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MIPIM: US Experts Tell World America Is Loaded With Opportunities, So Act Fast

Those that attended Commercial Observer’s panel on United States real estate investing today—the second day of the annual MIPIM (or Marché International des Professionnels d’Immobilier) property conference in Cannes, France—were told there are ample deals to be made in America.

At the event “Developing & Investing in the United States: Where, What & How?” some of the most prolific developers and lenders in the U.S. told real estate professionals not to worry about reports of rising interest rates, to expand their horizons beyond premium “gateway” markets (like New York City or San Francisco) and to act quickly or risk losing the deal.

Brookfield Property Partners Senior Managing Partner and Chairman Ric Clark opened the event by talking about the three trends his company sees affecting the U.S. real estate market: booming population growth of urban areas; the rise of millennials and increases in innovation; and technology for properties.  

Expanding on the first point, Clark said that cities around the U.S. are projected to have 350 million residents in the year 2050, up from 125 million in 1960. In 2014, he said, that figure was 258 million people. 

“Growing urban populations clearly present major challenges, but also major opportunities for those in the real estate business,” Clark told the audience. “The new city dwellers are going to need places to live and work, new schools and hospitals and a massive investment infrastructure will also be required.”

Bruce Mosler, the chairman of global brokerage at Cushman & Wakefield, moderated the first panel about developers’ thoughts on the market, which included Hines CEO of Capital Markets and the East Region Christopher Hughes; SL Green Realty Corp. co-Chief Investment Officer Isaac Zion; and Eran Polack, CEO and co-founder of HAP Investments.

Mosler informed the crowd of the reduced investment activity in New York City and other U.S. gateway markets, which resulted in a 23 percent drop to $96 billion last year from $125 billion in 2016. Comparatively, total investment in non-gateway U.S. markets dropped to $300 billion in 2017 from $339 billion in the previous year—just a 3 percent dip.

Hughes mentioned that investors need not focus only on gateway cities, because there are great opportunities elsewhere in the country.

“It’s a default to look at the gateway cities,” Hughes said. “As you start to look at the U.S. markets you should pay attention to the broader U.S. markets. You’ll make a mistake if you come to the U.S. and think there are only three cities to invest in. Follow the education [centers]; follow the underlying demand drivers.”

Zion pointed out that foreign investors need to understand that deals in the U.S. happen fast, so they need to be decisive.

“The quick ‘yes’ is always the best answer,” he said. “The quick ‘no’ is almost as good. It’s the long, long ‘maybe’ which unfortunately happens way too often. And if you are in that position you are not going to be able to act on potential opportunities.”

The second panel, moderated by Jonathan Mechanic, the chairman of the law firm real estate department at Fried Frank Harris Shriver & Jacobson, focused on lenders’ views of the U.S. market, and featured panelists Michael Shields, a managing director of ING Real Estate Finance; Christoph Donner, CEO of Allianz Real Estate of America; and Alexander Joerg, a managing director and head of real estate finance at Landesbank Baden-Württemberg.

Since capitalization rates—the expected rate of return on a project—are higher in the U.S. than in major European markets, investors can see a lot of upside, Shields said.

“You are breaking 3 [percent] caps in Paris and Berlin, so our risk guys when they see a 5 [percent cap rate], even though the base rate is higher, they like the U.S.,” Shields said. “And it’s such a big market. There are so many deals compared to [Europe]. London and Paris are the only two markers that have deal flow that compares to the U.S. So we could be a lot more selective and cherry pick a bit and figure out where we can actually compete.”

And since interest rates are climbing, now is the time to act, said Donner, who suspects that the movement in rates will boost deals.

“I think we are going to see more volume just because rising interest rates [means] it’s time now for clients to lock in rates for the long term,” he said, “because on a really long-term perspective these are ultra-low rates.”

Source: commercial

It’s MIPIM Time: Why You Should Be Excited for the Cannes Conference

Once again, it’s that time of the year for real estate professionals across the globe to head to Cannes, France.

Just two months ahead of the invitation-only Cannes Film Festival, where movie stars will take to the sandy city on the French Riviera and no doubt trade Harvey Weinstein horror stories, tens of thousands of men and women in business suits carrying briefcases and card holders will storm the streets of Cannes hunting deals during the annual MIPIM (or Marché International des Professionnels d’Immobilier) conference on March 13 through March 16.

The bulk of the events, which is organized by Reed Exhibitions subsidiary Reed MIDEM, will be held at the Palais des Festivals et des Congrès, a massive conference center on the Cannes waterfront.

MIPIM’s theme for the 29th annual conference is “Mapping World Urbanity,” and the event’s programming will try to address issues like, How will we live in cities in 2030 and 2050? And, what are the best strategies for building future cities in a globalized world?

There are plenty of reasons to be excited for MIPIM, but to approach a conference as big as this (with more than 24,000 people), a roadmap might prove useful. We talked with a few MIPIM-goers from the U.S. to get an idea of what the sophisticated attendant should look out for this year.

Networking (duh)

With approximately 24,200 expected participants from over 100 countries, it’s more than possible to find the right person to talk to at MIPIM, whatever your needs may be.

Of the attendees, there will be 5,000 investors and financial institutions, 4,500 developers, and 3,800 CEOs and chairpeople scrambling around the waterfront and in the Palais des Festivals. And there will be more than 3,100 exhibiting companies.  

And in case the conference center isn’t your scene to swap business cards, networking parties will take over the swanky hotels, luxury yachts and the beach.

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With an array of events and booths, there’s ample opportunities for networking at MIPIM. Photo: MIPIM

“The most important thing for me is the networking,” said Susan Greenfield of Brown Harris Stevens, who has been to the event for 28 consecutive years and has already booked her flight for No. 29. “I go every year because it’s the one place in the entire year where I see almost everyone I know from around the global at the same time.”

She added, “The thing that is so important about this event is you get so many decision-makers. One day I was walking down the street [in Cannes] and who could be facing me walking the other direction? Harry Macklowe. I said, ‘What are you doing here?’ He said, ‘I’m here to look for money, what are you doing here?’ ”

City and country exhibitions

If you’re thinking global and want to know what investment opportunities there are in cities abroad, this is the event for you.

The European cities put on a show at MIPIM, bringing large-scale panoramas of entire cities and models of megaprojects to dedicated pavilions. Last year, London and Istanbul had massive jaw-dropping displays.

“Some of the models and booths are off the charts,” said Jay Olshonsky, the president of NAI Global, who has gone to MIPIM for seven consecutive years and is returning this year. “Some people told me some of the models there are million-dollar [displays]. I always leave two or three hours for myself to walk around because you always see something you’ve never seen before.”  

“Le Grand Paris,” the name for the pavilion dedicated to the City of Lights, will feature 19 exhibitions and events each day. Belgium’s pavilion will feature experts and models of Flanders, Brussels and Wallonia, while Holland’s space will be dedicated to Amsterdam, Rotterdam, Utrecht and The Hague.

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Model displays of cities and large developments are popular in MIPIM, such as this one of London last year. Photo: MIPIM

On top of these, there will be booths dedicated to countries from Asia, Africa and North America. Not that the models and displays of cities are there just to be pretty or promote specific projects and the companies that are developing them; more than 370 political leaders and 500 representatives from cities will be in attendance to talk about development in their cities, attract developers and get investments in their locales. (We’ve already heard from the Moscow delegation!)

“If you go to ICSC in Vegas, which is by far a bigger show [with 37,000 attendees], it’s more about the displays about the companies [not cities],” Olshonsky said. “New York City doesn’t come and display at ICSC like Paris does in MIPIM.”

Panel events and keynote speeches

It’s not all deal-making and networking—MIPIM is also a place to learn about development trends across the globe. The event will feature more than 360 keynote speeches and well over 120 panels, sessions, workshops and networking socials covering a wide variety of topics—from Asia and Europe to sustainability and logistics.

And those events will also serve to gather experts across the globe and offer opportunities to get someone’s ear.

“[After networking,] the second thing that I find very valuable is attending these program and panels because I learn so much,” Greenfield said. “You never stop learning and real estate is always changing. If you don’t stay ahead, if you don’t stay involved, if you don’t stay knowledgeable, then you are going to miss out.”

Some panels to look out for include “Self-Driving Cars: Bringing a New Face to our Cities,” “Smart Housing: What Millennials Expect,” “Belt and Road Initiative: Capturing Opportunities Through Hong Kong” and “Urban Logistics: the Next Challenge for Cities.”

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The comprehensive panels with world-class experts are plentiful at MIPIM. Photo: MIPIM

And even Commercial Observer is getting in on the action, co-organizing the U.S.-focused two-panel event entitled “Developing and Investing in the United States: Where, What & How?” on the morning of March 14 at The Ruby Room in Palais des Festivals.

Ric Clark, Brookfield Property Group’s senior managing director and chairman, will deliver the keynote address and Jonathan Mechanic, the chairman of Fried Frank Harris Shriver & Jacobson’s real estate department, will moderate the panels. Cushman & Wakefield’s Bruce Mosler, SL Green Realty Corp.’s Isaac Zion, Hines’ Christopher Hughes, Hap Investments’ Eran Polack and Allianz’ Christoph Donner are just some of the panelists. (You can find us there!)


Come for the drinks and deals, but stay for the tech!

For the past couple of years, the presence of property technology companies has grown at MIPIM. As the sector is becoming a force in the industry—making more investors curious about what’s next to come—MIPIM has stepped up to provide some answers.

There will be a PropTech Lab event at MIPIM for the first time on March 15, where  invite-only real estate executives and tech leaders will meet and talk about the increased impact of technology on real estate.  

“MIPIM events and conferences will be great opportunities for members of the REBNYTech team to meet with industry leaders of tomorrow,” Ryan Baxter, a Real Estate Board of New York vice president for management services and government affairs, who is heading to MIPIM this year again and is a member of the advisory board of MIPIM PropTech, said in a statement. “We’re looking forward to learning more about smart cities and human-centric innovation efforts from around the world.”  

MIPIM also serves as the final leg of the third-annual MIPIM Startup Competition, an international tech competition in partnership with MetaProp NYC, a real estate tech accelerator. Nine finalists at the nexus of tech and real estate were selected from three previous events, MIPIM U.K., MIPIM Asia and MIPIM PropTech (in Manhattan), and those companies will face off in Cannes to determine the best of the lot on March 14.

The competitors from New York City’s MIPIM PropTech that are heading to Cannes are Real Atom, the first online marketplace for commercial real estate debt financing; PlanRadar, a digital software that facilitates project management for construction companies; and Acasa, an app that helps individuals manage household bills.

The winner will receive three passes to both MIPIM U.K. and MIPIM Asia 2018, four passes to MIPIM 2019 (again in Cannes), an automatic selection as a finalist for MetaProp NYC’s 2018 accelerator program as well as brand exposure and coaching at this year’s MIPIM.

And take in Cannes, for goodness sake!

“If you think about it, if you have got to go somewhere 6,000 miles away—for you and I, it’s not too shabby to go to the south of France,” Olshonsky said.  

Cannes is packed with bars, restaurants, hotels and historic buildings all within walking distance of the beach. For those looking to notch Michelin stars on their belts, there are plenty of options. La Palme d’Or, Villa Archange, Paloma and L’Oasis all hold multiple stars.

There are luxury hotels all around the beach area of Cannes. Some leading contenders are Hotel Barrière Le Majestic Cannes, InterContinental Carlton Cannes Hotel and Grand Hyatt Cannes Hôtel Martinez thanks to their astounding architecture and rich history.

And speaking of history, while you’re in town for a real estate expo, why not do a little sightseeing? Cannes is home to Eglise Notre Dame d’Espérance, a 17th century gothic church set atop a hill that overlooks the port area and it provides some amazing views. And there is also the Musée de la Castre, a museum that is set in a castle built by 11th-century monks.

Also just like the Hollywood Walk of Fame, Cannes is known for Allée des Étoiles du Cinéma, where stars leave their handprints. Finally, don’t forget to talk a stroll along the Promenade de la Croisette if you didn’t already do so on your way to and from the convention center.

Source: commercial

Industrious Raises $80M in Funding Co-Led by Fifth Wall, Riverwood

Rapidly growing Brooklyn-based flexible workspace provider Industrious, which has attracted members from Hyatt, Instacart, Chipotle, Fullscreen, Mashable and Pivotal, is about to get even bigger.

After tripling the number of its locations in the U.S. to 35 over the past three years, Industrious has completed its latest fundraising round and pulled in $80 million in Series C funding co-led by Los Angeles-based Fifth Wall Ventures and Riverwood Capital, according to an Industrious news release today.

The company has now raised a total of $142 million since its founding in 2013, according to a spokeswoman. It plans to further its expansion by adding about 30 more locations this year. Also Industrious is projecting its revenue growth will triple this year, according to Jamie Hodari, a co-founder and the CEO of Industrious. He also said that in 2018, the company plans to launch an app that will help connect tenants to events. He declined to go into further detail about the product.

“Our network is growing very quickly and that is a capital intensive proposition,” Hodari told Commercial Observer. “We have to be able to serve our customers where they are, wherever that is across the country.”

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Industrious plans to open many new locations around the country this year. Photo: Industrious

Other investors in the funding round include Alrai Capital, Outlook Ventures, Rabina Properties, Schechter Private Capital and Wells Fargo Strategic Capital, the release indicates.  

Fifth Wall, a venture capital firm that invests in burgeoning real estate companies, is backed by major property owners such as Hines, mall-operator Macerich, Prologis and Rudin Management Company. (Industrious is not the first coworking provider that Fifth Wall has invested in, but it is the first that has been publicly announced.) It has already invested in VTS, Appear Here, WiredScore and Enertiv, as CO reported first in January.

The company chose to invest in Industrious because of its ability to attract Fortune 500 companies to its model.

Industrious does not create flashy spaces designed with startups in mind, but implements sophisticated designs with actual offices—and a handful of coworking desks—at its locations.

“It’s an elegant, simple, refined aesthetic that attracts large companies,” said Brendan Wallace, Fifth Wall’s co-founder and managing partner.

Wallace added that Fifth Wall also selected Industrious because he believes the office space provider partners more with landlords than do its competitors, based on the structure of the lease agreements it signs.

The Fifth Wall co-founder declined to elaborate, but said Industrious is different than say a WeWork, which signs a lease and then fills its spaces with members whose collective fees work out to much more than the price of the original lease. In WeWork’s case, the coworking giant receives more upside than the landlord does for the space. (A spokesman for WeWork declined to comment.)

“I think that landlords have grown increasingly cautious to coworking players, including WeWork,” Wallace said. “What [Fifth Wall’s investors] were looking for was a coworking partner to deploy across their national footprint.”

Source: commercial

Four Reasons Why Oxford Properties’ Big Bet on St. John’s Terminal Will Pay Off

Oxford Properties Group and the Canadian Pension Plan Investment Board (CPPIB) announced yesterday that they closed on the $700 million St. John’s Terminal redevelopment project in Hudson Square.

The acquisition of the south portion of the site at 550 Washington Street from Westbrook Partners and Atlas Capital Group was major news, with Oxford owning a 52.5 percent interest in the project and control of the development and Canada Pension taking the remaining stake.

The City Council granted a zoning variance in December 2016 for the 3.3-acre project, which is supposed to include 1,500 rental apartments along with a mix of office and retail, when it was completely under Westbrook and Atlas. Westbrook and Atlas landed $300 million in financing from Morgan Stanley last year and used $100 million to acquire 200,000 square feet of development rights, as CO previously reported. (Westbrook and Atlas Capital will continue to own the northern portion of the site.)

St. John’s Terminal is not Oxford’s first rodeo on the Far West Side of Manhattan; the company is currently working with Related Companies on the Hudson Yards megaproject.  

We talked to real estate experts to get their takes of why spending $700 million for this project was a savvy move for Oxford and CPPIB.

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550 Washington Street.  Photo: CoStar Group

Hudson Square is ripe for redevelopment (and close to cool neighborhoods)

Hudson Square hugs up next to Greenwich Village and West Village to the north and Tribeca to the south. Not to mention Soho is to the east. It would be difficult to find four trendier neighborhoods on the island of Manhattan.

“What’s the old real estate adage—location, location, location, and this location has a tremendous amount of untapped potential,” said Daria Salusbury, the president and CEO of Salusbury & Co., which works on branding and consulting for developers.  “And Oxford is very, very smart, and they are very well financed.”

Salusbury was a senior vice president with Related Companies and worked on the development of the firm’s 261 Hudson Street project in the area before she left in 2016. The Robert A.M. Stern-designed rental building features approximately 200 apartments.

She added, “In three minutes you are sitting in Tribeca at a restaurant. And in five minutes you are in Soho sitting in a restaurant. In six minutes you are in West Village sitting in a restaurant. How can you go wrong?”

Plus, while the area was long known for its extensive warehouses, as development has thrived in the surrounding neighborhoods, Hudson Square has come into its own.

“Ride your bike down the West Side Highway and you’ll see the amount of development right off the highway on the West Village,” Steven Kaufman, the president of Kaufman Organization, said. “This is just south of all of that. It’s in between the West Village and Tribeca. And it’s like a hole in a doughnut there. It’s very ripe for development.

He added, “And it’s a big site. It’ll be a city of it’s own. It could be like Battery Park City.”


…And has no landmark issues!

Plus, it’s not like the New York City Landmarks Preservation Commission can get involved like in other neighborhoods nearby.

“Greenwich Village, Tribeca and Soho are protected because of the landmark issues. [But] it’s something that they don’t have to worry about, and here they can build something of scale and size,” said Robert Dankner, the president of Prime Manhattan Residential. “The fact that it is not landmarked and it’s one step to the left—it’s a very obvious next step.”

primaryphoto43 Four Reasons Why Oxford Properties’ Big Bet on St. John’s Terminal Will Pay Off
A rendering of other residential properties that could be constructed at the site. Rendering: CoStar Group

The Hudson River Park is a perfect amenity for future tenants.

The 550-acre park that extends from Battery City to the West 59th Street offers a plethora of activities for locals. It attracts 17 million visits each year, according to the Hudson River Park Trust’s website.

‘[St. John’s Terminal] is a two-minute walk to the esplanade. And there are a lot of possibilities there,” Salusbury said. “Look how much money the city put in to create that esplanade. You can bike with your kids or take a walk.”


They’re not going into Hudson Square alone.

Oxford Properties is certainly not the only ones working on projects in the area. Hines, Norges Bank Real Estate Management and Trinity Church Wall Street has an 11-building portfolio of 5 million square feet in the area, the majority of which is office space. They have CBRE and Newmark Knight Frank leasing up the buildings, as CO reported in 2016.

“Hudson Square has undergone an exciting evolution from New York City’s printing district to a vibrant mixed-use neighborhood with an impressive mix of creative companies, new residential opportunities, local eateries and other businesses that call Hudson Square home,” said Ellen Baer, the president of the Hudson Square Connection. “A waterfront community, amazing access to public transportation and lower west side location, Hudson Square is taking its place as a truly great New York neighborhood.”


But one note of caution for the developers trying to outdo other trendier areas nearby:

“As long as [Oxford and CPPIB] don’t get too ambitious with pricing and they recognize that it’s one step to the left, they should have a home run,” Dankner said. “They can’t get too ambitious because they have to look at [other projects] like Greenwich Lane, which is in the heart of the Village. That’s where everyone wants to be. In Hudson Square, there are still some spotty streets. You are not just there yet. It doesn’t have the neighborhood cleaners. It doesn’t have restaurants. It’s not old enough. It’s new. History has to be created there. It doesn’t have personality [yet].”

Source: commercial

Fifth Wall, Rudin Raise $4.3M in Seed Funding for PropTech Company

Fifth Wall Ventures led a $4.25 million seed funding round for Enertiv, a property tech company that creates hardware and software to track the performance and energy usage of building systems, Commercial Observer has learned.

Rudin Ventures, the Rudin family’s investing arm, also joined the funding round as well as New York Angels, Cerium Technology and MetaProp NYC. Enertiv, a seven-year-old company with 15 employees, is currently using its technology in 200 buildings across 30 states. The funding will help Enertiv expand its products and hire up to 10 more employees, such as product engineers and data scientists, within the year.

“We know we have a great team, we know we are solving a problem that often gets overlooked, we know we are really far ahead in the [industry], it’s nice that that was finally acknowledged by some key players like Rudin and Fifth Wall,” Connell McGill, a co-founder of Enertiv, told CO.

Enertiv builds meters, “Internet of things” sensors and software applications that allow it to capture data from building systems, such as energy usage from boilers, elevators, pumps, chillers and exhaust fans. This gives landlords knowledge about the intricate workings of their structures.

Furthermore, through Enertiv’s system one can digitally check on any specific equipment in their property, allowing building managers to quickly identify and repair problems, and even predict equipment failures ahead of time. Also if an equipment breakdowns the system will alert the building manager automatically. Ultimately, this technology can help owners reduce energy consumption and save money, McGill said. The company’s technology can also integrate with energy meters built by other companies.

Fifth Wall’s partners, which include major real estate owners and developers like Hines, Lennar, Macerich, and Rudin Management Company, invested in Enertiv because they are concerned about “energy consumption and energy savings,” said Adam Demuyakor, a senior associate at Fifth Wall.

“In older office buildings, there is no management system or brain there, so it’s a ‘dumber building,’” Demuyakor said. “Plugging Enertiv’s smart meter in, will turn them into ‘smart buildings.’ The potential for Enertiv is quite large.”

McGill declined to share the total amount of funding the company had to date.

Enertiv’s products have helped property owners reduce total operating expenses on average by about five percent, according to McGill. Another significant benefit for landlords is having buildings that operate smoothly.

“This is what helps differentiate one real estate company’s services and the experiences that they provide from others,” McGill said. “If they are able to preempt some of these issues—it’s too hot in this space, it’s too cold, there are odors, there is no hot water or the elevator is not working—if they are able to get ahead with our data that’s potentially 50 to 100 tenant complaints that aren’t coming in.”

Rudin was interested in Enertiv because it had been working on a similar concept. The landlord created tech company Prescriptive Data, which has a product called Nantum that collects building data like occupancy and electricity usage to help maintain optimal indoor temperatures and efficient energy use. Rudin executives hope there comes a time when they can find ways to partner Enertiv tech and Nantum.

“We were really impressed by [them] and think they have built and grown a really great company with a great product,” said Michael Rudin, a senior vice president of Rudin Management. “There are obviously a lot of buildings that are the right fit for what Enertiv is doing and that’s why we found it to be attractive. And maybe there is a way down the road that the technical teams [of Nantum and Enertiv] will collaborate.”

Source: commercial

CO’s ‘Women in Construction & Design’ Event Celebrates Breaking the Glass Ceiling

Some of the most accomplished women working in the fields of construction, architecture and development gathered at Commercial Observer’s “Breaking the Glass Ceiling: Leading Women in Construction & Design” event on Tuesday, where the conversation revolved around both the challenges facing, and the opportunities available to, women in a traditionally male-dominated field.

The morning was anchored by CO’s presentation of its 2017 Women in Construction Awards to six individuals who have made a mark upon their respective industries over the course of their careers.

The “Barrier-Breaker Award,” honoring women who have set a precedent in their fields, were presented to Aine Brazil, vice chairman at engineering firm Thornton Tomasetti; Jan Hilgeman, vice president of construction at Hines; and Carol Patterson, a senior partner at law firm Zetlin & De Chiara.

The “Woman on the Rise Award,” celebrating some of the most promising individuals working in the industry today, were given to Pascale Sablan, a senior associate at S9 Architecture, and Margaret Wrzos, an assistant project manager at AECOM Tishman.

And the “Innovative Designer/Engineer Award” was presented to Marianne Kwok, a senior designer at Kohn Pedersen Fox.

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Keynote speaker Linda Chiarelli at CO’s “Women in Construction & Design” event. Photo: Aaron Adler

But the day also featured three broad-ranging panel discussions and a keynote address from Linda Chiarelli, vice president for capital projects and facilities at New York University. Chiarelli, who served as deputy director of construction for Forest City Ratner Companies before joining NYU, noted that women make up only 9 percent of the construction industry’s workforce—with many of those jobs in administrative and non-construction-related roles.

But she also cited progress from the days when job interviewers would ask “if I planned to have kids,” and urged attendees to be aware of the city’s new law prohibiting employers from inquiring about job applicants’ previous salaries—a regulation designed to lessen the pay gap faced by women and people of color. “You should all be aware [of the law],” Chiarelli said.

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(From left) Karla Pascarella, Marissa Kelly, Stacey Dackson, Megumi Brod, Maey Khaled and Anita Woolley at CO’s “Women in Construction & Design” event. Photo: Aaron Adler

She was followed by the morning’s first panel, “Challenges and Opportunities for Women—Fostering a Culture of Diversity from the Field to the Boardroom.” Anita Woolley, first vice president of strategy and communications for AECOM’s construction services group, noted the benefits of “having people of different backgrounds” on staff, citing studies indicating that “diverse teams are more successful.”

Maey Khaled, director of technical services at NYU’s Tandon School of Engineering, recalled engineering courses where she’d frequently “be the only woman in the class” and stressed the need to foster industry participation from women at an earlier age group. Stacey Dackson, a project manager at Structure Tone, echoed that sentiment and the need to educate young women about the career opportunities available in the construction industry, citing the field’s “tremendous economic viability.”

Marissa Kelly, a project executive at Cauldwell Wingate Company, said that there is still the flawed perception that “women are too emotional to be in leadership positions” at a corporate level—a notion that “holds women back” in the industry, she said—while Megumi Brod, senior vice president and Northeast regional development officer for Rockefeller Group, urged attendees to both “be a mentor” to other women in their fields and also “make a mentor” who can help guide them through their career paths.

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(From left) Melissa Grzymala, Helena Durst and Jane Smith at CO’s “Women in Construction & Design” event. Photo: Aaron Adler

The second panel of the day, “Women Leaders in Construction & Design—How They Paved the Way,” included the likes of Kimberly Steimle Vaughan, chief marketing officer and chief people officer at construction firm Suffolk, who cited her company’s efforts to “create a culture of inclusion” and “infuse people in the organization from different backgrounds.” Vaughan said that while roughly a third of the firm’s workforce is comprised of women, she had been to job sites where there were more women at work than men, and that diversity had become a key tenant of Suffolk’s corporate philosophy.

Melissa Grzymala, an executive project manager at Faithful+Gould, recalled a high school guidance counselor’s incredulity at her career goal of becoming an engineer, while Elisabeth Malsch, a principal at Thornton Tomasetti, noted the importance of hiring women given how they occupy a roughly equal share of the graduating classes at most higher education institutions. “If you’re not hiring women, you’re not hiring the top of the class,” Malsch said.

Jane Smith, a partner at architecture and interior design firm Spacesmith, said that “obviously things have changed [in the industry]” since she first started, and urged the conversation away from the obstacles facing women. “The women in this room shouldn’t need to worry about whether they’re women or men,” Smith said. “Let’s talk about how we can succeed.”

Helena Durst, a principal at the Durst Organization, agreed with Smith’s argument, noting that the principles being discussed on the panel “are not male or female values; they’re hirable values…. We shouldn’t be talking about maternity or paternity leave; we should be talking about child care.”

But Durst also acknowledged that her own company “has a lot to learn” and is “far from perfect” as far as gender equity in the workforce, adding that the effort to improve “starts with awareness” and “talking about biases,” as well as “looking at policies that are [both] written and unwritten.”

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(From left) Susan Radin, Jan Hilgeman and Jennifer Bernell at CO’s “Women in Construction & Design” event. Photo: Aaron Adler

The morning’s third and final panel, “Creating the Next Generation of Women in Construction & Design,” featured Gilbane Building Company’s Brennan Gilbane Koch noting how the four previous generations of Gilbanes who led the family-led construction firm were almost entirely men—a state of affairs that has changed, given her current role as Gilbane’s business development manager. Anne Fletcher, a principal at architecture giant HOK, said that when she started in the industry she found herself not only doing “everything my male colleagues did,” but also “arrang[ing] shipping” and “answer[ing] the phone because I had the best phone voice.”

While Fletcher was recently named the new managing principal of HOK’s Los Angeles office, she also noted that she’s one of only six women on HOK’s 34-member board of directors—indicating the progress that remains to be seen in the industry.

Jennifer Bernell, executive vice president of development for Kushner Companies, discussed the challenges of balancing her role at Kushner with her responsibilities as the mother of four young boys—adding that she has been “fortunate” to have the support of her company, as far as maintaining a flexible schedule allowing her to meet the demands of being both an executive and a parent.

Susan Radin, a senior project manager at Turner Construction Company, cited progress as far as work-life balance expectations that are no longer exclusively faced by women—noting that in previous years, she “never heard from male colleagues that they had to [leave work early to] take care of their kids.”

Hines’ Hilgeman, who in addition to receiving the “Barrier-Breaker Award” also spoke on the panel, added that in her own career, she has stories about workplace harassment “not unlike what’s [been] in the news today.”

“We all have those stories, and we’re going to have them no matter what industry we’re in,” she said. “I think it’s a much broader, underlying cultural issue.”

Source: commercial

Owners Magazine 2017: Interviews with NYC’s Top Landlords

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At the risk of stating the forehead-slapping obvious, it’s been a strange 12 months.

There’s been a mixture of good and bad real estate news that can paint a picture of continued stability or darkening clouds on the horizon, depending on your point of view.

By October, the vacancy rate in all three major Manhattan markets for office space appeared to be falling, per Cushman & Wakefield data. Hundreds of thousands of square feet have been leased by Spotify, GroupM, Amazon and others. All of that is inarguably good news.

However, a year ago, few people knew that we were sitting on a retail powder keg ready to blow and take some of the biggest names in the industry with it, like Toys “R” Us, Aerosoles, Payless, Radio Shack…you get the idea. This is inarguably bad.

This is one of the reasons why it’s important to have a magazine like this one.

Yes, the data, the deals and the numbers are critical to understanding the state of real estate. But it’s also important to get a sense of what the key players are thinking right now. That’s why we asked 36 of the biggest names in the business what their vision of the market looks like.

We’ve supplemented these questionnaires with our own reported features.

Last year, New York was considered immune to the vicissitudes of the world economy because we were always a safe, stable place to park cash. That looked like less of a sure bet when China announced new outbound investment rules. Lauren Elkies Schram examines the topic in her story in this issue.

Some in the real estate community long hoped for a challenge to Mayor Bill de Blasio in this year’s mayoral election and put substantial money behind Paul Massey (one of their own) to take the reins of City Hall before that fizzled out. At the risk of propagating a Dewey-Truman blooper (we ship this magazine before Election Day), Aaron Short reported what developers are expecting and hoping for in de Blasio’s second term.

While many developers have spent the last few years touting the Far West Side of Manhattan, there is actually quite a bit of activity on the East River, something that Rey Mashayekhi examines in depth.

Finally, Liam La Guerre looked at something that’s always been written off as anathema to real estate developers: technology. It turns out, the shrewd owners are not only interested in tech, but they’re also developing their own. — Max Gross 

Source: commercial

Why More Real Estate Companies Are Getting Into the Tech Game

Over the weekend of Oct. 13 through Oct. 15, the Real Estate Board of New York hosted its inaugural hackathon, which brought teams from 40 different organizations together to compete for who could develop the best app to address real estate problems.

Prescriptive Data, a one-year-old software company, came away with two wins at the event’s sustainable maintenance and operations, and location intelligence categories.

It should be noted Prescriptive Data had a serious leg up. It was spun off from a division of institutional landlord and developer Rudin Management Company to sell its software Nantum, which gathers building data, such as occupancy, electricity usage and other factors, to help maintain optimal indoor temperatures and efficient energy use.

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A screen shot of the Nantum platform. Photo: Prescriptive Data

This is one of the open secrets of real estate and tech: Despite all the hand-wringing about how real estate is populated by dinosaurs who only understand brick and mortar, there are plenty of landlords worried about just how far behind the industry is and have been actively trying to fix the problem. Landlords are investing venture capital directly into new companies, creating venture capital arms or funding venture capital firms that invest in real estate tech, and making their own in-house technology.

The initial version of Nantum, Prescriptive Data’s first product, was created in 2013, and Rudin tested it with its buildings. 

“We wanted to improve our business, and once we developed Nantum and we saw how powerful the system was in our properties, we thought, ‘Wait a minute, we may be onto something here,’ ” Michael Rudin, a vice president at the company, told Commercial Observer.

Rudin started Prescriptive Data last summer and began selling Nantum on the market to landlords. At that time, it was using the product in 17 Rudin buildings encompassing 10 million square feet, according to a release. The company now has more than 12 million square feet of properties on its platform, according to a spokeswoman. (Rudin declined to say if Prescriptive Data was profitable yet.)

And through Rudin Ventures, Rudin has invested in a series of technology companies, including Hightower (since merged with VTS) in 2015, Radiator Labs in 2016, Honest Buildings and Latch in 2016 and Enertiv in 2017.  

But Rudin is hardly the only real estate company to invest in related technology; Blackstone, which has its own tech division with Blackstone Innovations, has invested capital in various startups, including property management platform VTS in January 2015 with $3.3 million.

Today, Blackstone executives, along with Rudin, Equity Office and other large real estate players that use VTS’ technology, make up the company’s customer advisory board. They meet as a group once a quarter to talk about things they like about the product and ways to improve it—on a voluntary basis.   

“They are seeing the value that they are getting for the product, and if they can get a stake in it, it is a pretty great thing for them,” VTS co-Founder and Chief Executive Officer Nick Romito said. “It’s better to be in the car than watch the car pass you.”

Brookfield Property Partners, Rudin and Milstein family’s Circle Ventures have invested in Honest Buildings, a project management platform that helps ensure developments are completed on time and on budget. And mall operator Simon Property Group, via Simon Ventures, has invested in Appear Here, a marketplace for short-term retail space (with terms from one day to as long as three years).

Appear Here recently raised funding from Fifth Wall, a venture capital firm that supports emerging real estate-related technology companies. Fifth Wall injected the undisclosed amount into the company to support its expansion in the United States, according to a release on the partnership. This is significant because Fifth Wall has investments from major real estate landlords such as Equity Residential, Hines, Macerich and real estate investment trust Prologis, and Appear Here needs landlords for its model to work.

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Appear Here’s software. Photo: Appear Here

“At our end, we are really trying to disrupt an old industry,” said Elizabeth Layne, Appear Here’s chief marketing officer and U.S. general manager. “But in order for that to be successful, we need landlords to put their space online. We need them to use our dashboard. And that’s a big change for an industry that is just used to using brokers and talking to a person instead of using the internet.”

Fifth Wall, meanwhile, has raised $232.3 million to date and has already invested in many successful tech companies that are seeking to enhance real estate-related services, including OpenDoor, which lets people instantly buy and sell homes, and States Title, which is seeking to revamp the title and underwriting process. Fifth Wall’s success via those startups has raised eyebrows among real estate executives looking to make their foray into the world of tech.

“We launched a corporate venture group in March 2016. The idea started when our CEO had conversations with Fifth Wall,” said Will O’Donell, a managing director at Prologis, during the inaugural MIPIM ProTech event in Times Square on Oct. 11. “The reality of why we started it is everyone at the company has a day job…but if you actually create a group that is 100 percent accountable for identifying where disruptive trends are occurring—where technology is coming out—and forcing the company to deal with it, it’s a very creative and helpful friction.”

The MIPIM event brought out more than 800 professionals—most of whom were new startup founders and marketers—but there was a sizable group of real estate executives from institutional developers and landlords, including Blackstone, AvalonBay, Vornado Realty Trust, Silverstein Properties, Equity Office and Japan’s Mitsui Fudosan. Ric Clark, a senior managing partner and chairman of Brookfield Property Partners, and Owen Thomas, the CEO of Boston Properties, were panelists at one of the forums.

The showing revealed just how hungry landlords are for tech. Many used the time to network with young entrepreneurs and discuss new technologies.

“We ran a very large [request for proposals] back in the spring looking for a technology vendor that we could essentially partner with to handle everything from lease management, lease pipeline, tenant tracking all the way through to the asset management and the accounting,” said Jonathan Pearce, a senior vice president at Ivanhoé Cambridge, during the panel discussion. “And we had very smart people around the table, and believe it or not, there isn’t just one solution that does all of that.”

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A panel at the MIPIM ProTech event about new ventures by real estate companies, which was moderated by VTS co-Founder Brandon Weber. Photo: Reed Midem

When the moderator Ryan Simonetti, a co-founder of online meeting-space provider Convene, suggested a company at the event might have a product that Ivanhoé was looking for, Pearce replied, “I’d love to talk to them.”

“What is happening is as companies have been successful in developing technology, large real estate companies are embracing them, and they see an ability to prosper both on the innovation side and the management side,” said Robert Courteau, CEO of Altus Group, an advisory services and software provider for real estate companies. “By investing in these [startups], it has immediate benefits on their own companies and perhaps make some money in the market. They are being opportunistic.”

Landlords are also ramping up the use of tech in their properties. Cove Property Group and partner Bentall Kennedy are wrapping up construction at 101 Greenwich Street, where they have partnered with Convene.

Convene, which Brookfield has invested in numerous times, will debut a mobile app for 101 Greenwich that will allow employee access through security turnstiles. The app will also allow tenants to give mobile building access to visitors, book Convene conference rooms and order the delivery of food to their space from Convene’s kitchen. In addition to this, Cove is adding facial recognition technology to the building to be used by employees to access their place of employment.

“We look for technology to increase the tenant experience in the building and things that are going to make us run the building more efficiently,” said Amit Patel, the chief operating officer of Cove. “If you are rushing into the building into the morning and you have something to do like a meeting, you want to be able to get into the building as quickly as possible. And it will alleviate pressure off the security staff.”

Last year, developer Savanna employed Cortex Index, which provides building engineers with an app that helps them operate complex HVAC systems more efficiently, at 110 William Street. This helped the developer reduce annual operating costs by $250,000, according to a Savanna release. Now the developer is looking for further tech opportunities.

“As we have done with Cortex and other technology platforms, we will continue to selectively implement technologies that fit within our portfolio and also help drive operational efficiencies and savings, ultimately creating value for our investors,” Nicholas Bienstock, a co-founder and co-managing partner of Savanna, said in a statement to CO. “I think we are now starting to see technologies that generate real payback on the initial investment required to implement them, in addition to providing certain operational efficiencies or data analytics.”

And then there’s the startup Outernets, which transforms vacant storefronts (or any window, for that matter) into interactive digital displays or advertisements. Omer Golan, who co-founded the company two years ago with his wife Tal, said that they have secured a few major landlord investors who are “very much involved,” but he would not reveal the names.

United American Land is working with Outernets, as is office-space provider and soon-to-be landlord WeWork (once considered a startup itself) at its headquarters in Chelsea. The company installs a special material on the glass and a projector system inside that creates the graphics onto the window. Outernets shares the ad revenue with landlords. And the technology also has sensors that pick up demographic data about the people passing by, which they also share with landlords.

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Outernets’ technology on a window at Dylan’s Candy Bar in Union Square. Photo: Kaitlyn Flannagan

These technologies are just the beginning as landlords increasingly see their value, Courteau said.

“You’ll see more capital going into [startups] as larger asset owners invest in technologies,” Courteau said. “There is still a lot more capital coming in.”

The next generation of real estate players may be a hybrid of landlord-tech developers.

Columbia University’s Graduate School of Architecture, Planning and Preservation began offering courses in real estate technology in June, called Hacking for Real Estate 1 and 2, to teach the next generation of developers about the importance of property technology applications.

There students learn how to use a variety of real estate applications and how to think critically about incorporating technology in their projects. The one-year master of science degree in real estate will be useful as technology begins to play a much bigger role in development, according to Patrice Derrington, the director of the program.

“We are teaching our students how to be digitally literate,” Derrington said. “That means capable of all apps, understanding the place for applications, being critical in terms of the usage of applications and having a more incisive look at daily real estate activities and considering potential digital solutions. They even do a little bit of coding to know just what it is like.”

To date, real estate companies have been targeting real estate-related ventures, hardly straying from things that would support their core business. But then there is amazing story of SilverTech Ventures, which works in collaboration with Silverstein Properties (as it was in part founded by Silverstein President Tal Kerret). SilverTech Ventures has been investing in both real estate and non-real estate startups for more than two years.

Kerret and other founders meet with about around 50 to 60 companies each month and choose one startup in which to invest every two months. To date, they have invested in 17 startups, including mobile wallet Cinch, identity protection startup Semperis and property management service Rentigo. Kerret said before the selection they like to spend a few months getting to know the executives.

“The graph is always up and the revenue will always come in the future,” Kerret said. “From the hundreds and hundreds of companies that we have seen it’s always [the same]. It’s like going on a date before you begin seeing someone.”

But for Kerret, investing in young companies provides them with something other than just the next business opportunity or way to enhance their own portfolios.

“I want to have fun with what I do in life, and I want to be around people I enjoy,” Kerret said. “I spend a lot of time with the CEOs, and I would rather spend time with people that I can have more fun with.”

Source: commercial

Squarespace Grows to 143,000 SF at 225 Varick Street

Hosting platform and website builder Squarespace has leased two more floors at 225 Varick Street in Hudson Square.

Squarespace inked a 12-year deal for 49,700 square feet on the fifth and sixth floors of the building, where it already leased 93,000 square feet on the 10th through 12th floors in 2014. Asking rent on the new lease was in the high $70s per square foot, according to The Real Deal, which was the first to write about the transaction.

The tech firm is expected to move into its new space in April 2018, according to CoStar Group.

Shake Shack also signed on for 27,000 square feet of office and retail space in the property between Clarkson and West Houston Streets last month. The upscale burger spot will open a flagship restaurant in the ground-floor retail space and a test kitchen on the lower level in mid-2018. It will also move its offices, which are currently located in Union Square, into part of the third floor in the spring of 2018.

Rocco Laginestra and Paul Myers of CBRE represented Squarespace in the deal, and CBRE’s Howard Fiddle, Paul Amrich and Neil King represented landlords Trinity Real Estate, Norges Bank Real Estate Management and Hines. A spokeswoman for CBRE declined to comment.

Source: commercial

Hines Refinances Houston Office With $163M From Goldman Sachs: Sources

Hines and partner Prime Asset Management refinanced their Houston building once called the Calpine Center with $163 million from Goldman Sachs, sources with knowledge of the deal told Commercial Observer.

The 696,000-square-foot Class A office building, located at 717 Texas Avenue, was the first building in Houston to receive the LEED Platinum environmental certification.

JLL represented the borrower in the deal, according to one source, though which brokers worked on the deal was not immediately clear. A JLL representative did not immediately respond to a request for comment. Goldman did not engage brokers in the deal, one source said.

Once named for anchor tenant the Calpine Corporation, a Fortune 500 commodities company, the building also hosts white shoe law firm Jones Day.

Calpine originally signed on for 250,000 square feet of space in the tower, plus naming rights, according to a report from the Houston Chronicle. In 2005, after their presence in the building was decreased when Calpine sold off a major portion of its business, the offices were re-named 717 Texas Avenue, the report said.

Designed by architect HOK, in what is sometimes described as a “postmodern” style, the 33-story tower was completed in 2003.

Hines declined to comment on the refinancing. A representative for Goldman Sachs did not immediately respond to a request for comment.

Source: commercial