NOTABLES IN REAL ESTATE 2021

MaryAnne Gilmartin

Co-founder, chief executive officer, MAG Partners

After leading the efforts to build the Barclay’s Center, MaryAnne Gilmartin is now running her own firm. Gilmartin is the founder and chief executive officer of MAG Partners, which she spun off from L&L MAG last year. MAG Partners is creating a 480-unit residential building in Chelsea. Gilmartin was previously the president and chief executive officer of Forest City Ratner Companies, where she oversaw a period of game-changing development. In addition to the Barclay’s Center project, at the center of the $4.9 billion, 22-acre mixed-use Pacific Park development, Gilmartin was in charge of the construction of the New York Times Building, designed by architect Renzo Piano, and the Tata Innovation Center at Cornell Tech, among other projects.

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How Mack-Cali CEO is making health, wellness into top amenity in its properties

Gilmartin: ‘There isn’t anything better you could give your employees than the comfort of knowing that they’re healthy and well, and doing it at no cost to them’

MaryAnne Gilmartin was named interim CEO at Mack-Cali Realty Corp. at the end of July — or, when New Jersey was between surges of the COVID-19 pandemic.

And, while Gilmartin says she has no desire to lose the interim tag (see story here), she has quickly jumped into the role — and has the company moving forward with a number of health and wellness initiatives in its buildings, including Harborside in Jersey City, perhaps the REIT’s biggest point of emphasis as it doubles down on urban office and multifamily.

Sure, there’s the extra cleaning that all landlords are doing. But Gilmartin is looking to offer that deep cleaning to tenants, to have wellness companies as key tenants in mixed-use buildings (perhaps at a discount) and to have facilities that could give COVID tests (and perform other health care needs, such as physicals) on site.

“There isn’t anything better you could give your employees then the comfort of knowing that they’re healthy and well, and doing it at no cost to them,” she said.

Gilmartin spoke earlier this week on a CBRE lunch-and-learn hosted by Vice Chairman Jeffrey Dunne and Executive Vice President Jeremy Neuer. It was moderated by Mary Ann Tighe, CBRE’s CEO for the tri-state area.

Here’s a look at some of her thoughts on health and wellness in Mack-Cali buildings. Her answers are condensed for clarity and space:

On offering (extra) cleaning services

We obviously have been hyperfocused on cleanliness and sanitary measures inside of our office and residential buildings. But what Ed (Guiltanan, senior vice president of leasing) and I have realized is that the tenants are looking for protocols and they’re looking to understand best practices.

So, we’re putting together manuals for our residential portfolio and our commercial portfolio so people can understand exactly what that means. We’re also thinking of leveraging the fact that, if we’re cleaning our lobbies, elevators, common bathrooms, we should be offering the same upgraded services to the tenants themselves, because a lot of our tenants are now having to clean their own spaces above and beyond conditions and specs previously seen. We, as a landlord, should be offering that.

It might be important to offer that to the commercial users inside of our buildings. I think we’re going to want to provide an offering that’s going to be both delivering services that maybe we didn’t offer the tenants (previously), and then a wellness program.

On bringing testing to properties

Right now, during the pandemic, we’ve been bringing testing on-site. You can have COVID testing right in our offices, because we have a partnership with Hackensack Meridian (Health). It’s enormously convenient for people to know that the doctor will come to your office space.

We’re going to make that available to our customer base. I think that’s something we’re going to continue to do in the future. If testing is a fixture of the near-term, workplace environment, we’re going to make sure we deliver on that amenity.

On wellness as an amenity

People want a higher level of service. They want wellness, they want both private and public outdoor space that’s attractive and allows them to work in ways that are much more flexible than just sitting behind a computer all day.

We want to make sure that we have ambulatory care and clinic facilities right there within the Harborside campus so that you can go to the doctor and get your annual checkup without going back to Manhattan and seeing your doctor. Day care, fitness and food is what makes us tick. And, if you can have all of that at your fingertips, I think you’ve got something really special.

On attracting wellness companies

Because we control the environment, if I think we’re not going to drive rents in the retail because it’s much more important that we drive the rents upstairs, I can offer food and beverage operators, fitness companies, day care centers unbelievable value in the real estate — knowing that I’m not looking for the highest rent, I’m looking for those that are the best providers, and then I’ll get paid back on that investment on my commercial space upstairs, if that makes sense.

On capacity, property tech in residential

The tracking is pretty simple through turnstiles. We’re not doing anything more sophisticated than that, but we’re besieged by proptech companies that are coming in and showing us all the gizmos. And a lot of them are really priced competitively, so it’s a no-brainer to do some of this stuff.

On the (residential) side, to do touchless experiences from the moment you walk in the building to your apartment is easy to do. So, I think that’s the way of the future. Why are you touching things if you don’t need to, if it can be done through a mobile app? I think a lot of it in the homes and for residents is going to happen really quickly.

On capacity, property tech in commercial, office

I don’t think that the densities are really a big issue at Harborside, because the space has been industrial space in nature — lots of light, lots of air. We have really nice proportions in terms of the amount of dedicated space per employee.

We don’t have a lot to undo, relative to what’s happened in Manhattan. I think a feature of the future is that space will be much more generous. The days of packing (people) in like sardines? I think those days are behind us. I feel really confident that Mack-Cali doesn’t have a major new term in that in that respect, because the spaces are not overly dense to begin with.

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MAG Partners, Safanad form new joint venture

MAG Partners will bring the development experience, and Safanad will bring the capital.

That’s the setup of a new joint venture between the companies, which is targeting $2 to $3 billion worth of deals, the firms told The Real Deal. Eventually, the joint venture will pursue ground-up development, but in the short-term, it is looking at distressed properties and projects, as well as building conversion opportunities.

The companies are already working together on a 479-unit rental building at 241 West 28th Street in Chelsea. The firms, along with partners Atalaya Capital Management and Qualitas, secured a $173 million construction loan for the project in October.

MaryAnne Gilmartin launched MAG Partners, a spin-off from the firm she formed with L&L Holding’s David Levinson and Robert Lapidus, in December 2019. Gilmartin noted that while her priority since leaving Forest City Ratner in 2018 has been new development, the pandemic has shifted her focus. She described the new arrangement —which will acquire sites and pursue deals as a general partner — as “MAG Partners fueled by Safanad.”

Safanad, a private equity firm that launched in 2009, tapped Oxford Properties Group’s Andrew Trickett in 2018 to help grow its New York real estate operations. Trickett called the joint venture with MAG a “convergence of capital and expertise.”

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Gilmartin confirms ‘interim’ CEO tag, says there will be new day-to-day leadership at Mack-Cali in 2021

Mack-Cali Realty Corp. interim CEO MaryAnne Gilmartin talked about the past, present and future of the real estate investment trust Monday during a webinar. And, while she said she will continue to have a major role in the company, Gilmartin made it clear that she does not intend to remove the “interim” tag from her title.

“I’m not 100% clear on the timeline, but in 2021 there will be new day-to-day leadership inside of Mack-Cali and I will go back to being chair of the board,” she said.

Gilmartin, who has stepped away from her job as founder and CEO of MAG Partners in New York City to run Mack-Cali, talked about where she saw the Jersey City-based REIT going during a lunch-and-learn webinar moderated by Mary Ann Tighe, CBRE’s CEO for the tri-state area. It was hosted by CBRE Vice Chairman Jeffrey Dunne and CBRE Executive Vice President Jeremy Neuer.

“My decision to serve as interim CEO was not something I anticipated doing,” Gilmartin said. “I was convinced of it when I was asked by the board to do it because it had a timeline associated with it.

“I knew that it was a bit of a rabbit hole and would require substantially all of my time, but that it wouldn’t be something like Hotel California — you can check in, but you can’t check out.”

Gilmartin said she remains committed to Mack-Cali — and that serving as interim CEO will allow her to do a better job as chair.

“My commitment to the company is solid,” she said. “I’m deeply loyal to the team. And I believe, as chair, I will be able to serve people and the shareholders effectively and mightily because I’ve been the interim CEO.

“The nice thing is, I’ve had the opportunity to do this. I will be able to stay with the story and see it out through its completion, and I also get to go home again to my team at MAG Partners, where we have a capital source, we’ve got a building on 28^th Street that we’re coming out of the ground building in West Chelsea and we see lots of opportunity through the pandemic.”

Gilmartin said she sees similar opportunity at Mack-Cali.

“I guess the safest thing I can say is that changes are afoot and that we are not going to look the way we look today in three years, if we have anything to say about it,” she said.

And, while it’s no secret that the firm wants to sell off its suburban assets, Gilmartin said there will not be a fire sale — regardless of what public pressure the company may face to do so.

“Selling segments in the business or (joint venturing), or bringing in new capital, just for the sake of satisfying the rally call for change, is not wise,” she said. “You can’t run the company based on what the analysts are saying has to happen. You basically have to look at the company and say, ‘We definitely need to change it up a little bit.’

“Selling suburban is a strategy to make the balance sheet simpler and to produce proceeds so that we can shore up the balance sheet and increase liquidity and reduce debt — those things make a ton of sense. And I believe, all through 2021, we will sell a billion dollars of assets and that will make a meaningful difference on the company’s bottom line.”

That would make for a different company, too.

“You’re left with a residential business that is robust and has extraordinary value,” she said. “And we can keep doing that. We can supersize that portfolio and be a bigger, better version of ourselves. And/or we can be a commercial company that extracts the value that we know exists on the waterfront and we could JV with other commercial operators and owners and be a bigger, better version of ourselves as a commercial landlord. I think either of those two things are possible.

“Having two businesses — a residential business and a commercial business — is a really nice story of diversification, particularly if it’s mostly urban. So, I don’t see it impossible that the company is a commercial and residential landlord. But it has to have a healthier balance sheet, has to have better execution and it needs to have access to greater sources of capital.”

No. 9: MaryAnne Gilmartin; Commercial Real Estate Power 50

Gilmartin was appointed interim chief executive officer at Mack-Cali in July 2020 with the firm dealing with activist investor Bow Street Capital. The dissident investor had been trying to elect its own slate of directors to Mack-Cali’s board.

Since taking the helm, Gilmartin has made several strategic deals to help, one of the largest landlords in New Jersey, refocus on more valuable waterfront properties.

She has put together a new team to orchestrate a transformation at Harborside, its mixed-use office campus in Jersey City. The group of professionals, consisting of newly hired experts and internal leaders, will facilitate the repositioning, leasing and marketing of the 4.3 million-square-foot property along the Hudson River.

Gilmartin has become a champion for women in the industry and recently founded her own company, MAG Partners, which just announced plans for a new residential development in Manhattan.

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Chelsea strip could hold clues for health of Manhattan development

It’s tucked away, low-key, and a bit rough. But West 28th Street between Seventh and Eighth avenues in Chelsea may hold clues about the mid-pandemic state of development.

The industrial stretch is the site of a handful of major projects, residential and commercial, that appears to be going full steam ahead even as others tap the brakes.

“These seem like tougher times than the last recession,” said Jana Angelakis, who is trying to sell her two-bedroom, two-and-a-half-bath condo at 261 W. 28th St. Since listing the unit last winter, Angelakis has cut its price four times, to $1.7 million from $1.8 million, while also offering it as a rental at $6,250 per month. “But it’s exciting to see what’s happening on this block.”

Of all the new developments, the one with the most immediate risk, perhaps, is the Maverick, an 87-unit, 20-story condo at 215 W. 28th St. Sales begin at year’s end, which will test the area’s luxury appetite.

Though officials have yet to approve prices for the project, which is from developer HAP Investments, they should average $2,400 per square foot, or starting at $1.2 million for one-bedrooms.

In comparison, new one-bedrooms in Chelsea now list for an average of $2.1 million, according to StreetEasy.com, with one-bedrooms averaging $1.3 million.

“Time has worked against me” with the project, which missed the peak condo market of 2016, said Eran Polack, HAP’s chief executive officer.

The Maverick also features a 112-unit rental portion, with an entrance at No. 225, that was conceived as a hedge against a softening condo market even before coronavirus hit; it will begin leasing this winter. Both the condo and rental will share a pool, saunas and a roof deck.

Other projects are right behind it, like 28&7, a boutique 11-story office building from GDSNY at 322 Seventh Ave., which will open in 2021. Whether the work-from-home trend impacts its leasing remains to be seen, brokers say.

And this month, ground-breaking occurs at 241 W. 28th St., a 479-unit rental planned from MAG Partners.

This fall, MAG turned not to a conventional bank for financing but a private equity firm, Madison Realty Capital, which lent $173 million. 

“As major tech companies continue to sign big leases within walking distance,” MaryAnne Gilmartin, MAG’s founder, said, “We expect to see very strong long-term demand.”

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MaryAnne Gilmartin; Founder and interim CEO at MAG Partners and Mack-Cali Realty

How flexible are you with negotiating rents?
We are currently repositioning Mack-Cali’s Harborside campus in Jersey City, where we have great office space with million-dollar views available to companies looking to control their full environment post-COVID-19 [pandemic]. For those willing to come across the river, it is an amazing value proposition.

Has your “dead to me” list grown?
Yes.

Are you in the market for financing?
Yes.

What would be the signs that things are NOT going to improve in 2021?
I am watching what happens with schools very, very closely.

What do you think will NOT go back to normal?
Only eating indoors. The new outdoor perches for dining in New York City are amazing — thankfully, that silver lining that is here to stay.

I also think residential builders and operators will capitalize on the [work-from-home] phenomenon and innovate with more outdoor spaces and working-from-home services.

Who do you like for mayor in 2021?
That’s a tough one. I am still waiting for a true civic hero to step up. In the decency and humanity front, I do want to commend Corey Johnson for being so human and honest, something we don’t see enough in politics.

What do you think the city and/or state should do to help both real estate and the city?

The mayor needs to start speaking up and stepping up for long-term growth and development for our city. While budgets are tight today, we need to continue to work to increase the competitiveness of New York City with strategic thinking and planning.

How do you think the November election will affect real estate? How do you see a Trump win? How do you see a Biden win?
A Trump win would be another blow to great American cities — and the New York region is atop that list. Biden’s road will be long and hard, but it will recognize the importance a prosperous tri-state area holds for the country and the world.

 
LIGHTNING ROUND
Where’s your apocalypse bunker? 

My rooftop in Park Slope.

Did you gain or lose weight during quarantine? 

Held steady with a lot more effort!

Sourdough bread, banana bread, other? 

Sourdough

Which TV show have you binged? 

News-binging got in my way.

What restaurant did you go to when restaurants reopened? 

North Fork Table

Where did you quarantine? 

North Fork with my kids.

Biden, Trump or Kanye? 

Biden

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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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