OWNERS MAGAZINE 2019: TALKING WITH THE TOP DEVELOPERS AND OWNERS OF NYC

Nov. 5, 2019 - Commercial Observer

Justin Elghanayan
President, Rockrose Development

Which commercial lease was your biggest win this year? Our lease with SmithBucklin at Alexander Court in D.C. was a big win for us, because it was a long-term lease on a low floor of our new trophy office building. When designing Alexander Court, we bet on tenants paying top dollar to be part of such an amenity rich-building. Getting a low-floor tenant to stretch its budget just to be part of the building felt like an important success.

Do you think we’re heading into a downturn? Why or why not? Given the length of the current recovery, there’s probably a downturn coming. That’s the nature of this business. I wouldn’t trust anyone who can say exactly when it will happen, but I will be prepared for it.

What do you think the future looks like for WeWork and other coworking operators if the economy slows down? WeWork and other coworking properties represent a small percentage of the commercial real estate market. New York’s commercial market will survive a slowing of the economy, with or without WeWork.

Is New York City losing its shine? Are property investors starting to look elsewhere? As the development environment gets increasingly difficult in NYC, developers and investors naturally consider alternative areas that make more sense on their balance sheets. This is a scary political environment.

How have you adjusted your business plan since the new rent laws were passed? Changes in rent laws have forced us to re-evaluate all of our current projects and future plans. Success in this business has always required making predictions about the future, such as the future economy, political environment, construction costs, rent laws. Those predictions seem especially difficult right now, but this has always been the case, to some extent.

Do the new rent laws present any opportunities for savvy owners? Every challenge presents new opportunities, you just need to know where to find them.

Is REBNY in need of a revamp? What needs to happen? This is a new environment for the real estate industry. Things are changing quickly, and developers don’t like uncertainty. REBNY is adapting, and it will need to continue to do so. REBNY will always have an important role to play in analyzing and communicating the long-term economic impacts of short-term political proposals.

What’s the biggest headache in your job that no one knows about? Today’s political environment is very frustrating. Major decisions are being made, sometimes to send a political message, without necessarily understanding the long-term impacts of those decisions. Our political environment doesn’t allow elected officials to make decisions based on an objective analysis of the facts.

What’s more important: having the best lawyer or having the best accountant? I’d go with having the best lawyer. A great lawyer should be thinking like an accountant when providing legal advice.

Most underrated neighborhood in the city? The resurgence of Harlem has been trumpeted for years, but I still think it’s an underrated neighborhood. With its proximity, transit options, cultural diversity, and beautiful housing stock, it’s still undervalued compared to other Manhattan neighborhoods.

If you could pick the Republican and Democratic nominees for President, who would they be? After just binge-watching Dwayne Johnson in “Ballers,” I’d vote for The Rock as a Democrat or a Republican.