This week's guest: Jared Epstein, Partner, Aurora Capital

0:00 Speaker 3 Good morning.

0:00 Speaker 1 This is Mike Stola for the Stolar Real Estate Report on the Cats round Table. The Meatpacking District an area that many years ago really had meat. They were slaughtering the meat, they were doing business. I remember going back that Bankers Trust had a stronghold in the neighborhood. But today I’ve been involved with an individual who’s been involved

0:20 with the meatpacking district for let’s say, his entire professional career. I have Jared Epstein, who happens to be a principal at Aurora Capital. So tell me about how you got involved with the meatpacking district and what has happened over the past twenty years.

0:34 Speaker 2 First of all, thank you Michael for having me. It’s always an honor to be in your presence and to be on a radio show or TV show, any of your forms of media. My involvement with the meatpacking District started back in two thousand and one, before nine to eleven, I was a night club promoter and marketer of restaurants

0:58 and lounges, and the meat packing was the place to be. It had a had a restaurant called FloraNT, which I frequented with my girlfriend’s parents who were just hipping cool, and then I would go to Lotus at night for the night club, which was really hot. And then of course there was pastise and marked. It was just an

1:19 amazing neighborhood.

1:21 Speaker 3 So what happened.

1:22 Speaker 2 So the next thing that happened I got into real estate. A few years later, I had a dog. I had a new girlfriend. We were walking the dog in the neighborhood in the meatpacking district from Soho through meat Packing and then back down to Soho. On our walk back down to Soho from fourteenth to ninth, we passed thirteenth

1:39 and ninth and saw a sign literally being going being put up on the building on the corner of thirteenth and ninth said triple net lease available with a name and a number, ALF Naman and some two on two number.

1:52 I called them that night, maybe at like six seven o’clock, as soon as I saw the sign and said, Alf nice to me. It’s Jared Epstein with Aurora. You know, we own some real estate and Soho. I have a family that I’m partners with that it’s very well capitalized, not well known, but very well capitalized, and we’d be

2:09 interested in acquiring the building through a policeholder I guess that’s what you’re looking for. Oh no, no, no, we’re not looking for a developer, he says, we’re looking for a luxury retail tenant. I said, okay, that’s great, but the buildings are in disrepair. I’m very familiar with what was in it previously, which was a hot cutting plant

2:27 and then a bakery. It’s been sitting there vacant for maybe ten twenty years because there was a tenant not paying rent and actually living in the building as well. And I don’t foresee a retailer coming along and redeveloping this property for themselves to then pay you rent. It’s going to cost them god knows how many millions of dollars,

2:47 how much time they’re going to have to go to landmarks.

2:49 Speaker 3 I just don’t think it’s going to happen.

2:51 Speaker 2 If it proves that I’m right, please give me a call, and I would continue to call him, like every few weeks, ol, what’s going on, what’s the latest? Can I get Can I meet with the owner? I want to explain to her, like why we believe we’re the right people to take over the property in terms of a long term lease

3:07 instead of a tenant. Eventually we finally got the meeting with Deanna Derso and her mother, Marie de Luca god Rest her soul and Dianna’s daughters, so Marie’s granddaughters, and we really built a very strong, like almost like familial relationship within the first hour of being together. I would say, talking about my career and what has led me to

3:35 be here with you on your show, It’s really always been about relationship building. With me, I genuinely care about people. I don’t have a filter, which sometimes creates like incredible relationships. It could also create animosity sorry with people. But I’m real and I connect with people deeply, very quickly, and that’s what happened here with the family. Within a few

4:03 weeks we’re working on the long term lease. Things, you know, diverted a little bit because Louis Vatan ELVMH came to the table and actually wanted to take the property and redevelop it. They changed their tune, mister Arnault wanted to buy it at the end of the day, and then we got our deal back on track and signed the

4:23 ground lease, probably in late two thousand and nine or maybe early twenty ten.

4:29 Speaker 1 So when would you say the major developments began in the meatpacking district.

4:34 Speaker 2 I would say the impetus to the change of the neighborhood really started with Irwin Cohen back when he bought the building which became the Chelsea Market, the old Nabisco factory.

4:46 Speaker 3 I believe it was right, so that started it.

4:49 Speaker 2 He had an incredible vision, definitely a visionary guy. I’m honored that I got to know him. God rest his soul as well. Too many people are going in this story. He created something really dynamic and special, brought a ton of foot traffic and awareness to the neighborhood. Then Paul Powiser and Charlie bought one eleven eighth Avenue, brought Google.

5:15 Speaker 1 And they bought it because they liked the power in the in the building.

5:18 Speaker 3 I was going to say that that’s right. It was.

5:21 Speaker 2 It was a former Port Authority building, so it had little I think that I don’t know if they knew that at the time.

5:27 Speaker 3 Maybe it’s the case.

5:28 Speaker 2 I’ve never spoken to Paul about that, like what made him acquire it. I know that it was through the RTC, so it was like very.

5:36 Speaker 1 As he said on TV show, Sure if you can get a dollary and Christian rent it’s worth and he got more than a dollar.

5:43 Speaker 3 That makes sense.

5:44 Speaker 2 So he lands Google because of this hyper connectivity that existed underneath the building. That took the me packing to another level. And then Paul, to his credit, also brought another level of like an emergence to the neighborhood, which was Apple on the corner of fourteenth and Night.

6:04 Speaker 1 It was two thousand and nine.

6:05 Speaker 2 Yeah, the problem I think the I think that was earlier than that, actually, because I recall when we acquired the corner thirteenth and ninth, Apple had been there for a couple.

6:16 Speaker 3 Of years already. The sad thing about losing.

6:22 Speaker 2 About that building becoming Apple is we lost Marked Markt, a great restaurant that had a massive amount of outdoor seating and people were there morning, noon, and night, similar to Pasties, but on a much larger scale and at a much more important location at the epicenter of the district.

6:40 Speaker 1 So let’s fast forward today. What’s happening over there. I know there’s movements up on fourteenth Street. Tell me about that.

6:48 Speaker 2 There’s a lot going on. So Gucci signed the groundbreaking lease on the corner of fourteenth and ninth, the southwest corner to take over the former gaslight bar and lounge, which had been vacant for a number eight years. They opened their flagship the Northeast Corners being redeveloped by Tavros.

7:05 The scaffolding finally came down. They rebuilt these beautiful, beautiful row houses from you know, back in the late eighteen hundred’s with an office tower behind it. We are redeveloping with ri Elis, the long term owner of the corner.

7:21 It’s basically an island that expands from Fourteenth Street down to Thirteenth Street with Hudson and Ninth Avenue frontage. We call it like the little flat iron building of the meatpacking district that whoever we lease that to will also continue to gentrify the neighborhood and I think on the path of it becoming more like a Madison Avenue luxury

7:43 luxurious neighborhood. Gans of Word Street, which we redeveloped, was a big, big move.

7:50 Speaker 3 I mean the street.

7:51 Speaker 1 The initial thing was with Michael when he developed the hotel over there.

7:55 Speaker 2 Yes, that’s right, Michael had you know, he acquired through also a at least through Richard Bourne and Ira Drucker, a former surface parking lot to create what is the Gansboord Hotel. He did recently a great renovation. The hotel’s doing great. The highest ad arts ever had an occupancy.

8:14 I think that’s a testament to the elevation of the neighborhood from really a nightlife an FMB zone to a mixture of that with luxury, retail and office.

8:25 Speaker 1 Okay, you really have a twenty four to seven community. Let’s talk about residential today. Sure happened over.

8:30 Speaker 3 There, got it?

8:31 Speaker 2 So there’s actually it’s not zoned for residential the Meatpacking district. However, there are some legacy grandfather tenants that live in the neighborhood, maybe a handful of them. But to the south you have the West Village, which is a very well heeled clientele that comes to the neighborhood the Meatpacking District at night and during the data shop at night to have

8:51 a meal, a drink, maybe you know, go go out the dance at a cabaret. There are a couple of them left in the neighborhood. And then of course you have Chelsea to the north, which is another the highlighte and yeah, the high Line isn’t residential, but it’s a great amenity for residential office in retail.

9:10 Speaker 1 So what are you doing with regard to residential in the community.

9:13 Speaker 2 Sure, so residential, it’s an extension of the community. I’d say it’s a little bit south of here. We developed one fifty Barrow, which is also known as the Keller because the former Keller Hotel was at the site. That’s on the corner of Barrow in West We created a beautiful new condo building by merging the old Keller Hotel

9:33 with a garage that we acquired adjacent to it knocked down, and then two homes on Christopher Street that we also knocked down. So that’s about sixty thousand square foot boutique luxury condo with a little retail on the ground on the corner, and then a little retail on Christopher. We also simultaneously built the newest luxury rental development in the

9:57 neighborhood on the corner of Hudson and Charles. It’s called one eleven Charles. We hired my friend Stephen Ferrara and Clayton Rigo. Got the building leased in record time, like right after TCO at about one hundred and thirty five dollars a foot blended. We preleased the retail. And next, and it’s not last, and it’s certainly not least, but

10:19 next is one forty Jane Street on the southeast corner of Jane and West, which will be known as one forty Jane. Incredible piece of land. I was.

10:29 Speaker 2 I would tell anyone at the time when we were acquiring it that I think it’s the best piece of land left in Manhattan, certainly left in downtown Manhattan. Unbelievable, unparalleled water views adjacent actually across the street from the Jaine Hotel which will become Jane Street Bungalows from Jeff Klein.

10:49 He’s creating like a member’s only club there.

10:52 Speaker 3 So heart of the West Village.

10:54 Speaker 2 Incredible views, one hundred thousand square feet, very pricey.

11:00 Speaker 1 Look A lot has happened over the years, and you’ve been very involved with like the Thank Jared Epstein for being here today and I’ll see you next week.

11:07 Speaker 3 You got it.