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Friday, February 10, 2012 Five Questions With...
JE: I've been in real estate since 1985. I'm an architect and worked for Skidmore, Owings & Merrill early on in my career. From there, I went to work for a family real estate development business for about 15 years. I was always interested in the development and ownership of buildings; more so than from the design side. The idea of working deals interested me. After the leaving the development company, I worked for Eastern Consolidated Properties from 1997 until 2003 and I've been with Cushman & Wakefield since. CREF: In what commercial real estate industry do you specialize? JE: We [New York Capital Markets Group] specialize in investment property sales in the five boroughs of New York City. We sell all property types and our focus is in middle-market transactions to private equity. My two partners, Charles Kingsley and Yoav Oelsner, and I left Eastern Consolidated together and joined the Capital Markets Group in New York. CREF: What notable deals have you been involved with? JE: We recently sold the Dia Arts Center in Chelsea for $38.5 million. We represent a host of non-profit organizations like United Cerebral Palsy, the Archdioceses of Brooklyn, New York Medical College and the New York Downtown Hospital. Non-profit work is one of our specialties. The challenge is working with boards and helping them understand their needs and the market. Our job is always even more difficult because we need to ring every dollar out of a transaction. The Dia Arts Center was challenging because it was going to be delivered vacant and it was zoned in a split zone. What was in our favor was the quality of the asset, the attributes of the property and that it was a very attractive investment for foreign investors. We also sold the Booth House for $56 million. It was another not-for-profit for New York Downtown Hospital. Again, the challenge there was how to make it into a premier property when it wasn't really billed that way at the time. We were able to convince developers that they could overcome some of the challenges of the property with renovations and get a premier location out of it. Pricing wise, we did 20 percent better than what the hospital originally anticipated. CREF: How has the industry changed since you've been involved? JE: Certainly, the nature of the debt markets has been a major story. It's been one of the reasons why we've seen such high pricing in the market because of the ability to securitize debt. Obviously, the credit markets have pulled back from that for the moment and people are very cautious about securitized debt. Hopefully that will clear over the next six to 12 months. Another big change has been the private equity funds that are around now. That wasn't the case back in the late 80s/early 90s - you didn't have all these funds that are available to private equity groups. I think those are two of the major changes to real estate that made it more efficient than it had been prior to that. CREF: How does the market look over the next 12 months? JE: Bumpy. I think the health of the market is all going to pivot on the credit markets. There is plenty of supply of equity in markets and there are plenty of developers who would love to do more projects. On the residential side, I don't think anyone has a clear picture of that market yet. I still think quality projects will sell or rent and it comes down to supply and demand. The same things holds true for office space in NYC. There are very few speculative office buildings going up, so that in turn will limit supply and makes it prohibitively expensive. Filed Under: Five Questions With... E-mail this article to a friend | Printer friendly format| DIGG this| Post to del.icio.us Comments on this article
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