Related story: “Ring a ding ding boys”: Behind Chetrit’s Ring portfolio beef with Princeton Holdings. That’s an amazing piece of real estate. How do you navigate such disputes, and do they dissuade you from doing these hairy deals? My lawyer, Alan Pomerantz, put his hand on my lap and said, “Let me talk.”, He said something which at a very young age was a tremendous lesson: “Guys, you spoke about 26, now you’re at 96. I had a choice, to go to Frank or Michael. Michael Ring wanted to give me 25 percent of the deal — which means 50 percent of his 50 percent TIC [stake] — for $100 million. This website uses cookies to improve your experience while you navigate through the website. So I buy real estate every morning when I wake up. They were both known to be quite difficult. I don’t have the lifestyle of yachts and planes and homes in the south of France. Another big shift that’s happened is this leftward movement in terms of rent reform and politics. Let’s back up: You flew to Karachi as a Jewish man. I did well over $1 billion of business with Joe Chetrit. What’s really going to shake this thing out is as people that own rent-stabilized buildings are not making a living and don’t have enough money to fix up your property, tenants are going to feel that what the politicians hurt was the quality of living. Before I had a deal with Gary, Joe joined in on the deal and he gave us a heavy markup — I think it was about a $46 million valuation markup. Could you donate $20 for 2020? [The lobbying] should have been done before the law came out. And he did. He says, “I want to put aside $100 million for my family.” I said, “If I give you $100 million, you’re going to be taxed from here to wazoo because you owned this forever. And that’s basically been your career. All Rights Reserved. Depends what you call development. You’re not a very extravagant guy — maybe you have an island I don’t know about. |. It was a bad miscalculation by the entire industry. Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. You just bought your building for $700 million.”. We lease it up, we upgrade it. I actually flew to Karachi with my lawyer. Over the years, people call me and they say, “Joe, I have a deal, would you like to buy this deal?” It’s a six cap, it’s got upside. It is mandatory to procure user consent prior to running these cookies on your website. By clicking Subscribe you agree to our Privacy Policy. In one of the first-ever in-depth interviews of his career, he sits down with The Real Deal to discuss his approach to dealmaking, the “brain damage” he suffered in his battle for the Ring portfolio, and what keeps him going in the business. Million Dollar Flavor Fantasia Shisha Tobacco kicks up huge clouds. He tragically died in a horrific car crash on February 18, 2016 at the age of 32. Put in $10 million, made $84 million. A lot of those deals are underwritten at very high rents, so the banks will have to come to terms with the Goldmans [Yoel Goldman of All Year Management] and Rabskys [Simon Dushinsky and Isaac Rabinowitz] of the world. We took him in and I went ahead and sold it to Gary. Hopefully you do good stuff with your money. Whatever the value is today, if I don’t sell it at that number, it means I’m a buyer at that number.”. So automatically, two-thirds of what most people say, I don’t say. If I could tax structure that deal for him in many different ways — whether I do a lease with an option to buy and I refinance the fee position and give him $20 [million] as a refi — which is not taxable – and he got his 20, then I have an option to buy it any time down the road. When you pick up that check and give it back to him, you know what you just did? It doesn’t make a difference if I own the other 50 percent. Gary was dealing with Frank, which was a much much harder nut to crack and way more expensive. I started off in real estate management and then went into buying my own small deals and growing from there. With a penchant for structuring debt and equity deals and assembling parcels for sale, Tabak has left his imprint on more than $13 billion worth of transactions over this three-decade plus career — most notoriously, the Ring portfolio in Midtown South. You take a guy that makes $3, $4 million clip. My partners used to say, “You got a great deal, what are you climbing into the guy’s life for? Please Allow Javascript and reload this page. 212 Fifth Avenue and 251 Park Avenue South, part of the Ring portfolio (Sotheby’s, Google Maps). Most of my portfolio we owned for a long time. Comets, the sun, and shooting stars whiz by. He’s making a $50 million profit. Get the deal done.” But when you find out why the guy wants to sell, that could enhance the value of the deal tremendously. There was a very contentious lawsuit with Joseph Chetrit. You’re more of a structured transaction person. Then there was an issue between us [and Chetrit] about what he’s entitled to and what I’m entitled to. When you go into these messy transactions, sometimes you’re up for a fight. He wants to keep 50 percent of [the deal] and he needs $100 million cash; I got both of them done for him. In 2013, Tabak even made a play for the Empire State Building. A rare sit-down with the head of Princeton Real Estate, who's played key behind-the-scenes roles in some of New York real estate's marquee transactions. So all the lobbying and all the work came in a little too late. For example, a guy comes to you and says he’s selling. He could come to me, pay me more because I really got my deal cheap. Everybody said, “Don’t sell it, hold on to it.”, I have a very interesting rule in real estate: You tell a guy, “I’ll buy your building for $700 million.” He says, “I don’t want to sell it.” When that situation comes to me and my partner says he doesn’t want to sell, I say, “Okay. Yes. Anyway, I’m a young kid, they flew me out here, and I’m ready to jump all over them. 78744. You can look at it sideways, backwards, upside down. Before I say something I think to myself: “Where am I right now and where am I going to be right after I say what I want to say?” I’m only going to say it if I’m going to be in a better spot. Related story: Gary Barnett reveals how he won the Ring portfolio. By using our site, you acknowledge that you've read and understand our use of cookies in our, Copyright 2020 Hookah Company. Try again later. So depending on how you slice it and dice it, the guy can end up with his result and your deal becomes twice as good. All rights reserved © 2020 The Real Deal is a registered Trademark of Korangy Publishing Inc. This category only includes cookies that ensures basic functionalities and security features of the website. All you end up with is $60. I don’t know. 3727 Drossett Drive Then there’s Joseph Tabak, who without a portfolio of trophy properties or any ground-up projects of note has become one of the most highly regarded dealmakers in the business. Hard to believe today. Right, I came in from the Michael Ring side, knowing I had a statutory right because it [the 14-building portfolio] was owned in TICs [tenancy-in-common, a form of deal structure in which property ownership rights are shared.] You’ve essentially become a hiccup in his plan. Known among his New York contemporaries as the “real estate doctor,” Tabak, the chairman of Princeton Real Estate Partners, regularly counsels everyone from All Year Management’s Yoel Goldman to Extell’s Barnett. Let’s talk about the Ring portfolio. The only caveat of that is tax. Austin, TX Why don’t you sell for just $20 million?” So either the guy says, “It’s my only asset,” or “My tax basis is so negative in this deal that for me to walk home with $20 million, I’ve got to sell this thing to you for 60, otherwise the rest of it is going to the IRS.” Now I know I have a perfect candidate. Great smoke, not too sweet, and great thick smoke even out of an egyptian bowl! A guy could be talking to both of us at the same time, saying the same thing, and I hear something different. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. With Chetrit, he sold the International Toy Center buildings for a collective $715 million in 2007, more than twice what the partners had paid just two years earlier. Along with Robert Wolf’s Read Property Group, Tabak put together the land for what is perhaps Bushwick’s most ambitious residential project, the Rheingold Brewery redevelopment. He was born in Athens on November 23, 1983. Great smoke, still trying to put my finger on it, but it essentially tastes like Mike & Ikes! What do you think the industry could have done differently? But right now, I don’t think coming in a more diplomatic way is going to get the law changed – the law is where it is. Round-up of top news and topics for each of the following cities: Editorially-curated headlines and news to know for the following areas: The numbers behind office leases, retail, sales and financing. The bank is not ready to write it off, the landlord is not ready to tell his investors “You guys are history.” So people are not buying, people are not selling and it’s just stuck. About one million people are ordered to work from home in order to reduce movement between districts. We did very well, never had a fight. From the Rheingold Brewery to the Ring portfolio to the Ritz Plaza, your mark is on all these properties in interesting ways. Without negotiating him, I brought him down to 50 percent of the price. Correct. Loses flavor around 30 minute mark in an egyptian, loses flavor around the hour mark in a Small Funnel bowl -, Our site uses cookies. “My partners used to say, ‘You got a great deal, what are you climbing into the guy’s life for?’ But when you find out why the guy wants to sell, that could enhance the value of the deal tremendously.”. But opting out of some of these cookies may have an effect on your browsing experience. “I buy real estate every morning when I wake up. Now it’s out of business, Thor delinquent on $105M loan at 597 Fifth. So this happens and on the other side you’ve got another player who’s extremely creative, Gary Barnett. I analyze the deal. We see the Milky Way Galaxy coming out of the darkness. They’re going to turn around, whether it’s to the city or the bank, and say, “Just take this off my hands because I can’t afford to be the Salvation Army.”. Fantasia is known for their innovative products and unique Hookah Flavors manufactured in the USA. Fantasia master blenders precisely infuse exotic flavors allowing for a robustly full, and extremely thick smoke that … I usually come up with structures — a lot of people look at deals and don’t find the value, or the value is there and you can’t realize it. International Toy Center at 200 5th Avenue (L&L Holding). Right. Any reservations? Buildings are going to start getting dilapidated and that’s what happened in the ‘70s in the Bronx. Where did you pick your stuff up? Great deal.” I say, “Why don’t we get together? The whole score starts off with outer space at the start of the bassoon solo that it goes back in time, back to the fantastic, to 4.5 billion years ago. I could sometimes make a mistake in a deal, it can happen – thank God it very rarely happens. I was done, I had my piece. With PIA [Pakistan International Airlines]? Another guy says, “Hey I want to go in for the long haul.” He goes and repositions the buildings and he condos it or he leases it and then boom, a bad market comes. First time I flew to Israel, I actually stopped in Iran on the way. It’s quite hard not to take personally. We are now in the period where you don’t see many transactions going on. There are deal junkies that just buy everything. I want to know his story: Why is he selling? Tabak has been involved in the Ring Portfolio, the Toy Center and other marquee New York real estate transactions. It all went away and everything is fine and dandy. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. So I say, “You don’t have to make a $50 million profit to buy a $20 million yacht. To check out more of The REInterview, a series of in-depth conversations with real estate leaders and newsmakers hosted by Hiten, click here.). Some real estate players are known for what they build, others for what they own. Every kid that starts off in real estate says, “You know what, as soon as I have a million dollars, I’ll stop right there.” But as the bar goes up, especially if you enjoy what you’re doing, you keep on doing it. Real estate stocks push up this week as U.S.-China trade tensions ease, Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case, Chelsea residents paid Gary Barnett $11M to protect their views from a planned tower, SL Green snags $1.25B construction loan for One Madison Avenue, Manhattan’s top real estate loans post second best month since March, WATCH: “It’s going to take longer, and it’s going to cost more”: Craig Solomon on the real estate capital stack, OneTitle set out to change the title industry. We come down to a planet which is Earth being born and pass by the Earth's moon down to the surface. Bismarckstraße 63, 40210 Düsseldorf +49 211 13658358 [email protected] [Instead], I will give you a loan against your TIC — the whole 50 percent TIC. At that time, the price on the deal was $26 million. Who’s ahead of who at the end of the day? We work 7 days a week, 16 hours a day for our labor of love, but with rising hosting and associated costs, we need your help! Many, many years ago, I had a negotiation by phone with the owners of the Roosevelt Hotel. Open up this hookah tobacco and you'll smell a candy cherry aroma with menthol undertones, reminiscent of sweet cough drops. We are having some technical difficulties. I know a lot of top developers come to you for advice. Pantelis Pantelidis was one of Greece’s most loved and popular singers. You pay back the loan and I own 50 percent of the deal.”. I like the challenge of it. And it’s very hard to calculate. Development was never your thing, is that fair to say? So, like my mother used to say, there’s a Polish lottery ticket: you win $1 million and they pay it out to you a dollar a year for the rest of your life. Instead of $26 million, it said $96 million. Do you have a target dollar number in mind before retirement? Some of the lenders actually that are repo’ing and they’re financing because interest rates are so low right now, they could put themselves in a better position where they could sell off a 60 or 70 percent piece of their loan at a really cheap number, leaving them enough room to be able to drop down the landlords’ payments to a number that still keeps them going. (Write to Hiten Samtani at [email protected]. So, [I ask] why are you selling the deal? While smoking this shisha, you'll enjoy more of a bubble gum flavor, … It was a different world, there was no problem. My client doesn’t care what the price is. I’m actually a deal junkie that just enjoys the real estate business. You work that money and you make another 30 and another 50. You wouldn’t sell it for $700 million – would you buy it for $700 million?” Usually the answer’s going to be no. It showed you a deal doesn’t have to be looked at straight. You can use that in court to force a sale or some sort of, “I buy you or you buy me.” Michael at the time wanted to get his hands on $100 million. You’re one of those classic New York real estate deal junkies. I know you came in from the Michael Ring side of things. He bought [the property] for $10 million 10 years ago, and he’s selling it for $60 million. Fantasia Distribution, Inc is the only hookah company that manufactures their entire hookah flavor line from Tobacco, Vape, E-Hookah, E-Liquids, to all Alternative Hookah products in the United States of … You’re indirectly responsible for this super-gentrification of South Brooklyn. 450 West 33rd, we bought together, the Toy buildings, we bought together. Is there going to be pain? If I would have known that part of what I need to underwrite in this deal is that brain damage that I went through for a bunch of years, I wouldn’t have done it. We also use third-party cookies that help us analyze and understand how you use this website. So, like my mother used to say, there’s a Polish lottery ticket: you win $1 million and they pay it out to you a dollar a year for the rest of your life. Open up this hookah tobacco and you'll smell a candy cherry aroma with menthol undertones, reminiscent of sweet cough drops. Chances are things are going to change, the government is not going to get everything they want, the landlords won’t get everything that they want. I say, “Hey, a guy is sitting in your office and put a check on your table for $700 million. That specific asset class — big, pricey rentals stacked with amenities — is in trouble post-Covid. Then the volcanoes … They just announced they’re closing the hotel permanently. Nobody thought Cuomo would ever sign this and I guess Cuomo had to sign it because he’s controlled by these people. By Arisha Rozaidee — 20 Oct 2020, 05:13 PM — Updated about 1 month ago First of all, 95 percent of my deals are not hairy. Fantasia is a premium quality hookah shisha tobacco. A rendering of Rheingold Brewery (ODA Architecture). We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. Please consider a one time or recurring donation of whatever amount you can spare, or consider subscribing for an ad-free experience. I’m not a retirement type of guy and I don’t have a number in mind. All you end up with is $60. Very tasty and refreshing. I’ve never dealt with a Ring prior to Ring. I rely on what I analyzed and I don’t think he understands his own real estate better than I do. I bought 50 percent of his TIC for $50 million instead of $100 million, because I gave him the $100 [million] against his entire share. There wasn’t a lot of dialogue going on before the law came out and there might have been some sort of a miscalculation where everybody thought there’s no way in hell this is ever happening. When we got there they said, “Okay, so let’s do a deal.” And they gave us a contract. I’m not a ground-up guy, that’s not the business that I’m in, but there is a very long play of real estate. Million Dollar Flavor Fantasia Shisha Tobacco kicks up huge clouds. That ranks among Gary Barnett’s favorite and most lucrative deals. How do you think that’ll shake out and what does that mean for your business? You pick the price, let him pick the terms.”. Telefonisch von 12 bis 20 Stunden von Montag / Samstag The Real Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry. Whatever the value is today, if I don’t sell it at that number, it means I’m a buyer at that number. That deal, which has acquired near-mythic status among industry insiders, had a colorful cast of characters including Extell Development’s Gary Barnett, the Chetrit Group’s Joseph Chetrit, the stubborn brothers Frank and Michael Ring and Tabak’s sibling, Eli Tabak. This interview has been condensed and edited for clarity. Related story: “Ringing in” a new era: Will a legal battle unravel the coveted Ring portfolio? I think he must have paid [Frank] six times more than I paid for my piece. The only transactions you’ve seen are the REITs or the debt funds that actually have debt that they have to pay off – they have an incentive to sell stuff at a discount just to get cash in the door. But it got messy. A lot of the pain is going to be for the institutions and the banks that lent the money, whether they’re going to make a deal with the landlord and bring the numbers down or bring the interest down to a low enough number to keep this thing alive. “If I would have known that part of what I need to underwrite in this deal is that brain damage, I wouldn’t have done it.”, We bought 450 West 33rd, I believe we paid $280 million and we sold it in 2007 for $700 million to Broadway Management. I just felt I’ll have an easier time dealing with Michael than Frank. And all of a sudden you’re writing a $30 million check for a $60 million deal. I’m just an analytical guy. But when I have a conversation, I’m not going to say something stupid. For full functionality of this site it is necessary to enable JavaScript. While smoking this shisha, you'll enjoy more of a bubble gum flavor, with minty undertones. That’s way better. If I would have seen that [the Ring portfolio dispute] coming, I never would have brought him in as a partner. From a young age, Pantelidis began writing songs, which he filmed and sent to friends, who then posted them on Youtube, which ultimately went viral. There’s a lawsuit going on that’s a flip of the coin. It’s really deal by deal. But out of the two, Frank wins, so I decided to deal with Michael. Necessary cookies are absolutely essential for the website to function properly. Joseph Tabak of Princeton Real Estate Partners. They’re complicated. The rhetoric against the industry has become more confrontational over time and is actually affecting policy. Landlords are going to be stuck. These cookies do not store any personal information. He says, “Well I need $20 million to buy a yacht,” or whatever it is. [Gary] was going to do the dissolution [of the TIC] anyway. (He later had a bitter and highly public falling out with Chetrit over the Ring portfolio) . Light from the volcanoes light up and the volcanoes burst with lava. Nobody takes that $84 million and puts it in a safe deposit box.

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