because it is one of the largest projects going on in New York right now. And whatever our role is it gives us an opportunity to learn…and it gives us an opportunity to put it in our portfolio and say on the next job we’d like to do more.”

On another transportation project McKissack has a much bigger role. It is the independent engineering consultant for the Metropolitan Transportation Authority’s capital construction projects—a role the company has had since 2009. It signed a second contract with the agency for three years in March 2016, to oversee $32 billion in planned projects or work under construction. The company reviews designs and provides risk assessments.

Some major projects McKissack can boast about completing are the long-awaited Second Avenue Subway extension, the design and planning of the East Side Access tunnel and the Canarsie Tube Rehabilitation (the reason why the L train is shutting down for 15 months).

McKissack Daniel describes her role as the agency watchdog.

“We trust what the agency is saying about its projects, but we verify what they say,” McKissack Daniel said. “We make sure what they say is what is actually happening.”

A case in point, when the MTA’s new $2.4 billion 7 line subway station at Hudson Yards, which opened in 2015, was suffering from leaks in 2016, McKissack provided oversight on the issue to the MTA’s board.  

“We participated in finding all of the paperwork and coming up with what we thought happened with the leaks—where did it come from,” McKissack Daniel said. “I can’t say what it was. We can’t talk about our findings on that one because we’ll probably end up in a lawsuit.”

Thanks to the work with the MTA, McKissack Daniel is focusing on how to expand the company’s transportation sector, just like she did with disaster recovery side of the business—this time in other cities.

“We are working on three strategic hires right now to give us that national presence and the expertise to compete against the AECOMs and HNTBs,” McKissack Daniel said. “There are clients out there that want a smaller firm—they don’t want a big conglomerate. There’s plenty of room for us right now.”

Source: commercial

Gilmartin, Lapidus and Levinson Explain How They Started Their New Company, L&L MAG

MaryAnne Gilmartin rocked the real estate world last week when she announced she was leaving her post as Forest City New York’s chief executive officer to found a new company, L&L MAG, with L&L Holding Company executives David Levinson and Robert Lapidus.

Since joining Forest City in 1994, Gilmartin and her team have built the New York Times Building on Eighth Avenue, the Frank Gehry-designed rental tower at 8 Spruce Street and the Tata Innovation Center at Cornell Tech’s Roosevelt Island campus. And most famously, she has spent the last decade shepherding through the byzantine city approvals and construction of the first phase of Pacific Park (formerly Atlantic Yards), the $5 billion, 22-acre complex rising around an active Long Island Railroad yard. (So far, five out of 15 buildings and 800 out of planned 6,400 apartments—2,250 of which are supposed to be affordable—have gone up with Forest City facing a looming deadline of 2025 to deliver the rest of the below-market units.)

L&L, for its part, has a well-established reputation for developing, acquiring, and operating commercial properties in New York City. The 18-year-old firm is in the midst of redeveloping 390 Madison Avenue near Grand Central Terminal, building the Norman Foster-designed 425 Park Avenue from the ground up and planning a 700-room hotel and retail project, TSX Broadway, in Times Square. Levinson and Lapidus also happen to be partners in the New York Yankees (and often describe their business ventures in baseball metaphors).

The partnership coalesced because Gilmartin, 53, has a reputation as a fierce dealmaker, Lapidus, 57, and Levinson, 69, told Commercial Observer. Much like the L&L founders, Gilmartin has taken on massive, difficult projects with complex financing and elaborate architecture and dragged them from the drawing board to reality, in the process making her one of the most powerful women in New York City real estate.

Levinson, whom Gilmartin had known for nearly 20 years, approached her in late 2016 about starting a new venture. She jumped at the chance.

Gilmartin is making the switch not a moment too soon: Forest City announced last week that the subsidiary of China’s Greenland Group would up its stake in Pacific Park to 95 percent from 70 percent, whittling down Forest City’s ownership to a sliver of the sprawling project. The company also axed 20 people from its Brooklyn office.

Last week, at the Real Estate Board of New York banquet, Gilmartin, the new CEO of L&L MAG, spoke to Commercial Observer about the new firm. The next day she sat down with us along with Lapidus and Levinson at L&L’s (and L&L MAG’s) offices on West 57th Street to talk about how they met doing a deal with Bear Stearns, Gilmartin’s encounter with a CEO who had a Matt Lauer button behind his desk and New York City’s cooling residential market.

Commercial Observer: Are you concerned about doing new residential construction in New York City given that we’re in the middle of a luxury residential glut?

MaryAnne Gilmartin: I don’t think this company is so keen on building a lot of $40 million condos. I think real long-term value creators are interested in multifamily, not in condos. Condos are really a great allocator of land cost, so if you pay too much for the land, you often have to build condos to make it pencil out. So the goal of the company is to build for value creation over the long-term, through market cycles and beyond. And the multifamily business, in the depths of the recession, the vacancy rate never pierced 3 percent. And [there’s] a housing emergency. So you’d have to work really hard to build too much multifamily in the city. The issue of course is price of the land, making the numbers work. And that’s our job: We have to figure out where to go and how to find the land.

David Levinson: I think that’s exactly right. And your point about the condo market being soft is actually to our advantage because the land prices now go down. So with that market stalled for the near term…land prices are going to come down, and the opportunity for multifamily would increase. Good locations, quality projects. That’s the best way to mitigate the risks.

What kind of projects do you guys really want to pursue, and in what New York City markets are you looking to build?

Robert Lapidus: Clearly, we’re not in the commodity real estate business. We try to create special products, and there’s a rationale for that. It’s not just that we like to build pretty things, but the better products are better financial investments. I think it’s a philosophy David, MaryAnne and I all share.

Levinson: The kind of buildings we’re going to build are environmentally sustainable, architecturally interesting, beautiful. They’ll have amenities that help people with their health, like fresh air, outside spaces, places for people to collaborate and meet. It’s really how people want to live and work in the 21st century.

If you’re thoughtful about these things, it’s really no additional cost or [it’s a] marginal cost. We’re not really talking about huge, significant costs to be thoughtful about how you’re going to design a building, how you’re going to underwrite the building.

Gilmartin: The underwriting is challenging. When we built the Gehry tower, we had six lenders. It was a $670 million loan. To sit and talk about what Frank Gehry was going to do for the skyline, every floor as you got higher up was in this beautifully proportioned tower—we had to underwrite it as if it were a forgettable luxury rental building [so lenders wouldn’t feel intimidated by the cost of the project]. And I said to the lenders, “Let’s just do that because I think it’s 10 cents a floor in rent as you go up to the top.” Nobody wanted to hear about it. To David’s point, if you can build it as a commoditized product and figure out how to do that and not pay more, it’s such a home run because the value is there and it’s going to stay. And it’s almost as elastic [against] fluctuations in the marketplace. There’s not only a flight to quality, but the quality holds up in a downturn or market correction.

Levinson: It’s really the best way to mitigate the risk, to not build a commodity building.

Lapidus: Think of something as simple as LEED, which is commonplace these days. But if you’re planning a billion-dollar project, and you want to hit a certain level of LEED certification, it might cost you an extra $500,000 or a million dollars on a billion-dollar project to get that. Everything we do is about upfront planning and coordination. By the time you actually start doing the work, you’ve thought about everything. There’s always going to be things you can’t foresee, particularly in what Dave and I have done in the past with taking existing hundred-year-old buildings.

Like 390 Madison?

Lapidus: Everything: 200 Fifth, 390 [Madison], 195 [Broadway], 425 [Park Avenue]. But when you have the luxury of building ground-up, you have other issues to deal with, but you don’t have that uncertainty…It’s like a treasure hunt. Some of our buildings, like 150 Fifth, you’d peel things away and Dave’s like, “You got to come down here and look at this. It was the bishop’s vault.”

Gilmartin implied in an interview with us at the REBNY banquet that commercial was more the priority. Is that the case?

Lapidus: We’re opportunistic. L&L’s history is office buildings with ancillary retail. Obviously, the project we’re doing, TSX Broadway in Times Square, has no office, which is a departure. What attracted us to that was an iconic, once-in-a-lifetime location and the ability to create a 21st century product and a very, very complicated construction. It had all of those elements even though it wasn’t office. With MaryAnn’s pedigree and background, we think the world has opened up to us even more. We’ve looked at residential things at L&L but haven’t really done them. It’s a very different view now because MaryAnne and her team have executed those successfully many times.

Gilmartin: I think I had said [at REBNY] my first love was office because, when I first came into the business, I built office buildings at Forest City. That was my bread and butter. But then what Pacific Park did and Spruce Street did was open up a whole new avenue. That was the great thing about being at a company where, if you dared to dream it and defend it and it penciled out, they were game. I had a great run—built two hotels [former Embassy Suites at Battery Park and Hilton Times Square]. That’s the spirit around here, too [at L&L]. You have to be sensible and know what risks you’re taking, but there’s a lot of ambition and a lot of enthusiasm around the city. And inside of that anything is possible.

Can you talk about how this partnership came together?

Levinson: So Rob and I had really been talking about, from day one, creating a platform for the most talented people we could attract. And as our business grew and as the projects got more complex, there was more of an urgency in our minds to bring in the most talented people we could find. As the founders take a company from point A to point B, very often the platform needs to have new blood, new management, people that have their own vision and drive.

It had come to my attention that [Forest City] changed the nature of their business, and it made me think that potentially, knowing MaryAnne as a “hopeless developer,” as she says, that she could end up in a place where she could be constrained. She might not be able to reach her own aspirations as a professional developer.

We knew each other. We did a deal a zillion years ago, which was interesting and successful.

What deal?

Levinson: It was Bear Stearns. I was advising and representing them [as a broker with Insignia/ESG], and they did a [300,000-square-foot] deal at MetroTech in 2003. So we go back a very long way. We reached out to MaryAnne, and it was sort of like a “let’s catch up” social kind of thing, knowing in my mind where I really wanted to go with that conversation. Over a period of about a year and a half, it was sort of a courtship. I watched what was happening at Forest City, and it was unfolding the way I had anticipated. And it was getting a little clearer to MaryAnne what we had in mind, and we had this very fun enjoyable lunch at the 21 Club [in November 2016]. I think MaryAnne proposed something that was a little different than what I had contemplated. And she proposed her team potentially.

And that idea of her and her team was something Rob and I hadn’t even contemplated. But it was an awesome idea. Then we started thinking, “O.K., so how would this work? And what would be the structure of our deal?” MaryAnne was at the point in her career where she wasn’t going to just take a job working for somebody. She really was in a place in the world where she should be an owner of the business. And we were totally O.K. with that.

Gilmartin: I was on a career quest for sure. If I was going to leave, it was going to be different than it had been up until that point. The notion of being an owner in something versus being a well-paid CEO, that I was clear on. And I learned along the way that the definition of partnership is a very interesting conversation.

I can tell you how you can dance around that discussion to the point of being utterly exhausting because what you get to fundamentally is, “You’re a partner but…” Doesn’t mean you’re going to actually own anything. You’re just going to shill and then you’ll get a piece of the upside.

I can say from the onset, David said all the right stuff.

What I find remarkable is not just that we figured it out on a deal front, but I was able to feel comfortable and they felt comfortable with me, and these guys have been partners for 17 years. For me it was a great validator that they’re not clones of each other and that they were able to be successful, enjoy each other, have fun and make money.

What was the most uncomfortable situation you’ve been in as a woman in real estate?

Gilmartin: [Years ago, Bruce Ratner] and I went to Midtown to meet with [the CEO of a now-defunct investment bank about a lease]. We were arguing over a buck a foot in rent [in MetroTech]. So we go in, and [the CEO] is like, “These people could be in Calcutta for all I care. What do I care about Brooklyn?” And I was like, “Oh, this is going to go really well.” He literally had like a button, and the door closed, and then he lit up a cigar, and it was like 9:30 in the morning. I thought, “Where are we? I just want to get the buck and get out.”

And he started with “Oh, I read the paper today. Turns out you’re in bed with The New York Times.”

And he looks at me, and he looks at Bruce. I’m like, “O.K. this is a little off topic, what are you saying?” And he’s like, “You’re stopping the Freedom Tower [from] getting built, according to [New York Post reporter] Steve Cuozzo, because you can’t fill your building in Midtown.”

[When he struggled to find tenants and financing for The New York Times building in 2003, Ratner applied for $400 million in tax-exempt federal bonds that were earmarked for rebuilding New York City after 9/11, the Times and The Village Voice reported at the time. However, the government ultimately rejected his application for the financing.]

I’m like, “That’s kind of deep. You’re giving us a lot of credit.” And he said to me, “I think I’m going to try and hire you.” And I’m sitting there with Bruce Ratner, and I’m like, “This is not about the buck. I just want to talk about the buck!”

[Afterward] Bruce says to me, “I’m so sorry, I should have just gotten up and left.” We got the 75 cents [a square foot].

Then we go downstairs and Bruce is beyond upset. I said, “Bruce, stuff like that, people get their comeuppance.” And as the future would have it, things didn’t end so well [for that CEO]. We go downstairs, and there are all these black cars lined up, and Bruce’s driver was off or something, and we had to go to another meeting. So there’s a car right outside the door of [the bank].

We get in the car, and the [driver asks if we’re the CEO we just left]. And Bruce is like, “Yeah, I’m him.” So we take the black car, and we’re driving up Madison Avenue, and the guy starts getting calls: “Where are you? Where are you?” And he’s like, “I got the guy in my car.” And they’re like, “No. you don’t. He’s looking for his car.” So Bruce takes out $500 and says to the guy, “Take us where we’re going. It’ll be worth your while. It’s worth it to me for you to not [kick us out]. And I could easily get another cab. Here’s 500 bucks.” So Bruce and I [won] in our little Brooklyn way…We got the 75 cents, and we left, and we took the car.

This is my story of like, “As a woman in real estate, have you ever had any crazy [moments?]”…and I’m like, “Well, there was this one time…”

Do you think the gender dynamics and balance of power in real estate will ever shift enough that we can just talk about you in terms of being a developer, instead of being a female developer?

Gilmartin: I don’t do panels with women talking about women in real estate. Because you know what? It’s not going to change anything. I’ll do a panel with some men, and if women come up, I’ll talk about it. But it’s not going to change if women get together and just keep talking about how it has to change. The change starts when fellas like this decide they picked the best person for the job, man or woman, and it happens to be a woman. And then we go change the world. And then I go inside of the C-suite, I do what I do, it opens pathways for women. Fifty percent of the people I brought [to L&L MAG] are women. Then I go into a boardroom at Jefferies [the investment bank], a bunch of guys, and I’m on the board there, and that’s when we start talking about a new board member, and you know we’re going to have a conversation about putting women in the mix.

The change really has to come two ways. Women have to get into the C-suite and the boardroom. And men have to sign onto the mission. And then we change the world. And then it’s not going to be such a big deal. I know I’m the beneficiary of this very shallow pool where women aren’t doing what I’m doing. I’m not proud of that. There’s a lot of fuss about it, and it’s all really exciting. But, it’s also quite pathetic. It shouldn’t be that big a deal.

Levinson: I’m not giving Rob and myself any special credit, but for us…we didn’t really see MaryAnne as we’re partnering with a woman. It’s really more of a coincidence. Our job is to create the best platform we can and either hire or partner with the best people we can. It wasn’t like, “Let’s go find a woman because the world needs a woman CEO.” They do, but that’s more of a coincidence. And at this moment in time, it’s a benefit because I think people really like this idea by itself. But that’s not what it was about. It was 100 percent about the best people. We know what it means to field a great team. This is our Giancarlo Stanton [who just got picked up by the Yankees] moment.

Gilmartin: Recently someone was quoted in all these stories that were written about real estate and women and the “MeToo” moment and all that. Somebody said, “You know the reason it’s a boys club is because people want to be among people who are like them.” [That’s] as opposed to saying you want your business to reflect the people you serve. You look around at our city, and if the city is our clientele, what the hell? There better be some diversity. So I look at it more on the outside as, Who are we serving?

Source: commercial

Gilmartin Leaves Forest City to Start Development Firm With L&L Execs

After 24 years with Forest City, MaryAnne Gilmartin is striking out on her own.

The Forest City New York chief executive officer is leaving her post at the top of Bruce Ratner’s firm to team up with L&L Holding Company executives David Levinson and Robert Lapidus on a new venture called L&L MAG. Gilmartin, who will be the chief executive officer of L&L MAG, confirmed the move to Commercial Observer yesterday after Brooklyn business website The Bridge leaked the news.

She’s also taking four of Forest City’s top executives, Jeffrey Rosen, Susi Yu, Adam Greene and Ashley Cotton, with her. Rosen will be the managing director of development and capital markets, and Yu will be a managing director and head of development. Greene will become a managing director of construction and development, and Cotton will serve as the managing director of communications and marketing.

The time is ripe for Gilmartin to leave Forest City. The company stands at a crossroads after transitioning from privately held developer to publicly held real estate investment trust two years ago. Forest City Realty Trust, along with its local arm, Forest City New York, are shifting away from ground-up development and focusing more on investing in and operating office and multifamily properties, she explained. Yesterday, The New York Post reported that Forest City is selling all but 5 percent of Pacific Park,  the 22-acre megaproject rising atop the Long Island Railroad yards formerly known as Atlantic Yards, to its partner on the project, Greenland USA.

Gilmartin and her crew have a services agreement with Forest City to finish the remaining work on Pacific Park. The developer has only completed four out of 15 planned buildings and 800 affordable apartments, with an approaching deadline in 2025 to complete 2,250 affordable units. The developer hasn’t started construction on any new buildings since 2016, but it has continued work on buildings that were already underway.

But Gilmartin, who is arguably one of the most powerful women in New York real estate, wants to stay in the development game. She also sees the L&L venture as a unique opportunity to start her own company, rather than run someone else’s.

“I’m first and foremost a developer,” she told CO. “It’s what I love. Dave Levinson and Rob Lapidus know how to raise capital, they love the urban landscape and they enjoy challenging projects. I’m taking the people I love at Forest City and doing more of the stuff I think is super challenging and rewarding.”

The 53-year-old executive added that she’ll miss Forest City, but that, “I think there’s a recognition that there isn’t a job big enough at the company to keep me challenged and keep me happy for the next decade.”

In her time at Forest City, Gilmartin has overseen the development of the $5 billion Pacific Park project, the New York Times Building at 620 Eighth Avenue, the Tata Innovation Center at the Cornell Tech campus on Roosevelt Island and the Frank Gehry-designed 8 Spruce Street.

L&L MAG will bring together Lapidus and Levinson’s talents for developing office buildings with Gilmartin’s ability to build residential, office, hotel and cultural properties, she said. They hope to work on a variety of projects, both in the city and elsewhere. The team will split its time between a redeveloped office space at 594 Dean Street in Prospect Heights and L&L’s 142 West 57th Street in Midtown.

“We are constantly on the lookout for the next big project, even in the midst of the most active phase in our history. This partnership with MaryAnne Gilmartin, who has been the driving force behind some of New York’s most transformative developments in a generation, is the ideal vehicle to further those ambitions,” Levinson said in prepared remarks. “New York City is long overdue for a woman to serve as co-founder and CEO of a major development company, and MaryAnne has more than demonstrated her unique combination of vision, perseverance and leadership throughout her remarkable tenure at Forest City.”

L&L’s current portfolio of commercial properties and development projects will continue to be owned and operated via its existing ownership structures and management teams, according to a press release.

Forest City’s spokesman didn’t immediately respond to a request for comment on Gilmartin’s departure.

Source: commercial

$93M CMBS Loan on West Virginia Mall Sent to Special Servicing

The $93 million loan backed by the Charleston Town Center Mall in Charleston, W. Va., has been sent to special servicing, according to an alert yesterday from Fitch Ratings.

The 10-year term loan, which carries a fixed rate of 5.6 percent, had a securitized balance of $100 million, was originated by Morgan Stanley in September 2007 and was transferred to special servicer C-III Asset Management LLC on Tuesday due to imminent maturity default. It comprises nearly a quarter of the $392 million BSCMS 2007-T28 commercial mortgage-backed securities transaction—originally sponsored by the now defunct Bear Stearns.

The loan is secured by the 931,333-square-foot Charleston Town Center Mall—constructed in 1983 and located at 3000 Charleston Town Center Drive in downtown Charleston, W. Va. It features over 130 specialty shops across three levels of the building, according to information from the mall’s website.

In April, Sears—previously one of the mall’s largest non-collateral anchor tenants, occupying 179,199 square feet of space—closed its doors. Subsequently, the loan was marked as a “loan of concern” by Kroll Bond Rating Agency over heightened concerns about the fates of the location’s two remaining non-collateral anchor tenants, Macy’s and J.C. Penney, each occupying 118,864 and 121,517 square feet, respectively, according to information provided by Trepp.

The loan was then put on the servicer watchlist in June, and in July—as the loan neared it’s September 8, 2017 maturation date—the borrower claimed it was “making changes to the partnership, which they expect to complete concurrently with the loan maturity date” and anticipated it would have the wherewithal to be able to pay off the loan on time, watchlist commentary provided by Trepp shows.

Jeff Linton, a spokesman for Forest City Realty Trust, the property’s sponsor, said in an email statement: “As previously announced, Charleston Town Center is in the midst of restructuring their partnership.  Concurrent with those changes, ownership is evaluating the most efficient way to handle financing for the project.” Linton went on to say that the mall will continue to operate as usual. 

This marks the loan’s first trip to special servicing.

Source: commercial