The Stoler Report – Real Estate Pro’s Outlook for 2019

The Stoler Report – Real Estate Pro’s Outlook for 2019


♪ [THEME MUSIC] ♪>>18 YEARS AGO, 18 SEASONS, I PUT TOGETHER A SHOW WITH FOUR PEOPLE. TWO OF THEM ARE HERE TODAY. IT IS CALLED OUR REUNION SHOW. IT IS A REUNION SHOW TO TALK ABOUT WHAT IS HAPPENING IN REAL ESTATE TODAY AND REALLY WHAT HAS HAPPENED OVER THE PAST 18 YEARS. SO TO REFLECT ON THAT, MY GUESTS INCLUDE BRUCE MOSLER, CHAIRMAN OF GLOBAL BROKERAGE CUSHMAN & WAKEFIELD. HIS BUDDY, STEPHEN B. SIEGEL, CHAIRMAN OF GLOBAL BROKERAGE OF CBRE. BOTH OF YOU WERE PRESIDENTS OF CUSHMAN & WAKEFIELD. WHEN WE DID THE SHOW IN JANUARY 2002 LIVE FROM A RESTAURANT IN THE SONY CENTER, THAT WAS A BUILDING ORIGINALLY BUILT BY AT&T. WHAT IS HAPPENING IN THAT BUILDING TODAY?>>IT HAS BEEN BOUGHT BY A FAMILY FROM THE MIDDLE EAST. RXR JUST CAME IN AS MAYBE AN EQUITY INVESTMENT, CERTAINLY AS THE OPERATING PARTNER. IT HAS BEEN REDESIGNED. SOME LANDMARK APPROVALS. IT WILL BE ON THE MARKET FOR OFFICE SPACE.>>AT ONE TIME, IT WAS OWNED BY JOE –>>WE ARE TALKING ABOUT 18 YEARS AGO. YOU BRING UP RXR. WHICH REMINDS ME ABOUT 18 YEARS AGO, THERE WAS NO RXR.>>NO.>>ALSO 18 YEARS AGO, THERE WAS NO DISCUSSION OR THOUGHTS ABOUT THE FAR WEST SIDE.>>THAT’S FOR SURE.>>LET’S TALK ABOUT THE FAR WEST SIDE BECAUSE I NOTICED READING SOME OF THE RAGS, YOU DID A RECENT BUILDING THAT I WORKED AT MANY YEARS AGO CALLED 441 9TH AVENUE. HOW DID A BUILDING THAT NOBODY WANTED TO GO TO ON 9TH AVENUE AND 34TH STREET, WHICH HAVE NO RESTAURANTS EXCEPT FOR ONE, YOU REALLY HAD NOTHING. EITHER ONE OF YOU OR BOTH OF YOU ON THE FAR WEST SIDE –>>YOU SPEAK TO 441 –>>441 WAS IN THE HUB, OUT OF THE HUB — EASY WALK TO PENN STATION. THERE ARE NUMEROUS RESTAURANTS IN THE AREA. IT IS FUNNY. THE BUILDING IS COMBINATION OF OLD AND NEW. THEY HAVE TAKEN THE EXISTING BUILDING AND MAINTAINED IT AND ARE GOING TO BE REDOING ALL THE WINDOWS, RESTORING ORIGINAL COLUMNS. BEING UPGRADED DRAMATICALLY. THEY ARE ADDING A 200,000 FOOT TOWER, WHICH VIRTUALLY TOPPED OUT TWO WEEKS AGO. CEILING GLASS, 14 TERRACES. FOR THE USERS OF THE TRADITIONAL TYPE OF SPACES LIKE GOOGLE AND FACEBOOK, THAT IS APPEALING TO THEM. THEY HAVE A COMBINATION. WE SIGNED A LEASE FOR 4, 5, 6, 7, 8 IN THE OLD AND 9 AND 10 IN THE NEW BUILDING. A LEASE FOR ANOTHER 100,000 FEET.>>RETAIL ON THE GROUND FLOOR?>>THERE WILL BE.>>WHAT ABOUT THE PARKING LOT? IS THE PARKING LOT STILL THERE?>>SOME OF THE PARKING LOT WILL STILL BE THERE, BUT SOMEONE IS TAKING 20,000 FEET OF IT FOR OFFICES.>>SO WHAT CAN YOU SAY? 18 YEARS AGO, WE WERE IN A DIFFERENT REAL ESTATE LANDSCAPE. MIDTOWN STILL –>>6 MONTHS AFTER THE TRAGIC EVENTS OF 9/11.>>WE LOST 12 MILLION SQUARE FEET OF CLASS A OFFICE SPACE. SOME OF OUR NEWEST STOCK ON A RELATIVE BASIS. HERE WE ARE 18 YEARS LATER. THE AVERAGE AGE OF PROPERTY IS 75, 77 YEARS OLD. MICHAEL BLOOMBERG AND HIS ADMINISTRATION LOOKED AT THE LANDSCAPE AND SAID, WHERE DO WE ATTRACT THE TECHNOLOGY TENANTS? HOW DO WE ATTRACT THE NEXT GENERATION OF TENANTS WITH THE AVERAGE AGE OF STOCK BEING SO OLD? HE HAD A VISION FOR HUDSON YARDS. ALL IN. IF FULLY DEVELOPED 28.6 MILLION SQUARE FEET OF COMMERCIAL OFFICE SPACE AND RESIDENTIAL ON TOP OF THAT. BUT HERE WE ARE TODAY, AND THERE HAS BEEN A SHIFT WEST. MANHATTAN WEST CONVERTED 450 WEST 33RD STREET AND 1.7 MILLION SQUARE FEET HAS BEEN LEASED TO THE INVESTMENT BANKING, TO THE BANKING COMMUNITY, TO THE TECHNOLOGY COMMUNITY. I DON’T WANT TO GO THROUGH THE LIST OF TENANTS, BUT WE ALL KNOW WHO THEY ARE. AT THE END OF THE DAY, A NEW TOWER, 2.2 MILLION SQUARE FEET, 92% LEASED GOING TO 100% VERY QUICKLY. WE WILL START THE LAST PHASE OF THIS 4 MILLION SQUARE-FOOT DEVELOPMENT. [LAUGHTER]>>OK.>>HE IS THE AGENT FOR THAT PROJECT.>>I REALIZED. PRETTY GOOD.>>AND THE GATEWAY TO HUDSON YARDS, IF I MAY ADD.>>THE REAL GATEWAY TO HUDSON YARDS IS 441 9TH AVENUE.>>CORRECT.>>THE REAL GATEWAY IS MANHATTAN WEST, WHICH IS ACROSS THE STREET. YOU ARE ABLE GO UNDERGROUND ALL THE WAY TO PENN STATION, THE MOST TRAVELED HUB IN NORTH AMERICA.>>LET’S TALK ABOUT THE WORLD, THE OTHER PHENOMENON WE HAVE NOT SEEN.>>YES.>>WHICH I NOTICED, YOU REPRESENTED WEWORK. WHAT IS YOUR THOUGHTS OF THE CO-WORKING SPACE IN GENERAL? ALSO THE MANAGEMENT CONCEPT, AS OPPOSED TO THE INDUSTRIOUS.>>I THINK THE CONCEPT IS CERTAINLY CONVENED IN THE CONFERENCING CENTERS WHICH SAVES, MAINSTREAM TENANTS FROM HAVING AS MUCH SPACE AS THEY MIGHT OTHERWISE USE FOR THAT AND EVERYTHING ELSE IT DOES. WEWORK, NOTEL, AND ALL OF THESE OPERATING SPACES, GREAT FOR MILLENNIALS. MY OPINION IS THEY HAVE EXCEEDED THE DEMAND. COMBINED. NOT POINTING OUT ONE ENTITY. I JUST THINK AT ONE POINT THERE WILL BE A DAY OF RECKONING AS IT RELATES TO ALL OF THAT SPACE AND THE CAPITAL TO FINISH IT UP. IT MAY BE JUST A LITTLE BIT BELOW THE MASON-DIXON LINE.>>SO MAY I JUST GIVE A COUNTERPOINT TO THAT? BECAUSE I THINK IT IS IMPORTANT. STEVE MAKES A VERY VALID POINT. IT IS VERY MUCH AFFECTING OUR INDUSTRY. BUT I WOULD GIVE YOU THREE REASONS THAT I THINK CO-WORKING WILL SUSTAIN.>>WITH A CAVEAT YOU DO SOME WORK WITH?>>AT THE END OF THE DAY, LET’S LOOK AT WHAT THE UNDERPINNINGS ARE AND WHAT IS DRIVING THE CO- WORKING PHENOMENON. THIS IS THE FIRST DISRUPTOR TO REAL ESTATE SERVICE SIDE, OUTSIDE OF TECHNOLOGY IN THE FIRST INSTANCE. WHAT IS DRIVING IT? FIRST OF ALL, GAP LAW CHANGE. THE REQUIREMENT NOW, THE TENANTS BRING THEIR LEASES ON BOUND SHEET DAY ONE HAS MADE CO-WORKING ATTRACTIVE BECAUSE OF THE FLEXIBILITY OF TERM YOU CAN HAVE. ONE YEAR, THREE YEARS, FIVE YEARS, ETC. CO-WORKING HAS MOVED FROM THE MILLENNIAL OR THE ONESIE, TWOSIES, TO THE MAJOR BANKS, MAJOR TECHNOLOGY COMPANIES. IT ALSO PROVIDES ULTIMATE FLEXIBILITY BETWEEN LOCATIONS. THESE TWO THINGS GIVE IT LEGS NOW AND INTO THE FUTURE. WE WILL BOTH BE BORNE OUT ONE WAY OR THE OTHER HERE. I DON’T KNOW WHICH WAY THINGS WILL GO WHEN WE SEE THE ADJUSTMENT BECAUSE WHATEVER INNING WE ARE IN AT THIS STAGE OF THE GAME IN THE REAL ESTATE CYCLE OR THE CYCLE FOR INDUSTRY, IT IS NOT THE MIDDLE. CERTAINLY NOT THE BEGINNING. CERTAINLY NOT THE MIDDLE. IT IS TOWARD THE END. DO WE HAVE SOME YEARS LEFT? POTENTIALLY WITH THE REGULATION AND OTHER THINGS THE ADMINISTRATION IS DOING. BUT AT THE END OF THE DAY, CO-WORKING WILL DO FINE IN A DOWN ECONOMY OR UP ECONOMY. WE WILL HAVE TO WAIT AND SEE.>>THE VERY DESCRIPTION, 100% ACCURATE. MAINSTREAM TENANTS ARE NOW ACCOMMODATING THEM IN A VERY BIG WAY, IN SOME INSTANCES COMPETING WITH THE VERY LANDLORDS THAT PUT THEM IN THE BUILDING. I THINK THAT IS ALSO AN ISSUE FOR THEM EVENTUALLY. THAT FLEXIBILITY THEY ALLOWED THE TENANTS TO HAVE, CANCELLATIONS IN 1, 2, 3 YEARS, BUILDING OUT SPACE AND TENANT ALLOWANCES COULD END UP — THEM AT SOME POINT, IF THESE TENANTS GET RID OF THAT PARTICULAR USE, LEAVE FOR OTHER LOCATIONS OR OTHER PARTS OF THIS COUNTRY ALTOGETHER AND I THINK THAT IS ANOTHER BUBBLE IN THAT BUSINESS. WE COMPETED FOR A TENANT WITH ONE OF THESE COWORKING COMPANIES. AGAIN, I’M NOT TRYING TO POINT A SINGLE ONE OUT. THEY GAVE THEM THE RIGHT TO CANCEL AFTER FIVE YEARS. TWO YEARS FREE RENT. THAT TENANT CANCELED AFTER FIVE YEARS. THE COST TO THAT ENTITY FOR THAT DEAL IS ASTRONOMICAL. TENS OF MILLIONS OF DOLLARS. YOU ROLL THE DICE AND ASSUME THEY WILL STAY AND GROW, BUT THAT IS A BIG ROLL OF THE DICE.>>OR THERE WILL BE SOMEONE BEHIND THEM. AT THE END OF THE DAY I WOULD SAY THE DEPTH AND BREADTH, OF THE COWORKING TODAY, THERE IS A VERY DEEP BENCH. TYPICALLY, THESE SPACES ARE LEASED BEFORE THE WORK IS COMPLETE, BUT NOBODY HERE CAN SAY FOR SURE WHEN THE ECONOMY SHIFTS HOW THIS WILL AFFECT ANY OF US, INCLUDING THE CO-WORKING BUSINESSES. THE UNDERPINNINGS TODAY OF WHAT IS DRIVING FINANCIAL SERVICE COMPANIES AND TECH BUSINESSES IN THEIR GROWTH, WHICH IS TO DECENTRALIZE IN SOME CASES, TO PROVIDE ULTIMATE FLEXIBILITY FOR THEIR WORKERS, IS FAVORABLE FOR THE CO-WORKING BUSINESS. THAT IS WHY I THINK IT IS SUSTAINABLE, ESPECIALLY THE BALANCE SHEET ECONOMICS.>>JUST GIVING YOU MY OPINION. THERE ARE A NUMBER OF LANDLORDS THAT WILL NOT DO BUSINESS WITH THEM.>>ONE OTHER COMMENT, BECAUSE THAT IS WHAT WE ARE HERE TO DO I THINK, POINT, COUNTERPOINT. AT THE END OF THE DAY, SOME LANDLORDS HAVE MADE THE DECISION TO COMPETE WITH COWORKERS.>>OR NOT LEASE IT TO THEM –>>OK. OTHERS HAVE MADE THE DECISION THAT THEY WILL PARTNER WITH THEM. RATHER THAN REINVENT THE WHEEL.>>OR SOME OF THEM HAVE AGREED TO DO THE MANAGEMENT ARRANGEMENTS, LIKE INDUSTRIALS. NO QUESTION.>>CONVENE IS A LITTLE DIFFERENT, THOUGH.>>LET’S GET TO ANOTHER TOPIC. 18 YEARS AGO, THERE WAS A COMPANY CALLED AMAZON WHO WAS BASICALLY IN THE BOOK BUSINESS. NOW WE HAVE AMAZON, GOOGLE, FACEBOOK, ALL OF THESE COMPANIES OPENING UP IN NEW YORK. HOW DO YOU SEE THE CHANGE WITH REGARD TO RESIDENTIAL, WHICH YOU ALSO KNOW, AND THE OFFICE WORLD?>>AMAZON DID NOT PIONEER THIS. THEY ARE ESTABLISHING A NEW BEACHHEAD HERE. THEY BROUGHT OUT LABOR FORCE, TRANSPORTING PEOPLE FROM SAN FRANCISCO TO SILICON VALLEY. PEOPLE WHO WANT TO LIVE THERE CANNOT AFFORD TO LIVE THERE. LABOR IS A BIG DRIVING FORCE. PUBLIC TRANSPORTATION HERE. ACCESS.>>HOW DO YOU SEE THAT EFFECT –>>THERE IS NO REASON WHY THEY WOULD NOT GO TO BROOKLYN. THAT IS THE REASON WHY AMAZON CHOSE LONG ISLAND CITY. BUT THEY ALSO HAVE CLOSE TO –>>MORE. THEY PROBABLY HAVE IN MANHATTAN CLOSE TO 1.5 MILLION OR 2 MILLION FEET. YOUR QUESTION IS THUS FAR WHAT WE HAVE SEEN IN LONG ISLAND CITY AND BROOKLYN IN PARTICULAR — LET’S LEAVE THE GOLD COAST OUT OF THIS, THE NEW JERSEY COAST OUT OF THIS — WHAT WE HAVE SEEN IS MOSTLY LOCAL GROWTH. WE HAVE NOT SEEN THE BIG PLAYERS GO THERE.>>WAIT A SECOND. WE DON’T SEE OTHER PLAYERS.>>SO FAR. WHAT HE SAID IS RIGHT. THE MAJOR PLAYERS ARE GOING TO RUN OUT OF GROWTH OPPORTUNITY IN NEW YORK IN THE VERY NEAR FUTURE, IN TERMS OF THE HIP AND COOL SPACE. PARK AVENUE SOUTH HAS THE TIGHTEST VACANY IN AMERICA. IF YOU ARE LOOKING INTO MAJOR AREAS, IN THE CITY SHORT OF NEW DEVELOPMENT, YOU WILL LOOK IN LONG ISLAND CITY.>>WHY CAN’T ONE OF THESE COMPANIES DO WHAT SPOTIFY DID AND GO DOWN?>>SOME OF THEM WILL.>>THEY CAN GO TO MAIN STREET BUILDINGS. IF THEY WANT TO STAY IN MANHATTAN, THERE WILL NOT BE ENOUGH OF THIS UNIQUE SPACE THEY LIKE. GOOGLE IS IN THE PROCESS OF MAYBE TAKING ANOTHER MILLION SQUARE FEET, BRINGING UP TO 3.5, 4 MILLION. 111 8TH AVENUE — THEY HAVE NUMEROUS AMOUNT OF TENTACLES OUT THERE. FACEBOOK IS IN THE MARKET FOR 800,000 SQUARE FEET.>>WHAT ABOUT THE OTHER FAR WEST SIDE, WHERE THE SPIRAL IS?>>SPIRAL AND THE BP BUILDING WHICH WILL NOW GET BUILT. THERE ARE OTHER OPPORTUNITIES. THERE WAS ONE TIME THAT WAS GOING TO BE A JETS STADIUM. AND EVERYBODY SAID “WAY TOO MUCH TRAFFIC, 8 SUNDAYS A YEAR.” NOW WE HAVE TENS OF MILLIONS OF FEET OF OFFICE SPACE AND OTHER HIGH-RISE APARTMENTS AND NEIMAN MARCUS.>>HUDSON YARDS IN GENERAL AND MANHATTAN WEST WE HAVE ALREADY SEEN BUILT 10 PLUS MILLION SQUARE FEET WITH ANOTHER TWO COMING ONLINE VERY SHORTLY. THERE WILL BE MORE BEYOND THAT. SO THE FAR WEST SIDE, OR MIDTOWN WEST AS WE CALL IT, IS ESTABLISHED. BY THE WAY, IT IS ESTABLISHED NOT JUST AS AN OFFICE PLAYER BUT ALSO AS A RETAIL VENUE. IT IS CONNECTION TO THE HIGHLINE. IT IS 24/7 LIVE, WORK, PLAY. EVERY BIG RESTAURATEUR IS MOVING OR ADDING A LOCATION MIDTOWN WEST. THEY WANT TO HAVE A LOCATION THERE, GIVEN THE POPULATION THERE. IT IS ENORMOUS. AMAZON MAKES A COMMITMENT LIKE THAT, BE SURE THERE WILL BE FOLLOW-UP. THAT WILL OPEN UP THE FLOODGATES.>>THE PROBLEM WITH LONG ISLAND CITY IS MOST OF THE BUILDINGS THERE ARE CONVERSIONS OR SITES THAT HAVE TO BE BUILT. AMAZON IS ALL OVER MOST OF THEM. THE CITICORP TOWER IS THE TIP OF THE ICEBERG.>>THAT IS A MARKER.>>WHAT WE ARE BOTH NOT SAYING, MAYBE THE PIONEER OF WHY ALL OF THIS PRODUCT, 70 YEARS OLD OR OLDER, IS A FIGHT FOR QUALITY. OPERATING COSTS ARE PRETTY MUCH THE SAME. THE EFFICIENCY OF THE SPACE –>>WHAT ABOUT THE MIDTOWN EAST REZONING? WHAT IS YOUR THOUGHTS ON THAT?>>I KNOW THERE IS ENORMOUS AMOUNT OF ACTIVITY BECAUSE I’M DOING IT ON A PRO BONO BASIS, NEGOTIATION FOR THE SALE OF RIGHTS FOR A SYNAGOGUE.>>HE IS A VERY RELIGIOUS MAN.>>A HOLY MAN. [LAUGHTER]>>IN A WAY.>>SEVERAL INTERESTED BUYERS. THERE ARE PROBABLY 4, 5 MILLION SQUARE FEET OF PROPOSED PROJECTS ON THE EAST SIDE.>>WHAT ABOUT THE FISHER BROTHERS SITE NEAR NYU LANGONE?>>THEY’RE TALKING ABOUT A MILLION-SQUARE-FOOT BUILDING. THE REST ARE RESIDENTIAL.>>THE ONE COMMENT I WILL MAKE IS TWOFOLD. FIRST IS ON REZONING. ONE IS WHEN YOU GET TO THE ECONOMICS, IT IS NOT SO SIMPLE. BECAUSE YOU ARE TALKING ABOUT PRICEY AIR RIGHTS OR THEY ARE PRICED RIGHT. THE PRICE IS THE PRICE. FACTOR IN THE TEARDOWN, THE REDEVELOPMENT, THE COST. WHEN YOU ARE ALL SAID AND DONE –>>RELOCATION.>>THE ECONOMICS ARE PRETTY STEEP VERSUS WHAT IS IN THE PIPELINE NOW MIDTOWN WEST OR DOWNTOWN.>>BROOKFIELD IS GOING TO REDEVELOP 666 5TH AVENUE. NOT THE EAST SIDE, BUT THE ROCKEFELLERS DID 1271. ENORMOUS SUCCESS.>>A LITTLE DIFFERENT THAN SOME OF THE OTHER SITES WE ARE TALKING ABOUT. BUT YOUR POINT IS THERE IS A DISPARITY BETWEEN SOME THAT HAVE BEEN LAYING THE PLANS TO REDEVELOP AND THOSE THAT WILL HAVE TO GO THROUGH THE WHOLE PROCESS.>>WHAT IS THE VIEWS OF EACH ONE OF YOU ON RETAIL IN MANHATTAN?>>RETAIL HAS TO BE REDEFINED. HAS TO BE A REASON PEOPLE GO TO DESTINATION AND COME OFF OF E-COMMERCE. WHAT THEY HAVE TO DO AND THEY ARE ALREADY DOING IT, THEY’RE MAKING IT A PLACE PEOPLE WANT TO GO AND — THEY WILL DO DROP-OFF AND PICKUP OF PACKAGES YOU ORDERED. YOU WANT TO RETURN SOMETHING, YOU GO. WHILE RETURNING IT, THE STORE IS THERE WITH THINGS TO SHOP. IT IS LIKE TIME WARNER CENTER, WHICH INITIALLY WAS A CENTER IN TROUBLE, THE VERTICAL –>>PEOPLE QUESTIONED WHETHER YOU COULD DO IT.>>NOW WITH THE RESTAURANTS, AND THE LINCOLN CENTER, PEOPLE HAVE OTHER REASONS TO GO THERE.>>THE TENANCY HAS CHANGED SIGNIFICANTLY OVER 14 YEARS. CREDITWORTHY TENANTS THAT NOW KNOW THE DEMOGRAPHICS FOR THEIR OCCUPANCY.>>RETAIL HAS CHANGED IN MIDTOWN PRETTY DRAMATICALLY IN THOSE 18 YEARS AS WELL.>>I MEAN, 5TH AVENUE’S ATLANTIC CITY.>>RETAIL HAS BEEN AFFECTED MORE SO THAN PERHAPS ANY OTHER INDUSTRY BY TECHNOLOGY. WITH THE ADVENT OF THE ONLINE BUSINESS, SO HAS RETAIL CHANGED. I BELIEVE RETAIL IN NEW YORK HAS BOTTOMED OUT NOW. THERE HAVE TO BE SOME, I THINK, RECONCILIATION, WHEN YOU SEE THE RETAIL RENTS RISING DRAMATICALLY, I WISH WE WERE TALKING ABOUT RETAIL CHANGE, BUT IN THE END ANALYSIS, WHEN THE RETAIL RENTS WERE ESCALATING SO QUICKLY, AT THE SAME MOMENT THE BUSINESS — THE DYNAMIC WAS CHANGING. IT HAD TO RECONCILE.>>KEY CONFLUENCE BETWEEN RISING RETAIL RENTS AND E-COMMERCE KIND OF MET IN THE MIDDLE. IF YOU WANT A — FOR THAT, TAKE A LOOK AT THE POLO STORE ON 5TH AVENUE WHICH IS SHOT AFTER TWO YEARS, THE RENT IS $900,000 A MONTH. IT WAS CHEAPER FOR THEM TO CLOSE IT THAN KEEP IT OPEN. THE LABOR COST TO KEEP IT OPEN THE HOURS NEEDED TO BE MADE THAT EXPOSURE EVEN WORSE THAN PAYING RENT IN AN EMPTY STORE.>>WITHOUT TECHNOLOGY, THE WAY BUSINESSES BRANDED THEMSELVES WAS TO BE ON EVERY BLOCK. THEY NO LONGER HAVE TO DO THAT. SO THEY ARE NOT DOING THAT. I THINK THINGS HAVE ADJUSTED NOW. I THINK HIGH STREET RETAIL WILL CONTINUE TO SUCCEED ON 5TH AND MADISON. THOSE RETAILERS THAT DO NOT MAKE IT EXPERIENTIAL AT THE END OF THE DAY WILL HAVE PROBLEMS BECAUSE NO ONE CARRIES INVENTORY. THEY DON’T NEED TO. YOU HAVE TO SHOW YOUR — AT THE END OF THE DAY, SHOW YOUR PRODUCTS SO PEOPLE COME IN AND PICK IT AND IT WILL EVENTUALLY BE SENT TO YOUR HOUSE IN 24 HOURS. THEREFORE THE STORE HAS TO BE EXPERIENTIAL.>>– THEY WILL SEND SIX DRESSES, TRY THEM ON, AND THEY WILL PICK UP FIVE OF THEM.>>WHAT DO YOU THINK OF THE BRONX?>>IT IS ON FIRE, BUT THE FIRE WILL FLAME OUT.>>ON FIRE FOR RESIDENTIAL RIGHT NOW?>>AND COMMERCIAL. THERE IS A SALE ABOUT TO CLOSE FOR THE OLD POST OFFICE. 90,000 SQUARE FEET. LOI’S OUT FOR THE TENANTS. THERE ARE OFFICE DEVELOPMENTS. RESIDENTIAL –>>WHAT ABOUT VANDERBILT?>>GOING TO BE A GREAT SUCCESS.>>GORGEOUS, GORGEOUS BUILDING. I THOUGHT THE LOCATION WOULD BE SOMEWHAT HARDER TO OVERCOME. I’M PLEASED IT WASN’T. SOME NAMED TENANTS AND SOME BIG RENTS BEING PAID.>>I THINK THE WHOLE COMMITMENT BY JP MORGAN TO REMAIN IN PLACE –>>BIG.>>HAS BEEN HUGE FOR MIDTOWN IN GENERAL, BUT CERTAINLY BENEFICIAL FOR ONE VANDERBILT. IT IS AN EXCITING BUILDING. IT IS GOING TO BE A GREAT SUCCESS. IT IS ALMOST OVER THE HUMP. END OF THE DAY, IT REPRESENTS THE BEST AND NEW CONSTRUCTION WE HAVE TO OFFER. PEOPLE ARE RELOCATING AT THE END OF THE DAY FOR EFFICIENCIES. EVERY BUSINESS TODAY IS IN SHRINK MODE. BUT FOR THE TECH BUSINESSES, THOSE FOLKS ARE NET ABSORPTION. LOOKING TO THE FUTURE, I THINK THAT WILL CONTINUE.>>MY SHINY CRYSTAL APPLE.>>BEAUTIFUL. CAN WE TAKE THAT HOME?>>NO.>>GOING TO BE SHINIER. YOU CAN TAKE IT HOME. [LAUGHTER]>>WE CAN TAKE HOME THE MUG?>>18 YEARS.>>A HANDKERCHIEF.>>I WOULD LIKE TO THANK MY REUNION GUESTS OVER THERE, BRUCE MOSLER AND STEPHEN SIEGEL. I WILL SEE YOU NEXT WEEK. [LAUGHTER]>>THANK YOU, MICHAEL. ♪ [THEME MUSIC] ♪

One thought on “The Stoler Report – Real Estate Pro’s Outlook for 2019

  1. So are they indirectly saying that coworking is a sub bubble propping up a much larger commercial office bubble.

Leave a Reply

Your email address will not be published. Required fields are marked *