Larry Silverstein Discusses CRE and the Future of NYC

RDM’s Blake Grosch and Joe Leach were in attendance at this year’s Massey Knakal Commercial Real Estate Summit. Now in its 4th year, the event brought over 500 commercial owners, investors, developers and other real estate professionals together for a full day event focused on New York’s office and retail markets.

This year’s keynote was delivered by Silverstein Properties’ Chairman, Larry Silverstein, who spoke about his early beginnings, today’s market trends, the future of New York City and the World Trade Center.

Starting out/ Fundamentals
• Started out with nothing and worked with his father to buy first building in NYC.
• After reaching out to a number of potential investors, they were able to convince enough people to give them money to do their first deal.
• A few deals later, the big banks who initially turned them down were interested in investing with them.
• Larry believes education is enormously beneficial.
• In his youth, he received his Juris Doctorate even though he knew he'd never be a lawyer.
• Recommends getting a law degree or business degree or both.
• Feels the reason Silverstein is voted one of the best places to work in NYC by Crains is due to its strong collegial feel.
• They have focused a great deal on internal growth and promoting from within.
• Silverstein makes sure employees have a good quality of life, which benefits both the individual and the company.

New York City
• Said New Yorkers have a high level of work ethic; believes we're blessed.
• The US is the most stable market in the world and New York City is its hottest market.
• This makes buying difficult because there’s a sea of investment capital looking for product.
• As a result returns have been driven down.
• Feels best opportunity today is to acquire land in NYC.
• Mentioned that over $300 per SF to develop office space downtown will be tough to generate a return.
• The new administration needs to work with developers to adjust the excessive real estate tax burden on office development.
• This is very important in order to keep business in the city and stimulate further development.
• Believes long term investment in NYC is hard to beat because the market is stable.
• It’s hard to retrofit old buildings to new technology standards.
• A popular trend is to convert old office stock to residential because residential doesn’t require the same technology standards as office buildings.

World Trade Center
• Larry said he thought development would have moved quicker.
• It was complicated because they had to deal with the administrations of both NY and NJ as well as the Port Authority.
• Said things will be done by 2018.