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THE TIMES, THURSDAY, JANUARY 17, 2019 ZM1

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THE REAL ESTATE BOARD OF NEW YORK Photo: Getty Images Getty Photo: This special advertising feature is sponsored by participating advertisers. The material was prepared by T Brand Studio and did not involve the news or editorial stas of . ©2019 The New York Times C M Y K Axxx,2019-01-17,ZM,002,Bs-4C,E1

ZM2 THE NEW YORK TIMES, THURSDAY, JANUARY 17, 2019

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NEW YORK ’S COMMERCIAL REAL ESTATE MARKET Photo: Getty Images Getty Photo: As the New York real estate industry gathers for the Real Estate Board of New York’s (Rebny) 123nd Annual Banquet, the industry is enthusiastic about its success in 2018 and is looking forward to a strong 2019. This success — bolstered by job growth, as well as unemployment and crime rates at historic lows — is attracting the country’s leading entrepreneurs and technological innovators.

Generating billions in annual tax revenue that funds vital city ser- vices, ’s real estate industry remains the engine behind the city’s economy. “As the Real Estate Board of New York celebrates its 123rd year, we are proud to report that Rebny is just as vibrant as the city itself,” said John H. Banks, president, Rebny. John H. Banks “Rebny’s outlook for the city’s future is an optimistic one,” he President, Rebny continued, “as our industry helps to guide the city forward with advocacy to advance sensible urban planning, responsible devel- opment and environmental sustainability to keep New York the greatest city in the world.”

,” said Banks. “We look forward to the upcoming legisla- Rebny Takes Issue With Commercial tive session in Albany, where we will work with Governor Cuomo and the new State Legislature. As the state’s rent regulations are Rent Control scheduled to expire in June, Rebny will advance policies to ensure Rebny was active at the city, state and federal levels in 2018, advo- investment in our housing stock, job growth and the creation of cating for the real estate industry in New York. A major effort much needed housing, particularly affordable rental units.” undertaken by the group was a campaign to educate and inform the public about a misguided bill innocu- ously titled the “Small Business Jobs Survival Act” (S.B.S.J.A.). Rebny Leads Environmental Efforts in City “The bill is commercial rent control because it would mandate arbitration between landlords and commercial tenants for lease In 2018, Rebny and its members were once again leaders in New renewals, allow a lease renewal term of 10 years at the tenant’s York’s environmental efforts, committed to working with the city option and require the property owner to accept the results of the to build a more environmentally friendly New York, and to helping arbitration,” explained Banks. “The impetus behind the legislation reduce citywide greenhouse gas emissions 80 percent by 2050. is the mistaken belief that the apparent increase in vacant store- Recognizing the difficulties in finding a realistic to achiev- fronts is solely the result of landlords either refusing to negotiate ing the City’s sustainability goals, Rebny hired a team of consul- a lease renewal or the landlord frequently asking for an untenable tants to help develop an appropriate energy-efficiency metric and rent increase — but those allegations do not have merit.” formed a coalition of allies, according to the group. Rebny’s Retail Reports and its numerous analyses pushing back In December, Rebny testified before the New York City Council in on false narratives around this issue gained considerable public conjunction with the National Resources Defense Council and 32BJ attention in 2018, according to Banks. “We organized more than SEIU to voice its general support of Intro 1253, which would set a 100 commercial brokers and property owners to attend and tes- path toward achieving greenhouse gas (GHG) reductions by 2050. tify at the City Council hearing on this legislation in October,” said The joint testimony emphasized the need to implement a reduc- the Rebny president. “We were joined by a coalition of groups tion regimen focused on long-term goals, but cognizant of short- representing homeowners, building service workers and business term realities, according to Rebny. Other environmental advocates improvement districts from across the city. The New York City and organizations like the Rent Stabilization Association, the Council Bar Association issued a report that found the Council lacked the of New York Cooperatives and Condominiums and the Archdiocese authority to enforce legislation on this issue and Mayor de Blasio of New York voiced similar concerns with the legislation before the signaled that there were legal hurdles with the current legislation.” City Council, according to Banks. Rebny testified that it would bring a lawsuit if the bill passed. Although the bill gained additional sponsors following the hearing, Rebny will continue to advance its fact-based advocacy in 2019.

Pushing Transportation and Infrastructure COVER: An aerial view of , Rebny continues to stress transportation and infrastructure devel- with the opment as it has for many years because it is vital to the city’s continued health. Rebny is pushing for the Gateway Project, for TOP: The lake at , example, which would create a new rail tunnel under the Hudson with Central Park South in River to connect Manhattan and New Jersey, would alleviate many the background of New York and New Jersey’s pressing infrastructural demands and help keep the Amtrak rail system productive for the entire northeastern . RIGHT: One World Trade “Rebny strongly supports the Gateway Project and encourages Center elected officials from across the country to provide New York and New Jersey with the vital federal funding the project needs to advance,” declared Banks. “We will continue to partner with like- minded organizations to advance this effort in 2019.”

Good Jobs and Affordable Housing

Thanks to New York’s sparkling economy, its population continues to grow and will likely reach 9 million by 2030. Rebny said that in 2018 New York City’s elected officials continued to support poli- cies that would help the city to address its need for more good jobs and affordable housing to meet the enormous demand of its growing population. “The mayor and City Council put in place several crucial zoning changes last year, in the process generating thousands of new units of affordable housing and driving economic investment in areas like Manhattan’s Garment District, Inwood, and Jerome Avenue in Photo: Getty Images Getty Photo: C M Y K Axxx,2019-01-17,ZM,003,Bs-4C,E1

THE NEW YORK TIMES, THURSDAY, JANUARY 17, 2019 ZM3

AS WORK TRANSFORMS, SO DOES NEW YORK CITY.

Companies today are hunting for vibrant, wired, amenity-rich spaces to attract and retain the best talent in of the global business marketplace, New York City. Where they do business not only showcases the investment in their operations and talent, but also embeds them in the fabric of their neighborhoods—where you live and work becomes a part of who you are. As innovative brands move to new spaces in unexpected places, they trust CBRE to guide them and pioneer this renaissance. We are proud to enable our clients to realize their potential in the new spaces they occupy—turning their real estate into real advantage. C M Y K Axxx,2019-01-17,ZM,004,Bs-4C,E1

ZM4 THE NEW YORK TIMES, THURSDAY, JANUARY 17, 2019

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Technological Needs of the Industry Seeking More Construction Jobs Like every industry today, the technological needs and demands An important program that Rebny strongly supports is Building of the real estate industry are rapidly changing. In 2018, Rebny Skills New York (BSNY), a not-for-profit organization that helps New advanced various initiatives to help meet those changes. Rebny’s Yorkers find construction jobs across New York City. It was founded Residential Listing Service (RLS) celebrated -year anniver- in 2015 and began connecting workers with historically high rates sary of Syndication. The launch of RLS Syndication has empow- of unemployment and poverty with access to quality training and ered Rebny brokers and salespersons to send residential listings expanded career opportunities. via the RLS to a growing network of local, national and interna- “In 2017, I became the chairman of Building Skills New York,” said Banks. tional consumer websites, and has ensured the accuracy of list- “Since then, Rebny made a substantial investment in BSNY and supports ings by centralizing listing data through a single feed. The success its expanding mission of helping underemployed and underserved New of this effort is demonstrated by the participation of 600 resi- Yorkers find continuous employment in the construction industry. dential brokerage firms with 98 percent of them having adopted In 2018, according to Rebny, BSNY placed individuals in over 220 Syndication. The RLS also developed and launched a new compli- constructions jobs, an increase of more than 90 percent over 2017. ance tool, which is a critical milestone in its commitment to clean BSNY had its most active month ever in October 2018, with 28 con- and accurate residential listing data, according to Rebny. struction placements. Of those placed, 100 percent are New York City Rebny was successful with another technological initiative as residents and 96 percent identify as black or Latino. BSNY has also well. “Driven by the demand for real estate technology innovation, placed over 50 individuals in additional jobs after their initial placement the Rebny Tech Committee hosted a global competition called the was complete. Ensuring that workers, who successfully complete one PropTech Challenge that tapped into the entrepreneurial spirit of job are then successfully placed in their next job is a priority for BSNY. the tech community and put forth innovative ideas for solving the “In 2019, Rebny will continue to support and grow BSNY. We see complex challenges facing our industry,” said Banks. tremendous opportunity for the organization to engage more local residents and help to develop and grow a skilled construction work- force,” said Banks.

HONOREES AT REBNY BANQUET

At each annual Rebny banquet, the association honors a distinguished group of leaders who are presented with top honors for their outstanding professional success and exceptional con- tributions to the real estate industry. 2019 is no exception. “The Rebny Banquet is more than a celebration of real estate’s best “The Rebny Banquet is real estate’s most important evening of the and brightest. It is an acknowledgement of how important our indus- year,” said Banks. “The event brings the whole industry together try is to New York and how much we love this city. The honorees for a night of making connections and catching up with friends reflect the kind of excellence and dedication that we all strive for. and colleagues. This Rebny banquet will be a great celebration of They have made exceptional contributions to both the real estate excellence, dedication, and public service that is represented by industry and our entire city,” said Rebny Chairman William C. Rudin. each of our distinguished honorees.”

The following honorees will be recognized at the event:

Daniel R. Tishman Bernard Warren Principal and Vice Chairman, Chairman and President, Tishman Webb & Brooker

Daniel R. Tishman, principal and vice chairman of Tishman, will Bernard Warren, chairman and president of Webb & Brooker, will receive the Harry B. Helmsley Distinguished New Yorker Award, receive the George M. Brooker Management Executive of the Year which is presented to an industry member for their invaluable con- Award, which recognizes individuals of superior accomplishment tributions to New York’s civic welfare and the real estate community. in property management based on outstanding professionalism, civic achievement, and contributions to the real estate industry.

Diane M. Ramirez Chairman and C.E.O., Ira Z. Fishman Halstead Real Estate Partner, HSP Real Estate Group

Diane M. Ramirez, chairman and chief executive officer of Halstead Real Estate, will receive the Bernard H. Mendik Lifetime Leadership Ira Z. Fishman, a partner at HSP Real Estate Group, will receive the in Real Estate Award for her exceptional accomplishments in the Louis Smadbeck Memorial Broker Recognition Award, which cele- profession, leadership and service to the real estate industry over brates a commercial broker with exceptional personal and profes- the course of her career. sional integrity, leadership, prominence in the brokerage community and service to Rebny’s committees.

Carol Kellermann President, Citizens Budget Alex Bernstein Commission Executive V.P., New Business, Bernstein Real Estate

Carol Kellermann, president of the Citizens Budget Commission, will receive the John E. Zuccotti Public Service Award. This award Alex Bernstein, executive vice president/new business at Bernstein recognizes a New Yorker who has displayed exceptional accom- Real Estate Group, will receive the Young Real Estate Professional of plishments and service in the public’s interest. the Year Award. This award, from the Young Men’s/Women’s Real Estate Association of New York, is presented to a member who exemplifies strong integrity, professionalism and personal ethics.

Helena Rose Durst Principal, The Durst Organization

BELOW: A completed 725,000-square-foot Helena Rose Durst, a principal at The Durst Organization, will industrial property developed by Rockefeller receive the Kenneth R. Gerrety Humanitarian Award, which recog- Group in Piscataway, N.J., in 2018. nizes a Rebny member’s meritorious service to the community. Photo: Rockefeller Group Rockefeller Photo: C M Y K Axxx,2019-01-17,ZM,005,Bs-4C,E1

THE NEW YORK TIMES, THURSDAY, JANUARY 17, 2019 ZM5

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ZM6 THE NEW YORK TIMES, THURSDAY, JANUARY 17, 2019

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OUTLOOK FOR NEW YORK REAL ESTATE

Major real estate companies, like the Real Estate Board of New York itself, were pleased with the New York City market results in 2018 and look forward to a strong 2019. Here is the outlook and analysis from some of the key companies in the New York City marketplace.

with the direct Class A vacancy rate sitting at approximately 14 per- Manhattan Leasing Shifts Into Higher Gear cent, according to Cushman & Wakefield. The booming multifamily market in White Plains, which registered a 5.8 percent year-over-year Manhattan office leasing has reached its highest level in five years increase in inventory and 3,361 units either planned or approved, has and this is a major trend to watch in 2019, according to John C. helped business relocation decisions into downtown White Plains. Santora, vice chairman, president, Tri-State Region at Cushman & “We can expect continued long-term growth for New Jersey’s indus- Wakefield. “As 30 percent of large tenants commit at least four years trial market. E-Commerce sales, which in large part have fueled this his- in advance of their current lease expiration, it has become a trend toric industrial expansion cycle, now account for $127.3 billion nationally to monitor as larger corporate users make forward commitments. — totaling 9.6 percent of all retail sales,” said Santora. “This along with Although big deals drive the market, 92 percent of deals in 2018 were strong port activity has fueled New Jersey’s industrial market in reach- from tenants 30,000 square feet or less. Net effective rents are up ing historical highs in the third quarter for both new leasing activity and 2.5 percent year over year — largely attributed to more expensive overall net absorption. Vacancy rates have remained at historic lows, deals being done in and Downtown. Although, net and asking rents hit another all-time high rising up 14.4 percent since effective rents are up, the discount between starting rental rates and one year ago. A healthy local economy and consumer confidence will net effective rents grew from 14.9 percent to 16.7 percent with land- keep the New Jersey industrial market on its current path.” lords offering more concessions to attract tenants.” Since 2017, reported Santora, Manhattan vacancy rates increased 70 basis points, but much of that increase can be attributed to new Durst Is Bullish on New York construction and large blocks in renovated buildings entering the market in Midtown South and Downtown. Midtown South will absorb and Philadelphia much of the vacancy increases as quality space leases up relatively “The commercial market is robust and we are seeing considerable quickly. “Midtown vacancy is unchanged compared to the end of activity in our portfolio,” says Jordan Barowitz, vice president of 2017 at 9.5 percent. A trend we noticed in the second half of the Public Affairs for the Durst Organization. “Commercial rents are mov- year is that landlords across all markets are actively marketing large ing up and we are leasing up Condé Nast’s space at 4 blocks that are two to four years from possession, even if a tenant quickly. We should have all of its space leased by the time it moves to has not committed to a new location,” he said. next year. The residential market is not quite “In retail, we see a more tenant friendly market,” noted the Cushman as strong because of all the product that has come on the market.” & Wakefield executive. “We are seeing shorter or flexible terms on Barowitz is excited about the activity at One World Trade Center, retail leases allowing start-up retailers, such as those moving from which the firm co-developed with The Port Authority of New York E-commerce to brick-and-mortar, to experiment with product and and New Jersey. “We’ve seen an increase in leasing activity over the merchandising without long-term commitment or major capital last six months down at One World Trade Center,” he notes. “We have expense. Also, landlords are more amenable to different uses including done more than 210,000 square feet of leases this year.” restaurants, food halls and fitness concepts for their vacant spaces.” These companies are so called TAMI (technology, advertising, On the capital markets side, Santora said: “Our dominance in media and information) tenants, according to Barowitz. “We are Manhattan continued. Our market share in Manhattan increased year pleased that One World Trade Center has emerged as the largest over year from 20 percent to 64 percent for all deals over $75 million.” community of TAMI tenants in New York City with 28 different TAMI Santora said that overall, office and multifamily dollar volumes tenants occupying 1.8 million square feet of space. We are looking still make up a majority of the core property types in New York City forward to attracting more of these tenants in 2019.” commercial sales at 48 percent and 41 percent through Q3 [2018], In midtown, Barowitz said that the corridor is strong respectively, and both property types were expected to end the with a low vacancy rates. Over on Avenue of the Americas, its 1133 year with strong, positive volume growth for the first time since 2015. Avenue of Americas building is 100 percent occupied. Its 1155 Avenue Retail sales have also re-emerged in 2018 with volumes through Q3 of the Americas has been repositioned and features a rooftop pavil- already exceeding 2017 levels. Industrial is the only major asset sec- ion that will provide access of outdoor space and floor-to-ceiling tor expected to come in under 2017-dollar volume for 2018, but this glass windows with dramatic views of the Empire State Building and is mostly attributed to lack of inventory. all of . Commenting on the new Amazon headquarters move here, “On the West Side of Manhattan, most of our activity is at 151 West Santora explained that New York City has always been a hub for or ,” said Barowitz. “We built out a large the best and brightest talent and this announcement further con- amenity space on the fourth floor of the building where we updated firms that major companies still want and need a strong presence in the old Frank Gehry Cafeteria into a food hall that is operated by New York City. “We are still uncertain on the specific impacts that Claus Meyer Cafeteria and Commissary.” Amazon’s headquarters will have in City and on New Durst is partnering with Convene to add premium conference York overall, but we know it will be positive. Amazon’s confidence in space to the fourth floor. The company has also built out an area New York City is certainly a very encouraging sign.” that is a coffee bar during the day and a drinks bar at night. “We Cushman & Wakefield noted that interest in the outer boroughs is find that smaller to midsized tenants need to have amenity space growing as the city continues to thrive: “Larger companies no lon- within the building to attract the talent that they require,” said ger view New York City as only Manhattan, and there is interest in Barowitz. “Common amenity space is becoming a necessity to meet investing in the outer boroughs like the Bronx,” he said. “I think we the demands of the market.” can expect to see continued appetite and activity in the Bronx market In upper Manhattan, Durst is developing plans for its site at 1800 especially with recent legislation regarding Opportunity Zones. We , which is on the corner of 125th Street. “We are concep- continue to invest in our Bronx and outer-borough teams as we see tualizing a development there,” explained Barowitz. “We have a great demand for these markets continue to grow.” opportunity for both residential and commercial at the site because In looking at the tristate region, Cushman & Wakefield said that of the rich transit resources in the area.” Fairfield County started off 2018 well, registering a 5.8 percent Looking at Queens, The Durst Organization is about to add the uptick in overall leasing activity. Since then, however, velocity has superstructure to its 900-plus unit residential building in Long Island tapered quite significantly. “Year-to-date, overall leasing activity City. The building is not far from where Amazon is planning its sec- for the county is projected to be 40 percent lower than last year’s ond headquarters, which Durst sees as a real shot in the arm for New annual demand, despite notable leases finalizing earlier in 2018. York City. The Durst building will be one of the tallest buildings in Nonetheless, submarkets with efficient public transportation contin- Queens when completed. Included in the development is the adap- ued to do well in 2018. The Stamford and Greenwich Central Business tive reuse of the historic Clock Tower building, a landmark 1927 build- Districts (C.B.D.) showed a year-over-year increase in the share of ing that originally housed the Bank of Manhattan. leasing activity relative to countywide demand. Building amenitiza- Moving north in Queens, Durst is excited about its Halletts Point tion, transportation efficiencies, as well as the proximity to housing project in Astoria. 10 Halletts Point will open early in 2019. The proj- and urban life have attracted tenants to move into more urban sub- ect offers residents immersive amenities, panoramic city views and markets such as the Greenwich and Stamford C.B.D..” premium rental residences. Overall leasing activity in Westchester County contracted sharply The Durst Organization also sees great potential in the Philadelphia in 2018. Every submarket, except for the northern submarket, marketplace and has acquired a substantial site with waterfront views, recorded a year-over-year decline in leasing demand. Demand in the just north of Ben Franklin Bridge. Look for more news on this project White Plains C.B.D. slowed again in 2018 due to a tightening market, as plans are developed by the company.

Companies Electing to ‘Reinvent’ Themselves With New Office Space BELOW LEFT: 1133 Avenue of the Americas “In New York City, one trend I can point to is the number of com- BELOW RIGHT: Halletts Point panies relocating to new space. Historically, one quarter of all deals done in a given year are renewals” said Mary Ann Tighe, C.E.O. of the New York Tri-State Region of C.B.R.E. “But for 2018, renewals totaled just under 15 percent. Companies are electing to completely reinvent their businesses and they are doing it, in part, with space. Rendering: March Rendering: Photo: Vanni Archive Vanni Photo: C M Y K Axxx,2019-01-17,ZM,007,Bs-4C,E1

THE NEW YORK TIMES, THURSDAY, JANUARY 17, 2019 ZM7 Midtown Means Business.

With appreciation to REBNY on the occasion of its 123rd Annual Banquet, we thank the following brokerage professionals for their contributions to our leasing success at 1271 Avenue of the Americas, 1221 Avenue of the Americas and throughout our entire New York City portfolio in 2018.

DAVE CAPERNA ROBERT FLIPPIN YIN LI KEN RAPP CBRE CBRE Savills Studley CBRE

JOHN CEFALY SCOTT GAMBER ROBERT LOWE CRAIG REICHER Cushman & Wakefield CBRE Cushman & Wakefield CBRE

LAUREN CROWLEY CORRINET MICHAEL GOLDMAN JOHN MAHER KENNETH SIEGEL CBRE Savills Studley CBRE JLL

TIMOTHY DEMPSEY PIERCE HANCE DAN ORGAN ANDREW SUSSMAN CBRE Cushman & Wakefield Cushman & Wakefield CBRE

THOMAS DOUGHTY EVAN HASKELL JOHN PAN MARY ANN TIGHE JLL CBRE Top Real Estate & Management CBRE

PAIGE ENGELDRUM PEYTON HORN JONATHAN PLOTKIN MARIA TRAVLOS Cushman & Wakefield Cushman & Wakefield Colliers Cushman & Wakefield

WILLIAM FANG LISA KIELL SARAH PONTIUS ZACHARY WEIL Block & Lot Realty JLL CBRE CBRE

HOWARD FIDDLE DAVID KLEINHANDLER MICHAEL PUORRO KENNY YIP CBRE CBRE Hanover Bank Colliers

SUNNY YU PD Properties

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ZM8 THE NEW YORK TIMES, THURSDAY, JANUARY 17, 2019

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Q. AND A. With Rebny Chairman Bill Rudin, C.E.O. and Co-Chairman, Rudin Bill Rudin Chairman Management Company, reflects on his Real Estate Board of New York (Rebny) first year as chair of the Real Estate C.E.O. and Co-Chairman Rudin Management Company Board of New York (Rebny).

Q: What do you consider the most important factors in the city’s continuing success? Q: Turning to Rudin, how is your development in A: New York City has seen tremendous success driven by a strong going? economy, record job growth and a booming population. But A: Rudin Development is completing construction on Dock 72 at with this success comes a number of challenges. Our infra- the Brooklyn Navy Yard with our partner Boston Properties and structure is the lifeblood of New York. We desperately need co-developer WeWork. Public-private partnerships are driving increased investment in our subways and buses. Our city’s pub- growth at the city-owned Navy Yard, which is now home to more lic housing, the New York City Housing Authority, is crumbling than 400 businesses and more than 7,000 employees. Dock 72 due to a culture of disinvestment. Preserving New York City’s was designed to be a perfect addition to that ecosystem and to housing stock requires a reliable income stream to meet oper- meet the needs of creative firms that are continuing to pour into ating expenses, prepare for capital improvements and keep up our city and looking at Brooklyn for space. The project includes with repairs. All stakeholders must work together to actively 35,000 square feet of state-of-the-art amenities, including a plan and achieve common-sense solutions. food hall, health and wellness center, conference center, bas- ketball court, open lawn space and multiple terraces. We’re also Q: What do you consider Rebny’s biggest thrilled about plans for a new N.Y.C. Ferry stop outside Dock 72, accomplishment in 2018? which will provide yet another transit option alongside the Navy A: In December, the City Council approved a plan to change zoning Yard’s connectivity to local subways, on-site CitiBike stations, restrictions in Manhattan’s Garment District. This plan lifts strin- and new car-share and bike-valet services. gent regulations that limited new development and provides investments to preserve the district’s historic apparel manufac- Q: Can you discuss Rudin’s focus on technology, turing industry. It also represents an opportunity to unlock the particularly as it relates to sustainability and transit-rich neighborhood’s true potential. Rebny participated in energy savings? a steering committee composed of community stakeholders and A: By successfully integrating technology throughout the Rudin testified in favor of the plan throughout the public approval pro- portfolio we have reduced emissions by 44 percent, shrinking cess. Mayor de Blasio, the Economic Development Corporation, our carbon footprint while also realizing cost savings of roughly Council Speaker Corey Johnson, the entire City Council and 30 percent. Our start-up subsidiary, Prescriptive Data, and the Manhattan Borough President Gale Brewer all deserve credit for Nantum Building Operating System captures data in real time this pragmatic and innovative plan. so that building operators can make informed decisions that result in improved comfort for tenants and energy efficiencies Q: What are Rebny’s most important goals for 2019? and savings. The system uses machine-learning technology A: We recently formed a new Rebny working group, which began to positively predict, prescribe and influence building perfor- meeting and setting goals to prioritize increasing diversity and mance. It is this type of application of technology in real estate inclusion in New York City real estate. Among our 2019 goals that shows the nexus of good business and public policy. is to continue focusing on empowering women and people of color in the real estate industry. Q: What does it say about New York that with Rent regulations expire in June and will be a top agenda item a whole country to choose from, Amazon during the Albany legislative session. Rebny will be focused on decided to come here? rational changes that balance the need to address the city’s A: Amazon’s decision sends a clear message that New York City affordability crisis with the need to ensure the private sector is a global tech hub and that our outer boroughs are stron- continues to invest in, and build, the rental housing this city ger than ever. It is also a recognition of the incredible talent critically needs. We also expect the issue of congestion pric- pool of our city’s diverse and dynamic tech workforce. The ing to play a major role in Albany this coming year, just as it did 25,000 jobs generated by Amazon’s headquarters will bene- in 2018. Rebny has partnered with the Environmental Defense fit the entire city and this project will help generate thousands Fund, Riders Alliance, Uber and other groups to form a coalition of additional jobs in the surrounding communities. Let’s also that will campaign for congestion pricing. Funds generated by remember that the incentives in this deal weren’t designed congestion pricing would help reduce traffic in Manhattan and just for Amazon — they are economic development tools that finance much-needed mass transit improvements.” the city is using effectively to diversify our economy across the boroughs and create new opportunities for New Yorkers.

It is expensive and fairly disruptive to move to new space. So when in East Midtown will be announced in the coming year,” she predicted. 83 percent to 84 percent of people who have the option of staying A major issue for the city and the real estate industry is infra- in the space they currently occupy elect to move, that tells you a lot structure development, according to the C.B.R.E. executive: “Rebny about the change in the business environment today.” was well ahead of its time raising the alarm about the need for new A second trend noted by the C.B.R.E. executive is the strong pref- infrastructure and transit improvements. As proof, just look at the erence by tenants for new or renovated buildings. This year, she success of the area around the Transit Hub in Lower noted, of all deals 100,000 square feet or greater, 60 percent were Manhattan. I am absolutely certain that we would not have tenants done in brand-new or fully renovated buildings. By definition these like McKinsey leaving Park Avenue to go to the World Trade Center buildings are the highest priced, according to Tighe. had there not been perfect transit access. We need to get aggres- “A third trend has to do with the nature of tenancy right now,” she sive and creative about new transit. We need to get the Gateway continued. “The tech companies have come on very, very strong. They project underway as well as the BQX [Brooklyn Queens Connector].” traditionally represented about 4 percent of the space in the city, but C.B.R.E. is working on many exciting projects around the city as they closed 2018 occupying 8 percent of space. 2018 ended up with 2019 begins, but Tighe underscored three projects including 550 2.5 million square feet going to companies that define themselves as , The Wheeler and the World Trade Center. “The tech companies. Landmark tech deals include Google’s purchase of redevelopment of 550 Madison will offer a 21st century building with Chelsea Market and Facebook taking the rest of 770 .” a lovely Midtown park, a real benefit to the community. As for The A fourth trend that she sees is the growth of companies that offer Wheeler, it is a Brooklyn redevelopment plus new construction on flexible office space: “Flexible office space has become a sizable top of the Macy’s department store. The store will be reimagined part of the market. These companies occupy 12 million square feet and smaller, but remain operational. Above it will be an extraordinary of space. They more than doubled the amount of space they occupy office building with all the infrastructure that you would expect to this year compared to 2017,” she said. find in a top Manhattan building. Regarding the World Trade Center, While companies are indeed moving to new, more expensive space, in 2019 there is a high probability that we will finish the leasing of 3 they seem to be making the decision to save on rent overall: “One World Trade Center. This will mean that most of the Trade Center reason people are moving to new, more expensive spaces is that their space will be committed, with the exception of .” employees will occupy less space in the new offices,” she said. “So Although Tighe is optimistic about the future of the city and the while a tenant may be paying more per square foot for rent, his or her real estate industry, she has some concerns about legislation that overall rent expense may be the same or less. People are paying more may come out of Albany. “There is legislation that may be com- for space, but concession growth has been significant. In 2013, tenant ing out of Albany that is well intentioned, but not fully informed. improvement allowances on average were $75 per square foot. Today, Fortunately, we have a governor who is savvy about real estate, tenant improvement (T.I.) allowances are $100 per square foot.” but that’s not necessarily true of all the members of legislature.” As former chairman of Rebny, Tighe strongly pushed for the rezon- ing of Midtown East. As that rezoning has come to fruition, she was asked about its impact: “With the Greater East Midtown rezoning, we are seeing proof of concept that the new plan is working and working well. The first is . The building will not be finished for a BELOW LEFT: 550 Madison couple of years, but it is already 52 percent leased for triple-digit rents. The second is JP Morgan Chase’s decision to demolish and rebuild BELOW RIGHT: . The current building houses 6,000–7,000 Chase employees. Under the new zoning plan, Chase will be able to con- struct a larger building that will house 15,000 employees. More deals Rendering: Snohetta Rendering: Joe Woolhead Photo: C M Y K Axxx,2019-01-17,ZM,009,Bs-4C,E1_K1

K THE NEW YORK TIMES, THURSDAY, JANUARY 17, 2019 ZM9

THANK YOU TO OUR WORLD“CLASS CLIENTS FOR MAKING NKF THE LEADING DEBT ADVISOR IN NYC + BILLION OF FINANCING IN 

+ BILLION OF ACTIVE FINANCING ASSIGNMENTS

JORDAN ROESCHLAUB DUSTIN STOLLY Vice Chairman & Co-Head Vice Chairman & Co-Head 212.372.0755 212.372.2019 [email protected] [email protected]

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ZM10 THE NEW YORK TIMES, THURSDAY, JANUARY 17, 2019

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First completed in 1959, 1271 Avenue of the Americas was originally ‘Like-New’ Office Buildings Spur designed by Harrison & Abramovitz & Harris, the architects for all Tenant Demand of , and developed in partnership by Rockefeller Group and Time Inc., the building’s original anchor tenant. The build- While the newest office projects in New York City have received a lot ing was built by George A. Fuller Company, which was known for its of well-deserved attention, in 2018 the Class A occupier market has construction of many other prominent New York buildings including clearly demonstrated that “like-new” office product in the traditional the U.N. headquarters, the and . heart of Manhattan remains very much in demand, according to Daniel The redesign of 1271 Avenue of the Americas is being handled by Moore, Rockefeller Group president and chief executive officer. Pei Cobb Freed & Partners. The redevelopment project includes He cited the firm’s success of its $600-million repositioning pro- a new glass curtain wall, restoration of the building’s landmarked gram at 1271 Avenue of the Americas, the 48-story devel- lobby, new elevators, plazas and building systems. Work is sched- oped in the modern expansion of Rockefeller Center on the west side uled for completion by 2020. of . In the two years since this program commenced, The neighborhood’s amenities around 1271 Avenue of the the company has entered leases totaling more than 70 percent of Americas, within a five-block radius, include 10 parks, 10 museums, the office space in the building with Bessemer Trust, Blank Rome, 65 , 115 theaters and more than 400 restaurants and 2,000 Latham & Watkins, Major League Baseball and Mizuho Americas, retail stores. In-building amenities include well-known and estab- according to the C.E.O. lished restaurants including Capital Grille, Ted’s Montana Grill and Le Pain Quotidien, as well as direct access to the B, D, F and M subway lines and the shops at Rockefeller Center. What does Rockefeller’s C.E.O. predict for the New York City real estate industry in 2019? “Heading into 2019, the office market will be one of the ‘haves’ versus the ‘have nots.’ New or ‘like-new’ prod- uct in great locations will successfully compete. Older buildings in need of material capital reinvestment will be in a much tougher situ- Photo: Kevin Chu, Jessica Paul Kevin Photo: ation,” he said. The Rockefeller Group C.E.O. noted that access to talent is a key driver, maybe the key driver, of office leasing decisions in New York City. “Over the next few years, as the generation that grew up with smartphones and social media begins the family formation chap- ter of their lives,” he said, “their priorities will be informed less by ‘live/work/play’ and more by ‘live/work/educate (the kids).’ Quality housing options, great schools and reasonable commutes will become more important and the value of Midtown’s unparalleled transit network and proximity to Grand Central and Penn Station will be rediscovered. The amenities found in Midtown and its unri- valed access to transportation are like a tailored blue suit or a black cocktail dress — they never go out of style.” In addition to its office properties, The Rockefeller Group has wisely made a strong commitment to warehouse and industrial development as more and more consumers shop online for merchandise rather than visiting brick and mortar stores. Warehousing is in huge demand today, particularly in markets like northern New Jersey, which is extremely close to major consumer markets. “We expect the strong fundamentals supporting the industrial market to continue, particularly in New Jersey and other port-centric markets across the U.S. like the Inland Empire [in California],”said C.E.O. Moore. “Modern facilities with clear-heights that allow for state-of-the-art logistics operations will be in high demand by occupiers and investors alike. But there are no easy Greenfield sites in the best submarkets. New development will require demolition of existing properties and mitigation of environmental issues — not for the faint of heart or the inexperienced [developer]. Multistory industrial, while successful overseas, is still in its early days here. Construction costs and truck sizes are complicating factors.”

ADVISORS REAL ESTATE FOUNDATION RE ADVISORS PRIME MANHATTAN REALTY James Cleary Jeƒ Lerch Jeƒ Hersh THANK YOU Jeƒrey Rosenblatt HUDSON REAL ESTATE PARTNERS RELO REDAC We are grateful to the CBRE Alexander Schwartz Shinya Sangu Scott Bogetti New York brokerage Cara Chayet JONES LANG LASALLE RETAIL WORX BROKERAGE Stuart Eisenkraft Bob Ageloƒ Jonathan Krieger community for your Ramsey Feher Christian Allen Benjamin Friedland Kirill Azovtsev ROBERT K. FUTTERMAN support in helping us Annette Healey David Dusek Michel Cohen Brendan Herlihy Paul Ferraro Neal Ohm lease over 1,100,000 SF David Hollander Paul Formichelli Gary Kamenetsky Erin Grace SAVILLS STUDLEY in 2018. David Kleinhandler Deborah van der Heyden Nate Brzozowski Joseph Mangiacotti Simon Landmann Nicholas Farmakis Lewis Miller Matt Ogle Zev Holzman Robert Myers Bill Peters Dan Horowitz Michael Poch Jason Schwartzenberg John Johnson Zachary Price Patrick Smith Jeƒrey Peck Jesse de la Rama Derek Trulson Richard Schuham Kenn Rapp James Wenk Stephan Steiner Clyde Reetz Corey Zolcinski Scott Sloves Greg Taubin Andrew Sussman KASSIN SABBAGH REALTY Mike Wellen STISSING REALTY Albert Manopla Sacha Zarba Marc Sitt Steven Solomon COLLIERS INTERNATIONAL LEE & ASSOCIATES WHARTON PROPERTY ADVISORS Jedd Horn Jonathan Durst Peter Braus Ruth Colp-Haber Michael Joseph JP Sutro Mike Stone WINICK REALTY GROUP David Tricarico NEWMARK KNIGHT FRANK Steve Baker CRESA David Falk Louis Eisenger Noel Flagg Ken Hochhauser Jane Roundell Ryan Gessin Danielle Winick Barry Spagna Stephen Gordon Jeƒ Winick Bob Stella Jason Greenstein Scott Gutnick CUSHMAN & WAKEFIELD, INC. Michael Ippolito Stephen Bellwood Dan Katcher Peter Berti Ross Perlman Conor Daugstrup Peter Shimkin Lou DeVanzo Hal Stein Gordon Hough Travis Wilson Jamie Katcher David Mainthow Douglas Regal David Rosenbloom Justin Royce Aron Schier Jonathan Schindler Tara Stacom Robert Tanzmann Peter Trivelas Brian Weld Barry Zeller C M Y K Axxx,2019-01-17,ZM,011,Bs-4C,E1

THE NEW YORK TIMES, THURSDAY, JANUARY 17, 2019 ZM11

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2018 Strongest Leasing Year in City’s History

As 2018 closed, New York was having its strongest leasing year in the city’s history, according to Brian Waterman, executive vice chairman, Newmark Knight Frank. “We are on track to have 42 million to 43 million square feet of office space leased. In addition, a bright spot for the city is the diversification of the OPPOSITE: 1271 Avenue of the Americas, tenant base and the people who are committing to office space the former Time & Life Building, which is in the city.” undergoing a $600 million redevelopment Waterman said that the city no longer needs to rely on the financial services sector to lease space. The leasing market is BELOW: Downtown New York City now a cross section of industries. “The Amazons and the Googles who have announced recently that they are making major com - mitments to the city are a positive change,” he said. “They enhance New York as an intellectual power center of the world. Additionally, the biotech industry and the health care industry are both rising in New York.” Newmark has a cross section of product in the New York City marketplace and a number of opportunities in Long Island City that will benefit from Amazon’s move there. In addition, the firm is coming to market with 460 West for SL Green, which is right across from Hudson Yards and offers 450,000 square feet of space. Waterman said that what’s exciting about the project is that it is a Midtown South/Chelsea type offering with a great “cool” factor around many glass and steel build - ings. The firm is also marketing One Soho Square for Stellar Management and will bring an additional 250,000 square feet of space to market. Another exciting project for Newmark is the former McGraw-Hill Building at 330 West 42nd Street that will be repositioned in the future as a first-class asset with a large block of space. For New York to continue on its path of a bright future, “We need to have good governance, focus on quality-of-life issues and transportation in the city,” said Waterman. “It doesn’t feel like these are a major focus today. By moving here, Google and Amazon are saying that they believe in the intellectual capacity of the city, but at the same time, the quality-of-life issues, the homelessness, must be dealt with. We are going through a trans - formative period right now with the urbanization of America. People want to live in New York, but they want leaders who will focus on the quality of life of the city.” n Photo: Getty Images Getty Photo:

AT THE CENTER OF WHAT’S NEXT Cushman & Wakefi eld is proud to support REBNY and the talented real estate professionals that help shape New York City and the world around us. Congratulations to the honorees of the 123rd Annual Banquet and to our previous REBNY award winners for their outstanding contributions to the industry and dedication to their clients. REBNY Most Ingenious Deal of the Year JONATHAN SERKO MARK WEISS RICHARD BERNSTEIN Executive Vice Chairman Executive Vice Chairman Executive Vice Chairman Henry Hart Rice Achievement Award Robert T. Lawrence Memorial Award

REBNY Most Signifi cant Retail Deal of the Year KENJI OTA NEIL SETH Executive Director Director

cushwakenytristate.com C M Y K Axxx,2019-01-17,ZM,012,Bs-4C,E1

ZM12 THE NEW YORK TIMES, THURSDAY, JANUARY 17, 2019

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