NEW YORK—Four men who own a large chunk of the New York cityscape got together on Tuesday to talk business.
At the annual Real Estate Expo held at Columbia University, John Catsimatidis, chairman and CEO of the Red Apple Group; Richard Mack, North American CEO of Area Property Partners; Steven Witkoff, founder and CEO of the Witkoff Group; and Richard Dansereau, head of Investor Relations for Stonehenge Partners Inc., discussed their investments and their overall projections for real estate trends in the city.
Hotels figure big in the future, for better or for worse.
Over the next three years, 140 new hotels will spring up around the city. That’s the buzz on the blogs, anyway, according to panel moderator and president of New York Real Estate TV, Michael Stoler.
Mack, who is heavily involved in the hospitality industry, says he has been seriously considering building hotels but has decided against it.
Changing zoning laws and increased tourism are likely to boost the market, but he thinks eager developers will over-saturate the market.
The panelists agreed that the hotel industry is different than traditional real estate and requires a special type of business acumen.
Dansereau explained that the hotel business is cyclical and he has rarely seen anyone make money on it long term.
While the hotel market may become over-saturated, Mack says the retail market in the New York metro area is under-saturated. It’s one of the few places in the country where this is the case, said Mack. He says it’s a good investment “if you can have some staying power.”
Catsimatidis commented on the state of economic recovery as reflected in the real estate industry.
“It’s like flying a four-engine aircraft on three engines. You’re not going down—hopefully you’re not going down—but you’re not rising very fast either.”
Steven Witkoff, founder and CEO, Witkoff Group
“I think there are storm clouds out there for New York.
Gov. Cuomo is a very refreshing voice, but every time I hear this concept of a millionaire’s tax … I belong to a country club, I can tell you that 75 members of my country club—this is a very affluent country club—have now permanently moved down to Florida.”
John Catsimatidis, chairman and CEO, Red Apple Group
“Retail is very interesting. You’ve got to be young, bold, and willing to work like I did 40 years ago, seven days a week, to make it work. ...
You gotta make sure the store or stores are open every morning. You gotta make sure they’re open all the time, you gotta make sure your employees show up. You gotta make sure your employees don’t bring class action lawsuits against you.
Richard Mack, North American CEO, Area Property Partners
“While we think that the fundamentals underlying business travel, which is corporate profits, is very good … the weak U.S. economy is something that really scares us when it comes to consumer travel.
We just don’t like leisure hotels right now, we think that that’s going to be a long recovery.”
