Question: What’s your outlook on the future of New York City real estate?
Ian Reisner: In 2005 and 2006, when we were planning a building, many of my friends and family and colleagues in the industry said that it's crazy; there are so many condos being constructed in New York and there would be a glut in the market and we'd suffer just like other places, like Las Vegas and like Palm Springs and San Diego, and for that matter, Miami. And what I've always told people is you really have to always go back to the demographics and New York has a unique situation. Every single family in every part of the world wants to send their first born, their brightest child to get ahead in the world and one of the first places they think of is New York, maybe London. So we have the brightest minds, we have almost every major corporation with some type of headquarters here. We have every industry here and as a result the demographic inflow of people is consistent and it means we have a growing population. We had eight million people just a couple years ago; we're about eight and a half million people now and growing. So there are consistent needs for more houses and more apartments and more hotels and more restaurants. So the demographics of New York are positive and it's a growing city, and as a result I'm still bullish on residential real estate. That doesn't mean prices are going to go up five, ten, or 15 percent a year or more like they did a couple years ago, but it means that prices will remain firm and probably trend up over in time with inflation. So I think that New York City -- so New York City real estate is a stable, growing market in my view.
When we were looking to develop residential real estate, I was trying to think of where would be the best place to develop. And many brokers showed us extremely inexpensive land in places like Newport, New Jersey and Newark, New Jersey and Greenpoint, Brooklyn and Williamsburg and Long Island City, and even the World Financial District downtown. What I said to Matty is what we need to do is we need to find a needle in a hay stack. We need to go back to what my father always taught me in real estate, which is location, location, location. And when we found this piece of land on the far west side in Hell’s Kitchen, I knew that was it. Why? I watched as I grew up, my Uncle was gay and I saw what was going on in the West Village in the '80s and '90s, I saw what was going on Chelsea where I came out and where I went to my first gay bar and I had lots of friends living. I had lots of friends living and starting around the year 2000, I saw a migration of bars and restaurants and, for that matter, friends, moving to Hell’s Kitchen and I knew that would be the next Chelsea. I really did believe that.
And when I bought the piece of land on West 47th Street, west of 10th Avenue, everybody thought I was in the outer, outer zones of the city and I thought it was crazy. We were a five minute walk to Times Square and we are in the heart of Hell’s Kitchen and now 10th Avenue is becoming a little bit like 9th Avenue. A Bar-Tini bar opened a few weeks ago on 45th and 10th. There is a great restaurant called 44x10 on 44th and 10th and here we are on 47th and 10th with a robust neighborhood; the gentrification is in full swing. And to solidify that gentrification, Kimpton Hotels from San Francisco just opened a hotel on 48th and 11th called Ink48 and Ogilvy & Mather moved their Worldwide Headquarters from Worldwide Plaza to 47th and 11th in July with 2,000 young professionals working there. So I had a belief in Hell’s Kitchen, I saw the gentrification happening, I thought it would continue and it's actually happened much quicker than I expected.
Recorded on October 14, 2009