future fashion trends 2017

future fashion trends 2017

   18.11       Fashion 2017

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♪♪ [theme music] ♪♪ >>>michael stoler: thereal estate market is on fire. everybody is buying.properties are trading. people arebuying, looking. who knows what'sgoing to happen. so today with theassistance of my friend ben levine, who will beconsidered the executive producer, we've puttogether this group of young dynamic leaders andone older guy over there

to provide their insighton how they see the real estate market and what'sgoing on in the market. as i said my gueststoday include ben levine, who is the vice presidentof development for douglaston development/levine builders. bryan woo, who is directorof acquisitions for youngwoo. ben atkins, who is the founderc.e.o. of abingdon square. then we have rob reffkin,who is the founder, co-founder, andc.e.o. of compass. and last but

not least my buddy chadtredway, who is the head for the northeast for chasefor all multifamily lending. so what do we havehere? we have one banker. we have one former goldmansachs investment banker who's into real estatetechnology in the brokerage. we have a developer whoexceeded the age limit but we still like him. >>>benjamin levine: lookat how young he looks. >>>michael stoler: no, no. imean, he does look young.

you know, i'm very happywith the gray hair over there so i can growmy beard over there. we have the other guywho has a little blond in there, the developerand then we have an acquisitionsdeveloper and so on. what we're saying beforein the green room is that not everyonehas seen a total, you know, when there wasthat recession of 2008 or when 9/11 hit, whichwas a different time.

how do you, how do you seethe market and you know because as i saideverybody there's irrational exuberanceas one might say. how are we trying toprotect yourself that you don't go crazy with thisirrational exuberance? ben? >>>benjamin atkins: i thinkthe fundamental thing we do is, i look for deals that makesense on a cash flow basis. that's alwaysthe easiest thing. i mean debts cheap rightnow. equity is plentiful.

but if you stick towhat we think of as core investment parameters,which don't allow you to just recognize the gain onthe exit or based off of assumptions that areprojected 24 or 36 months out, i like to buy brickswhere i know going in there's a easily executable strategythat gets me to a stabilized asset within a pretty proscribedperiod of time. >>>michael stoler: now wego to the opposite side because youngwoo has beeninvolved with a variety of

things and like we weretalking just before that you're going upto the bronx, which is an area thatpeople feel is booming and you know the silvercupstudios are good friends of mine and ben justannounced that they're moving up to the bronx,they're opening up silvercup a secondary location. you'velooked at different deals. you've looked at piers,you've looked at the post office, how do you look atthe market today and how

does the family andthe organization feel? >>>bryan woo: i think it'spretty interesting what's happening right now rightbecause the real estate market in new york ispretty overbought in my mind and there are a lotof eyes on the assets that exists in certain marketsand in particular in core manhattan you have a lotof people who are new to the market who arebringing a lot of money into it and are reallysort of driving up prices.

on top of all the 1031money so in that market you know we're new york city experts, howdo you be competitive? you know and to me i was talkinga little bit about this before but you have to really be ableto excel in three fields. you have to have the money,you have to have the liquidity, you have to have theexpertise and you have to have the creativity and ifyou're being beat out in these markets on the liquidity frontyou have to bring something else. so if you canbring the expertise,

if you can do somethingdifferent and if you can be creative about itthat's one way you win but for us right now a lotof the sort of internal mantra that we're goingwith is don't compete. you know go out to themarkets where you are really the expertbecause you live here. you know, you've grownup here and you have the relationships herego to those markets, like in the bronx,pick up assets that are

reasonable, thatare not overpriced, build in creative ideas,be able to underwrite a good cash flow and then atthe end of the day be able to exit and say, ok well mysell out here is reasonable. i don't need to sell outat seven thousand dollars a square foot in orderfor this to make sense. >>>michael stoler:banker. you've seen a recession. you were inmiami in 2007- 2008. how does chase look at themarket today because as i

started with this irrationalexuberance and as bryan brought up the fact thatwe have a 1031 and people trade assets, they go tothe next asset level over there. how do you look atit and you want to be conservative because ifyou remember going back to the predecessor of themultifamily at chase, wamu was a littleaggressive and the world was a little crazy.how we're looking at this? >>>chad tredway: so ourapproach is we continue to

focus on the fundamentals. and i think the other bigthing that we really look for is a long-termpartnership with our borrowers. so for us we're workingwith borrowers day in day out. our borrowers tend to begenerational in nature. so they typically aren't looking toflip in and out of a deal. they tend to want tohold for the long term. and really the customer isparamount in every single thing we do. so i think itstarts there.

but other than that youknow we feel like the markets really got legs,prices have continued to climb, cap rates are coming inand so we're just careful- >>>michael stoler: how do youlook at the situation of the rentstabilization laws last week, you know,that came up? you know people say therents aren't going up under the stabilizationrules but the insurance is going to go up, the realestate taxes are going to

go up, the water and sewergo up and then if you want to maintain your buildingsunless you even up the changes in the majorcapital improvements they're amortized over adifferent period of time. how do you look at allof those effects on the market? >>>chad tredway: welloverarching i think you know chase and allbanks can agree we want affordable housing for allthe citizens of new york and as we look at rentstabilization and some of

the increases in taxesand water and sewer, we really look at thecash flow of the building. so i think it's still tooearly to tell how things will shake out just interms of what's going to happen with rentstabilization but overall we really, you know, wereally are focused on affordableplaces for tenants. >>>michael stoler: so here'snow, as i was startingat the beginning,

i have a formerinvestment banker, goldman sachs banker,who's into technology and we were talking prior tothe show what the effect of technology, and weare in a tamy city. we are in a technologycity especially with all of the new companies over heregoing up on the internet. how do you see technology and itseffect on real estate today? >>>robert reffkin: i thinktechnology will continue to inform decisions.

at compass what we want iswe want to create a world where people make thesmartest real estate decisions and thetechnology build is meant to answer the questionsthat people have. the first question iswhat's the right price and what's theright neighborhood? why is this the right fee? whyare you the right agent? there are answers to allthese questions given the data that's out there andso what we seek to do is

normalize the data acrossmany different sources, we have sixteen source ofdata that have different addresses, differentsource of information, want to normalize itto one single account, so you don't have to go to fivesources to get information. >>>michael stoler:here's the question. and i understand thevalue of the technology. it's the consumer whois using the technology. you know somebody whomay be a baby boomer,

you know, i'm a babyboomer but i'm one of the few people who happensto have a facebook, you know, you canfind me on facebook, twitter,instagram, you know, i'm not the normal person ofsomebody in that category. i'm not sure your dad isat that level of having all of this typeof thing. knowing your father he has no idea. he'sstill with a quill pen. would you say that themillennials are more

people utilizing the urban,the compass program? >>>robert reffkin: well ithink the greatest myth about the buyer isthat buyers are finding apartments by themselves. right? 80- 90% of the marketof buyers are being, are coming to propertiesbecause a broker is saying you should cometo this property. and so the way we thinkabout it is are the tools we build are to informbetter broker advisers,

whether it's on the sellside or on the buy side, to be able to tell a client youknow this is the right price. the idea that you know showsheets when you go to open houses don't have analyticsaround the building, around why- >>>michael stoler: it's prettypictures. come on. i mean- >>>robert reffkin: i thinkagents are similar to banker's. some advise in buying andselling a company versus a property. and the sameanalysis should be, this is the biggestdecision that the average

person makes inthis country. >>>michael stoler: wewere talking before about levine builders/ douglastondevelopment in williamsburg. right now who'scoming over there? what's the personwho's renting space? >>>benjamin levine: youhave a lot of creative types, consultants, people that don'tnecessarily work 9- 5 hours. i think you have peoplethat are not interested in living in the financialdistrict or on the lower

east side and williamsburg hasbecome a destination. you know, 2007, 2008 and 2009 that'swhen we were building there. i think that wesold the view, you know, people wouldcome and we wouldn't turn them to williamsburg, weturned them to manhattan. giving neighborhood tourmeant parading bankers through thestreets so they said, ok that's the l train, that'swhere bedford is, you know, that's the bedford cheeseshop, that's where sea is.

i think that now when peoplecome they're already taking the subway, they're alreadygoing to the neighborhood- >>>michael stoler:if they can get on the subway. that's part ofthe problem. >>>benjamin levine:transportation is great going to williamsburg and ifyou don't like the subway you cantake the water ferry. >>>michael stoler: i likethe subway but you have to make sure that youcan be pushed on.

it's like going tojapan. ok. push the people. >>>benjamin levine: take anuber. you're not a subway guy. >>>michael stoler: i am a subwayguy. but here is my question. you're alsolooking at, you're not, as we weresaying with bryan, bryan wasn't onlytalking about brooklyn. he was talking about the bronxwhere the opportunities are. you're looking rightnow, you're working on a development infort greene.

>>>benjamin levine: newyork prices have gotten very high and i think thata lot of the upside has been priced out of dealsand i think that people who are entering into deals noware entering at very high basis. and you know i wishthem the best of luck. >>>michael stoler: sofor a millennial you are talking like aconservative millennial. >>>benjamin levine: wellno. here's what i'll say to you. we're doing a project inseattle right now and i

don't think we've eventhought about this yet. we have a site on5th and virginia, two blocks away from theamazon campus in downtown seattle, and there youknow you're talking about rents of forty two dollarsa foot and you're talking about a basis and returnwhere deal can work. and you're talking about acity that has an influx of young creative people. businesses like amazon andwe like the demographics there,

we like the economics and we'recomfortable going there. i mean i think that sevenyears ago if you told us we're going to seattle we wouldsay you were out of your mind. well i would say iwas out of my mind. >>>michael stoler: look seattle, i've advised banks overthe years and there's been the ups anddowns with seattle, it's a market but it'sone of the fastest growing markets and it'sa need. you went to florida.

you're too youngto go to florida. >>>benjamin atkins: ididn't retire to florida. >>>michael stoler: i mean southbeach but you went to wynwood. >>>benjamin atkins: yeahi mean it's interesting. >>>michael stoler: heknows the florida market well. good, bad and the ugly. >>>benjamin atkins:florida's been a great market. but you know when iapproached florida i start looking in florida in2007 and you know it was

interesting when iwas looking in wynwood originally and i was oneof the very early guys down there, that marketsbecome very competitive, but when i first startedlooking down their pricing was one hundredfifty dollars a foot. rents were you're probablynetting seven dollars a foot. i liked what i saw. the metricsdidn't make any sense. we got into a recessionand by '09 pricing was at

seventy five to onehundred foot and rents were twelve dollars net. so all of a sudden themetrics made sense so i think one of the lessonsi learned in florida, like in any market, ifyou're going into a new market you've got to bea little careful because when you when you leavenew york everything can seem really cheap butyou really have to try to spend the time andunderstand the market.

>>>michael stoler: youknow what makes new york what it is is the factthat you have 56 million visitors, that you havepeople from every college everywhere wants to cometo new york so there's always amarket over there, which relates to chad's comment beforeabout the rental business. you know you'realways going to be there. so how do you look at emergingneighborhoods as a banker? because you know fortgreene at one time was

considered not an areaand then we were saying, ben's part of the show,about you know east new york but east new york is goodfor certain type of business. how do you and the bank look atdifferent neighborhoods today? >>>chad tredway: so thesimple answer is really deal by deal andsponsor by sponsor. >>>michael stoler: so you'regoing back to the basics of older people. no, no. you're not talking abouta technology oriented,

you feelcomfortable with sponsors, and as i saidprior to the show, the greatest thing aboutthe real estate business and i was analyzing thisthe other day that there are two threegenerations and you can, you could be agenerational person like you are, but you canbe a generation person, you can createyour own generation. there are people whostarted you know because

i've done some of the lifestories and you know that that they've evolved inthe real estate business and they've been able togrow and to see different markets like your fatherwhen he came to the market and when your fatherwas working for people. >>>chad tredway: wellit's what you said. i meantechnology is amazing. we think that it helpsmake the market more efficient but nothingcan substitute for a good

relationship with someoneyou know and trust. >>>michael stoler: -whichis perfect because rob, if you look at their business,the initial business plan, which you're stillcontinuing, was technology but the combination oftechnology and the people. >>>robert reffkin: compass:yeah, we want to combine experiencedagents with technology. we believe that you knowacross industries and that people have gone frompure relationship driven

selling to relationshipspowered by data driven selling. selling with additives toselling with analytics and we want to be at theforefront of that. you know this is abusiness where agents have increasingly becomeprofessionalized over the last decade regardless ofwhether we're here it's going to continue happenand we just want to help make it go even faster. >>>michael stoler: nowwhat's interesting is you

know there have beenplenty of brokers in this business that weknow, you know, residential brokers buti'd say you've been the only new majorplayer to create. you know corps came in to a certain level andthey grew to a certain market. you know prudentialdouglas elliman was a ten year, it's even a fifteenyear, evolution over there. do we see because of thetechnology and because of the money available, doyou see a lot of players coming

into the market perhaps who arenew technology for real estate? and how important arethese technology companies to you as a banker and toyou as a developer and so on? >>>chad tredway: well ithink robert said it best, which is it all comesback to the customer. so for us we're constantlylooking for ways to innovate, to grow and toservice the customer and part of that ison turn times. you new york, turn timeson how fast you can close

a loan continue to be anissue. and we're attempting to use technology to process aloan within 20- 25 days. so it's an applicationthat you probably wouldn't think of when you whenyou talk about banking or innovation but it'ssomething that to robert's point really revolvesaround customer service. >>>benjamin levine: you know, i think that when you talkabout technology in real estate, from our ownpersonal experiences,

we look at things likerent payment and you look at some of the new rent paymentbusinesses and you say, wow. i think this isa great idea. wow i'd love to integratethis into my property. but i don't necessarily wantto be the first person to do it. now if i have a 369unit or a 509 unit rental building and there's aproblem and i'm one of the first people, who do i call,how does it get dealt with. i think that you knowyou look at something like

butterflymx isanother one, which is a security systemthat a bunch of guys from new york real estate actuallystarted. it's a great concept. it's another way toenter your building, virtual doorman, buthow much can i trust it? you know i think that it'shard to be the first mover in a lot ofthese businesses. >>>michael stoler: look igot a phone call last week from a person who justquit his job at apple and

he was evaluating a jobgoing to work for a start up business whodidn't have the, they had 15 milliondollars in capital and they wanted to go into themanagement business of b&c office buildingsand they were, and their plan was soskewed because they felt that they would get theb&c office buildings if they dealt with the administrativeassistant in the building. i said, they didn'town the building.

the building isowned by an owner. the owner is the personwho provides the services. so you know so sometimesthe greatest technology idea is you have to applyit and speak to the focus group or the group of people who trulyunderstand the real estate. >>>benjamin atkins: onething that has been out there, been getting alot of press recently, is the crowd fundingplatform and you know i as a developer and a sponsorit's always intriguing to

have access toother equity sources. i think that, i'm not surewhat asset that platform offers yet to my business.i'm still thinking about it. >>>michael stoler: theinteresting matter on that crowd funding, because idid it at a seminar that i held since acouple weeks ago, is that fundrise, who isprobably one of the bigger people in crowd funding, it'sreally crowd funding for debt. they're not talking aboutcrowd funding for equity.

so what has happened is it'spreferred equity but it's not, it's predominantly debt,because it's easier over there. >>>benjamin atkins: andit's a safer investment. >>>michael stoler: it's asafer investment and the other problem that youhave with crowd funding for equity is if thethings don't happen, you're going to blow up,it's going to be like the tax shelters and you're goingto have a problem over there. but crowd funding isevolving and there are

different types of peoplein the crowd funding. >>>chad tredway: wehaven't really seen that in the primary markets though.so it tends to be tertiary or secondary markets wherewe're seeing- >>>benjamin levine: back to yourquestion about technology, sorry tointerrupt, so you have to look at technology but you alsoneed to have smart people that understand howto implement the technology. >>>chad tredway: andunderstand the business.

>>>benjamin levine: andi've sat down with 24 year old kids that justgraduated from college, worked a year inbanking and said, oh we have this newunderwriting software that's going torevolutionize the way that peopleunderwrite buildings. >>>michael stoler: butthat's exactly what i said before about the situationabout this person from apple, you know, who quitthe job at apple because

they felt that this is anidea and in the business, you know, and withoutgoing through the entire model of speaking to peoplein the management business. >>>benjamin atkins: it's thesame with crowd funding. as crowd funding movesmore towards less from the debt side into the equityside at a certain point somebody has to beunderwriting the real estate and has tobe underwriting the development strategy forthat individual asset to

ensure for the investorsthat it's a good deal. >>>bryan woo: i think it's alsoa sexy thing to look at right. i mean i think real estateis a really sexy asset class for someone intechnology to look at because you're saying isee this enormous market, i mean what is the marketin the united states, like 13 trilliondollars right. taking a look atthis enormous market, i think i can comehere and create something

efficient and behugely disruptive. you know rob your company is doing itright now with compass right? i mean you know weworkis another company that's coming up and beingvery disruptive but the question really remains onwhether or not they can be successful in thelong run right. we're right now exploringdifferent multifamily ideas and we have abuilding in which we actually leased out aportion of the building to

a company called compass. so compass is doing thisco-living concept here in new york and in sanfrancisco and they recently got into troubleand i think it really came from someplace where,i'm sorry it was campus, they really didn't knowwhat, not compass, campus. >>>michaelstoler: campus, campus. >>>bryan woo: campus, andthey had a problem because they didn't understandthe fundamentals. right?

they didn't get brick andmortar and i think brick and mortar issomething that's very hard fundamentally fortechnology to understand. >>>chad tredway:to your point too, it's different betweenkind of residential, the condo or singlefamily market and then the commercial market as well rightso it's highly localized. you really have tounderstand the sub market. you have to understandthe asset class.

you have to understandif there's leases or if there's rent stabilizedtenants or there's a number of things that acomputer can't tell you so it's really two differenttypes of applications. >>>michael stoler: it'slike what ben said before you know when we weretalking about east new york. east new york is finefor industrial and if you understand the ica,the icap's on the taxes, i did a show the other dayon production in new york city.

i had people,food production, and one of themsaid, do you realize the opportunities thatyou gained if you, he said, if i went to newjersey to move my catering facility they were goingto give me 12 million dollars. he said, i come to new york iget three thousand per employee. it's a differentsituation and you know when you're evaluating it'slike, going off a bit, you have a serioushealth condition.

you don't go just to thefirst urgent care center. you evaluate more thanthat and fortunately the good players or theplayers who are going to remain in real state,through recessions, ups and downs, are goingto spend more time and evaluate as opposed tosome people out there who are maybe new kids on theblock, foreign money, you know, investors overthere who see the market. you know, i do have mycrystal apple that one of

my younger guys got mea couple months ago. so where do you seeyourself in five years? >>>benjamin levine: ithink that our goal is to build high rise mixed userentals all over the five boroughs as much inmanhattan- >>>michael stoler: plusseattle and arizona too. >>>benjamin levine: and actuallylondon. we're doing a hotel in london. the key is to buy at theright time- >>>michael stoler: which iswhat bryan said before, 100%.

>>>benjamin levine: but ithink that right now is not the right timeto buy development. i think that in the nextfew years as rates go up, there's a littledisruption in the economy, that there will be opportunitiesand it's all about positioning yourself so that you canbe taking, so that you can be taking advantage of thosesituations. not that you're going to be taking advantage ofby those situations. >>>michael stoler: ben?

>>>benjamin atkins: i thinkthat, i love new york and new york's a marketi will always do business in. i think that i see myselfdoing more business out of new york in the nextcouple of years and one of the things that we'vespent a lot of time carefully looking, andwhen you're from new york and you've done a lot ofbusiness here you kind of sometimes feel there's noplace, there's no other place to do business andnew york's a unique animal.

but the macro demographictrends across the united states have reallymandated that there's a lot of other cities tolook at where a lot of young people aremoving, there's a lot of population growth, therepro-business environments so i think that takessome time to stand those markets up but i thinklooking out of the city right now there's alot of opportunities. >>>michael stoler: and ithink it's a perfect way,

you're talking aboutopportunities because that's what compass is doing.ok. you started in new york. you went to washington and you weresaying where are you going. >>>robert reffkin: we'regoing to go to miami in late augustand then boston. in five years i would hopethat whether you're in taiwan, taipei, london oryou know los angeles you say i want to buy a place,let me compass it first. that's the world wewant to create

>>>michael stoler: banker? where do you see chase,yourself and the growth? >>>chad tredway: so for usit's a long-term commitment. look, our bank's beenaround for over two hundred years, we expect to bearound for another two hundred. we're incredibly committedto the east- >>>michael stoler: i like thelittle pen you have up at the- >>>chad tredway:you like that? yeah, we're incredibly committedso i think for us we want to be

the most customer friendly bankfor multifamily in the city. >>>michael stoler: andyour other colleagues want to be in that way for othercommercial real estate also. >>>chad tredway: for office,industrial and retail we're getting traction thereas well and we look to mirror what we'redoing in multifamily. >>>michael stoler: with likethirty seconds, left youngwoo. >>>bryan woo: five years fromnow, king of the world right? but i mean who knowsit's going to happen.

honestly i think that newyork is a little bit over bought right now so youhave to be careful in that two three year time spanbut four to five years out there's going to be a lot ofbuying opportunity. a lot. >>>michael stoler: soi'd like to thank ben, as bringing everyone here. myfriend chad that i brought. bryan, ben, rob andchad and i'll see you next week.