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>>> Michael: It's hard to
believe that it's 20 seasons for
the Stoler Report and to
celebrate the 20th anniversary
of the show of the new season.
I've brought together a group of
business and real estate leaders
to provide their thoughts of
what's going to happen once the
pandemic ends, and once we have
a vaccine. My guests they
include Alan Suna, CEO of
Silvercup Studios. Leslie
Himmel, co-managing partner of
Himmel + Meringoff. Jeffrey
Levine, chairman of Douglaston
Development, Levine Builders,
and Clinton Management. And last
but not least, Joshua Muss,
chairman of Muss Development.
So, we started 2020 with some
people saying everything is
going to be great. Now, we've
gone through a series of crisis.
What do we expect when we have a
vaccine? Because yesterday, I
was listening to the chairman of
Cushman and Wakefield on CNBC,
and he said he doesn't see the
office market rebounding for
three years. Leslie, you're
involved with the office market,
so is Josh to a level. What do
you see going to happen with
office market? 
>>> Leslie: Well, Stephen
Meringoff and I founded Himmel +
Meringoff Properties 36 years
ago. So, I'd like to look at the
pandemic and the protests and
the extreme duress our
businesses under right now with
perspective, because if I don't
look at it with perspective, I'm
not going to be able to do what
we've done many times, which is
rebound from very tough time.
So, I think about October 19th,
1987, when the stock market
crashed. I think about the early
‘90s, when the government
changed the rules for banks and
all banking stopped. I think
about 2001 and the horrible
terror attacks when things were
really bleak, as well as the
tech bubble. And I look at 2008
with the financial crisis. And
then I look at today and I say,
okay, I know times are tough.
I'm not going to minimize that.
The city's now under duress. And
a lot of people are working from
home. I see light at the other
side of the tunnel. Larry
Silverstein's, one of my early
mentors and he, very early on,
did a one-on-one speech where
the Commercial Observer started
to mention that and he just
said, you know what, you got to
see light at the other side, New
York City is one of the greatest
cities. Yes. We're going to go
through difficult times.
Unfortunately, the small tenants
and, and retail are really
having a hard time. But people
come here because it is one of
the greatest cities. I don't
know if any four of us would be
on this panel, if we weren't in
New York City to create our
careers. So, it will come back.
I can't predict if it's 36
months or 24 months or 12, but I
know that once the vaccine
happens -- this morning,
and as Russia has already has
some vaccines, once the vaccine
happens, we will come back. And
certainly, this next six months,
12 months are going to be
difficult. And I see it being,
you know, maybe it's a V or a
Nike -- -- shape, no idea what
shape, but we will come back. It
is a new chapter for New York
and we just have to change
quickly with technology and how
we're thinking. 
>>> Michael: So here, Jeff, you
know, you're involved today,
you're building new properties.
You were allowed to build even
in April. Where do you see today
the residential market? Because
yesterday I also noticed. I went
to the Stuyvesant Town website
and they were giving three
months free rent, they were
giving free internet. Where do
you see the residential market
today? 
>>> Jeffrey: Well, good news is
that I am already starting to
see stability come back into the
rental market. In the market, in
the market rate rental market,
if we saw occupancy for, from
the high nineties where they'd
been historically, down to low
nineties and even a tad below
during the peak of the virus.
What we're seeing now is that,
by giving concessions, whether
it be a month or two units,
frankly, big concessions on the
small units not been that
essential. We are keeping our
occupancy above 90%, but what
happened is when we dropped
down, our collections were also
going down. But today, since
we've lost the weaker residents,
who have either lost their jobs
or have voted with their feet
out of New York City, we are
getting up towards the 95%
collection rate with a more
stable tenants who have chosen
to stay or chosen to enter into
new leases. The affordable has
been a very different story,
because frankly speaking, this
virus has affected those people
who live in affordable housing,
whether they be minority or they
be lower income earners, greater
than it has the market rate
community. Many market rate
earners continued to have jobs,
or were able to work from home,
but people in food and beverage
and hospitality and service work
really were unable to work and
were unable to pay their rent.
So, we saw rent collection, not
occupancy, occupancy stay steady
in the high nineties. People
were not moving out, because
they could not rent out
apartments, because in many
cases they had no wages. Our
occupancy stayed in the high
nineties, but for a moment, our
collections have dripped down to
the 75 level, which was
astonishing. Having said that,
it's has stabilized, whether
it's some of the governmental
programs of subsidy and
benefits, or some of the people
actually going back to work,
which you see is happening in
the city as we speak. But our
collections and our affordable
have also moved back into the
mid nineties, which I think,
excuse me, the 90 percentile,
which I think is quite good
considering what's going on. So,
I'm very optimistic about the
housing industry, multifamily,
be it affordable market, or
seniors. And in our seniors
portfolio, we are experiencing
not so much a collection issue
at all, because many of the
people in the seniors are on
fixed incomes who are on subsidy
of some sort, but we are
experiencing an occupancy issue
because to protect our residents
from the virus, we had to
instill great measures of
isolation and hygiene. And we do
not allow visitors into the
building other than for medical
emergencies and such. We've been
prohibiting family members,
we've been basically keeping our
residents safe and we've done a
very good job and I'm very proud
of all of them, our frontline
people, in all of our
facilities. Management of market
rate affordable and seniors,
they've done a great job in
keeping our resident service and
safe at some risks themselves
and some great strides. So,
we're experiencing occupancy in
the seniors. But again, there
will be great pent up demand.
And as soon as we have either a
medical solution to the problem,
be it a vaccine or a cure, I
think that we will see residents
occupancy move up in all these
areas, because frankly speaking,
you know, urban living and in my
senior situation, suburban
living for the most part,
generation X, which is the
millennials and generation Y
still find Manhattan life, city
life compelling. They want the
activity, they want the action,
they want the society, they want
the culture. And seniors, the
baby boomers, you know, we've
all, all of us --
-- I believe baby boomers,
except possibly from
Leslie. Having said that, baby
boomers are now no longer the
majority in our society. My wife
is appearing in the background
-- say, hello. 
>>> Jeffrey's wife: Hi! 
>>> Jeffrey: And baby boomers
are now no longer the majority
of our population, we've lost
that role to the millennials, I
believe. And that having been
said, the baby boomer generation
entering assistant independency
and living needs are going to
fuel that as well. So, I'm
optimistic. I don't know if that
was a question, but I continue
to be very optimistic about the
sectors in which I work, which
are places where people sleep.
The only exception being, I
would not go into the hotel
business, although I would have
done that -- 
>>> Michael: Which is perfectly
-- -- that's what I was going to
ask Josh. Josh has premier hotel
Marriott in the borough of
Brooklyn. Let's talk about the
hotel and let's also talk about
the possibility of people
thinking about converting the
hotel room into a residential
thing. How is hospitality at
Brooklyn? 
>>> Joshua: Jeff, you sound like
you were talking to your bankers
there. Very optimistic. What
concerns me, by the way, aside
from the coronavirus is how the
city is being handled, and I'm
sure we all agree with that. So,
so one thing we did turn down
was the opportunity to house the
homeless. And truthfully, if a,
if an owner does that, I seem
that, it seems like it should be
in a place like as long as
there's no residential. But
aside from that, I don't see any
hotel in the country being able
to survive this onslaught. And
everybody has to think of
alternatives. I've discussed
with Michael and the, we have
looked at the alternative, for
example, to convert it to
housing. And it's a very good
market where we are and our
rooms are rather large and could
probably done successfully,
except you have a lot of city
issues that have to be overcome.
For example, every bathroom
has to be made handicapped.
Well, if every bathroom would
made handicapped we're right
back in the hole. And, it's so
much politics, so much ill will
that's going on in terms of
hotels. Happily, we're
diversified. I hope that Michael
asked me on a different topic, I
don't want to be as negative as
I sound, but again, if there's
no air travel, if there's no
business coming into New York
City, if there are no tourists
coming in who is going to go
into these hotels? And that is a
basic issue that New York City
has to face. And I might add
that the unions are not
cooperative, which like, you
know. So, if you ask me
specifically for the hotel
question, Michael, I'm not
optimistic. 
>>> Michael: Alan, what's
happening with the studio
business? Let's talk about the
studio business in Long Island
city and -- north
up in the Bronx. 
>>> Alan: Well, the studio
business shut down in mid-March
with the, you know, the
explosion of COVID. That doesn't
mean our clients went away. It
didn't mean that they stopped
paying rent. But the activity
shut down and, you know, as a
result, you know, studio
business is not just the renting
of space, it's also providing
equipment and other services.
So, you know, our revenue
dropped by probably, you know,
40%, maybe 50%, for quarters,
you know, two and three of this
year, if you're averaging it
out. The good news is that,
we've run the business very
conservatively as Jeff knows,
for some time. And we, you know,
we had enough cash on hand to
not only maintain the business,
but to make certain that every
single employee that we have
was not furloughed, was not
laid off. We continued
everyone's benefits. It's just
the way in which we choose to
operate. The studio business is
going to really be robust
probably starting this fall, as
it has been for the last number
of years. The big issue there
was getting the unions and
guilds to agree on protocols on
how work could continue. And
they're just about finished with
that. And in fact, a couple of
our clients have already started
back at work building sets in
one case and striking sets in
another. We are fully occupied
and will continue to be fully
occupied well into, you know,
next year. And one of the
positive things for the business
that we service, that came out
of COVID-19 is that people were
home and they're watching and
consuming more content than ever
before. You know, the governor
talks about being home with his
daughters more now than he'll
ever be even in the future.
Well, when you're home with
family, a lot of people have
just been watching an awful lot
of television and they're not
watching “I Love Lucy,” anymore.
You know, people's tastes have
really gone in another
direction. So, the demand for
content is really, really strong
and we're expecting it to
continue to be strong in the, in
the years ahead. And from the
industry that we are in, in that
regard, you know, things that
I'm very optimistic about it. On
the other hand, all the rental
housing that we had owned, we
sold everything as Jeff knows. I
think the last piece we sold was
probably in January of 19 and we
got very lucky, because the cap
rates were great. And then all
of a sudden, the rules, having
to do with housing in New York,
changed by the city council. And
I think that that's really one
of the most unfortunate things
that has happened, because it is
disincentivizing people like
ourselves, like Jeff, and what
have you, to continue to build
new housing because it's, it's
made it very uneconomic to build
new steps on a going forward
basis. 
>>> Michael: Leslie, you're
involved with the life science
business. Let's talk about
what's happening on the thoughts
about the life science. 
>>> Leslie: I think you also
want to know Facebook last week
signed up for over 700,000
square feet in the Farley
Building, and Blackstone's going
to be doing a new corporate
headquarters. So, as much as
there's been a lot of negative
news on the office front, those
are, you know, one's tech, one's
finance, some good news. Life
science, I actually did a panel
about a month ago, particularly
on life science and the growth
of it. And we own a property at
525 West 57th street that we
purchased in 2005. It's a
complicated deal. I -- it was
known as the International
Flavors and Fragrance building.
They had at one point had most
of the building did a sale lease
back, and then the operating
position on the bottom six
floors, they wanted an operator
to purchase. Though we're known
for doing complicated deals and
off-market deals, so we, it
was brought to us. And we looked
at it and CVS was one of the
tenants, paid $16 a foot.
Genzyme, which is known as a
life science company, was also
in there. And we purchased it in
2005, which at kind of a low
cash on cash return. But in
hindsight, it was kind of as the
hundred bucks a foot or the cost
of a work letter right now that
I'm doing for new space in my
office, my and our office
buildings around Midtown South
and a lot of the ones that we
own. When we purchased it, we
didn't look at it as a life
science building, but because we
had Genzyme in there and we also
had IFF had a lot of their labs
there, what they were doing, as
time went by, we actually ended
up putting in the preeminent MS
doctor Dr. Sadiq, and the tissue
STEM cell foundation, which is
working on getting a cure to
multiple sclerosis. And then
Genzyme became lab corp. So, we
kind of organically took this
property, which has large floor
plates, 50,000 square feet. And
isn't an M zone, which you need
to be, if you want to do life
sciences. Now, CVS finally left
after being there for 20 years
and we were sad to see them go,
but at their very low rental,
that was okay. And so, what
we've decided to do is make it
more of a life science hub we
already had that and CVRE has,
is now going on large marketing
campaign for us. We renovated,
spent millions of dollars doing
a double height lobby, making it
very attractive with the
elevators. And we did this
because we're looking for green
shoots, you know, in this
market, there's definitely
unfortunately a lot of
industries that are not doing
well, but life science, not just
because of the pandemic, but
biotech and life science has
been a growth area. If you look
at Boston and you look at San
Diego and you look at some of
the cities around the country
that had been hubs before we
were, New York is quickly
catching up. We have very
little, Alexandria was the first
years ago under EDC did that.
There are a number of them in
development. And the hard part
is you need to have the right
zoning and which we have in. You
also want to be near hospitals
if you can. Why are they coming
to New York? Talent, right?
Because you, you need, you need
the scientists, you need the
engineers, you need people who
want to sit and do the research.
And the interesting thing about
life science, if you're in a
life science lab and whether
it's a vivarium where
you're working with animals, you
can't, this is something you
can't do from home or we're all
like, and you can't just sit on
your screen. You're sitting
there with microscopes and
you're sitting there perhaps
with animals. You have to be in
the lab. So, it's, it is, it's
needed, a science is going to
develop, and we're excited that
we have a project that can take
advantage of one of the few
areas that is really expanding
in New York City right now. 
>>> Michael: I know that Mr.
Musk, I believe, is still
involved with one kind of
development. At one time, Mr.
Suna whose mike is muted right
now, did a couple of condo
developments in Long Island
City. Where do you see the
residential condo market
today and in the near term?
>>> Jeffrey: I'm happy to
answer, Josh. You can go next.
Reality, I learned, I have waxed
rich and I have waxed poor
living in condominiums. That's a
function of market timing and
having waxed rich and poor I
have learned that I or my
opinions is anybody else smart
enough to know time the markets
to know that you will be
delivering a condo product at a
time in the economy where the
job numbers are good, the GDP
numbers are good, interest rates
are low, the banks are willing
to lend and the buyers are
willing to buy. The psychology
has so much to do with it. I
think we all know now that those
condo projects which have been
overbuilt in the next five years
as a result of the early success
of the condo market in New York
City post the great recession
starting with Gary Barnett's
One57, every developer followed
suit and there are oversupply of
uber luxury condominiums are
sitting in the market with bad
absorption to start and worst
absorption after this virus
situation. So, I do not know
when that supply will be
absorbed. Right? I fear it will
take a very long time, but I
know it will take much longer
for the banking institutions to
start lending to condo
developers again. So, that's not
a place that I would want to be.
>>> Michael: Josh -- 
>>> Joshua: I'm going to wax
philosophical a little bit. I'm
doing a lot more research on the
internet than most because I
don't spend as much time in the
office as much because I've been
thrown out. I'm going to have a
lawsuit of age discrimination
someday. But in the meantime,
I'm looking at the overall
market in terms of everything
and I'm fearful of the second
wave. The first wave where we
are negotiating with tenants and
we're negotiating with banks,
we're negotiating amongst
ourselves as to how to properly
handle people, some people claim
they can't pay. Some people
can't pay. We're extending
leases. Happily, we have enough
to sustain ourselves and we too
have kept our people in full
salary. But I think that at a
certain point, some people are
either going to despair of being
able to hang tight, they will
stop putting in capital
improvements. They'll stop
putting in their own cash. They
going to be concerned with all
the ugly stories that we see in
the New York Post, for example,
and some of them, I do believe,
and we are concerned that the
people who are manning these
lifestyle offices may not want
to come into New York. So,
there's still a second wave to
see how we handle the second
wave. The first wave, I think
we're all doing fairly well.
Anybody who's a decent landlord
is making terms with their
tenants. As far as condos is
concerned, I don't think
anybody's going to plunk down a
big buck in most places in New
York City, until they understand
what happens when the dust
settles. They don't want to see
the homeless, they want to see
the police sustained. And they
probably do want to see no
matter, except we don't know
what we're going to get into
next. So, all of these issues
weigh on in everybody's minds,
and I'm not sure that we can
predict what's going to happen.
We don't even know what's
happened already. 
>>> Michael: Alan, you're in
Long Island City. What do you
see the future in Long Island
City, as opposed to the uber
condos that Mr. Levine talks
about? You allegedly have
affordable condominiums in Long
Island City. 
>>> Alan: Affordable
condominiums, it's a, it's
almost like an oxymoron of
sorts. I mean, they're all kind
of expensive. You know, I share
the concerns that Jeff has
raised and Josh has raised with
regards to all types of housing
in New York. You still have
landowners, you know, in terms
of building new, Jeff and I
talked about this the other day,
if you want to build affordable
housing, you really have to be
able to find land at a
reasonable enough price, or else
the math just doesn't work. I
think that there's a lot of
people that have moved out of
the city for now. You know, this
reminds me a little bit of stock
market traders is that as soon
as they see something, you know,
they all go like a bunch of
lemmings. And so, people have
moved out and the real estate
values in the suburbs have gone
up. Even Mike and Jeff out in
the Hamptons where you have your
homes. I want to go back to
something that Leslie was
talking about before, and it's
not limited to life sciences,
but life sciences is a good
example. I see a tremendous
future in New York City in the
world of life sciences and then
in tech. And not just because
Facebook just signed a big lease
and, you know, Blackstone is, is
doing their thing. People do
need to interact with one
another and we can do so in a
limited basis this way in the
world of Zoom, but you miss the
richness of being in an office
with other people, you know, the
all the other kinds of things
that come up. In life science
and tech, and those two worlds
are actually converging to some
extent. Leslie, you know, talked
a little bit about labs, but
it's, it's more than labs now.
Labs, maybe they make up 40 to
50% of the world of life
sciences. There's a tremendous
amount of data driven life
science applications and the
people that are living and
working in that world want to be
around others. I am optimistic,
some things that I have heard,
I'm in the board of a major New
York hospital. There will be
some sort of a vaccine, over the
next few months. And I think
that it's going to bring people
back. Some people it's going to
give pause in terms of
returning, but I think more than
anything else, all the strengths
of New York about the density
and being around other people,
it's going to come back in a
very strong way and I'm
optimistic about it. 
>>> Michael: So, in, in
summation, I'd like to say,
hopefully we see the vaccine.
Hopefully we see people return
to New York. And I'd like to
thank Leslie, Alan, Jeff, and
Josh. And I'll see you next
week. 
>>> Jeffrey: Thank you. 
>>> Alan: Take care Mike. 
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