Haute Residence hosted its 2017 Luxury Real Estate Summit at New York City’s CORE: Club, on April 28, when the biggest names in the industry discussed what’s next for the New York City and South Florida homebuyers.
The summit featured three panels: the NYC Titans of Business, Florida Titans of Business, and Power Brokers––moderated by Peter Grant of The Wall Street Journal, and Jennifer Gould Keil of the New York Post.
Kicking off the event, the NYC Titans of Business featured Bruce Eichner, Elie Hirschfeld, Billy Macklowe, Mitchell Moinian, Don Peebles, and Michael Stern. The developers were asked to first highlight one of their current, or most recent, projects, and what sets that project apart from others in the area. Later, they focused on from where major capital has been coming in recent years, as well as the target markets for investors.
“The reality is that developers are gamblers,” said Don Peebles of Peebles Corporation. “As you’ve heard, we’re optimistic. There’s an old saying––now I don’t subscribe to this––but if you play blackjack in Las Vegas, you know, if your money lasts, then your luck with change. Well, the name of our business is to have some strength in the capital side. So, if you can ride it out, hold on to your prices and you have a good product, it will sell because as Billy said, this is a global market. It’s the best real estate market on the planet. Therefore, you will find buyers for it. If you build a good quality product, like all of us do, then you will have a buyer for it.
Renters have already moved in to the property by JDS Development Group at American Copper Buildings. JDS founder Michael Stern said, “Despite a lot of talk about weakness in the rental markets, we’re seeing very good velocity there, and we are giving one month concession on a typical 13-month lease, but nothing beyond that. We’re seeing some pretty good velocity, averaging around $90 a foot…”
Presenting New York City on an international scale, Billy Macklowe of William Macklowe Company added, “Over the years, you’ve seen that maturation of the global markets and how the global markets have become one. So, it’s really hard to pull New York out of that… we now stand as the safe haven capital market, globally. And you’ve seen such diversity and inflows of capital from all over the world… and that has yet to really pull back.”
Continuing the conversation, Mitchell Moinian of The Moinian Group said, “…I’d say that no one really knows I think at the end of the day because it’s just the way that the economy goes. But I do mimic what Don and Billy are saying because that’s why we are developers. We have to be optimistic and we have to be bullish on what we do or we’d probably be in the wrong business… The city that prevails the most is New York City… At the end of the day, like Billy said, it’s a long-term business, and we count on New York City prevailing and pulling through in the long run.”
Speaking in support of President Donald Trump and his ventures, Elie Hirschfeld of Hirschfeld Properties said, “Let me just give an antidote on our president. Back some time ago, when there was Penn Yards on the West Side, which is a 100 acres of land going, from 59th Street to 72nd Street, our family purchased that site as the first purchaser. We purchased it with a partner, the largest builder in South America: Francisco Macri. Times went bad at some point after our partnership had rezoned the site, and they needed to sell. There was a bankruptcy in Argentina, and they sold to our good friend, Donald Trump. So, we remain in the partnership with Donald Trump… Today, Francisco’s son, Mauricio Macri, is in the White House as the president of Argentina. Well, Donald, our other partner, is the president of the greatest country on earth. So, we feel particularly connected to both of them, their optimism. Interestingly, this president of Argentina, Mauricio Macri, is a businessman, and now, a very popular president of Argentina in the last three years, doing wonders… Take a look at the NY Times today and yesterday. It’s a cover photo of Macri and Trump.”
Offering a more numerical-focused perspective, Bruce Eichner of The Continuum Company explained: “I tend to think about numbers… If you step back and try to look at this in a more granular fashion. One: Where’s the equity and where’s the debt? Where’s the condo market, or I should say, markets because it’s the market for luxury product, i.e., one thousand, five thousand dollars and up… And then there’s this passage of the new 421 law, which doesn’t look exactly like the old 421 law. I’d say two things. [It’s} hard not to be optimistic about the prospects of the city of New York, long term, but in terms of trying to figure out what one does, where one does it, it requires a little bit more of this if you’re going to have meaningful economics.”
Images courtesy of Jason Malihan