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Leslie Himmel: Opportunity in Real Estate Asset Bubble (Audio) · Bloomberg Intelligence

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  Speaker 1: Hayes along with pim Fox, continuing our very special live
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  Speaker 1: And now we're gonna be talking, in fact to one
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  Speaker 1: of the most prominent women in the New York City
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  Speaker 1: real estate industry. She's become one of New York's most
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  Speaker 1: active owners, having accumulated a substantial portfolio PIM of commercial
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  Speaker 1: real estate holdings valued in excess of one billion dollars.
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  Speaker 1: How was the number of one, Leslie Himmel, managing partner
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  Speaker 1: Himmel and maron golf properties. But right now let's go
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  Speaker 1: special addition of taking Stock. Today, we're coming to you
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  Speaker 1: from the offices of accounting and advisory firm Eisner Amper
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  Speaker 1: as they prepare for their annual real estate Private Equity
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  Speaker 1: Summit this Wednesday. Down appear sixty and there's going to
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  Speaker 1: be hundreds of private equity investors, real estate developers and
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  Speaker 1: more talking about the real estate investment environment. So how
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  Speaker 1: perfect that we have with us today one of the
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  Speaker 1: most prominent women in New York City's real estate industry.
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  Speaker 1: Leslie Himmel, managing partner, founder at Himmel Amerngolf Properties. Welcome.
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  Speaker 1: Let's say, it's great to meet you. Thank you for
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  Speaker 1: having me. So tell us a bit about your company,
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  Speaker 1: what part of the real estate industry you specifically fit into.
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  Speaker 1: Stephen Marengolf and myself formed Himmel and Marengolf Properties about
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  Speaker 1: thirty two years ago, and through the past three decades
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  Speaker 1: have accumulated a privately held portfolio of secondary office buildings.
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  Speaker 1: Were known for buying an emerging neighborhoods like Times Square
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  Speaker 1: before before it became popular, Park Avenue South Back actually
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  Speaker 1: in nineteen seventy nine, Uh down on no Ho soho.
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  Speaker 1: Everything now has a name. We purchased something out in
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  Speaker 1: Long Island City in six So we've been known for
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  Speaker 1: buying properties emerging neighborhoods, renovating, repositioning and retending and then
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  Speaker 1: holding them for the long term. We have continued in
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  Speaker 1: this market we have a few billion dollars worth of
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  Speaker 1: secondary office buildings. We are continuing to spend a lot
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  Speaker 1: of time on renovating our properties, financing as much as
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  Speaker 1: we can in the lowest interest rate environment that we've
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  Speaker 1: ever seen, and getting ready for what we think is
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  Speaker 1: going to be a change of a cycle. We've been
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  Speaker 1: delighted that sum If I have had a fantastic partnership.
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  Speaker 1: Very unusual two individuals have a masked portfolio and stayed
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  Speaker 1: partners for so long. UM. Steve Maradas probably my my
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  Speaker 1: best friend and challenges me every day, is an engineer
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  Speaker 1: and training. We have our own management and leasing company
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  Speaker 1: that helps us keep those buildings full. The effort to
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  Speaker 1: put together this whole portfolio, as you mentioned more than
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  Speaker 1: thirty years. What would you do now if you were
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  Speaker 1: just getting into the business, where would you be looking? Well?
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  Speaker 1: I wake up every learning feeling like I am just
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  Speaker 1: getting back into the business, as I wake up saying
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  Speaker 1: what can I do today to increase my portfolio? UM,
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  Speaker 1: my son's over at Jamestown Properties. I guess he's just
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  Speaker 1: starting in the business. You can't really find properties as
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  Speaker 1: much off market like we used to. UM, but I
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  Speaker 1: think you're asking a really good question, because Steve Maronoff
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  Speaker 1: and I have been asking how do we reposition ourselves
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  Speaker 1: this year after building a war chest of a few
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  Speaker 1: hundred million dollars of cash to go and buy as
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  Speaker 1: the cycle starts to change, and where will those opportunities exist?
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  Speaker 1: And I'll tell you where we think it's going to
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  Speaker 1: happen is the last few years we've had a rising
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  Speaker 1: tide and an a rising tide. The operator is almost
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  Speaker 1: like a janitor or a custodian, and it's they're important.
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  Speaker 1: But asset values keep going up as interest rates change,
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  Speaker 1: and I think the twenty million square feet of property
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  Speaker 1: gets added to the commercial stock in New York, we
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  Speaker 1: believe that they'll be a little bit of a tide
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  Speaker 1: going down. And that's when the operator becomes so important
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  Speaker 1: than we become the captain of the ship and very
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  Speaker 1: very important. So I would keep going at the same
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  Speaker 1: thing in a slightly different energy level. So changes SoC
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  Speaker 1: you're talking about the interest rate credit cycle, I imagine
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  Speaker 1: it isn't aside Eric Rosingrand, president of Boston FED, who
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  Speaker 1: I had a chance to speak to a couple of
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  Speaker 1: times out of the Jackson Whole FED conference in August
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  Speaker 1: has given a couple of speeches lately his worry about
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  Speaker 1: a commercial real estate bubble. Do you see anything like that?
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  Speaker 1: And are you then kind of girding for this change
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  Speaker 1: from pools of liquidity everywhere, very low rates around the world.
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  Speaker 1: Is something less generous? That's a great question, and the
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  Speaker 1: answer to that is yes. Trees do not grow to heaven.
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  Speaker 1: Interest rates don't stay at zero forever. Uh. I saw
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  Speaker 1: a chart last week at M and T s board
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  Speaker 1: meeting where I'm on their board, where we had a
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  Speaker 1: chart of all the negative yield bonds that are being
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  Speaker 1: held in Europe. Um. We know this will change. And
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  Speaker 1: what my concern is in real estate when you have
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  Speaker 1: a zero interest rate environment, we just we just borrowed
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  Speaker 1: for at fourteen sixty Broadway at three point six percent
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  Speaker 1: interest only ten years. It's record lows. We love it,
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  Speaker 1: but that might be causing an asset bubble, which, for
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  Speaker 1: operators like ourselves, will create an opportunity to buy again.
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  Speaker 1: That opportunity assumes that you've got the cash or the
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  Speaker 1: wherewithal in order to execute. Are most people prepared for
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  Speaker 1: that or is that an outlier? Do you find yourself
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  Speaker 1: having to explain why you're holding money on the side.
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  Speaker 1: I think Warren Buffett was a market timer and would
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  Speaker 1: hold cash when he really thought it was president to
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  Speaker 1: do so. Oh, and we're similar. A lot of our
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  Speaker 1: competitors will finance. Maybe you don't want to have as
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  Speaker 1: much cash on the sidelines. That's been our philosophy. We've
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  Speaker 1: been frozen in the eighth inning for quite a while,
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  Speaker 1: and uh, perhaps we have some extra innings to go.
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  Speaker 1: But we're ready to pounce when that market changes. Well pounds, indeed,
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  Speaker 1: we're we're looking forward to say how it goes it
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  Speaker 1: Pouncings work pretty well for you so far. Great, Thank
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  Speaker 1: you very much. Leslie Himmel is a managing partner and
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  Speaker 1: the founder of Himmel and Maringough Properties based in New
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  Speaker 1: York City. Talking about the future of New York City
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  Speaker 1: real estate. Thank you very much for being in anticipation
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  Speaker 1: of the fourth annual Yes Eisner and for Real Estate
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  Speaker 1: Private Equity Summit taking place at Pier sixty on Wednesday.
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  Speaker 1: This is Bloomberg. Thank you a changing credocycle. If had
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  Speaker 1: a preserve that's ready to raise interest rates. Very important
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  Speaker 1: for the real estate market is our continue our special
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  Speaker 1: live broadcast here at Eisner Emper. We're gonna look at
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  Speaker 1: the bond market with Dan Fuss of BLOOMA. Blumas sales
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  Speaker 1: on Bloomberg Radio