The FORT Podcast -Dov Hertz – Founder @ DH Property Holdings, LLC – The Greatest Land Assembler New York City Has Ever Seen
Before founding DH Property Holdings, Dov was the Executive Vice President of Acquisitions of Asset Management at Extell Development Company. During his 13+ years at Extell, Dov negotiated and supervised the acquisitions of over $20 billion of New York real estate. Dov was directly responsible for sourcing some of the most notable transactions over the last 10 years, including The Ring Portfolio, One 57, Nordstrom Tower, and One Manhattan Square.
On this episode, Chris and Dov discuss:
– Stories from Dov’s career assembling iconic NYC sites
– Pivoting to Class B Industrial
– How to Negotiate in RE
Listen on:
Spotify
Apple Podcasts
YouTube
Topics
(00:00:00) – Intro
(00:01:56) – Dov’s early career
(00:05:02) – Land assemblage and zoning in NYC
(00:13:12) – Tenant risks
(00:16:06) – Assembling Central Park Tower site
(00:27:21) – Assembling 1 Manhattan Square site
(00:32:45) – The Ring portfolio
(00:48:19) – Hiring Japanese actors to finalize a deal
(00:56:42) – Venturing into Class B Industrial
(01:13:58) – How would outsiders perform in NYC trying to assemble land?
(01:15:00) – The power of negotiation
Episode Summary
In this episode of the Fort podcast, Dov Hertz, a renowned real estate developer, joins Chris Powers to share his extensive experience in New York City’s high-stakes real estate market. Hertz, known for his strategic approach to land assemblage and development, offers listeners a detailed look into the complexities of his work and the factors that have driven his success.
Hertz begins by discussing his early career and the pivotal moment when he started working with Gary Barnett at XTEL. He recounts his initial lack of experience in land assemblage and how he learned the intricacies of New York City’s zoning laws. He explains the importance of understanding the city’s zoning regulations to identify underdeveloped blocks with high potential for development. This foundational knowledge allowed Hertz to excel in assembling valuable land parcels, which is critical for large-scale developments.
A significant portion of the conversation focuses on the challenges of land assemblage, particularly dealing with holdouts. Hertz shares various strategies he employed to negotiate with property owners and tenants, often using creative methods to keep his intentions discreet. He highlights the importance of patience and persistence in this process, noting that land assemblage is a long-term game requiring substantial capital and a willingness to navigate complex negotiations.
Hertz also delves into the financial aspects of real estate development, emphasizing the role of private high-net-worth individuals in funding these projects. He explains that institutional equity is often reluctant to engage in high-risk, long-term investments like land assemblage. This reliance on private capital underscores the significant financial risks and rewards associated with real estate development in New York City.
One of the more compelling stories Hertz shares involves his work on the Central Park Tower site. He describes a high-stakes negotiation with a competitor that owned a crucial piece of land blocking his project’s prime views. Through strategic maneuvering and leveraging a tenant’s lease, Hertz was able to negotiate a mutually beneficial agreement, ensuring his project could proceed without compromising the desired views of Central Park.
Another notable topic is Hertz’s experience with rent-regulated tenants. He provides insights into the legal and logistical challenges of vacating buildings for redevelopment, often requiring buyouts of tenants who have strong legal protections. Hertz emphasizes the importance of understanding tenant motivations, which can sometimes extend beyond financial compensation, to successfully negotiate these buyouts.
The episode also covers Hertz’s transition from XTEL to starting his own firm, DH Property Holdings. He discusses the motivations behind this move, including his desire for new challenges and the opportunity to apply his expertise in a different context. Since founding his firm, Hertz has focused on industrial development, particularly in urban infill markets like New York, New Jersey, Boston, and Philadelphia. He highlights the growing demand for Class B industrial properties and the strategic importance of tenant retention in these markets. Hertz’s offers practical advice and insights for aspiring developers, emphasizing the need for thorough market knowledge, creative problem-solving, and strategic negotiation skills.
The FORT is produced by Johnny Podcasts