NYC CRE Summit Preview: Q&A with Matthew Baron
by Josh Anderson
NEW YORK, NY — Matthew M. Baron is the President of Simon Baron Development. Since 2005, when Mr. Baron joined forces with Jonathan Simon, their company has grown from one employee and a few hundred million of assets to over $1.5 billion of assets and 14 professionals. Mr. Baron currently sits on the Board of Directors of the Long Island City BID, and is also a member of the Board of Directors of Ollie, which is a company he and Mr. Simon helped found. Mr. Baron was also an Adjunct Lecturer at New York University’s School of Continuing and Professional Studies where he taught a course on Real Estate Development. Mr. Baron holds a BS in Finance from NYU Stern and an MBA from Columbia Business School. Matthew will be a featured speaker at CapRE’s New York Commercial Real Estate Forecast: Gloom, Doom or Boom on November 6. Below we caught up with him to learn more about his latest activity and perspective on the NYC market.
CapRE: Thanks for chatting with us today Matthew. What have you been working on recently? Any deals or activity you can highlight for us?
Baron: Over the last four to five months we’ve been leasing up The Alta in Long Island City. We’re about 60% leased. About a third of the units are co-living, managed by Ollie. About a week or so ago, we closed on the re-cap of our original capital partner of that project. We’ve also got an office project in Brooklyn that was recertified a few months and are now going through the interview process. We’ve got another project in Newark as well.
CapRE: So what are your thoughts on New York? What’s next for the Big Apple?
Baron: We’re opportunistic investors. So for us, we always try to be cognizant of where we are in the cycle. But I think that, and it’s a function of where we are today, it just feels like market cycles are hard thing to time. Most people would agree we are probably in the later innings of whatever game we are playing but it’s hard to say how long that game keeps going. So the opportunities we look for are unique ones that allow us to create value irrespective of where the market goes. Sometimes that may be for uses that aren’t tied to the market and we’ve been focusing on that the past couple of years.
But there really is only one New York and it’s where everybody wants to work, everyone wants to play, and everyone wants to invest. So if you have a reasonable outlook, you can have staying power. And if you don’t time the market perfectly, it can still be okay.
CapRE: With all of that in mind, what are some things that New York can be doing better, to make the most of the last (few) innings we have left in this game?
Baron: Some of the things at the top of the list are transportation and infrastructure. Everybody is talking about that and everyone will continue talking about that. We’ve got 100+ year old infrastructure network that needs to be upgraded. Every summer, it feels like it’s the summer of hell. Those are the kinds of things that hurt our ability to be a market leader. With the rise of Uber and related companies — I read something that said there are 100,00 more cars on the road than there were 5 years ago — even if there are only 5000 on the road at any given time, the fact that the city hasn’t been able to regulate it, that’s huge. So you’ve got a combination of ridiculous traffic and aging infrastructure those things are not helping us. People want to be in New York City but they’re not conducive to that.
Then if you go to affordable housing, I think that one of the problems I have with this administration is that there has been big push on affordable housing but a lot of the stats are misleading. I haven’t seen any major shift from my seat in policy that has created any substantial amount of affordable in the city and that’s a huge failure.
CapRE: What are you looking forward to about our New York Multifamily Summit? What topics or themes do you think people will want to hear about and discuss?
Baron: For me, it’s about running into people and hearing what they have to say about the market. It’s a great opportunity to catch up with people I may not see on a daily basis.
As for others, I think everybody wants to talk about the investment landscape and where we stand in the cycle. People keep telling me how hard it is to get deals done because of where valuations are. Everybody expected them to come down more. Depending on asset class, some have, but not all have.
CapRE: Last question. What neighborhoods or boroughs are the most exciting for you right now?
Baron: We’ve been big investors in Long Island City for a long time. I still believe that market has tremendous legs. Especially with the shut down of the L that is coming this summer. And Long Island city will be a big beneficiary of that. When you look at transportation infrastructure there, it’s really almost unrivaled when compared to other areas. But it hasn’t built up the cache that Williamsburg or downtown Brooklyn has. So I think that will continue to play out. And I also think that Greenpoint, though it has been on everyone’s radar for awhile now, it still has some legs there are as well.
CapRE: Thanks for your time and insight, Matthew. We’re looking forward to seeing you on the 6th.
Hear more from Matthew at CapRE’s New York Commercial Real Estate Forecast: Gloom, Doom or Boom November 6 on the 11:45 am – 12:30 pm panel, “Multifamily Outlook: Analysis of Apartment Market Demand-Supply, Rental Rates, Absorption of New Product and Investment Sales Volume.”