November 15, 2019
The Real Deal

Unions at bay, but hostility for real estate worse than ever

Inside an elegant dining room at the Pierre hotel Thursday, panel moderator Robert Blumenthal scanned the floor — packed with real estate’s biggest names — for signs of unrest.

It was a decidedly calmer scene than at the same Schack Institute of Real Estate capital markets conference a year ago, when protesters interrupted the panel discussion to blast Stephen Ross, the Related Companies chairman, whose firm was in a dispute with unionized construction workers.

“I’m glad we’re all here again,” Blumenthal quipped. “We also have more security this year.”

Ross, who shared the stage with fellow industry titans Marty Burger, MaryAnne Gilmartin, Scott Rechler and William Rudin, noted that the dispute between the Building Construction Trades Council and Related Companies was settled this year and the labor group has stopped protesting Related’s use of nonunion labor at Hudson Yards.

Rudin said the deal had paved the way for an agreement between the Real Estate Board of New York and the Building and Construction Trades Council, which was announced last week.

But the conversation took on a more serious tone as the panelists discussed the recent shift in the state legislature.

“I’m anxious of what’s happening in Albany,” said Rechler, chairman and CEO of RXR Realty. “I don’t think we’ve ever operated in such an anti-business, anti-real estate environment.”

He added, “We’re talked about by the activists as the enemy. You think about Occupy Wall Street after the banks collapsed — we’re that today; real estate’s that today. And that’s a tough place to be.”

Said Ross: “Those forces that kept Amazon out are still very active.”

When asked about WeWork, the panelists had mixed views about what is next for the struggling co-working company.

“I’m not worried,” said Rudin, CEO and co-chairman of Rudin Management Company, which has a new building at the Brooklyn Navy Yard, Dock 72, anchored by WeWork. Co-working is an important part of the real estate ecosystem, he said, and “here to stay.”

Ross noted it was still uncertain what would happen to shared office space companies if the economy retrenches. “We’re going to have a recession at some point,” he said. “And seeing if these companies that are in those short-term spaces that are not really highly capitalized are able to survive, and what will happen with that short-term space.”

Still, Related’s new lease with Facebook was seen as a positive sign for New York’s tech industry.

In Long Island City, Gilmartin said her team had been working for the last year on a district-wide innovation plan for the waterfront, which was to house Amazon’s new headquarters before the company withdrew nine months ago.

“While the political calculus around Amazon was off and wrong in so many ways, the economic and location analysis was spot on,” said Gilmartin. “Last year, were in negotiations to partner with a large landowner in Long Island City and shook hands on that site on Valentine’s Day … a few hours after Amazon pulled out.”

She continued, “I think the lessons learned have helped us go back to Long Island City and say, ‘What has to be different?’”

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