NYC Conversion Recipe
Servings: $200M of profits
Prep time: 3 years of hustle
Signature chef: SL Green
---- Ingredients ----
- One obsolete NYC building ($300M, dry-aged 50+ years)
- $805M redevelopment budget (cream it together wisely)
- One caramel drizzle “notch”
- Indulgent “amenities swirl”
- Signature topping (members-only club)
- $485M construction loan (with a sprinkle of recourse)
- $320M equity base
- 90% sugary tax abatement
- 650 tenant filling
- One sub-5% exit cap rate (for a zesty finish)
---- Directions ----
1. Prepare the base:
Start with your “crust,” evaluating the strengths and challenges of your site. Large floor plates? No worries—reshape them into sleek, efficient layers. Maintain the building’s structure but add a “notch” to elevate it.
2. Whisk in the budget:
Blend the equity and debt into your redevelopment bowl. Gradually fold in the $400M until the mixture is silky and ready to bake. Add a pinch of Gensler saffron to enhance the aesthetic flavor.
3. Add the secret sauce:
Top the cheesecake with your premium amenities—$5M fitness center and $8M members-only club. These extras will give your project the wow factor glaze, but note that it spoils quickly.
4. Bake for 3 years:
Let the project come together in the oven of redevelopment. Watch closely through all stages—demolition, reconstruction, and final touches—ensuring no delays or budget busts.
5. Sprinkle sugary tax incentives:
Generously apply your 90% tax abatement for sweetness and cost efficiency.
6. Layer in tenants:
Spread 150 affordable housing layers at $2K/month and 500 luxury tenants at $7K/month.
7. Chill for 30 minutes in freezer
Stiffening the tenants will make the ingredients more digestible.
8. Serve to billion-dollar buyer:
Plate and immediately sell for $1B at a 4.5% cap rate.
Ps - Enjoy the sweet taste of success, but be warned: do not attempt to recreate this recipe without the sugary tax abatements.
Read the full article here.
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