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Owners Magazine 2019: Talking With the Top Developers and Owners of NYC

BY THE EDITORS | NOVEMBER 5, 2019 9:00 AM

Craig Deitelzweig
President and CEO, Marx Realty

Which commercial lease was your biggest win this year? Although not our largest lease, the roughly 60,000-square-foot lease expansion, extension and relocation by ANA at 10 Grand Central was our most impactful as it freed up the top four floors of the building. These floors are now part of our ridiculously high-end Penthouse Collection, with private outdoor space, direct, in-your-face views of the Chrysler Building and soaring, 20-foot ceilings. We anticipate achieving some of the highest rents in Midtown for this space.

Do you think we’re heading into a downturn? Why or why not? All of our indicators show that the New York City market is as strong as ever and our portfolio has never been busier. Likewise, the commercial real estate markets in cities like Atlanta and D.C. continue to show steady growth.

What do you think the future looks like for WeWork and other coworking operators if the economy slows down? These coworking groups will perform poorly during a recession. They have performed poorly during past recessions and the durational mismatch inherent in their business model persists today. The challenges that I have seen are that they expanded far too fast and along the way they were able to convince some of the market players that having a location in their building was a benefit to the landlord and other tenants. I don’t believe that outsourcing culture and community is ever a good idea, so at Marx we create hospitality-like experiences and dramatic spaces specially tailored for our tenants and all the while reinforcing the building’s unique brand and heritage.

Is New York City losing its shine? Are property investors starting to look elsewhere? New York is one of the strongest and most dynamic office markets in the world and continues to improve with the explosion of technology companies locating and expanding here. New York will remain a prime and stable choice for investors.

How have you adjusted your business plan since the new rent laws were passed? Thankfully, we do not have multifamily assets in New York. 

Do the new rent laws present any opportunities for savvy owners? Nothing good will come out of these regulations. The biggest concern to New York today is the increasing burdens that these ever-expanding regulations pose on the local economy.

Is REBNY in need of a revamp? What needs to happen? REBNY continues to do a great job educating the public on the impacts of over-regulation on the economy. We all need to work together to help prevent another Amazon debacle from reoccurring. [It’s] hard to understand how well-paying and “new economy” jobs in Queens (my hometown) were somehow considered a bad thing. 

What’s the biggest headache in your job that no one knows about? We have been credited with being the first to truly marry office and hospitality and reinvent the office product. As a result, our buildings have doormen outside; music in our lobbies; a signature scent being diffused through the HVAC system; and a club floor with a lounge, high-end cafe and beautifully landscaped outdoor terraces. Overall, the biggest challenge we address every day is that details matter. We make sure all of our tenants and guests are properly welcomed, so our front-of-house associates undergo rigorous training to ensure that everyone performs the Marx way of treating our tenants. Our goal is to perfect the art of making our tenants feel special at “hello.”

What’s more important: having the best lawyer or having the best accountant? I’m a former Skadden lawyer, so I understand the incredible value a sharp lawyer provides.

Most underrated neighborhood in the city? Midtown East. It is by far the most transportation convenient and offers the most diverse talent pool in the entire city. The restaurants, fitness venues and services available make it a great location for finance, tech, legal and creative firms. In the past, any landlord who owned an office building near Grand Central barely had to lift a finger to be successful. The tenants came to them. Now, with new building stock being built on the west side, many of the buildings in the Midtown East market need to be reimagined. Landlords content with the success of the past will fall further behind while creative owners will continue to thrive. We are actively pursuing acquisitions of these types of assets in Midtown.

If you could pick the Republican and Democratic nominees for President, who would they be? Lyndon Johnson versus Ronald Reagan.

LIGHTNING ROUND:

Favorite book? I love reading biographies of visionaries and industry titans.
Too many to pick just one.

Favorite restaurant? Serendipity 3. We have enjoyed a delicious sundae celebration for every one of my kids’ birthdays.

Favorite vacation spot? We’re heading to Australia this winter and I already know it will be our best vacation!

Favorite TV show? “Succession,” even though I try to raise my kids to be the complete opposite of those kids

Favorite movie? “Scarface.” Queens was a pretty rough place when I was growing up so this reminds me a bit of my childhood.

Favorite sport? Baseball. The Mets are my favorite (and most heartbreaking) team by far. Next year is our year.

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