Speaker 1: New Yorkers.
Speaker 2: Toxic. This is the seventy seven WABC Mini Cast. Good morning.
Speaker 2: This is Mike Stolar for the Stolar Real Estate Report.
Speaker 2: Real Estate is a generational business. Many real estate families
Speaker 2: have been involved with real estate, first, second, third, fourth,
Speaker 2: and even fifth generation. Today I have I think it
Speaker 2: would be the fourth generation, correct, okay, of a real
Speaker 2: estate family who are owners and operators of office buildings
Speaker 2: in Midtown as well as involved in residential apartment housing
Speaker 2: in Hudson Valley and around the country. I have Daryl Handler,
Speaker 2: who is the president of Pro real Estate and also
Speaker 2: the co founder of Arena Capital Corp. Yes, okay, So
Speaker 2: tell me what Arena Capital Corp. Is.
Speaker 1: So, Arena Capital is a fully integrated operator developer of
Speaker 1: largely multi family, but multi family and mixed use properties
Speaker 1: starting about an hour north of New York City and beyond.
Speaker 1: So call it north Westchester to around Albany.
Speaker 2: How did you decide on that market?
Speaker 1: You know, it's kind of funny.
Speaker 2: I was.
Speaker 1: It was the depths of COVID. I was stuck in
Speaker 1: New York City. I was walking to the office every
Speaker 1: day and it was pretty dire. It was a twenty
Speaker 1: block walk and I would see nobody on the streets
Speaker 1: and I would see no cars, and I was just
Speaker 1: going to the office every day and I needed to
Speaker 1: touch grass and get some fresh air. I had randomly,
Speaker 1: I'd been up to the Hudson Valley many times in
Speaker 1: my life, but i'd randomly, in the moment booked an
Speaker 1: airbnb upstate and just to kind of just change it
Speaker 1: up and you know, for peace of mind. And when
Speaker 1: I was up there, there was so much going on.
Speaker 1: There was you know, the streets were bustling, the great
Speaker 1: coffee shops, nice cars and in great shopping and amazing restaurants.
Speaker 1: And it kind of dawned on me, like, you know,
Speaker 1: I really wanted to do something that was outside of
Speaker 1: office leasing, and I wanted to do that for a
Speaker 1: very long time. It was a kind of an aha
Speaker 1: moment that you know, this was, you know, sort of
Speaker 1: an hour two hours away from where I lived, and
Speaker 1: it was a lot going on. So I had put
Speaker 1: together my first deal.
Speaker 2: It was the deal.
Speaker 1: It was a fourteen unit apartment building in Kingston, New York,
Speaker 1: and I had heard about it through a friend and
Speaker 1: off market, and you know, the numbers made sense, so
Speaker 1: I put a deal together with friends and family money,
Speaker 1: and we bought that deal and I want to say
Speaker 1: middle end of twenty twenty maybe early two, twenty twenty one,
Speaker 1: and we were off to the races. So you know,
Speaker 1: we were we you know, I'd been looking at markets
Speaker 1: for a long time, but that was sort of like
Speaker 1: a kind of punched me in the nose.
Speaker 2: And you know, but you had never really been involved
Speaker 2: with the community up there.
Speaker 1: No other than going there, you know, from time to
Speaker 1: time throughout you know, my childhood or young adulthood. And
Speaker 1: but no, it was it was sort of I wouldn't
Speaker 1: say completely random, but it was on the random side.
Speaker 2: So what do you see is the opportunities in the
Speaker 2: Hudson County.
Speaker 1: Yeah, I think that there is a lack of there's
Speaker 1: a tremendous lack of new supply there. Uh, there's a
Speaker 1: lot of you know, a lot of inbound migration there
Speaker 1: due to COVID. But even before COVID, there was a
Speaker 1: great renaissance of the Hudson Valley sort of. I always say,
Speaker 1: it's sort of like the Brooklyn you know, the Brooklyn
Speaker 1: fication and hipster sort of movement had happened at the
Speaker 1: same time. It was happening in Williamsburg is happening up
Speaker 1: there because the same community of creatives who you know
Speaker 1: made Williamsburg super cool. They weren't going to the Hamptons,
Speaker 1: they weren't going to the Jersey Shore. They were looking
Speaker 1: for a sort of a more creative community that they
Speaker 1: can call their own. So there was a lot of
Speaker 1: you know, win at our sales going into COVID. Then
Speaker 1: COVID had happened, and that that displacement helped out the market,
Speaker 1: you know, tremendously.
Speaker 2: What have you been doing recently up in the Hudson.
Speaker 1: Can We we have a massed a portfolio of you know,
Speaker 1: largely multi but there's definitely some mixed use aspect to
Speaker 1: our portfolio.
Speaker 2: Uh.
Speaker 1: And we have bought in many of the major river
Speaker 1: towns along the Hudson Valley. There's a huge portion of
Speaker 1: our portfolio that's you know on main Street, so real
Speaker 1: walk ability, real uh, you know, triple A locations within
Speaker 1: the context of those markets, as well as like you know,
Speaker 1: pure workforce housing.
Speaker 2: Okay, so where are the opportunities you.
Speaker 1: Know, we we we were really bullish on the you know,
Speaker 1: the river towns along the Hudson Hudson I mean specific
Speaker 1: we we we spent a lot of time in Hudson,
Speaker 1: New York. We spent a lot of time sobrityes Beacon,
Speaker 1: you know, we are spending a lot of time in
Speaker 1: Dutchess County and in general at large, and uh we
Speaker 1: you know, we're we're exploring some additional markets, you know,
Speaker 1: we we we've we've spent a lot of time in
Speaker 1: Albany and the surrounding markets there, and a couple of
Speaker 1: markets that are east of the river as well.
Speaker 2: What about the rent freezes and the regulations would effect
Speaker 2: on it.
Speaker 1: Yeah, so you know, in the state of New York,
Speaker 1: it's not you know, it's not you know, statewide rent
Speaker 1: control or rent stabilization. There are certain markets that get affected.
Speaker 1: You haven't been affected by it that we have navigated.
Speaker 1: We steer clear of that as much as we can.
Speaker 1: There is good cause in a lot of these markets,
Speaker 1: good cause eviction, which is you know, I think important
Speaker 1: protection for the tenants. But also you know, you can
Speaker 1: navigate through uh you know throughout that you know, on
Speaker 1: the business in front front.
Speaker 2: And now let's take the hat back to the handler.
Speaker 2: Absolutely tell me what's going on in the office market.
Speaker 1: So in the office market at large, I think it
Speaker 1: has been as hot as it's been since I've been
Speaker 1: in the industry. You know, good space in any sub
Speaker 1: market is leasing fairly quickly and at a at an
Speaker 1: increased rent. Comparably we're year or two years ago. You know,
Speaker 1: half of that is just purely the market. I think
Speaker 1: work from home some tenants still do that, but there's
Speaker 1: a lot of tenants that don't. There's an aspect of
Speaker 1: it that there's a less you know, a smaller denominator
Speaker 1: of opportunity or options. So like there's a supply shock,
Speaker 1: you know, the demand is up and the supply is
Speaker 1: down due to you know, conversion to RESI or you
Speaker 1: know largely that there's been you know, I think fifteen
Speaker 1: plus million square feet of RESIE conversions, which will I
Speaker 1: think will only increase.
Speaker 2: So what's happening in the buildings they do own.
Speaker 1: We're we're very least, we're extremely occupied. We're probably ninety
Speaker 1: seven ninety eight percent occupied throughout the you know, across
Speaker 1: the board. You know, we're we're we I always say that,
Speaker 1: you know, in our sub market, we're a premier option,
Speaker 1: so you know, we are not the plaza district Triple
Speaker 1: A new buildings. But we are within our sub market,
Speaker 1: which is you know, transit oriented, value oriented tenets and
Speaker 1: just a total market at large. I always think that
Speaker 1: we are offering the best, you know, best quality in
Speaker 1: those markets. So we've been able to attract great tenants
Speaker 1: at a rent that's not as what we were getting
Speaker 1: in twenty nineteen, but certainly a healthy rent. And you know,
Speaker 1: we we have very little vacancy and I think that'll continue.
Speaker 2: And on the pure brokerage business, what's going on with you?
Speaker 1: And Yeah, so we spend a lot of time doing
Speaker 1: you know, transacting throughout the city, not just specifically in
Speaker 1: the market Midtown West, and we do a lot of
Speaker 1: work in Soho, a lot of work in the Plaza district.
Speaker 1: And I think the story is sort of the same
Speaker 1: throughout any sub market. The top quality options are leasing
Speaker 1: at a at a great premium and at a really
Speaker 1: rapid pace, and there's there's a huge need for you know,
Speaker 1: high end built space like you know, if if a
Speaker 1: space you know pre COVID handro particularly. We never pre
Speaker 1: built anything, We never furnished anything before the attraction was
Speaker 1: come to our buildings. And we'll custom build the space
Speaker 1: to you how you want it, and you know that
Speaker 1: was gonna that's gonna take a you know, six to
Speaker 1: nine month lead time and plan ahead and you know
Speaker 1: you'll move in a year from now or whatever it was.
Speaker 1: Now it's we want space, we want space, you know tomorrow.
Speaker 1: We want to build, we want to furnish, want at
Speaker 1: high end. And so you know in you know, in
Speaker 1: let's call it Midtown South, you know, in bigger floor
Speaker 1: plan or floor plates that were never sort of pre
Speaker 1: built before the pre built ones are moving rapidly and
Speaker 1: in many cases there's you know, there's a you know,
Speaker 1: a competition to get the best space.
Speaker 2: In the market. What about sharing.
Speaker 1: It's interesting, like you know, I think that there was
Speaker 1: way too much of it pre COVID, and maybe there
Speaker 1: was a market for too but you know now, you know,
Speaker 1: five years after COVID, a six year after COVID, it's
Speaker 1: it's still it's still a very important, I think, piece
Speaker 1: of the puzzle of the market. Where there's tenants that
Speaker 1: are either have a hub here or they're still too
Speaker 1: young or nason to have their own office that needs
Speaker 1: something and they want to not be in their apartment
Speaker 1: and they want to you know, be have some flexibility.
Speaker 1: So I think there's a huge need for it going forward.
Speaker 1: I think maybe there was there was a little too
Speaker 1: much that kind of got you know, worked out through
Speaker 1: you know, the market over the last five years. But
Speaker 1: you know, I think that you know, you know, before
Speaker 1: there was you know, dozens of providers. Now there's you know,
Speaker 1: three or four providers that I think have done a
Speaker 1: really good job and have you know, pretty substantial and
Speaker 1: high occupancy.
Speaker 2: So overall, it sounds like things are pretty good up
Speaker 2: in the Hudson County.
Speaker 1: Yeah, yeah, we're bullet We're very bullish on the on
Speaker 1: the region.
Speaker 2: The office market in New York is very strong today.
Speaker 1: I would say so yeah. I'm you know, I think
Speaker 1: you now more than ever it's been you know, I
Speaker 1: always say, like, you know, the last five or six
Speaker 1: years has been challenging. You know, last year and a
Speaker 1: half the market has been really strong for office Lea saying,
Speaker 1: I think, you know, it'll continue that way.
Speaker 2: I'd like to thank Daryl I had much for being
Speaker 2: here today.
Speaker 1: Thanks for having me. Great to see you.