August 7, 2022

Square Feet | The 30-Minute Interview: Stephen M. Ross

Mr. Ross, 71, is the chairman, chief executive and founder of the Related Companies in New York, which is best known for the Time Warner Center. Among the company’s latest projects is the development of the 26-acre Hudson Yards.

Mr. Ross is also the chairman of the fitness-club operator Equinox Holdings and the majority owner of the Miami Dolphins National Football League franchise.

Q Are we embarking on another building boom in the city?

A There isn’t going to be a huge boom, because real estate is really a function of jobs. Now I think we’re gaining back a lot of the jobs we might have lost. And I think people are optimistic, especially developers, but I don’t think you’re going to find as much financing available.

Going forward, you’re going to see a lot of consolidation of corporate offices and demand for new space. I think there’s going to be a fair amount of construction in the city, particularly downtown and in Hudson Yards. And more specifically — Hudson Yards!

Q O.K., so let’s talk about the Hudson Yards development. Any tenants locked in yet?

A We’re speaking to nine tenants — for office space — each of whom is looking at over a million square feet. I’d really rather not say who they are. In our first phase, which is roughly four and a half million square feet of office space, I think we’ll be able to announce signed deals for three million square feet by the end of the year, and start construction next year. There will also be 750,000 to a million square feet of retail, and the balance will be residential and a small hotel.

Q Have you secured financing?

A We haven’t set up who are going to be the construction lenders yet. You can’t really talk to them until you have something to propose to them. In today’s market you have to really prelease. You’re not going to be able to finance a lot of “spec” space.

Q You do have a partner, the Ontario employees pension plan. How much is it investing?

A They’ve made a commitment for $475 million. They have a lot of experience through the subsidiary Oxford Properties. But we’re taking the lead and we have the majority of the project; we’re over 60 percent.

Q Any concerns about Brookfield Office Properties’ proposed office tower a few blocks from Hudson Yards ?

A I don’t think it’ll have a major impact. They’re on Ninth Avenue, where there’s virtually no development around it. We’re creating our own environment. We have a large mixed-use project and we’re looking to create a critical mass. We’re also offering a better value, from the standpoint that we have a 20-year real estate tax abatement.

The tenants could own or lease. We’re prepared to sell very close to cost, because we have all this residential square footage that we’ll look to make most of our money from.

Q You’re basically creating a neighborhood.

A Yes. I think every good developer, in the back of their minds, wants to transform and leave a legacy. Time Warner Centers certainly transformed the whole West Side. As a developer, it’s a great feeling knowing you have made an impact. There’s also a lot of responsibility that goes with that: you have to really put the city’s needs first. It’s not all about making money. And that’s why the city — knowing what creating a neighborhood means for its growth — has offered a tax abatement to tenants taking the first five million square feet. 

Q Let’s talk about MiMA, your new mixed-use building.

A We’ve rented close to 200 of the 500 market-rate units at over $75 a square foot. The rentals were built under the 80/20 program, so there are also affordable units. We’ll start selling the condos next month. We haven’t priced them yet. The project has been well received because of the amenity package that includes a private Equinox club, an outdoor movie theater and a dog run.

Q What’s the status of the Hunters Point South middle-income housing project in Queens?

A The city now is really doing the work, putting it in a position where we could start it next year. It’s really the first project that’s going to be addressing the work-force-housing needs of the city. I started out in affordable housing.

Q And you started out professionally as a tax lawyer.

A I did some restructuring of deals for real estate clients. I enjoyed what they were doing more than what I was doing.

Q Do you still live at the Time Warner Center?

A I’m the president of the condo board.

Q What do you hope to be known for years from now?

A How we made cities better, transformed neighborhoods, and built a great company that’s known for doing quality work.

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