MEET THE LANDLORD
VITAL STATS NAME: Tom Lebling COMPANY: Equity Residential TITLE: Head of of NYC & US property management
UNITED STATES
Rockville, Md.
AGE: 50 HOMETOWN: Rockville, Md. CURRENTLY LIVING IN: Lower Manhattan
How many buildings does Equity Residential own in the New York area? We have 38 properties with 10,330 units. Twenty-five of those buildings are in Manhattan, and three in Brooklyn. There are four in Jersey City, one in Hoboken, as well as scattered smaller properties in the far [New Jersey and Connecticut] suburbs.
Back in 2011, the portfolio was much smaller, with 15 New York City buildings totaling about 4,500 units, right? We’ve never had this many buildings in the area. We started here 10 or 12 years ago, just with a couple of properties in New Jersey. [But in a highly publicized deal], Equity purchased Archstone a little over a year ago for $9 billion. That added 10 properties in the area for the firm. Out of those, eight were in Manhattan, one in Brooklyn and one in Hoboken. That added 4,000 or 5,000 units.
Has your workload doubled since the Archstone deal? I know the deal also added 20,000 units to Equity’s national portfolio. I’ve been in charge of the Northeast, which is Washington, D.C., New York and Boston. But [the deal] changed things [and added California to my coverage area]. I used to be based out of New York; now I’m based in Chicago. I still have a place in New York for about two more weeks.
Do you see Equity International founder
Sam Zell more now?
He’s heavily involved in understanding what’s going on in our company, but I don’t have much interaction with him.
How did you get involved in real estate? I started in accounting for a small property management company in Virginia, and realized accounting was not very exciting. I decided to work on a few properties and fell in love with real estate. Before joining Equity 12 years ago, I oversaw property management for Houston, San Antonio and Dallas at Aimco [Apartment Investment and Management Company].
Does Equity only own rentals in the New York region? Our portfolio is rental apartments in single apartment buildings that are A or A-plus assets. We don’t own one unit here or two over there. It’s primarily 250 apartments or more in one building. Our largest complex in New York is Trump Place, a three-building, 1,300-unit site at 140, 160 and 180 Riverside Drive. Our primary target used to be the Wall Street finance person. That’s shifted in the past few
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years toward new media and the tech industry. Our residents’ careers have changed. That’s kind of indicative of the way New York’s going in general.
Tell us about Equity’s current development projects. In New York, we have two ground-up projects underway — one at 28th Street and Park Avenue South and the other at 68th Street and Amsterdam Avenue. Prism Apartments on 28th is a partnership with Toll Brothers, where we own half of the Christian de Portzamparc–designed building. We’ll be renting the bottom half and Toll Brothers will be condo-ing the top half. We’ll start leasing there in August. The second one has an exoskeleton design. It looks kind of like a spider web. It frees up space inside each apartment because all columns are on the outside. We’ll start leasing that early next year.
What are some of the challenges that have come across your desk as a New York landlord? I recently dealt with a long-term resident who felt like his renewal was higher than it should be. I gave him examples of our competitors’ rates. What we offered him was a fair deal, and he ended up agreeing with that.
Anything else? Occasionally some maintenance issues reach my desk. Six or eight months ago, we converted most of our properties to smoke-free. A few residents who are smokers were not pleased. I understand their frustration, but in today’s world, the majority of our residents are not smokers, and we were receiving a lot of complaints about smoke filtering through air ducts. We gave them notice, and anyone who’s in a current lease is entitled to smoke until their lease comes up for renewal.
Can you describe a typical day? I spend a lot of my time on the financial side, trying to maximize net operating income at each of our properties. We are constantly reviewing financial performance.
What direction is Equity’s New York portfolio going in? We will continue to hopefully grow in New York, but it really has to be the right deal. We have a pretty large mass of properties now, so we can be selective. We’ve looked at a few in Long Island City and other parts of Queens, but haven’t felt like they were the right deals for us.
The Archstone acquisition changed a lot. Is another mega-deal in the cards? I would say we’re not actively seeking that kind of big deal. If something came along, we’re always trying to be opportunistic. What we’re really concentrating on now is running the properties we have, and doing all the small thousands of things that make a difference to our residents and investors. By Mark Maurer PHOTOGRAPH FOR THE REAL DEAL BY MAX DWORKIN