Home News William Macklowe On Building in Brooklyn and the Five-Day Workweek – Commercial Observer

William Macklowe On Building in Brooklyn and the Five-Day Workweek – Commercial Observer

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B.Irie; William; You know, Harry’s son — whatever he does, you’ve heard of William McCullough. Especially if you live in Park Slope, Brooklyn.

young mucklow left his father’s company In 2010, he founded the William Macklowe Company and poached his father’s 12 employees at the time. Over the past few decades, he’s made a name for himself in Brooklyn. Purchase of Controversial Park Slope Development Site $59 million from Avery Hall Investments in 2020 at 120 Fifth Avenue.

His deal has never been an easy one. After Avery Hall faced a major backlash from Parkslopers, who were upset over their plans to demolish the 30,000-square-foot Key Foods grocery store and replace it with a mixed-use apartment complex, McClowe rebuilt Baltic and Douglas Streets. Got a parcel betweenIn a special deal with a local civic group, McClowe and his co-developer Senluck Ridge and his Partners agreed to provide 45 units of affordable housing for him in a 180-unit project. recently Discount grocery store Lidl arrested Replace key fobs on site.

Macklowe is optimistic about the development’s ability to attract Park Slope residents and the wider Brooklyn market.brooklyn saw office lease nearly 30% increase Q2 2022 Retail Asking Rent Compared to Previous Quarter Rising in 10 of the borough’s 17 major shopping streets earlier this year, and Rent soars in most affordable neighborhoods June (good news for developers, not so good news for residents).

Not all are hunky dolly, but there are still nasty recession everyone’s heart Many companies are cutting office space in New York — Macklowe sees Brooklyn as the future of New York City.

This interview has been edited for length and clarity.

Commercial Observer: Why Brooklyn?

William Macklow: Brooklyn is a very dynamic and exciting borough and market, even our own country, but people will judge you for calling it that. We tried to find a suitable location that met our criteria. [120 Fifth Avenue] I happened to do it. Brooklyn alone would probably make him the fourth largest metropolitan area in the country. And we’ve seen Brooklyn’s evolution as a marketplace where people want to live as an economic choice.

The market has performed pre-pandemic, during the pandemic and even better now. When me and my development partner David Welsh of Senlac Ridge Partners came together as partners to purchase this piece of dirt, we knew Park Slope was one of Brooklyn’s premier neighborhoods. I noticed that. Plus Plus site of A Plus Plus Market. So we are very excited to be able to build in such a dynamic environment.

Speaking of that site, both Lidl and CVS signed on as tenants. Are there any other deals for the remaining space and how is that project progressing?

I think they are both great tenants and very good co-tenants and give back a lot to the community. I have an interest in retail.

And I think Lidl’s and CVS’ commitment early in the development process will only lead to better results and we’re starting to catalyze even more interest from a large number of quality tenants. We are looking for tenants who work with us, who work with our community, and who work with the people who live above it.

How did you see the Brooklyn market being more widely held than your own investment?

Rents are at an all-time high, absorption continues to grow rapidly, and we’ve seen our geographic boundaries with Brooklyn stretch further south and further east. Having established Brooklyn as its own identity and character, we believe the stability of the Brooklyn market will continue, especially through the pandemic.

Young, vibrant and dynamic. With a great streetscape, great restaurants, open spaces, parks, and development brought to Brooklyn over the past decade or so, the building is very well appointed. The office is where people want to go after work or preferably when they come home from the office rather than working from home. It’s an extension of the 24/7 fabric that makes the streets come to life and is a very fun place to be.

What do you think is in store for the New York City office market? Is this the end of the office as we know it?

This is a very difficult question to ask as I’ve spoken to a lot of people who are smarter than me, but I think it’s a shame to see the end of The Office. Understanding that COVID has not necessarily created flexible work schedules or the ultimate in telecommuting.

I think the five-day work week is gone. Also, younger generations of office workers want some flexibility. But equally, as we have seen for decades and generations, great ideas, great successes, great innovations, and great advances have come from collaboration, teamwork, and unity. . These successes and advances are very difficult to replicate.

I think there’s an inflection point where people realize that, and I think people want some social interaction during the day as well. , restaurants are packed, bars are packed, people are taking advantage of all the cultural stuff New York has to offer, but they’re not going to the office. Breaking from the bend at some point, people go back to work. I think we are starting to see strong pressure to return to offices, especially the financial sector. Because it’s a place where progress and progress are made by being together and working together.

We get there and think office buildings will meet these challenges. How we use space will change. The nature of amenities in office buildings will change. This will slowly but surely get people back to work.

Have you decided to move from your office to your home?

I didn’t really leave the office. I am not a fund. My business uses up our own capital, so we can work opportunistically and go in whatever direction we see fit. We love our office. We love our New York office and believe in our New York office. We were doing a lot of value-added office redevelopment and were lucky to sell a lot of buildings before the pandemic.

There was too much capital in pursuit of added value in the office, and the deal was significantly compressed. We felt the risk profile was getting a little too tight for us, so we switched and did a fair amount of medical office development. This has been very successful for us. We are still continuing our investment efforts in that area.

And we love housing.I’m known for my offices, but over the years I’ve been involved in developing multiple apartment buildings in New York City.The real estate market is just such a great opportunity, so we jumped at it. Condo at 21 East 12th StreetSo we do it all.

We are currently watching the office market closely, are actively participating in investment sales, and are ready to take on office risk when the time is right. I am a believer in the office.

You mentioned the clinic and you Recently sold its interest in an Upper East Side medical building and 323 East 61st Street To LaSalle Investment Management. What was behind that decision?

It was the right time to harvest. We buy and hold, buy and sell, buy and recapitalize, build and sell, build and hold.

Are you concerned about the current interest rate environment or other larger economic trends?

I think our project is fairly well hedged in terms of funding, but I’m sure it’s impacting the market on many levels.

Which office properties do you see as good investment opportunities?

new or new enough. Ability to effectively repurpose office buildings to meet the demand of today’s or potential tenants and transportation oriented properties.

Are there new markets or other commercial real estate types you are considering investing in?

I think I’m closer to home now. We are not pursuing cap rate compression outside of New York. We’ll see what happens here. Over the next 12, 24, 36 months, there should be some pretty great opportunities.

You have had a tumultuous relationship with your father. Have you repaired the relationship or talked to him recently?

I think enough has been written about it. I would like to ask you the next question.

Anything else you’d like to add?

We are a New York company. We believe in New York and are very much looking forward to getting started later this year.

You can contact Celia Young at: [email protected].

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