Monday Properties, a New York-based office owner and operator, has seen a string of departures since September as the firm pivots from New York real estate.
Half a dozen real estate employees have left headquarters, including Dang Phan, the co-president and chief investment officer; executive vice presidents Richard Brookshire and Ron Pollack; Sean Harris, a director of acquisitions; and associates Brian Wang and Bryce Duke. The firm does not plan to fill these vacancies, according to media reports, leaving it largely without an acquisitions team in New York. Its Washington, DC team of investment professionals, however, remains intact.
“It’s just very hard to transact in today’s environment,” Anthony Westreich, the firm’s chief executive officer, told PERE. “Over the last couple years, the challenge we’ve had and many office landlords have had is that values have risen to historically high levels. In my opinion it’s much better to be a seller than a buyer.”
Monday Properties has been a net seller since the height of the real estate boom, making its last large acquisition in 2007. The firm originally made investments through joint ventures with partners such as Goldman Sachs, Invesco Real Estate and Rockpoint Group, with Westreich funding his firm’s 5 percent to 25 percent stake in the properties with his family’s money. Starting in 2013, he created a new investment management entity, Monday Capital Partners, and brought Phan, along with a number of executives, into the business.
The company exited its last Manhattan property in May, selling The Helmsley Building, a 1.3 million square foot office tower, to The Blackstone Group and RXR Realty. The two parties bought the building, which was 94 percent leased in May, for $1.2 billion, according to Real Capital Analytics. Monday Properties purchased the property for $1.15 billion in 2007 and sold a 95 percent stake to Invesco Real Estate of Dallas and South Korea’s National Pension Service in 2011 for $769.8 million.
He planned to sell the New York properties eventually. Given the fact that Monday Properties does not plan to make any new investments in the foreseeable future, Westreich said that the departures of the six acquisitions professionals consequently did not come as a surprise. “Without the large New York holdings, it didn’t make sense to have as many people on the payrolls,” Westreich said.
Back in 2013, Westreich told PERE that he did not anticipate holding onto the firm’s existing assets for a long period. “There will come a point in time over the next three to 10 years where anything that was owned that was Monday Properties will have been sold,” he said in the November 2013 issue of PERE.
The firm will continue its multifamily development efforts in Charleston, South Carolina and North Dakota, but stay relatively inactive in its primary markets, New York and Washington DC.
Monday Properties now actively manages nearly a dozen suburban Washington offices, in addition to its multifamily holdings – but the CEO says the firm will buy in the future, given the right market conditions.
“We’re going to wait for a correction here and then we’re going to pounce,” Westreich said.