Women of Influence honoree: MaryAnne Gilmartin, MAG Partners LP and Mack-Cali Realty Corp.

Editor’s note: This profile is one of 10 spotlights we’re publishing this week featuring this year’s New York Business Journal Women of Influence honorees. We asked each of the 10 to complete a survey form through which we can share with you some of their background, their achievements and their industry insights. You can see all of the profiles that have been published to date, along with related coverage, here.

Name: MaryAnne Gilmartin

Companies: MAG Partners LP / Mack-Cali Realty Corp.

Titles: Founder and CEO / Interim CEO

Where born: Queens, New York

Education: Fordham University (B.A.S., Master’s)

In my job, I’m responsible for: The people, places and things that drive value. I have a deep affinity for the built environment and think of our role in the metro area as civic developer, owner and operator. Above everything, it takes great people to do great things, so my primary duty is to act tirelessly as chief talent officer. As a project manager by training, I work hard to resist the temptation to do and, instead, build the great people that will design, build and operate the great buildings. Running firms like Mack-Cali Realty Corp. and MAG Partners is all about nurturing and unleashing a culture of excellence and creating endless possibilities for the people around you.

The most challenging part of my job is: Finding enough time in the day to do everything I want to do. My mind is constantly churning; there’s always more to do no matter how much you delegate. I wouldn’t change it for anything, but I make sure to dedicate thinking time to work “on” the business and not just “in” the business.

I know I’ve done my job well when: The New York metro real estate industry looks like the people we serve. Our industry’s diversity (or lack thereof) still does not reflect our diverse and eclectic customer base, and that needs to change. When the real estate industry is defined by an inclusive, diverse and merit-based pool of professionals at every level, mission accomplished.

A tip I’ve learned that’s helped me with networking is: Place a great value on human connection and the power of your words and deeds. Reputation and integrity take time to build and an instant to destroy.

The best advice I’ve received for career development is: Stay curious and always be learning.

The attributes I look for in a candidate when hiring are: Passion, purpose and guts.

Do you serve as a mentor for someone? If so, how do you try and fill that role?: Because I feel like it’s my duty to give back, I have always mentored young professionals over the years. There is no magic elixir, but telling my story and sharing what I have learned along the way can empower the next generation of real estate minds.

Do you have a mentor yourself? If so, what do you look for from that individual?: Mentoring has played an outsized role in my professional evolution. The role of mentor or mentee is critical to the career development of the women in our field. My two most influential mentors have been Bruce Ratner and Mary Ann Tighe. With both of them in my corner, I hit the career lottery.

Knowing what you know now: What advice would you give yourself 10 years ago?: Invest in Zoom.

How would you describe what the year 2020 has been like?: Nothing typical. Challenges spinning out from L&L MAG to MAG Partners and assuming the role at Mack-Cali have kept me busy.

What’s been the biggest challenge of this pandemic-driven year for you?: Not being with my MAG Partners team. We have Zoomed three times a week, but nothing beats that personal connection you get from being in the office. Oh, and making sure the kitchen is always stocked for my three kids. I forgot how much they eat.  

What, if anything, has developed for you this year that could perhaps pay dividends in the years to come?: Does becoming interim CEO at Mack-Cali count as a developed skill? I’ve always been nimble but have continued to stretch myself this year, and that will always pay off in the long run.

Charities/foundations/causes I regularly support: I’m honored to be on the board of trustees for Brooklyn Academy of Music and New York Public Radio, two wonderful organizations that serve NYC with great news and culture.

Favorite vacation spot: Anywhere with a beach.

Book I’ve read recently that I’d recommend: One that I’ve actually gone back to a few times is “The Elegance of the Hedgehog.”

TV show, movie or program you would find me watching if I had several hours of viewing time available: I’m actually looking for a new show right now. Any suggestions?

Something about me that would surprise my fellow Women of Influence honorees: I am an introvert

Hashtag for my life: #idontdo#

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MaryAnne Gilmartin’s Firm Lands $173M Construction Loan For Mixed-Income Chelsea Project

The development firm launched by MaryAnne Gilmartin in 2018 has secured one of the biggest construction loans in Manhattan since the coronavirus pandemic took hold.

MAG Partners scored a $173M construction loan from Madison Realty Capital for its new apartment building in Chelsea, even as Manhattan’s multifamily market continues to take a beating from the pandemic-prompted exodus of renters. 

The proposed 479-unit building at 241 West 28th St. — set to be completed in 2022 — will be 30% affordable housing, MAG Partners said in a release. The project is a joint venture between MAG Partners, Safanad, Atalaya Capital Management and Qualitas. Construction will begin next month. 

“We were pleased to fill a void which would customarily be financed by conventional banks, and provide our flexibility, certainty, and conviction,” Madison Realty Capital co-founder and Managing Partner Josh Zegen said in a statement. “Located within a few blocks of Hudson Yards and other prominent tech tenant expansions on the west side, [the building] will be one of the only new multifamily rental projects built in Manhattan in the next few years.” 

Gilmartin is currently serving as interim CEO of Mack-Cali Real Estate, a post to which she was appointed in July. At the time, she said MAG would be led by the internal team in place. Before founding MAG Partners, Gilmartin was the longtime CEO of Forest City Ratner.

In a statement, she emphasized the planned building’s proximity to the city’s tech hub, saying it will be a draw to renters long-term. 

“This is an incredibly desirable location as major tech companies continue to sign big leases within walking distance, and we expect to see very strong long-term demand for this property when it opens,” Gilmartin said. 

While tech giant Facebook inked a large lease nearby at Vornado’s Farley Building in August, adding to the 1.5M SF it plans to occupy in Hudson Yards, advertising and technology companies made up nearly half of the companies to offer their spaces for subleasing in Q3.

Brokers also say they are seeing some of the most dramatic apartment rent drops and concessions in Midtown while many leave Manhattan for other boroughs or outside the city, as the work-from-home revolution takes hold and many offices still remain empty. 

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MaryAnne Gilmartin lands financing for West Chelsea project

MaryAnne Gilmartin’s MAG Partners + Atalaya + Safanad + Qualitas have secured a $173 million construction loan from Madison Realty Capital for the development of 241 West 28th Street, CO first reported. Upon completion, the West Chelsea project will span 372,000 SF, and contain 479 apartments, plus a ground floor retail component. 

• Why it matters: Some investors are stepping back from funding projects in New York City. Commercial-loan volume is down more than 50% this year as of early October, and no loans larger than $50 million from the five boroughs have been bundled into commercial mortgage securities in 2020, though there has been a handful of large single-asset, single-borrower deals, WSJ noted. More than $3 billion worth of loans backing commercial property in the city are delinquent, and loans in creditor negotiations total an additional $4 billion.
• Dig Deeper: The three-year financing reportedly has a loan-to-cost ratio of 65 percent… 70 percent of the units will be market-rate and the rest will be designated affordable. The project benefits from a 35-year tax abatement.
• Worth Noting: In 2018, L&L MAG signed a 99-year ground lease for the site. Now that the L&L MAG partnership has split, MaryAnne Gilmartin’s MAG Partners will be leading the development. [CO+WSJ+Trepp]

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MRC Provides $173M Construction Loan for MAG Partners’ West Chelsea Rental Project

A new rental tower is now fully set to rise in West Chelsea. 

Madison Realty Capital (MRC) just closed a $173 million construction loan for the development of 241 West 28th Street, Commercial Observer has learned. A joint venture between MaryAnne Gilmartin’s MAG Partners, Atalaya, Safanad and Australian investor Qualitas is developing the 479-unit project.

MRC provided the developers with a three-year financing at a 65 percent loan-to-cost. Jeff Rosen, a managing director at MAG Partners, led the financing on behalf of the sponsorship. Maverick Capital’s Adi Chugh negotiated the debt.

“This, in some ways, is a bet on New York, but it’s also a recognition of the resilience of the industry in the face of the pandemic,” Gilmartin told CO today.  “This project is one I’m particularly proud of, because it took so very much to get here. And while I’ve been involved in financings and closings that have been far more complex — from a real estate point of view — I can tell you that all of the externalities and the dynamics associated with the last six months have made this closing a real accomplishment. We are really appreciative of all the sponsorship, including Madison.”

In 2018, L&L MAG signed a 99-year ground lease for the West Chelsea site, with plans to build a 372,000-square-foot COOKFOX-designed property that included retail space on the ground floor. Now that the L&L MAG partnership has split, it’s MAG Partners who is leading the project and it marks MAG Partners’ first standalone deal.

When completed, 70 percent of 241 West 28th Street’s units will be market-rate and the rest will be designated affordable. The project also benefits from a 35-year tax abatement. With the construction financing now sealed, development will kick off next month, and the building is expected to be delivered in 2022. 

“We’re very excited to have closed this $173 million loan at a relatively low loan-to-cost with such an esteemed sponsorship group,” Zegen said. “This marquee 479-unit multifamily rental building, located within a few blocks of Hudson Yards and other prominent tech tenant expansions on the West Side, will be one of the only new multifamily rental projects built in Manhattan in the next few years. We were pleased to fill a void which would customarily be financed by conventional banks, and provide our flexibility, certainty and conviction.”

The deal is one of the few significant construction loans to close during COVID, and the sponsorship had to navigate the new debt playing field when selecting a lender. 

“One complexity was that the conventional lenders are just not showing up at the dance, they’re all frozen,” Gilmartin said. “The usual suspects for us weren’t available to commit, and didn’t believe they could go the distance with us because the future is so uncertain. So, there was a smaller group of prospective lenders. I love [MRC] because Josh and his team are in our business; not only are they lenders, but there are builders themselves. They know how to underwrite risk, and they understand value creation associated with development. 

“And that’s a rare thing in a lender,” Gilmartin added. “So, partly, it’s their DNA that brought them in and I think their staying power had a lot to do with how they’re hardwired. They were the perfect lending option for us, given the state of the city, the uncertainty, and for them it was all about the sponsorship, because they —like us — believe that this is a moment in time and that New York is going to come out of this.” 

The project is close to some buzzed-about projects, including Vornado’s redevelopment of the landmarked former post office at 421 Eighth Avenue. In August, Facebook inked a 730,000-square-foot deal for the entire office portion.

“West Chelsea was — pre-pandemic — one of the hottest locations in all of New York, and it’s a very difficult place to afford a multifamily building because land prices are extraordinarily high,” Gilmartin said. “If you were just doing a straight-up purchase of the dirt you’d never pencil out on a 70/30 [project]; it just would never make sense.”

Gilmartin said that Edison, which owns the land, did not want to part with its interest in the site, “so, we have here an opportunity to put online a beautiful, mid-block, 22-story asset, and it’s very difficult to imagine that anybody else is going to be able to do what we’re doing,” she said. “We’re building this project in the heart of the tech community and, even through the pandemic, Facebook, Apple, Google and Amazon have all doubled down on the city. We think this particular location is really the heart of where much of the city’s growth and prosperity will lie.” 

The deal represents Safanad’s first multifamily project in New York City. 

“This was a really unique opportunity for us to work with great partners and to make an investment in New York City residential but — more importantly — New York City in general,” Andrew Trickett, a partner at Safanad, told CO. “We looked at this project and its location, and this opportunity is a really great long-term bet on New York City. We’ve had a lot of headwinds flying around the marketplace today, but we have an enormous amount of faith in MaryAnne and her team’s ability to execute here.” 

The rental tower isn’t Atalaya’s first foray into the Nomad market. In 2018, the investment fund provided $65 million in preferred equity as part of a $315 million construction financing for Flag Luxury Properties’ Ritz-Carlton hotel at 1185 Broadway. 

For MRC’s part, it has been actively lending and investing through COVID-19. According to sources, the firm has raised more than $1 billion in capital since the beginning of the pandemic. 

MRC’s ability to approach deals as a lender but with an owner’s perspective was an ideal fit for the 28th Street project, Chugh said. 

“There’s an old saying that goes, ‘You cannot learn about roads from a road map. You can only learn about a road by traveling it,” he said. “And I think Josh is a perfect amalgamation of a lender who also is empathetic to the equity owner/ operator side of the business. When I am talking to Josh about a transaction, I’m talking to somebody who has a multi-dimensional understanding of the deal. He understands the deal from a finance perspective, and he understands the deal from a development perspective. He understands what is required for a developer to be successful, and then he creates a platform and a deal that gives them the tools to get there.”

As for what’s next for MAG Partners, Gilmartin has her hands full but is excited for the future. In July, she was appointed interim CEO of Mack-Cali, as reported by CO. 

“One of the really big milestones for me and my team on this project is that I have spun off out of my partnership with David Levinson and Robert Lapidus, which was a two-year success,” Gilmartin said. “I’ve spun off into MAG partners, which I own 100 percent, and this project came with me along with my other projects. So what’s really exciting about this building is that it’s a hallmark of MAG Partners, which is a 100 percent woman owned, ground-up development company. With this talented group of people that I took from Forest City, I created L&L MAG and now have spun out into MAG Partners, and 28th Street represents the first project of many.”

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Big Mack Attack: How MaryAnne Gilmartin Is Working to Turn Around Mack-Cali

There’s nothing like an uprising from investors to oust a company’s chief executive to spice up a global pandemic.

After a proxy battle last year shook up the Mack-Cali Realty Corporation’s board of directors, one of New Jersey’s largest landlords faced another clash in mid-March when an activist investor called for the resignation of CEO Michael DeMarco.

The investors got their wish in July when DeMarco left his post after nearly five years as the pandemic waned on. In his wake, the company named real estate titan MaryAnne Gilmartin, who cut her teeth at Forest City Ratner, to serve as interim CEO for six months. (DeMarco couldn’t be reached for comment.)

“I think it’s an outstanding choice given her background both on the public and private side and her expertise in large, complex developments and working through complex structures,” Thomas Catherwood, an analyst at BTIG who covers Mack-Cali, said. “I think she’s uniquely suited for the task of taking over what is a complex company.”

CBRE’s Mary Ann Tighe said Gilmartin has a “persuasive ability” to get people to get on board with her plans — convincing the legendary Manhattan broker to help out on a Jersey City project, for instance — who has “outperformed” her entire career. Tighe first met Gilmartin when Forest City Ratner was pitching, and eventually won, the chance to build the New York Times Building at 620 Eighth Avenue.

“Nobody thought they were a serious contender for the job,” Tighe said. “Bruce Ratner did a great job, but I can tell you MaryAnne carried the day. All the New York developers were stunned and it was because she had a vision for The New York Times — as did Bruce clearly — and they were able to execute that.”

And it’s not just outsiders pleased with the choice. Ronald Dickerman, founder and president of Madison International Realty, which acquired a 5 percent stake in Mack-Cali last year, also heaped praise on Gilmartin.

“She’s very, very bright, very capable and I think that she will do well,” Dickerman said. “We certainly agree that the company needs to continue its evolution.”

Gilmartin, who is splitting her time with running her own firm, MAG Partners, said she’s “hit the ground running” in her nearly two months at the helm of Mack-Cali in order to bring about the change investors have been clamoring for at “warp speed.”

“I’ve done a couple of big moves in a little bit of time,” Gilmartin said. “This is an interim position, but we’re not going to wait to make strategic changes to move the company forward and to deliver better value to the shareholders.”

Banking on the ‘burbs
So far Gilmartin has quickened the pace of Mack-Cali’s strategy to sell off suburban office holdings to shore up its balance sheet and focus on multifamily and office properties in higher-density waterfront spots like Jersey City.

In July, Mack-Cali sold off its Madison, N.J., office property at 3 Giralda Farms for $7.8 million and in mid-September its Florham Park property at 325 Columbia Turnpike for an undisclosed amount, CoStar Group reported. On Sept. 17, Mack-Cali closed on a $160 million sale of a 10-building office portfolio in Morris County, N.J., to Onyx Equities, Taconic Capital Advisors, Axonic Capital and Machine Investment Group. Gilmartin said Mack-Cali expects to get rid of more in the next quarter.

“It gives us the opportunity to pay down corporate debt and also invest in the waterfront assets of Jersey City,” Gilmartin said.

Gilmartin has also shaken up Mack-Cali’s staff. She brought in new people to fill key roles at the company, including a new head of leasing she can’t announce yet as well as former Forest City Ratner and MAG Partners vets Rob Willis, Adam Greene and Ashley Cotton. And, in August, the company tapped Basis Investment Group CEO Tammy Jones to serve as lead independent director of its board.

The new hires haven’t come without some pain. In early September, Mack-Cali laid off about 20 people on its nearly 300-person staff. Gilmartin couldn’t give the details on the divisions targeted in the cuts but said some were related to the disposition of certain assets, while, for others, Mack-Cali outsourced the roles.

“Obviously, that’s always as a CEO one of the hardest things you’ll ever do, but as a public company, a bloated [general and administrative expense] is never a good thing, particularly in challenging times,” Gilmartin said.

Aside from staffing shakeups, Gilmartin has turned her focus strongly on the 4.5 million-square-foot Harborside office campus on Jersey City’s waterfront. The site has faced plenty of vacancies after the company started a $75 million renovation in 2018.

“I think it’s probably the most underrated piece of commercial real estate in the region,” Gilmartin said. “Repositioning Harborside as a campus on the Jersey City waterfront when we all go back to the office is a major, major priority of mine.”

To help those efforts, Gilmartin tapped CBRE’s Tighe to come across the Hudson River and help build a New Jersey-based team to lease up the property while pitching the property to Manhattan tenants.

“This isn’t one of these cases where you go and say ‘It needs everything,’” Tighe said. “You don’t have that reaction at all. You have the reaction that this is a very under-appreciated asset and MaryAnne has a very clear vision of what to do.”

Tighe will continue to market the property to the traditional tenants that filled it — financial institutions and law firms — but also wants to appeal to tech companies that might be attracted by the vibrant neighborhoods nearby.

“I think what New York City companies and brokers — because you’re always marketing to the brokers — haven’t seen is the evolution of Jersey City itself,” Tighe said. “Now you got this cool residential neighborhood that is all over.”

Plus, the area might save companies significant sums. CBRE marketing materials show tenants could pay nearly 32 percent less than the average rent in Downtown Manhattan and nearly 50 percent less than Midtown renting at Harborside.

Even with all the changes in a short time, there’s still a lot to overcome before Mack-Cali can shake off the past missteps and come out on the other side. The company has millions of square feet of its suburban portfolio to sell off and the pandemic likely cut the costs it could fetch for it.

“It’s probably going to be a little more challenging in the COVID environment,” Gilmartin said about the selloffs. “Everybody’s talking about the suburbs having a second coming. It’s hard for me to know if that’s true, but I can assure you we’re going to market into that story because there are definitely buyers out there who believe that.”

Mack-Cali’s stock price has dropped by nearly 9 percent since January; and, in July, before Gilmartin took the helm, Fitch Ratings downgraded the REIT to a negative outlook of BB-. Fitch cited the company’s “high leverage, weak liquidity coverage, active development program, limited unsecured debt and equity capital access and moderate complexity from joint venture (JV) investments” as reasons for the drop.

BTIG’s Catherwood said that while the company has some amazing land holdings in Jersey City and Weehawken, its huge debt load — it’s carrying a debt to equity ratio of 1.38 — makes it hard to capitalize on it.

“I don’t think they have the time horizon to fully build out their land bank in the company’s current structure,” Catherwood said. “Something is going to need to happen: whether it’s a different type of partnership, whether it’s some sort of recapitalization, whether it’s an outright sale. The problem it faces right now is it’s a company going through growing pains.”

The weight
A lot of Mack-Cali’s debt came from the company’s huge push into the multifamily market nearly a decade ago.

Mack-Cali started in 1969 as Cali Associates when John Cali built his first office property in Cranford, N.J., The New York Times reported. He kept going and developed office buildings all around New Jersey, including the International Financial Tower in Jersey City.

The company went public in 1994, and became Mack-Cali when it merged with fellow New Jersey firm the Mack Company in 1997, The Wall Street Journal reported. Things started to take a turn for the worse when former Mack Company head William Mack left in 1999, and Mitchell Hersh became CEO.

Hersh started a huge push into the multifamily market in 2011, which kicked into high gear in 2012 when Mack-Cali acquired residential developer Roseland Partners for $134.6 million, the Journal reported. Since then, the company has built huge luxury developments like Urby and the Soho Lofts, both in Jersey City.

However, Hersh faced criticism for his brash management style. The company, too, kept underperforming in the early 2010s while the rest of the real estate sector improved. Hersh left in 2015, with Mitchell Rudin taking over as CEO and DeMarco as president. DeMarco was later bumped to CEO and Rudin became a vice chairman. Rudin eventually left for Savills in 2018.

DeMarco and Rudin faced the task of dealing with Mack-Cali’s high vacancy rate throughout its nearly 25 million-square-foot suburban office portfolio while it carried one of the highest levels of debt for any office REIT, the Journal reported.

That high debt level sprang from the company’s controversial push into multifamily, but DeMarco had no other choice but to go all-in on the strategy, Catherwood said.

“The previous management was stuck with a very challenging situation,” Catherwood said. “Really, the only strategy left for them, short of selling the company, was to sell their suburban offices to use that capital to develop more residential assets.”

The company started to aggressively sell off its suburban portfolio to put the money into its waterfront holdings, with it dispossessing $528 million worth of properties in 2017 alone and nearly $400 million in 2018, as Commercial Observer previously reported. It was around this time that Ronald Dickerman saw potential in Mack-Cali, and Madison International bought 4.5 million shares in February 2019.

“It’s a listed property company trading at a large discount to [net asset value] which is executing a transition that, if successful, will leave them with a major concentration of Class A residential and office directly on the Jersey side of the Hudson River across from Hudson Yards, Manhattan West and Brookfield Place,” Dickerman said. “If the company continues executing on the plan, in our view the company will either be much more attractive to REIT shareholders or is likely to sell themselves.”

In DeMarco’s own words, there was no better person to lead the company’s change than himself. In a 2017 interview with NJ.com, DeMarco called himself a “turnaround expert” and a “stone-cold killer.” He had similarly high praise for himself in a 2018 interview with CO.

“I only have one speed; it’s just the way I am,” he said. “If I do something, I do it very well.”

After the battle 
But not everybody was as confident in DeMarco as he was in himself. Investment firm Bow Street, which owns a 4.5 percent stake in Mack-Cali, started a proxy battle in 2019 to install more members on the board after Mack-Cali turned down a $2.4 billion takeover bid that would’ve spun its office portfolio into a separate REIT, The Real Deal reported.

After a very public back-and-forth, Bow Street eventually succeeded and got four members added to Mack-Cali’s board, including Gilmartin. It was then that Gilmartin realized the problems with the company couldn’t be fixed with a simple board shakeup.

“It turned out to be a lot harder to make a difference just because of the way the board was structured,” Gilmartin said. “Once you’re inside, while you’re not under the hood inside the company, you start to appreciate how governance works, the board dynamic; the level of engagement on the part of the board members and all that, to me was, was deeply disappointing and there was lots of room for improvement.”

In March, Bow Street started a push to replace DeMarco, writing in an open letter that, “It is now clear that the rot at Mack-Cali goes far deeper than any of us knew and that more comprehensive action is required to protect shareholders’ investment.”

“Having lost two proxy battles in successive years, I haven’t come across that in any other REIT,” Catherwood said. “To completely overhaul the board, to completely overhaul the corporate governing structure and then the change in the C-suite is really indicative of a sea change at the company.”

Gilmartin took over either for six months or until the company finds a permanent CEO. Mack-Cali will in turn pay MAG Partners a monthly fee of $150,000, a sign-on bonus of $300,000 and a $200,000 completion bonus, according to Securities and Exchange Commission filings.

Gilmartin said she’s up for the task of changing the company while continuing to run MAG Partners — which she said is having its staff step up to help run it — and searching for a permanent CEO. She’s confident in Mack-Cali because she said it already has most of what it needs to turn around.

“It’s been really intense, but really, really great,” she said. “You need great assets and you need great people. Mack-Cali has both.”

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Covid is Forcing Real-Estate Developers to Rethink Buildings

Someday, years from now, a resident will wake up in their luxury condominium at developer Gregg Covin’s The Cedars Lodge & Spa in Hendersonville, N.C. They’ll make breakfast on the island in their big kitchen and sit on their heated balcony. They’ll walk out of their private entrance and use an elevator that serves only three other units. They’ll work out in a series of small exercise rooms and gather with friends at a restaurant in a glass atrium.

Hopefully, Covid-19 will be a distant memory. But every aspect of these homes will have been shaped by the pandemic.

Mr. Covin tore up his original plan for a part-hotel, part-condo project with small kitchens, few balconies and large amenity spaces, and began redrawing the concept in March. “For sure, there are going to be long-term changes in behavior because of this,” said Mr. Covin, who still aims to break ground this year.

One of the trickiest parts of a luxury real-estate developer’s job is divining what buyers and renters will value—and pay top dollar for—in the three, four or even five years it takes to go from design to completion. Covid-19 has made that more complex, as developers try to tease out which parts of the pandemic experience will fade away and which will remain as part of the culture.

Some costs can be passed on to the renters or buyers who want the changes enough to pay more for them. Mr. Covin, for example, was originally planning units in the $300,000 to $500,000 range, but now thinks buyers will pay $350,000 to $750,000 for larger units that can be used as second homes.https://tpc.googlesyndication.com/safeframe/1-0-37/html/container.html

Rental developers also are betting the postcrisis market will reward them for adding or installing specialized furniture that can make a small space seem larger so residents can work from home more comfortably. Other changes aimed at improving air quality or enabling distancing from other residents—such as re-engineering ventilation systems, adding elevator banks, or reconfiguring common areas—may help lower resistance to high-rise living, a lifestyle that has taken a beating in this crisis.

There is evidence already that the amenities and elements valued by the rental market have changed since the pandemic hit. Luke, a conversation-friendly real-estate chatbot that texts listings to apartment hunters in New York City, analyzed 30,000 messages from potential renters between December and February and compared them with those between March and May.

The New York-based company found that requests for home offices rose from 0.5% of messages prepandemic to 3% once the pandemic hit. Private outdoor space requests jumped by 20%, while requests for in-unit laundry (a rarity in New York City) went up 17%. Interest in gyms plummeted. Requests fell by 10% for in-building gyms and by 50% for gyms nearby.

In San Francisco, 30 Van Ness, a 47-story multiuse building with 333 condos located a block from Twitter’s headquarters, is slated for completion in late 2023, said Arden Hearing, executive general manager, West Coast, for Lendlease. Even with that distant time horizon, the pandemic prompted numerous design changes.

“Because of Covid, we’ve thought a lot more about stairs,” he said. To encourage residents to use them, and decrease elevator density, the project will now have stairs that are wider and carpeted, with art and natural light, he said.

Until March 15, the amenity plan also featured an open 12,000-square-foot space for co-working by day and lounging by night. New blueprints, Mr. Hearing said, divide that space to include a music studio, a fitness area, art space, a cooking-and-dining area and a screening lounge.

Some sections will have glass partitions, to give a sense of togetherness while creating physical separation. Many will exit to an outdoor area. The building also will include horizontal ventilation, with each residential unit having its own system, as opposed to the traditional vertical system that filters air throughout a tower, he said.

The HVAC upgrades alone will add several million dollars to the project, Mr. Hearing said. The investment is expected to differentiate the project from older buildings and help with marketability, he added.

In New York, MaryAnne Gilmartin, founder and chief executive of MAG Partners, plans to begin construction later this year on 241 West 28th Street, a 480-unit rental building in Manhattan’s Chelsea neighborhood.

She said much of the original plan should play well in the postcrisis era, citing its two towers connected by a garden, allowing for shorter and less-crowded elevator rides than with a single tower, and more outdoor space. Still, the crisis has inspired her to upgrade air filters, create a separate entry for deliveries, and add touchless elements that let residents use their phones to call elevators and open doors.

At Echelon, a 14-unit project in the design phase in Delray Beach, Fla., developer John Farina had planned four elevators. In early April, he changed to eight elevators, so that no resident would have to share an elevator with more than two other units.

Mr. Farina, president and chief executive of U.S. Construction, said he made the change in light of how successful another Delray Beach project, called Ocean Delray, has been. The 19 units, priced from $5 million to $9 million and slated for completion in early 2021, are half sold, he said. Each unit will have a private air-conditioned garage, and four will have private elevators.  

The pandemic has made some developers re-evaluate the economics underpinning their projects. Mr. Covin said that after a long career developing luxury projects in downtown Miami, he is switching to North Carolina because he believes there will be heavy demand for second homes at the midpoint of the East Coast—and less interest in dense city living.

Scott Brennan sees a strong market for luxury single-family homes in Florida. He developed an 8,000-square-foot house on the market for $14.5 million in Boca Raton. He had an additional piece of land on which he planned four townhouses with a common pool and green space. 

Now, because the pandemic has reduced interest in shared amenities, he plans to build just two homes, with private yards and space for home gyms and offices.

“The original house suits the Covid discussion perfectly,” said Mr. Brennan, who happened to have opted for expanses of retractable glass doors that give the home plenty of flexible indoor-outdoor space. The new homes will be similarly designed, he said.

Colin Behring, chief executive of Behring Co., based in San Ramon, Calif., already has 1900 Broadway in Oakland under construction, but he has planned alterations.

He said working from home will be increasingly important, but it isn’t financially viable to make the apartments larger. Instead, more units—25% rather than 5%—will have furniture by a Boston-based startup called Ori. Designs include beds that drop from the ceiling to the floor at the push of a button, or that retract into a home-office module. The 39-story building is set to be completed in late 2022.

A Rental Complex in Quincy, Mass.

This project, in the permit stage, had to be altered to allow for more access to the outdoors. The solution, shown in this rendering, was to add balconies that will give some tenants a way to get fresh air and sunshine. PHOTOS: LBC BOSTON AND PCA (2, RENDERINGS)

Among the most common design changes made by developers is adding outdoor space or increasing access to those spaces. In a rental project in Quincy, Mass., now in the permit phase, developer LBC Boston is adding balconies to about a quarter of the units, said Margarita Kvacheva, senior vice president. “We are strategically placing the balconies on the south side, because those get the daylight and that’s where people can go out and get vitamin D,” she said.

At Natiivo Miami, a 51-story multiuse building in the Florida city slated to break ground this year and to be completed by late 2022, developer Keith Menin is planning retractable glass walls. Though expensive, he said they would be valuable in linking common areas—such as a gym and a walkway to the pool—to outdoor spaces.

“This could be the new norm,” Mr. Menin said.

Touchless systems, already a luxury amenity, are becoming necessities, developers said. Ric Campo, chairman and chief executive of Camden Property Trust, began rolling out Chirp, a virtual leasing platform, in the company’s 164 rental buildings last year.

The system lets prospective renters set up an appointment, be guided by a map from a parking space to the unit, gain entry via a code, tour the unit alone, and sign the lease online. Residents can use fobs or their phones instead of keys, Mr. Campo said.

Home is Where the Stethoscope Is

Several Florida developers are linking projects to the medical industry, giving buyers technology, service and access to special care.

Buy a House, Get a Year of Telemedicine

Miami-based developer CC Homes, which builds about 500 single-family homes a year, will provide buyers at its Canarias in Downtown Doral development with a year subscription to Baptist Health Care on Demand, said chief executive Jim Carr, who is also chairman of the board at Baptist Health South Florida. Buyers of the $500,000 to $2 million houses will receive a home-exam kit with stethoscope, tongue depressor, otoscope for ear exams and a thermometer that feeds information to telemedicine providers at Baptist. The year’s subscription costs about $1,000 per family, Mr. Carr said.

Someone Hot Just Entered the Building

2000 Ocean, a 64-unit condo building in Hallandale Beach, Fla., will have infrared cameras in the lobby to detect when someone walks in with an elevated temperature, said developer Shahab Karmely, of KAR Properties. Buyers of units, opening in May 2021 at $2.7 million to $12 million, will also receive an iPad and home medical kit. The developer said he won’t dictate how the fever information will be used, nor will he link the iPad to a telemedicine service. “We are supplying the technology,” he said. “How it will be used is up to the homeowners themselves.”

Neighbors in Scrubs

Developer Daniel Kodsi is negotiating with a medical center to occupy the 100,000-square-foot medical building abutting his 55-story Legacy Hotel & Residences in Miami World Center. The project, due in 2023, was originally meant to capitalize on the booming medical-tourism industry. Now that coronavirus is upon us, Mr. Kodsi believes it will be viewed as a benefit to buyers of the $300,000 to $2 million condos. “Imagine a shelter-in-place situation, and having doctors, nurses and a pharmacy right downstairs,” Mr. Kodsi said. “Health is the new wealth,” reads the website for the project.

Write to Katy McLaughlin at [email protected]

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Rent-a-CEO: Inside Gilmartin’s short-term gig at Mack-Cali

After a massive shakeup of Mack-Cali’s board, MaryAnne Gilmartin is temporarily stepping in as the New Jersey-based real estate investment trust’s CEO.

Gilmartin, through an agreement between Mack-Cali and her company MAG Partners, will serve as CEO for six months or until the company finds a replacement, whichever happens first, according to filings with the Securities and Exchange Commission. Mack-Cali, in turn, will pay MAG Partners a monthly fee of $150,000 and offer a one-time cash sign-on bonus of $300,000 and a completion bonus of $200,000 at the end of Gilmartin’s term, according to filings. An activist investor had pushed for the resignation of Mack-Cali CEO Michael DeMarco since earlier this year.

MAG Partners has also been offered a fully vested stock option to purchase up to 230,000 shares of common stock at $14.39 per share, and up to 100,000 shares of common stock at $20 per share. Gilmartin is still serving as chair of Mack-Cali’s board, which will lead the search for a permanent CEO.

“I think this is going to be an awesome gig. There are many many people who have been sidelined for lots of reasons. Or have just been looking for something new, given that the world order has shifted,” Gilmartin said in an interview Monday. “I’m wildly confident that we will have a great selection of talent.”

Gilmartin said she’s not “stepping away in any significant way” from MAG Partners, the development firm she launched last year as a spinoff from the partnership she formed with L&L Holding nearly two years prior. Her team — largely made of Forest City alums — will continue to handle day-to-day operations. MAG Partners is one of several firms looking to develop part of the former Amazon site in Long Island City. Most recently, the company signed letter of intent for a ground lease with Trinity Real Estate to develop a 150,000-square-foot boutique office at 122 Varick Street.

Mack-Cali, meanwhile, has been shifting its strategy from operating suburban offices to acquiring multifamily and office properties on the Hudson County waterfront. In December, the REIT agreed to sell its entire suburban office portfolio to a joint venture led by Onyx Equities in a deal valued at $288.5 million. Last March, it unloaded a 56-building portfolio in Westchester and Fairfield for $487.5 million.

Gilmartin was one of four board directors who had criticized Mack-Cali’s leadership in May, amid the REIT’s proxy fight with investor Bow Street. Gilmartin — along with three other board directors backed by Bow Street — said other members of the board put a “rubber stamp” on decisions favored by ousted CEO DeMarco, Bloomberg reported at the time. Bow Street, which owns a 4.9 percent stake in Mack-Cali, ultimately won eight of the nine board of director seats last month. Gilmartin was named chair.

In a March letter to shareholders, Bow Street had called for DeMarco to resign, accusing him of various missteps, including ignoring viable bids from companies interested in acquiring Mack-Cali. A representative for Bow Street declined to comment. DeMarco, who replaced Mitch Rudin as CEO in 2017, couldn’t immediately be reached.

Daniel Ismail, an analyst at Green Street Advisors who covers Mack-Cali, said the CEO switch was expected by investors, given the recent shakeup of the board. He expects activist investors to continue pushing for a sale or merger of the company. He noted that Gilmartin has experience working for a public REIT, Forest City, which was also sold shortly after she left the company.

“There’s probably a lot that can be reconfigured,” he said. “But in this environment — in the middle of a pandemic — many of these large strategic things are going to be difficult, as is looking for a permanent CEO.”

When asked about her goals as interim CEO, given her criticism of previous leadership, Gilmartin pointed to the reconfigured board, which aims to create an “independent transparent board that focuses on governance and strategy.” She sees herself as an intermediary between management and the board and says she is focused on company culture.

“There is no direction yet as to the board’s thinking on strategy because the board has really just been reconstituted,” she said. “There’s no great reveal yet because the work has really yet to be done.”

Rich Bockmann contributed reporting.

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MaryAnne Gilmartin Appointed Interim CEO of Mack-Cali

Real estate titan MaryAnne Gilmartin, who cut her teeth at Forest City Ratner and went on to form a partnership with David Levinson and Rob Lapidus before leaving to start MAG Partners last year, has been appointed interim Chief Executive Officer at Mack-Cali, according to a release from the real estate investment trust.

In addition, Tammy K. Jones, Co-Founder and CEO of Basis Investment Group, was named Lead Independent Director of the REIT.

Prior to today’s announcement, both Gilmartin and Jones had been serving on Mack-Cali’s board. The release said that Gilmartin will continue to also operate MAG Partners. There was little said about where the previous CEO, Michael DeMarco, is going, other than a statement of thanks from Gilmartin.

“On behalf of the Board, I would like to thank Michael for his service to Mack-Cali,” Gilmartin said in a statement. “I look forward to working with the talented Mack-Cali team and all of our stakeholders to ensure that the Company operates at the highest level.”

However, there had been a concerted push for DeMarco’s removal from Bow Street LLC, a New York-based investment firm that owned 4.5 percent of Mack-Cali’s stock. Bow Street called for just such action in an open letter published in March. “It is now clear that the rot at Mack-Cali goes far deeper than any of us knew,” the letter said, “and that more comprehensive action is required to protect shareholders’ investment.”

#72 MaryAnne Gilmartin Founder and CEO at MAG Partners

“Resiliency” is a word that gets thrown around a lot right now, but for some executives, the belief in a rebound is deeply rooted in experience. “Right after 9/11, when we were building The New York Times building,” recalled MaryAnne Gilmartin, who was then at developer Forest City Ratner, “people were like, ‘No one is going to want to be in a skyscraper ever again.’”

Her point is that you don’t bet against New York, the city that she has loved fiercely ever since growing up in Far Rockaway, Queens. Yes, today there’s a pandemic, but “developers,” Gilmartin said, “are hopeless optimists.”

Certainly her Happy Warrior buoyancy has played out well for the City in the past. In a career spanning more than two decades at FCR—the last six as CEO—Gilmartin added not just the Times Building, but also the Barclays Center, Frank Gehry’s downtown Spruce Street tower, and the Tata Center at Cornell Tech to the skyline.

In March 2020, she took her optimism to its logical extension by forming her own firm, MAG Partners. “For me to own 100 percent of the company is a big move for me,” noted Gilmartin. “As much as I love risk, I also knew that I was taking on a team of people whose livelihood depended on me.”

For two years she had been at L&L MAG, a partnership with Robert Lapidus and David Levinson, but, “after the first couple of deals with L&L, I realized that people would back me with my track record.”

Umm, yeah!

Now on the drawing board are three projects. She is part of a four-developer team in Long Island City (“we call it Amazon Redux: It will be a veritable job engine for Queens, and we’re doing it with the community at the table,” noted Gilmartin). Downtown, her firm is working on 122 Varick, an office building on land leased from Trinity Church. She explained her vision, “I could have the first office building in that submarket, which is Google and Disney all day long.” On the residential front, she is building a 480-unit rental at 241 West 28th Street, 30 percent of which will be affordable.

“We are really nimble,” she said of MAG Partners, “because we have sites, not buildings, so a lot of my thinking is ‘how is this building going to perform in a post-COVID world?’ Now I’m focused on things like ‘what are we going to care out about forever?’”

To her full plate, last month she added the chairmanship of Mack-Cali. Gilmartin, who is also on the board of NY Public Radio and BAM, had been a director of the Jersey City-based REIT for a year after being elected as part of an activist slate. New York City might be a little jealous about sharing her, but if Gilmartin’s history is any indication, there’s plenty of her positive energy to go around.—A.R.

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Developers Unveil Big Plans for LIC Waterfront, Up to 12 Million Square Feet Planned

A group of developers looking to build on a 28-acre section of land surrounding Anable Basin provided an overview of their plans at a Community Board 2 Land Use Meeting Wednesday night.

The developers announced that they are looking to build 10-to-12 million square feet of space on the 28-acre area with buildings that range in height from 400 to 700 square feet, the equivalent of 30 to 60 story structures.

The plan would focus heavily on commercial space, and the project would be developed over a 10 to 15 year period. The developers aim to get the property rezoned next year.

The plan includes 7 acres of open space, space for three schools and ½ million square feet for arts and cultural space and similar uses. The plan would also include a pedestrian/bicyclist bridge over Anable Basin that would connect 5th Street on both sides of the water.

The developers said that about 50 percent of the 10-12 million square feet would be for commercial use. The proposal would also include mixed-income housing, although the number of units was not disclosed at the meeting.

The plan–presented by a development team consisting of TF Cornerstone, Plaxall, Simon Baron Development and MAG Partners—incorporates the sites where Amazon HQ2 was slated to be built as well as some adjacent parcels.

The developers—with the exception of TF Cornerstone—each own a portion of the 28 acre area. TF Cornerstone is looking to develop two city-owned lots on 44th Drive, which are part of the 28-acre area.

The group came together last year at the request of the city council, which called for the developers to come up with one unified rezoning plan for the area as opposed to each having a separate concept for their own property.

The developers formed YourLIC and have hosted four workshops since November to solicit feedback from residents covering topics such as economic empowerment to open space. A fifth workshop was postponed due to COVID-19.

“We want to create a true mixed-use district with all the community resources needed to make it a place to live, work, play and thrive,” said Paula Kirby, managing director of Plaxall, whose family has operated a plastics factory and owned property in Long Island City for 70 years.

The developers said the project provides Queens with the opportunity to develop an economic engine at a time when New York City—and the borough especially—has taken a financial hit. They said it would generate a significant number of high-paying jobs.

The development team said that the scale and height of their buildings would also be in context with other Long Island City districts–such as Court Square and Hunters Point South.

“We believe this is appropriate for this location,” said Eleanora Bershadskaya, a Senior Associate at TF Cornerstone.

TF Cornerstone, she said, is developing parcel C at Hunters Point South, with one of its two towers reaching 550 feet.

Furthermore, the properties in the Court Square section of Long Island City are of a similar size. For instance, One Court Square—also known as the Citigroup Building–is 50 stories tall and about 670 feet tall. The Skyline Tower, which is going up at 23-15 44th Dr., will be 778 feet high and 68 stories.

The developers were asked about the scale and density of the plans given the pandemic. They said that they are planning for the long term and that there will be demand.

“We think density makes New York City great and we remain committed to that,” said Ashley Cotton, with MAG Partners. “We think immigrants, young people, professionals and college grads will continue to come here.”

The group went into detail about the open space, noting that it would provide a connection to Hunters Point South and sets the stage for a corridor that could eventually go to Queensbridge.

The plans call for a junior soccer field, a tot lot and a track at the northern section. Then farther south, provisions are made for a plaza, esplanade, kayak launch and more.

Kenny Greenberg, a member of the Land Use Committee, asked why the city-owned sites on 44th Drive were not being exclusively used for public use. He noted that community activists and elected officials—such as Congresswoman Carolyn Maloney—have called for the city-owned parcels to be used for a public purpose.

Bershadskaya, with TF Cornerstone, said that the developer has taken into consideration what has been said and changes have been made.

The initial plans for the parcels– that were put out as an RFP by the Economic Development Corp– called for 1,000 residential units along with commercial space and various amenities.

The sites, Bershadskaya said, will no longer be used for residential purposes. The sites will be for commercial use only and will include public space and a public school.“We are committed to public amenities,” she said. “This feedback hasn’t fallen on deaf ears.”

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