Legacy Building with Bill Rudin

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This is the Insider's Edge to Real Estate Investing with James Nelson, the principal and head of Avis & Young's Tri State investment Sales Group. In this program you'll learn game changing strategies to outperform the market. James will teach you how to source, execute and capitalize on the best real estate opportunities in New York and around the world. Now here's your host.

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Welcome to episode number 189 of the Insider's Edge to Real Estate Investing. This is your host, James Nelson coming to you you from our new studios on the fourth floor of 535th Avenue where Avison Young has our offices. Thank you to the team, Nick and Irene for helping us with the setup here. It's fantastic and looking forward to having guests show up and see the new studio. So for today, we've got a great episode with us. I'm going to be interviewing Bill Rudin, who's co executive chairman of Rudin Management Company. I want to thank rebny, the real estate board in New York. Bill was a former chairman of rebny and it was that relationship that has brought us together. And so we're going to be talking about today the civic responsibility and giving back and all the incredible things that Bill and his family have done for New York. The company was founded in 1925 by Samuel Rudin, is now led by its third and fourth generations. That's actually pretty rare. Not just the longevity, but the fact that the family still has kept the portfolio not only going but thriving. Today the portfolio is comprised of residential buildings totaling more than 4 million square feet. In commercial office buildings totaling more than 10 million square feet. So Bill's going to talk about sharing and staying true to the founders, guiding principles and also monitoring trends and how to make decisions. He really emphasizes, as I said before, the value of giving back to your community and getting involved in ways that you can help people in need. As always, you can go to james nelson.com that's where you can find the show notes for this episode and how to connect with Bill as well as Rudin Man Management Company. So we're going to have a brief word from our sponsor and we'll get right into that interview with Bill Rudin.

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Okay, welcome everyone. With us today, Bill Rudin who is co executive chairman of Rudin. Their real estate portfolio includes 15 office towers spanning over 10 million square feet of space, 17 luxury apartment buildings and developed the Greenwich Lane, a world class residential project all located here in New York City. I want to especially thank the Real Estate Board of New York. Bill was their former chairman who was kind enough to, to help us put this together and really looking forward to the conversation. So thank you Bill, so much for joining.

Well, it's great to be here and you know I could, I think on your background there, I can see some of our buildings right there. Right over your right shoulder is 1 Battery Park Plaza right off of the Battery park, which I was a former chairman of. So that that picture says it all about New York City and what a great city it is.

Absolutely. And very timely because I think I also saw in the news you just did two leases down there. So we, in this market, we love hearing about leases.

We're trying, we're trying depends on where it is. But yeah, we're, we're, you know, we're, we're, our leasing guys are busy and you know we'll, we'll get into, into that market in a, in a, in a moment. I'm sure.

For those who don't know Rudin, maybe talk a little bit about the history. I'd read. Founded I guess was it your grandfather? It was it 1925. Maybe talk about how the firm started and how through the generations that you've built it to the portfolio it is today.

Well next year we'll be celebrating our 100th anniversary of, of the founding of, of, of Rudin Management which is sort of like the, the management company that runs all of our individual buildings, residential, commercial and it was really Sam Rudin, my, my grandfather, he was one of the nine siblings. His parents had immigrated to the United states in the 18 in 1880s. And Louis Rudinsky, I think was his given name. He had a different name while he was in, in. He was in Russia. Place called Minsk and Pinsk, which during the Ukrainian war people heard about Belarus and Minsk and Pinsk and a sort of ironic, you know, history sort of repeating itself. He, at 15 years old, Louis was gonna be constricted into, I think was the Russian army to fight the Polish army. I'm not sure sure what, which side, but he didn't want to, he didn't want to go into, into the army. He was a conscious, conscientious objector. Before probably that expression never came, you know, you know, came to being. But he also, he, he left Russia because as a, as a Jew, he couldn't own any real estate and he couldn't practice his religion. So he came to the United States. And where did he come into? Literally right over your shoulder to the, onto the right is Castle Clinton. And before 1900, before Ellis island was. Was created, Castle Clinton was the United States Immigrant Depot where people came in and got checked, you know, health wise and were processed. So about 8 million Jews, Irish, every race, color and creed came, you know, seeking economic and religious freedom, came to the United States and came through Castle Clinton and the Battery. He came in with nothing. He started a dry goods store on the Lower east side. And he always had a desire to own real estate. After a while he had, you know, saved some money. And as the story goes, John D. Rockefeller Senior would take his horse and buggy literally again over your shoulder, your right shoulder from 26 Broadway, where standard Oil had their headquarters at the tip of lower Manhattan. And he would take the drive up Broadway and along the way he would stop along to stores to make sure they were selling his kerosene. And Louis and his, and his wife Rachel had a store on Christie Street. This is the legend, as it goes. He came into the store one day and, you know, obviously they, they knew who it was and you know, Louie, are you selling my kerosene? Yes, of course, Mr. Rockerville, we are. And they chit chatted and as they're walking out to the horse, you know, the horse and buggy, my grand great grandfather said, Mr. Rockville, where do you live? Because I live on 54th Street. So flash forward a year or two. And Louie's attorney came to him and said, Louis, I've got a, I've got a property for you to buy. He goes, where is it? He goes, On 54th Street. He goes, I'll buy it. I think it was $5,000. And he says in, in 1905, the attorney goes, well Louie, don't you want to go look at it? He goes no, no, no, no. If 54th Street's good enough for the Rockefellers, it's good enough for my grand grandfather didn't realize though was Mr. Rockefeller's mansion was, you know, on the west side between 5th and 6th across the street where the Museum of Modern Art is and the Rockefeller mansion is still, is still there. It's a landmark. But this property was between Lexington and third and literally on the wrong side of the tracks because in 1905 Grand Central Railroad was an open cut dividing Park Avenue and the mansions were to the west and the stables and the servants quarters or the helps quarters were on the east side. Louis didn't ma, it didn't matter to him. He bought it in 1905 and it was a, you know, five story walk up and. But then there was a crash of 1907, the famous 07 crash where J.P. morgan saved the United States, had all the bankers together and you know, they, they, they backstopped the US Treasury. But all the tenants in the building left. And so Louis and Rachel moved their family nine, the nine children up to 54th between Lex and 3rd. My grandfather and his siblings went to school literally on the site that I'm standing on, sitting on at 345 Park Ave. There was a school on Lexington Avenue and 52nd Street. And on, on Louie's deathbed he told his, his, his son Sam never to sell this property and to you know, buy more. And Sam, who was not the oldest but became sort of the, the leader of, of of the family in the pack, followed you know, Louis's advice, assembled the site and we have two buildings on that site now. We have 641 Lex on 54th Street, a you know, 300,000, 300,000 square foot office building and then on 55th Street, 6 East 55th street, an apartment building. So that's sort of the, you know how this started then. You know this. So in 1925, Sam Incorporated rude Management. He bought his first, his first property new development. He, they were, he was buying properties on the west side, particularly residential, only residential. But he bought a, a they at, at, at that point in time in the, in the, in 1924, 25, he had moved with his wife May up into Throgs Neck and he would take the subway home I think the sixth line. And it was the terminus of the sixth line was Benson Street, 1400 Ben Street. He saw this vacant lot and he bought that side and we built, we built. He built his first apartment building there. And that's. My father and uncle were brought up in Throgs Neck and went to DeWitt Clinton High School. And then after the war, Sam's two sons, Jack, my, my uncle and Lou, my father got into the business. There were other family members and off to the races. He would, he was a, a voracious builder. He would, he was really an, a futuristic urbanist who believed that if you built an office building, you needed to build an apartment building for the workers to have a place to work. So if you look at the arc of our, of our business, particularly in the 50s and 60s, first half of the 70s, whenever we build an office building, you'd see us also building an apartment building. And he also believed in the power of mass transportation. His philosophy was if, if you can't get there by subway, I don't want to own it. So if you look at our locations of our buildings, they are in relatively either right next to or into. Some of them are integrated like at 560 Lexington AVIA, the subway is right in, into our plaza or within two or three block walking distance. So that's sort of the background of, of of the family. Then in the 70s, mid-70s, my cousin and I and my, and my sister and, and his sister got into the business. And then you know, unfortunately my father died after 9 11. He was, had nothing to do with 9 11, but he was very sick with bladder cancer. And you know, he was it. I remember going to his apartment. He actually ironically lived at 136 East 55th street on the top floor in a beautiful penthouse. And I had to go over and tell him what had happened downtown. And you know, it was a very difficult conversation I had with him. And near the end of his life he, he, when he decided not to take any more treatment, he, and this is the way my father was. He said, you know, I want to say goodbye to all my friends and everybody, you know, been involved in his life. So we called everybody up and they, you know, we did it in, you know, in shifts and they went up and to the bedroom and, and I never forget Hillary Clinton was there, was then the US Senator for New York. And he grabbed her hand and said, you know, don't let my city be destroyed. And it was a very touching moment. And she promised we would all work together in the rooting way and you know, bring the city back, back together so I could go on and on about my Family history, but you know, just, you know, as, you know, as my cousin and I are third generation, we now have in our business, running our business. My daughter and son, Samantha Rudin Earls and Michael Rudin, they are now co CEOs. Eric and I are co executive chair. And we made this transition over the last couple of years and, and officially made it happen on January 1st. And it's incredible to be able to have a front row seat to see the next generation, you know, follow the philosophy that, you know, Sam, Jack and Lou had established and then Eric and I and our, our generation, you know, push forward. But to see them and, and, and their contemporary ways of doing things moving our company and obviously a very difficult, you know, environment, particularly for a commercial, you know, for commercial real estate. And you know, it's, it's incredible. We literally just yesterday had a company town hall. We do this a couple of times a year in our building at 3 Times Square, which we've totally repositioned. We have a new amenity space in the 16th floor which is incredible, beautiful. So we had you know, 170, 180 people up and we did a whole presentation and updated the company on where, where we are and where we hope to be going. And they did an incredible job. And you know, as a, as a, as a father, it's, it's, I'm, I'm very proud to see that they have committed themselves again, not in an easy environment that we, that we're, we're living in now and you know, high interest rates, high inflation, wars, you know, turmoil, you know, coming out of COVID all the, you know, all the things that we know that have, you know, happened over the last few years. But you know, when we, I walked out of Three Times Square about 6 o' clock and you, you know, started walking up north. The amount of people that were on the streets and you know, it was Wednesdays matinee day, you know, and, and so a lot of people coming and going, the workers and the tourists and it was, you know, it was energizing being in our, in our meeting and hearing the plans and you know, my cousin, I opened up the meeting and Samantha and Michael, new president, Neil Gupta, our first outdoors non family member being president, did their presentation, then Eric finished it. We did a little ribbon cutting and then had a reception for all of our employees who stayed, you know, till 6:30 or 7:00'. Clock. And you know, it was a great way to, you know, mingle. And we're, you know, when I walk around our office you know, it's a lot of new faces, a lot of transition that's happened. People have retired. A lot of people that I used to work with, and there's a whole new, you know, generation of, of, of people working in our company and leadership roles. And, and so it's, it's, it's. For me, it's, it's great to see that and the camaraderie and the, and the understanding, we were very clear, like, you know, we gotta roll up our sleeves and, and, and, and work hard together and, you know, batten down the hatches to get through, through this difficult period of time. And everybody's up to the task and everybody's, you know, understands what the, what we, what we need to do. And so it's. It to me, my final words were, I, you know, I look around the room and I see, you know, a bright, A bright future. We gotta tackle issues. We gotta do things differently. And they are doing things differently than what, you know, what we used to do. But that's good. And, you know, change is, is, is positive. And it was a day before we, some of us had been to a lunch, the Economic Club, where Jamie Dimon, the CEO of JP Morgan, was speaking, and he, he and I quoted him in my presentation that, that nothing is divinely ordained. There's no, you know, success isn't divinely ordained for us as individuals, for us as companies, for us as a city, as a state, as a nation. You just can't, you can't rest on your laurels. And he was making the point that, you know, when he started in the business, majority of the, of the workforce for JP Morgan, obviously it's an international firm. A lot of them were, you know, were in New York City. Now they're all over the country. They're in Florida, they're in Texas or wherever, and, you know, our city and, you know, we need to fight for the right things, the right laws, the right regulations, all the things that are, are important to attract and retain, you know, companies to fill up, you know, the buildings behind you and behind me and create opportunities for people to fulfill their dream, just like Louis Rudinsky did, you know, and, and have opportunities. And if, if we don't, as an industry, stand up and voice the things that we think are important, whether it's taxes, affordable housing, crime, education, and doing it in a way that does not scare people away from our city. We have to be that voice of common sense and, and, and reason. And obviously real estate, you know, developers are not high on the list of where people think, you know, that we're all out for ourselves when. And the reality is we're, as my father used to say, we're only as good as, as New York City. Right? I can't, we can't move. We can't put our, our buildings on wheels and move them across the George Washington Bridge. So that philosophy of, of caring and helping out institutions, philanthropic organizations is something that, you know, is in our DNA. And what, you know, my children and my cousins and everybody's involved with philanthropic organizations, whether it's my sister at the Whitney Museum and myself at the Battery and Michael First Te and Samantha with the Roundabout, Eric, Central Park Conservancy and other organizations. His wife runs New 42nd street, the non for profit era group in times Square, which was a key driver in the rebirth of Times Square. So we, we, we encourage our employees to, to get involved. We, we do, we just, we actually just did. Last day, Last Friday, in celebration of Earth Day, had volunteer day down at, at the battery and nearly 90 of our employees, including my, my children and my grandson, my two year old grandson Ali in there, you know, rolling up their sleeves, you know, moving dirt around, you know, getting weeds out and getting ready for the spring. So that's all part of our, of our ethos and our, you know, and how we, you know, get involved not just in our own business, but the area around our buildings and New York City. Wow.

Well, Bill, I want to start by thanking you and everything that you and your family have done for the industry and for our city. And I, I know it has been a tradition. I mean, I remember this is before I got into the business, but I, I remember reading about when New York City was about to go bankrupt. And if I'm not mistaken, your, your father was a really big part. I, I think as the story goes, they advanced their property taxes and that allowed our government to stay open so that this, this tradition has been passed on from generation to generation. And it's, it's really wonderful to see.

You know, it's, it's. I, after my f, before my father passed away, about a year before, before he got sick, he started doing an oral diary. He had this woman come up and they would sit in the office and do what I'm doing right now. But they would, you know, record it and he would tell these stories, right? This is how I learned, you know, the history. And he would go back to, you know, his, his grandfather and, and then talk about, you know, what he and his brother did. And so He. He did that for about a year, and we had these audio tapes, and then unfortunately, he, you know, he passed away. And I couldn't. I couldn't get myself in the right mind headspace to listen to, you know, to the audios, because it was just too fresh. But about six months later, I'm in the car and I. I put one of them, and it was a cd. I put it in and I started listening to it, and it was. It was just incredible, you know, and it was, you know, near the end, you could hear him getting tired and, you know, he was getting progressively sick. But. And I said to myself, we need to do. We need to tape this. There's a. There's a bigger story in what he was. What he was trying to accomplish. And I hired a friend of mine to produce a video. And. And we. We used his audio and integrated it so his. So he was present in the visit. In the. In the video. We had clips of him being interviewed. And we interviewed people that he dealt with and whether it was family members, his wife, me, my. My sister, my cousins, my. My kids, my niece, nephews, my. And, you know, a whole panoply of people, business leaders and political leaders. Walter Wriston, who used to run Citibank, and David Dinkins and Hugh Carey. And, you know, these. Some of these names may not be familiar to some of your audience members, but these were the political leadership of. Of the 70s. You know, Ed Koch, he was friendly with Barbara Walters, he was friendly with Michael Douglas. And we had a whole host of, you know, George, President Bush 41. My dad was a very good friends with him. Gerald Ford, President Ford, who famously said, you know, the headlines in the mid-70s, you know, new York dropped dead. And I arranged to have a, you know, as one of the. One of the people to be interviewed, I arranged to have him be interviewed. And I was told by his aides that I was not allowed to discuss that headline in the fiscal crisis of the 70s. So I said, you know, okay. So I took my notes down. And he came up. He just had a few Secret Service agents and no aides. We set up in our conference room, and My first question, Mr. President, thank you for coming up here. How did you meet Lou Rudin? My father. And he goes, I met him in the fiscal crisis of the 70s. And I'm, like, laughing at myself. I guess they didn't tell him. He wasn't allowed to talk about it. But since, you know, he brought it up, we went on. He goes, yeah, there was some headlines in the Newspaper that, that said, I said New York, drop dead. I never said those words. And, and so we went on and had a wonderful, a wonderful conversation. I thought, wow, this is pretty, you know, pretty amazing. So one of the other people we interviewed was Hillary Clinton and she was still a senator. And she came up with the phrase, you know, we had gotten the 52nd street and Park Avenue named Lou Ruden Way, because that's where my dad, our officer on 52nd park, when he would go to lunch, whether it was the four seasons or 21 or whatever it was, or the hot dog stand with Gus the hot dog guy, he would stand there and he would conduct business on the corner of 52nd and Park. We he made the deal with Blackstone to take 60,000ft, the 345. In the mid-80s, whatever it was coming and going. When people were leaving the city in the 70s, he would, he would be very, very upset because the CEO was leaving the city because they would say it's crime and it's transportation, it's this and that. But it was really, you know, in his view. And it was documented that they were moving up to Westchester or Connecticut because they wanted to be next to their golf course and have a better quality of life. And so by the mid-70s, the city was, you know, heading way in the wrong direction, was about to go bankrupt. And he and a bunch of other real estate people and business people got together and came up with this idea of prepaying their real estate taxes to, to really bridge loan the city because they were literally running out of money. And they did it, I think three or four times and help save the city, you know, so they wouldn't go bankrupt. And it was an incredible selfless act on so many people. I think they raised, you know, hundreds of millions of dollars to, to prepay the taxes and meet payroll and got them to the point where finally the federal government, even after Ford said drop dead, the federal government came in and provided support on, on financing. But you know, my dad at that point also started the association for Better New York, which is an organization after he passed away that I became chairman of. And then when I became chairman of rebny, Steve Stephen Rubenstein, whose father Howard was also a founding member of abni, has taken over as chairman and has done a great job and still going on. We had the mayor speak two weeks ago. The governor is coming to speak in a, in a couple of weeks. And it's a great organization still promoting, advocating, convening to, to fight for our great city. Because if we don't fight, who is going to fight? And so we, you know, that's something, you know, I definitely taken away from being around my father and uncle, and I think my kids have done the same thing, understanding that. That connectivity between our business and the health of our city.

So coming up on a hundred years, four generations, and I think I read somewhere that over 30 family members still involved in the, in the business. Is that really kind of that shared ethos, if you will, is. Is that really what has kind of kept the family business to. Together and to continue to grow? Because, I mean, I'm. I'm sure there's a lot of family businesses out there that have, you know, splintered off into dozens of different enterprises. The fact that you all have not only stuck together, but have continued to build on it, what. What do you think it is that that has helped you prosper throughout the years?

It's really the, the four of us, Eric, my cousin Sammy and Michael, we have one other cousin who works in the commercial leasing side. All the other family members. And there's, you know, there are a lot of us are, because remember, Sam had eight brothers and sisters, so, you know, some of them didn't have kids, but, you know, they're. So we've got a lot of cousins and, and so they're, you know, they're stockholders, partners in, in. In some of our projects, not all of them. And. But yes, you know, running a family business is not for the faint of heart. And. But if you were at that town hall meeting yesterday, you'd see, you know, Eric, it's not his children, it's his cousins smiling with pride as much as my wife and I were sitting there on what they've done and how they communicate with their cousins and have, you know, great relationships all the way around. We, we. We have quarterly meetings. We try to update and communicate with our family members as, as. As best we can. And, and you know, they, I think they have faith and trust in, in. In us and, and how we're running the business, and we have to make hard decisions. And we, you know, we just signed. I'm. It's in the real deal today. We, we had signed a contract a little while ago with a company to buy one of the family office buildings in Lower Manhattan, 80 Pine street, which was an incredibly successful building built in the late 50s and did our family very well for many, many decades. But the world has changed. And, you know, particularly some leases, big leases were rolling over. Tenants want a different space. These are big Floors, a lot of columns, particularly in the base of the building. We spent a lot of money renovating the lobby and doing a medi space. But the downtown market unfortunately is, is, is, you know, is, is not in great shape. And so we made the decision as a family, working, you know, communicating with everybody that this was the right, you know, not the greatest time, but the right time to exit this building. We have a contract out and hopefully close in the next couple of months. And I think, you know, not 100% sure what the developer is going to do, but the buyer. But I think they're trending towards a, a conversion like, similar to what we did at 55 broad with Nathan Berman and, and Larry Silverstein. Well, we kept the piece of the equity in that deal because we want to learn about conversion because in the state budget that was just passed and using the downtown mid-90s plan, renovate, revitalization plan, where you went from 10,000 people living in lower man to 70,000 people now allowing conversions of obsolete office buildings that was included in the budget, allowing buildings south of 96th street in certain vintage buildings to be converted to residential. We need the. The mayor is going through the regulatory process now for his city of yes, which will help expedite the conversions. It will, it will make zoning changes that are very important to allow the multiple dwelling law to adapt to the new world that we're in and make these conversions economically viable. So you know, if you'd asked my father and uncle and grandfather, their mantra was never to sell a building. Right. You know, that was just something that they would never do. But unfortunately these buildings, a lot of them were built in the 50s, 60s, 70s and it in a, in a totally different. They were modern for that age. Today they're not modern. And as you well know, what are we seeing in the commercial market, we're seeing this tremendous flight to quality and a bifurcation of what tenants are looking for post Covid to get their tenants, their, their employees back into the office. Right. So they, they want spaces that are modern, high ceilings, environmentally friendly, amenitized, close to public transportation and they are prepared to pay a premium. We're seeing that to, to achieve that. And there's a, there's a. We have a building at 52nd Park Avenue where we're going to get several hundred thousand feet back from KPMG at the end of 2025. And we have people lined up within the building and outside the building to take that space at very, very strong numbers. We're designing an amenity program for this building that will have a wellness center, have food offerings, have a restaurant, a grab and go, things that are very, very important or for, for companies. We've got the space, we're in the design process now and it will coincide when that lease, you know, you know, and be part of our marketing material for our tenants, prospective tenants, and for the tenants in the building, including my own, our own employees. You know, when we showed them some of the plans, they were, they were very excited. So this is what's going on. And so 3:45. Okay, great. You go a few blocks away and some of our other buildings in this neighborhood on, on 52nd and 3rd. So literally two blocks away. And it, it's a world of difference. A building built in the 60s. Low ceilings, columns, no amenities, and the economics just don't pencil out. So those type of buildings, you're already, you know, hearing SL Green working on a building on 3rd Avenue for conversions. Other, you know, other purchases. There was one on, on Broadway and 55th street yesterday by Yellowstone that will probably be either mixed use or all residential. So that's where the world is going. And we need to adapt our business plan to this changing environment. We're, you know, we want to, we, we're, we're not a. Not for profit. We can't, you know, you know, we can't do deals that are not going to be. Make any profitable sense or be able to be financed. So we know we're looking at highest and best use for our buildings and doing analysis of that. We have a whole team that's looking at that. And so I think my father and uncle and grandfather would understand that, you know, what we're trying to do and be excited when we fully develop our Plan like at 55 broad, which is well underway to being renovated and hopefully, you know, sometime in the beginning of 2025, start moving tenants in, residential tenants. And this is. We, we have a huge housing shortage, right? We have, we have a lot of empty office space, but we don't have enough housing. So that shift, we think will continue and have strong demand. People want to live in Manhattan. People want to walk to work. That's something that became evidently clear post Covid. The building that my dad used to live in on 55th and legs in the, in the great financial crisis of 2008, that building, another building on 36 and park, the young people got fired and that that building went from 95% occupancy to, you know, low 80s overnight. And that happened Covid also. But what also happened when the vaccine started coming out, those two buildings were the fastest to start renting up. Why? Because the people were getting called back to the office and could walk to work. So those buildings were sort of, you know, leading the pack and all the other buildings caught up. So shifting gears, you know onto the positive side. The residential market is, is very, very strong. And so our properties are knock wood are doing very very well. And now we've got good cause eviction not so great. But we'll work our way through it and let's see what happens with you know the, the governor's 485X which is replacing 4P 1A. Highly confident that people will take, take up the ability to do the conversions which will be very, very positive I think for the city in the short, medium and long term, you know, to help alleviate some of the housing issues.

Yeah, no, I certainly agree with that and I'll have my white paper out shortly on the implications of the housing package. But yeah, I think it will spur a lot of office to residential conversion. Hopefully we'll see some much needed development.

Also take some inventory off the commercial market and you know, help be helpful to simulate. You know I left out important data. So where, where I am on Park Avenue, 52nd street that you know the, this, the Plaza Grand Central District has a sub 10% vacancy but you go to 3rd Avenue you have a 30% vacancy. I think the average throughout the city is about. And you this is, you know this better than I do is around 20% but in the hot but in the high end class A buildings the, the vacancy is, is, is relatively low. And it's interesting I think last year I'm looking at a stat right now, 73% of the leasing activity since January of 23 was in a building that has some sort of amenity. Food, gym, conference, you know, wellness. So that's a trend that telling you that's where the market's going and that's why we as developers need to be looking at that. And that's what we did at Three Times Square. We did a new lobby in the amenity space, the gym downstairs. And we're getting very good traction. We're you know I think we just hit 60% leasing there with. And I met one of the tenants that we had just signed a lease with law firm Kilpatrick. They were taking a tour of their space under construction and he told me and he came down to look onto the 16th floor, our amenity floor. And he goes bill, I got to tell you something. Of all the spaces we looked at, you know, in all the buildings. So it's got to be at least, you know, a dozen, maybe even more. Your amenity space is the best space we've seen. So that was a great affirmation of what we are, you know, what we did and it helped us get you know, pretty good rents for, for, for Times Square. So another stat I'm sure. You know, last year I think There was nearly 140 leases in double digit rents that were signed. So north of 100 bucks, some 150, some at 200. And so that's what I said at the beginning, that there's a premium that tenants will pay if they're getting the right type of product. And so that's where you're seeing a tremendous shift in, in, in, in deals getting done and what the owner is put into these, into their properties.

Yeah, there's no doubt been a plight to quality and it's been really amazing to see how you all have embraced technology and environmental considerations as well. I know with Three Times Square you had the well health safety rating and really prioritizing the health and wellness, which has been great to see. And be excited to hear more about your plans to co develop with Vornado a 62 story tower at 350 Park Avenue for Citadel. So anything you can share with that, again, incredibly exciting thing for the city.

And in about seven or eight years my views will be blocked by that building. It's literally right outside my window. I look at 350 Park Avenue every day. This is actually was my grandfather's office and then it was my uncle's office and now it's, it's my office. And I, I, I, I a, a, a friend of mine who was a congressman came up, you know, in, in January, February and he goes like they still let you have the corner office. Like you know, talking about my kids, I go yeah, they're letting me keep it for a while. So why am I meeting with you? I should be meeting with them. I said go be my guest. But yes, it's very, very exciting. And the mayor announced that at an Amity breakfast a couple weeks ago where we, we started the ULURP process and filed an application. So we'll be going through the regulatory approval process. And this is something that Steve Roth and ourselves have been talking about and working on together for at least 10 years. He really led the industry in getting Midtowney's zoning change that would, that allows the tearing down of obsolete office buildings and up zones the, the, the Midtown east area from Madison to, to park. And it really, it started in the, in the, in the, in the, in the Bloomberg administration and, and it didn't, it didn't happen. And then de Blasio came in and got it done in 2017. And right after six, eight months after that, Jamie Dimon and JP Morgan announced that they were going to build their new world headquarters on the site of their existing headquarters. They had to find other spaces in the neighborhood, which they did. They tore down the SOM designed 270 which was a modern building, but had it reached its useful night life. They needed new trading floors, they needed environmentally friendly space. So that, that, that development really was the catalyst of. Because a lot of tents in the mid, you know, in the mid teens of, of of the 20s were moving to Hudson Yards and other parts of the city because they couldn't find modern space. But it also accelerated owners of existing buildings of Park Avenue renovate their buildings which almost every building on Park Avenue, Seagram Building, Lieber house, our Building 399, the Fisher's Building. Two buildings on park have done that. And we started getting tenants coming back into Timothy Tennis. And then you had east side access open up a couple of years ago, which was very important. But so the Vornado team and the Rudin team came together. We own the building behind 350 Park, 40 East 52nd street which was BlackRock's headquarters for a couple of decades. They moved out to Hudson Yards is an example of, you know, they wanted a new modern building. And so we joint ventured, we bought another little piece on 51st Street. And Steve Roth had a very good relationship with Ken Griffin who's the founder and CEO of Citadel and Citadel Securities. And even though they had just moved, signed, they had signed a lease and were moving into 425 Park Avenue. They were growing. They're a huge company. They had just announced they were leaving Chicago and moving a lot of people to Chicago, but they're also moving a lot of people to New York City. They have a tremendous ethos of working this. They were five days a week coming into, you know, during COVID having that, you know, collaboration and being together is a very important part of their, of how they run their business. And over a period of about a year we negotiated a deal with Ken and his team and the Rudin team and the Vernado team. And we're going to build a million 7 or 800,000 with building 62 stories high, I think the second tallest building in the in the city and they're going to occupy 7 or 800,000ft of it and be the, you know, the, the lead tenant. Ken is our partner and what, what better way to, you know, continue in a stop and, and reaffirm New York is the financial capital of the world than having, you know, Ken and his team have their New York headquarters at 350 Park. So it's a very, very exciting project. It's going to take, you know, multiple, multiple years to, to accomplish. But you know, again I'll have a front row seat to, to the development of, of, of this, of this great, great Norman Foster design, you know, green state of the art building.

It's no doubt a huge vote of confidence for New York. And after Chicago I, I thought and, and yes of course they're, they're here with 4:25 but also made it clear that they're setting up shop in Miami. So to, to see that they've come and made a major commitment here in New York and as, as you mentioned to really establish this as the financial capital of the world. Just vital at this time. And I guess and I'm going to.

Ask a rhetorical Gordon, why? And the answer is why? Because New York has the talent. And, but there then this leads into this. Nothing is preordained success. Right? So we have the talent. We just, we have to, we have to continue to provide the infrastructure, public transportation, the east side access is great. We have to educate our kids. We have to provide housing and all of these things need to continue to. We don't, we can't rest on our laurels. As Jamie said. We have to, we have to keep pushing forward and the young people want to be here. That's, that's who the market is for these converted apartments. They're highly amenitized. Pools and gyms and lounges and there's, they're small apartments, they're not apartments that Sam rudin built at 215 East 68th Street. That's a 700 foot, you know, studio. Right. 700 foot apartment now is a one or two bedroom. Right. It's all shrunk wrapped and, but they have amenities and the young people are going to work whether it's Citadel or JP Morgan or Evercore or wherever. And they're really not in their apartments that much because they work, you know, 12 hours a day. They, you know, and then, you know, they, they just need a place to shower and get a quick meal and get back into the office the next day. So that's very, very important. I think for the future. And you'll see, I think, you know, thousands of units, hopefully in the next four or five years come on the market in Midtown that will I think fill a very important need for, for.

Our city, no doubt. So Bill, you already gave a lot of the reason, I'm sure, why you've continued to invest here in New York, but it still begs the question and certainly we saw a lot of your contemporaries, certainly after Covid, start to diversify, go into different markets. And yet Rudin's holdings, if I'm not mistaken, are still entirely here in New York City. So have you ever thought about going into different markets? Obviously you do a lot of office, multifamily, some, some retail mixed use components, but even maybe different asset types. So why you've continued to focus on, on New York City and what you know best?

Well, this is, this is, you know, but also a legacy. I mean we know this market where our brand is well known. The Rudin name is synonymous with quality and both on the commercial and residential side. And, but I think that's a question really for the next generation. I think, you know, what we've learned is you need, you know, we, we need to diversify. You know, our diversification is owning office and residential like right now. So the, you know, residential market's doing strong, that's helping us out. Commercial neo, not, not so strong. But we, we've dipped our toes into some other things, you know, that you know, outside the city on, in terms of, of debt structures and things like that just to, you know, to understand that. And those, those, those investments, you know, although they're not, you know, you know, being a developer I think have, have given us a taste of, of, of different markets and we'll, we'll see. I think we need to get our, get, you know, get this transition from the, from my, my generation to the next generation fully, you know, fully integrated and deal with some of the, you know, the issues like some of the older office buildings, see where we can, you know, take advantage of the conversion opportunities and you know, and then you know, look at, you know, where, where, where best to allocate our, our, our, our capital. So that's all, you know, we're, we're top constantly looking at, at. We know our business models and our strategies and have a lot of discussions about that. But right now we're in a little bit of a hand to hand combat, right, dealing with, you know, the class B type of buildings and investing in our residential portfolio. We've added gyms We've added other amenities. You know, in a building on Park Avenue, we're adding an outdoor ground floor terrace with a fireplace and a lounge. And so we're, you know, we're spending, you know, millions of dollars, you know, making sure that our properties are, are competitive and up to speed. And that takes a lot of time and effort. But the future, you know, who knows what direction that takes? But yes, we have to keep an eye out on over the horizon. Over the horizon, as my dad used to say, to see where those next opportunities will play themselves out.

Wonderful. So, Bill, with only a couple minutes left, I'd love for you to give some advice to our listeners, our viewers. Public service has been so ingrained and giving back all the charitable works that you do, why is that important? Why would you urge someone, maybe who's even new to the business to get involved? And, and maybe it's volunteering, maybe it's sitting on a community board, maybe at some point in their careers running for city council. I mean, why, why is that important?

Believe it or not, in the late 70s and early 80s, I was on community board number five. And you know, I had to go over to a church on the, on the west side. And it was an important experience for me as a young man in my, in my 20s to see, you know, sort of the sausage being made in terms of, of, of zoning and what people were looking for and, you know, what was going on. It was, I think, very, very helpful to me. And, but again, as it goes back to what I said in the beginning, you. We need people's voices who are not far left, not far right, sort of, you know, hitting the ball down the middle of the fairway, so to speak, who are moderate and understand that you, we, we need that interaction. We need businesses, we need, you know, quality of life. We need all of these things that attract and retain of the employees. So you have to get involved. You have to, whether it's. Get involved with REBNY or Young Men and Women's Real Estate association or whatever organization, abni, we have a, you know, young leadership group there. We have, my daughter runs the women's committee of the, of, of abni. And it's all about meeting and networking and interacting and, and, and meeting new people and, and getting new ideas and, and having the conversation and, and you know, there's nothing better than being, you know, involved in a philanthropy and seeing, you know, whether, whether you're writing a check or you're volunteering and everything in between to, you know, help people who need help that, you know, that you walk around the city and you see obviously more homeless people in New York and your heart goes out and, and, but it comes back to, you know, housing. Can we find appropriate housing for them? Can we give them the social services that, that they need and the mental support that they need? And so this, so whatever you can do it. First of all, it makes you feel good. It makes you feel like you're, you're, you're, you know, you're not running away from the problem. You're facing the problem. And that was what my dad was fighting against. These CEOs would, you know, leave the city and think that they were, you know, escaping their problems, when in reality, five years later, they had crime up in Westchester or homelessness or drugs or whatever it is. You can't run away from the problems. So you have to, you have to engage. And, you know, one of the great things that, you know, my family's involved in and something again started because of my father and uncle's interaction with, you know, with Mayor Beam at the time back in the 70s. And a gentleman by the name of Percy Sutton, who was the Manhattan Borough president. And somebody, some crazy guy named Fred LeBeau came to Percy Sutton and said, hey, we're going to take the, the New York City Marathon, which in the 70s was run around in Central park like six times. And we're going to do for the bicentennial, 1976, we're going to have the race in all five boroughs. And everybody thought this guy was out of his fricking mind, right? And so in the 76, crime was up and people were leaving the city. At the press conference, people thought, like, people are going to get mugged, you know, running on the streets. It was like not a very good art to the idea. But Percy Sutton came to jackaloo. Sam Rudin had just died in 1975. And they said, we need $25,000 to help get this race, you know, going. And my father and uncle didn't even, you know, didn't have to go to a committee, then have to go to, you know, a board. They said, you got it, 25,000. But we want the, want the trophy to be named after Sam Rude. And their father and Hersey went to the Roadrunners and they right away, and it was the Rudin family manufactured Hanover Trust, which is now JP Morgan Chase, Leonard's Magazine, a guy named George Hearst, asic, the running company, and a few other Perrier. And that was the start of the New York City Marathon. I think there were a couple thousand runners. Nobody thought it could get done. It got done, and instead of just happening one time, they said, hey, we. We did this. We figured it out, the cooperation, the city was amazing. And they did it again, and then they did it again. And every year it went from 2,000 to 5,000 to 10,000 to now it's 50,000 runners. And if not the greatest day in New York City, one of the great days in New York City where everybody comes together, people come out and volunteer, and they hand out water and, you know, the medical tents, and there's all. All volunteers. So, you know, something like that. It's a simple thing, but it's, you know, we go to the starting line and see the races go off and see them go over the Verizon Bridge, and then we run ahead to the finish line. And, you know, it used to be my grandmother gave out the trophy, then my generation gave out the trophy, then my kids generation gave out the trophy, and now we've got the. The. The fifth generation. My grandkids give out the trophy. And it's just an amazing, you know, an amazing day and amazing, you know, sense of accomplishment when you see the elite runners finish. But more importantly, our friends, our family, our coworkers were running 4 hours, 5 hours, 6 hours, and their effort to. To accomplish, you know, something that's very, very meaningful, and it's a great experience. So whatever it is you do, do it full throttle, you know, running the marathon, volunteering, doing whatever, you know, helping soup kitchens feed homeless people. You got to go out and do it. Just do it like Nike says. So that's my. That's my advice to young people and get engaged. Get. Get engaged in whatever it is that your passion is, and have your voice heard. Don't let the other people drown you out. Let your voice be heard. And you know, that. That. That's so critical for. For the future of our city and our country.

No, that's an incredible way to end. I mean, you have such an incredible story and your. Your family's story, and just so appreciative of everything that you all have done again for the industry, for our city. And for those of you listening and watching this, I know you've gotten a ton out of this. And again, just take these words to heart and really take action. So thank you again for joining, Bill. Really appreciate it. And for those of you listening, thank you is all for sharing this podcast or if you're seeing this on Instagram, LinkedIn, Twitter, passing along. We're out there to help inspire others to get into this incredible business and to give back. And that's what I really took away from this episode. So thank you again. Until next week, this is your host, James Nelson.

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