ship, the company branched out into
third-party management in the late 1980s,
and today manages more than 6,500 residential units throughout New York City
and Long Island.
RENY: Tell about the opportunities
Kaled sees in third-party asset management.
Edward Kalikow: A lot of properties,
rent-stabilized in particular, were sold in
the run-up based on very unrealistic expectations and assumptions about how
the rent stabilization process really works.
As an operator of 30 years, I watched this
from the sidelines and almost was amused
by it, because people were entering into
bidding wars to buy these properties, but
the underlying fundamental assumptions
were flawed.
Robert M. Morgenthau
PAL Chairman
Robert J. McGuire
PAL President
John B. Osborn
PAL President
Raymond W. Kelly
PAL Honorary President
Invite you to celebrate the 4th Annual
We believe there are opportunities on
several levels. Some of the institutions
that helped finance these purchases may
be looking for management of the assets
with a no-nonsense approach with realistic expectations. Just because you’re
allowed to charge a rent legally doesn’t
mean you can collect it in the marketplace. As we’re seeing today, rents don’t
always go up.
From the management standpoint,
we’re hoping to use our experience to
help institutional owners that are ending
up with these properties. From an investment standpoint, we think that now may
be the time, although we haven’t seen it
yet, for some of the institutions to put
these fallen angels on the market at more
realistic values. I got off the train when I
was told that in order to buy, I couldn’t
have a due diligence period. I told myself, “you know what? That violates Real
Estate 101.”
BUILDING NEW YORK’S FUTURE
Luncheon
Co- Chairs:
DAVID ARENA
Grubb & Ellis
BRUCE E. MOSLER
Cushman & Wakefield
STEPHEN B. SIEGEL
CB Richard Ellis
Friday, September 25, 2009
The Pierre
Fifth Avenue at 61st Street
RENY: How are you positioning the
company to take advantage of these
opportunities?
Kalikow: We have a very good infrastructure in place to manage these assets. And
managing our own is one of the things we
pride ourselves on. We are different from
a lot of management companies in that
we are owner-managed, so we have a formula that we bring to our own properties
as well as those of our third-party clients.
RENY: Along with attention to real
estate fundamentals, what else positions the company to excel in this
market and then in a rising market?
Kalikow: New York City is one of the
most complicated places to run residential real estate, especially if it’s stabilized.
In light of the Tishman case and some of
the decisions lately on preferential rents,
you’re dealing with a moving target. So
how does a business decide on making an
investment in a municipality where the
rules are always changing? That’s one of
the things that cause me to be very conservative in my underwriting.
