Transcript: Francis Greenburger, Time Equities



The transcript from this week’s MIB: Francis Greenburger, Time Equities, is below.

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This is Masters in Business with Barry Ritholtz on Bloomberg Radio.

BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: This week on the podcast, I have a special guest, his name is Francis Greenburger, he is perhaps best known for popularizing the idea of the cooperative as opposed to the condominium in residential real estate development. This is a really fascinating conversation, if you’re at all interested in real estate development and how projects move forward, some of the challenges in dealing with the market cycle and credit availability and pretty much anything related to what could throw plans off for building a big building, you are going to find this conversation to be absolutely fascinating.

So with no further ado, my conversation with Francis Greenburger.

My special guest today is Francis Greenburger, he is a real estate developer, an author, a former literary agent and a philanthropist, he is the founder of Time Equities one of the larger real estate developers here in Manhattan, in New York City, perhaps he is best known as the creator of the residential co-op. His autobiography is “Risk Game, Self-Portrait of an Entrepreneur” Francis Greenburger, welcome to Bloomberg.


RITHOLTZ: So I’m kind of fascinated by your background and your history and we’re going to get into a lot of the details, but the obvious question, what sparked your interest in real estate coming from a background working in the book business?

GREENBURGER: It was pretty intuitive, I remember this day, I was walking down the streets looking at buildings, looking at architecture, thinking about built environments and thinking about real estate in New York and realized that I had some sort of a visceral connection with it that defined my background or any particularly logical connection with my past.

RITHOLTZ: So in your book “Risk Game” you wrote something that stayed with me quote “The real estate industry has created far more bankruptcies than billionaires” unquote, explain that.

GREENBURGER: Well I think if you look around New York and I was walking here past, for instance, Harry Macklowe’s gallery on Park Avenue, you know Harry who I know has had a mixed career, he’s had some incredible successes, but he’s had some incredible failures all in New York City real estate. So it’s about timing, it’s about risks, and it’s about what you choose to do or not do.

RITHOLTZ: So let’s talk a little about timing and risks. You bought a piece of land down at 50 West Street back in the 1980s with the plans that you would develop or redevelop it in the future and then that piece of property lived through September 11 and the great financial crisis, tell us a little bit about your history with 50 West?

GREENBURGER: Okay, actually when I bought it, I wasn’t thinking of redeveloping it, I was thinking of it more as an income property and it was fully leased and I think it made about a 10 percent return so it looks like something I could just hold on to and over time watch rents go up and hopefully expenses keep stable and have growing income and growing value.

Around the — in the 90s, we lost some tenants and New York was just beginning to think about downtown as a mixed-use environment.

RITHOLTZ: I mean that was very nonresidential back in the day, right?

GREENBURGER: Very nonresidential although Battery Park already existed and there was something called the Giuliani plan, which offered tax benefits if you converted commercial properties to residential. So we were actually started to convert part of the building and was I think one of the first properties to qualify under that plan.

By 19 — by 2005, we had maybe converted half the building but there was a lot of major work that we need to consider when we realized that the siting of the building was such that it if we demolished it and build a new building would be extraordinary views available from the apartment, so we began to study that as an option.

RITHOLTZ: And you spent a lot of money on architects just even thinking about this, right?

GREENBURGER: We spent — you know one of the surprises when you go into development is land is expensive, well preparing plans is very expensive and we develop full plans for the building which at that point was to be a hotel and a condominium apartment complex, but our plans got interrupted by the course of events in the financial world.

RITHOLTZ: So let’s talk a little bit about that, here’s a building that you’re racing to meet the deadline for certain tax advantages, you have already built the foundation, you sunk a lot of the main support beams but you haven’t started building the building itself and then September 15th ’08, Lehman Brothers collapses into bankruptcy and I think you were talking about a $500 million financing for the whole project from start to finish, what did the collapse of Lehman Brothers do to that development?

GREENBURGER: Well I recognized almost immediately that building into that kind of financial environment would be disastrous, so I made the decision very quickly to pull the plug, halt development and wait for a better day.

RITHOLTZ: In other words, not actually give up the property but hey let’s postpone this project until credit frees up a bit.

GREENBURGER: Credit frees up and credit is only one part of the equation if it’s for sale housing the way this was condominiums, there got to be a willing market to buy it because otherwise you might have the financing, but you haven’t — would not be able to pay it back.

RITHOLTZ: Right, makes sense. But that ran into a problem almost immediately, didn’t it?

GREENBURGER: Yes I had a little misunderstanding with the bank who would finance the foundation construction for me even though I told them what I was doing and they seem to concur, all of a sudden in January they sent me a letter saying I was in default because my loan required me to continue building no matter what, and of course I called them and said “are you crazy?” anyway I don’t really know what was going on and within a couple of weeks, they backed off on and we renegotiated the agreement to allow for the interim period that would be needed until the market was suitable both from a financing point of view as well as a buying…

RITHOLTZ: And how did the building ultimately turn out?

GREENBURGER: Well it turned out very, very well.

RITHOLTZ: One of the things that I found so fascinating in your book “Risk Game” was how razor thin the margins were for building properties and the constant search for cash and financing. Is that a fair description of commercial real estate in the 1970s or generally?

Well I would say generally and it also depends on the nature of what you’re developing. So if you are in a generic kind of marketplace with generic ideas, not surprisingly the competition is fierce and the margins are highly compressed.

RITHOLTZ: When you say generic marketplace, what are you referring to?

GREENBURGER: Well, for example, New York City, which for the last 10 or 15 years has been considered one of the best investment markets in the world, so capital from everywhere every corner of the world wants to be here so there’s fierce competition and cap rates get compressed.

However at the same time, if you go to other regions of the United States or internationally, you’ll find a different picture market by market, submarket by submarket.

RITHOLTZ: Very, very interesting, one of the things I thought it was fascinating heading into the financial crisis was a similar situation where a lot of global money was looking for returns, much of it found its way to New York real estate development and I heard a lot of real estate deal lawyers complain “Gee, the ROIs — the return on investments on all these project seem to be getting more and more compressed.” Is that a fair description of what was — what you saw leading up to the ’08 collapse?

GREENBURGER: Very much so although I have to say that it’s not only leading up to the 2008 collapse, it’s prevalent in markets that are in great favor on really on a continuous basis.

RITHOLTZ: So it’s just that competitive.

GREENBURGER: You know if you go to Toronto today which is one of the– one of the biggest development markets in North America, it has been probably 15 or 20 years, you’ll find that on the profit margins on development are around 12 percent, that’s probably half of what it would be even in New York.

RITHOLTZ: Really? It’s that tight.

So one of the things that was so surprising about the financial crisis from a real estate perspective, I have always thought of developers as being somewhat countercyclical and somewhat opportunistic after a crash they love to go looking for high-quality buildings and high-quality plots for development that have fallen on hard times and are much less expensive than they normally would be and there seems to be a tendency of them throttling back as the economy begins to overheat and interest rates rise.

I don’t know if we really saw a lot of that in that – let’s call it ’01 third party ’08 cycle, am I looking at it with a biased perspective or was that unusual versus prior cycles where developers seem to be savvier, they seem to be the smart money?

GREENBURGER: Well, I think that it’s not all developers or I think the world divides itself and there is a tendency when the sun shines, when monies available for many developers to move forward, there are other developers and I can think of a couple in New York for example the Durst Family who were intergenerational and used to thinking over long periods of time and I remember that in post the collapse of 2008, they started looking around and buying when nobody else was.

So of course you also have to have very deep pockets because in these countercyclical times banks are not necessarily willing participants, so often you either have to have very, very good banking relationships or you have to be able to buy with your own resources on all cash basis and then hope to finance at a later time. So I think the vast part of the development crowd sort of follows the money and then there’s a group that’s exceptional who were more countercyclical.

RITHOLTZ: Interesting.

Let’s talk a little bit about the innovation that is the cooperative, how did you come to recognize this legal structure as superior to others and tell us a little bit about that development?

GREENBURGER: So you mentioned that I invented the co-op, which isn’t true.


GREENBURGER: The co-op existed long before I got…


RITHOLTZ: Is it better to say you popularized the co-op?

GREENBURGER: I did, what co-ops prior to when I got involved which was in the late ’70s were really familiar at two ends of the spectrum, either Park Avenue, very expensive apartments, were many of those co-op buildings or interestingly, there was some low income or limited profit co-ops that were created for the people who could only afford minimum — really affordable housing done in co-op form, those are done, some unions created those – that housing, some were government and some were other not-for-profit groups.

But in between, sort of middle-class housing, it was not yet popular, and I recognize that both buildings in the boroughs for instance, the large complex that I undertook in Brooklyn and elsewhere would be suitable for home ownership and I also recognize that there were secondary buildings, some nonelevated and very good locations in Manhattan for instance in Greenwich Village that would be very desirable and people would be interested in owning.

So it was really seeing a broader market for co-ops as opposed to actually inventing the first one.

RITHOLTZ: Your dad was a literary agent and worked with quite a few very famous authors. How did you find that business? What was that like?

GREENBURGER: Well it was it was very much in my family and in my blood so I grew up among publishers and writers.

RITHOLTZ: And some pretty famous writers.

GREENBURGER: Some pretty famous writers.

RITHOLTZ: Stephen King, James Patterson, Dan Brown, these are household names aren’t they?

GREENBURGER: Yes, some of those came after my father died more during my tenor, but yeah they were very much part of my growing up and my consciousness.

RITHOLTZ: How long did you actually work as an agent?

GREENBURGER: Well, I worked actively for about a decade on and sort of 50-50 with my real estate activities and then I cut back the agency work, probably — I still own the agency today, it’s probably 5 percent or less of my time.

RITHOLTZ: So back then, it seemed that authors did not really get a great deal out of the publishers, was the business really all that lopsided back then? What was it like?

GREENBURGER: Well I think publishing was evolving, the distribution of paperbacks was getting wider, book club distribution was strengthening, so the revenues that a very successful author could command were growing, and you saw a leapfrogging of the value of brand-name authors during that period.

RITHOLTZ: So let me give you an example of something from your book that I found astonishing. Your office represented Stephen King and his prior deals when you first brought them on limited his annual royalties to$10,000 a year, so even if he earned much more than that, it will get spread out over time. That seems like a terrible deal.

GREENBURGER: Well, I have to correct a couple of things.


GREENBURGER: We only worked with Stephen for a moment in time because certain issues that came up in his mind regarding conflicts that he felt we have with other clients, but before we represented him, he was working directly with Doubleday and in the ’70s, theoretically in a way to help authors because we didn’t have income averaging, so if you earned a lot of money one year, you pay a very high rate of income tax, and if you earned less the next year, you couldn’t balance the two years, I think later on in tax legislation, you could do that. But anyway at that time, so publishers and authors created this sort of maximum earning concept that they put in contracts purportedly to help the authors, but what happened in Stephen Kings case was that his earnings were so enormous that what seemed like a reasonable annual amount initially became 100 year payout for what the earnings were as a result of the success of his books.

RITHOLTZ: And you did a couple of other very big books, I remember “Bronx Zoo” about the New York Yankees and “The G Spot Book” just went berserk, that became a global bestseller, tell us about that.

GREENBURGER: Well I represented a psychologist — a popular psychologist from California, a man named George Bach and he had — he often stayed with me in New York when he was here, he had just come back from a sexology conference where the author of “The G Spot” Beverly Whipple, had made a presentation about her research and theories. And he said to me “Look, Francis, you should get a hold of her and she should write a book” So I said okay, I’ve never heard of the G spot, I decided that I felt it was more appropriate to have a woman and woman agent in my office pursue it with her which she did and we signed her up and the rest is history.

RITHOLTZ: And that sold just huge amounts in all around the world.

GREENBURGER: All around the world.

RITHOLTZ: I have to go back to the 1970s, really where you cut your teeth in real estate, what was it like trying to develop real estate when interest rates were double digit and this seems to be a lot of impediments to getting anything done in New York City.

GREENBURGER: Well in the early ’80s, I was undertaking my first renovation, it was a building in Brooklyn Heights actually, and I watched the prime rate sore all the way, I can’t remember if it hit 18 percent or 19 percent but it was astronomic, and actually it was an inverted yield curve so the long rates were lower, you could borrow five year money at about 14.75 percent mortgage money, and what we did in those days, the bank had a way that you could buy the rate down, you pay them certain amount up front so the homeowner would get a mortgage of 12 3/4 percent which in that crazy environment seem like a good rate and so that was how we went about selling some of our units, the rest we ended up renting and selling a few years later when the market stabilized.

RITHOLTZ: So the regulatory environment, the sort of NIMBY thing that we still see today the not in my backyard issue, was that a big problem in the ’70s and ’80s or were people sort of open-minded about development is good, it’s an economic increase and it creates more housing?

GREENBURGER: Well, I think the people are more flexible but there is a NIMBY kind of mentality particularly depending on the type of housing that is being created, we undertook to build a major project in Brooklyn, downtown Brooklyn, and when I proudly told the borough president that we were including a major component of affordable housing, he said “no way, not in that neighborhood.”


GREENBURGER: And I couldn’t believe my years that this…

RITHOLTZ: Politician?

GREENBURGER: Politician was not favoring affordable housing eventually overcame that because I explained that it was being cosponsored by the actors fund and that some of the people — some of the people there would be formerly homeless people, but some of the other people were going to be retired actors who were — needed housing and that somehow made it more politically acceptable.

RITHOLTZ: Quite interesting.

So in New York, we’ve seen a huge number of these very tall buildings going up, what do you think about the state of real estate — commercial real estate development today?

GREENBURGER: Well I think in terms of for-sale housing, the market is bifurcated, if it’s housing that is at a low price point, which for New York City means below 3 million.


GREENBURGER: There’s still reasonably active market, the super luxury market has cooled off dramatically and I would say that this is not a time that I would want to be building super luxury housing, and I think some of the projects that are sort of caught in the middle right now that are being built are going to have trouble selling their units.

RITHOLTZ: So that space very much boomed for a while during the post credit crisis recovery, it seemed it was scraping along and then it just exploded, did we overbuild? Did the prices just get to silly? What seems to be the issue there?

And those tend to be cash purchases not mortgage properties…

GREENBURGER: Well I think…

RITHOLTZ: Especially in the higher-end, is that fair?

GREENBURGER: No, I don’t think that that is necessarily true, it’s mixed. Maybe half cash and half financing. You know I think it was a confluence of events which are often what occurs and those events are a combination of increased supply, a misperception of the depth of demand so you know people see a few apartments, you know, 100 apartments being sold at a certain price point and developers extrapolate that into being a market for 1,000 or 2,000.

So often, under the market system we really don’t know when we’ve oversupplied the market until things stop selling.

RITHOLTZ: That’s how you know.

GREENBURGER: And the other factor which I think is coming into play now is that as a result of the tax legislation that was recently passed, New York and some other states that may be high service states but have to have high taxes to support them are in disfavor and I’m sure that’s in the minds of some wealthy people who are thinking of locating here.

RITHOLTZ: We are talking about SALT, state and local tax deductions, the rich got capped at a pretty low level which is hurting New York, California, I would guess Chicago and Boston.

GREENBURGER: I think those are all on the list and there are others.

RITHOLTZ: Right, I also recall reading your referenced LLCs more easily by condos versus co-ops in order to in many ways provide some degree of privacy for whoever the owner is, are we still seeing a lot of LLC purchases of along those ways for those purposes or has — there was a giant “New York Times” article couple years ago about this or has that trend kind of eased off.

GREENBURGER: Well, I think LLCs exists for two reasons. In some cases, it may be anonymity but in other cases it’s a simple legal protection against personal liability.

RITHOLTZ: Makes sense.

GREENBURGER: And many lawyers would advise their clients regardless of whether they are concerned about their identity or not to purchase through what’s called a single purpose LLC.

RITHOLTZ: So liability to protect the household or liability to protect the owner in case there’s a…


GREENBURGER: It’s to protect the owner, I mean normally you have insurance, et cetera but you know, god forbid some very, very unexpected event occurs, if it’s owned by an LLC, you would be protected, whereas if you owned it in your own name, you would be totally reliant on your insurance which may be fully adequate but a very cautious lawyer would recommend an LLC.

RITHOLTZ: Time Equities, I know you focus a lot in Brooklyn and Manhattan, are you outside of the New York area? Where else do you do you look to do some construction and renovation?

GREENBURGER: Well actually, Time Equities is a very national and international company we own property in 30 states, we own property in six countries, US, Canada, Germany, Holland, Italy and one property in the Caribbean.

RITHOLTZ: And let’s talk a little about the real estate cycle, where are we here? Is this late cycle, early cycle? It seems like there hasn’t been a lot of supply coming to the market, that doesn’t seem like a lot of existing homes have come up. How are you looking at where we are in that in that season?

GREENBURGER: Well, I think real estate is always in two cycles, one is its own cycle supply and demand in a particular submarket, and the other is what’s the financing market look like and what is the ability of purchasers or renters to consume additional real estate. I think the economy generally, bankers say we’re in the 10th, now 11th inning of a nine inning game…


GREENBURGER: And so we also know that intuitively and that’s, of course, a concern. Different submarkets have different characteristics, we tend to be on opportunistic and we look for properties that are underperforming in a given market and real estate tends to exist over long periods of time. So we don’t think in 12-24 month segments, we think in five and ten year segments, so we could be in and out of the cycle within that period of time. So the credit cycle you referenced, I’ve heard lots and lots of people complain that they had to jump through all sorts of hoops to get a mortgage, if we’re in the 11th inning, we still seem to have fairly tight credit unless that’s changed, how do you see us in terms of availability of credit not necessarily price of credit which is still pretty reasonable.

GREENBURGER: I think the — again that the credit markets are bifurcated and when people refer to the problems of getting mortgages, they are usually talking about the markets of the market for home mortgages. And there, the regulators, the government reacting to the last crisis which seemed to enfranchise too many borrowers became very, very restrictive, I remember as perhaps you did that I think it was Bernanke, who couldn’t get a mortgage himself.

In any case, in the commercial the financing of income properties whatever their type, residential, office, industrial, the markets are pretty liquid and although the market has maintained a decent discipline, there is more flexibility now in things like the repayment terms that we’re seeing a lot of interest only loans rather than self amortizing or 10 year amortizing loans.

RITHOLTZ: These are on the commercial development side?

GREENBURGER: On the commercial income property side, yes.

RITHOLTZ: We have been speaking with Francis Greenburger, he is the founder of Time Equities, a real estate development company both nationally and around the world. If you enjoyed this conversation, well be sure and come back and check out the podcast extras where we keep the tape rolling and continue discussing all things real estate.

We love your comments, feedback, and suggestions, write to us at, check out my daily column on, follow me on Twitter @Ritholtz. I’m Barry Ritholtz, you’re listening to Masters in Business on Bloomberg Radio.

Welcome to the podcast, Francis, thank you so much for doing this, I am a real estate junkie, I grew up in a household with a mom who was a real estate agent, it was always dinner table conversation and I as a person in finance, always paid close attention to what was going on in real estate. If you were looking in the right place as much as so many people said the financial crisis came out of nowhere, if you’re looking at the right part of the real estate market, there were tons and tons warning that a freight train was coming down at the tracks at everybody, I just think most people weren’t looking in those spaces.

GREENBURGER: Talking 2008?


GREENBURGER: I think it took, certainly took me by surprise and I think it wasn’t a — like most people who work in an industry you might know a lot about your industry but you don’t necessarily know global finance as well as you might. I mean we all take it into consideration and the system was really a banking and finance problem as opposed to a real estate problem.

RITHOLTZ: To say the least. The other thing that took me by surprise, we have a president today who comes out of the real estate development sector, I was surprised that the 2017 tax code basically punished places like New York City and New York State by capping the state and local taxes, that that was kind of shocking to me, I figured if anyone would want to do that, it would be President Trump, but he signed off on that.

GREENBURGER: Well, I can tell you a funny story, Barry, Ronald Reagan made the same proposal in 1982 and a number of the major New York real estate families led by Larry Tisch called an emergency meeting, they wanted to raise 2 million or 5 million overnight in order to fight the legislation that was being proposed, same salt kind of provisions, and I went to that meeting and Trump was there and I think I was people kind of hamming and hawing and I said “come on, a sidewalk causes $100,000 our whole portfolios are at risk here” and I immediately agreed to make a substantial contribution and Trump was number two and the others fell in line.

So we obviously had a very different point of view at that time but if he has a good memory, he certainly knows that this is a pivotal issue that has existed over a long period of time so yes I was very surprised to see him not appreciate the importance of what was involved.

RITHOLTZ: It almost seems like it’s a red state pay back to the blue states for not voting for him, I don’t know the thinking behind it, it certainly doesn’t raise a whole lot of money for the federal government it’s relatively modest in the scheme of things I guess the high tax high service states somehow offend the low tax low service states, that’s my best guess for that.

GREENBURGER: Well I think I have no particular knowledge, I think Trump has left the real estate world and obviously become totally devoted to this political activities and seems to have transferred all of his allegiances to the right wing base which he credits with his election.

RITHOLTZ: I think he’s probably right about that. So you mentioned that Time Equities has not only gone to expand into 30 states but is now international, when did that begin, what was that process like?

GREENBURGER: I think that even though America may think of Canada as an extension of the US, they don’t, I can assure you that and that was my first international investment which I think was in 1997.

RITHOLTZ: You mentioned Toronto, is that where it was?

GREENBURGER: No, it was actually in Montréal.

RITHOLTZ: A lovely city.

GREENBURGER: A lovely city, I’ve been dealing with a broker was based in Montréal on the US transaction which we completed and he said “Hey you should come up, there are some great buys and it’s very inexpensive.” and I went up there and I had — he arranged a lunch with a bunch of developers bankers and it would seem very pleasant until we got to dessert and then war broke out over the French English separatism…

RITHOLTZ: In Montréal.


So then I realized what the problem was and at that particular point in time, that would have been the ’96 ’97 pricing did not really reflect the problems that were going on but by ’97 ’98 they did, and that’s when I made my first purchase.

RITHOLTZ: So in other words, that dual language mandate helped to drive real estate prices lower?

GREENBURGER: Well it was a confluence of events that there was an extended recession, but certainly the fact that the Anglophiles led by the Seagram (ph) family had made a decision to pull out of Montréal was not a positive, in fact the first property I bought was from Seagram — from Seagram’s owned entity.

RITHOLTZ: And what do you think of Montréal today?

GREENBURGER: I think it’s a fantastic city, I often say it’s France in North America…


GREENBURGER: It’s booming, it’s got a great tech center sector, I think it’s a wonderful place.

RITHOLTZ: And some folks have said that Canada had come through the financial crisis without any of their banks blowing up, they have far fewer banks, a lot of concentration in the four or five largest banks but a whole lot more regulation and a lot more oversight, the good news is the banks are all in pretty good shape, the bad news is a lot of people pointed Canadian real estate as one of the bigger bubbles in the world, what are your thoughts on that?

GREENBURGER: Well it’s true that cap rates in Canada have compressed a great deal and I haven’t been able to buy any new income property there for five or more years. So I certainly agree that the market has — is very expensive. Does that mean it’s a bubble? Maybe. I think the bubble that’s referred to is sometimes a construction boom in Toronto. Toronto has traditionally absorbed 15,000 to 20,000 new units a year which is extraordinary and they’ve been doing it for almost 20 years.

RITHOLTZ: They have that much immigration to the city?

GREENBURGER: They have that much immigration both international as well as domestic and people wonder how long can this continue without some sort of a breather?

RITHOLTZ: Since I started going to Vancouver for a conference about a decade ago, I just think that’s a fantastic city, it’s beautiful, the weather is nice, the people are nice, the architecture is great, it’s right on the bay, some people have described that as a China induced bubble, a lot of folks out of China can get money out of the country to buy real estate and they — the locals complain about the see-through towers, these brand-new buildings go up, they are fully sold, nobody’s living in them, what do you see is happening in Vancouver?

GREENBURGER: Well the history of the largest development project that I know of in Vancouver was of course owned by Li Ka Shing who is perhaps the wealthiest person in Asia, I think he is Hong Kong based. He also owns 10 percent of CIBC, one of Canada’s largest banks, so his presence, and he’s legendary, he’s the Warren Buffet of Asia, and certainly has a lot of the investors and apartment owners who have followed him and who have bought the complex that he has built there and I haven’t been there recently but it’s enormous.

So there is a very close tie to China, to Asia, and of course it’s convenient because you can fly there easily being a West Coast city and I can imagine that today with the Chinese currency controls that that will affect the Vancouver market, in fact I think I read a little bit that it already has of a clearly the ability of the Chinese to buy outside their market is being severely reduced and compromised at the moment.

RITHOLTZ: So you mentioned you have investments in real estate outside of North America, where are you putting money to work in either Europe or South America or Asia, what catches your fancy these days?

GREENBURGER: Well my most recent there are really two places that I would think about. First is Holland, Holland was at the end of a long recession about two or three years ago, the banks weren’t lending and a lot of the local real estate companies were very compromised by the losses that they took during the sustained recession so real estate was very cheap and all and nobody had the ability to execute on it and buy it. So we have bought about 25 or 30 office buildings there in the last two years, that has been an area of great activity to us and we set up a small asset management officer that we’re very, very Netherland centric.

In addition, we just the began and made an investment in Italy which is working its way out of an enormous pile of…


GREENBURGER: Debt and issues in a similar contrarian play.

RITHOLTZ: Where in Italy?

GREENBURGER: Well,. We bought what we did was be bought a portfolio of nonperforming loans that says that it was controlled by a Tuscan bank so most of the loans are in and around Tuscany.

RITHOLTZ: Okay, there are worse places in the world to spend time. If you’re looking at Italy, are you looking at any of the other our Southern European countries that seem to fall on hard times over the past couple years? Greece or Portugal or Spain?

GREENBURGER: Well, we spent time looking at Spain but we found that the tradition, the customs of the market are less transparent there than we were used to, and so we were thinking closely about it and allied ourselves with some local groups but nothing came of it. It’s funny you mentioned Greece, we were having a discussion about Greece just the other day and we will take a look.

Portugal is obviously country that’s very much on the rise and has a lot of very positive indicators and I’d like to investigate it more although I suspect the real estate there has already reflected the upturn in their economy.

RITHOLTZ: I would imagine that making an investment overseas whether it’s Canada or Italy is much more challenging than being in your own local backyard. How different are the legal rules, how different is the business culture, what do you encounter when you try and bring what you’ve done in the United States overseas?

GREENBURGER: Well clearly, gaining a very, very careful understanding of the legal structure is important, understanding the tax structure and that’s sort of the first steps that we take when we think about a country, we look of course at sovereign risk, but we look at the legal and tax structure.

I remember going to Poland and a lawyer there was lecturing me on how Poland had special laws that non-Polish citizens couldn’t own speculative real estate and then he spent two hours explaining how to get around it. And I said, well you know, I don’t really like to get around things, if I’m not welcome here, thank you…


GREENBURGER: And I can then can continue to concentrate in Germany which certainly has lots of rules.

RITHOLTZ: But it’s pretty transparency.

GREENBURGER: It’s transparent.


GREENBURGER: So you have to understand each market and study it and understand what you are getting into.

RITHOLTZ: Not too long ago, I was sort of shocked at how relatively inexpensive Berlin was compared to the rest of Europe. Where are you investing in Germany?

GREENBURGER: Well, I started investing in Berlin in about 2003, 2004…


GREENBURGER: And actually ran into a publishing friend when I was at a publishing convention in Frankfurt and he said “you like real estate, go to Berlin, they’re giving it away” and they were so I bought as much as I could find that made sense in sort of the 2004 to 2010 ’12 period, but now the market just like Canada has become a very, very favored investment market, prices have escalated and we’re not able to buy properties there at good spreads, we’re happy to have the ones that we do and they are very, very much more valuable than they were when we bought them.

RITHOLTZ: And you guys, Time Equity is not much of a flipper if you buy a property at a good price and it appreciates but it’s throwing off income, you would — my understanding is you prefer to hold on to those?

GREENBURGER: We’re very cash flow oriented, so we sort of built our business based on having a very strong amount of cash flow because when you’re in the flipping business or totally in the for-sale business, you’re a victim of markets and what you do when the markets go south? If you’re running an income business or rental business, you know that there is going to be income there through thick and thin, it may vary to one degree or another but you’re not going to suddenly have the tap go dry.

RITHOLTZ: You, speaking of taps, you mentioned the Dutch, I think most of Holland is below sea level and they have some pretty extensive structural engineering to keep water out even if we see sea-level go up, there was a piece in the New York Times not too long ago about the threats to certain coastal cities in the United States and that the insurance industry has been raising rates if you’re anywhere near either a hurricane zone or a rising waters situation. How do you see the potential threat of rising ocean levels relative to real estate investment?

GREENBURGER: Well, it’s certainly probably the greatest the disruption that the business faces we read every day whether it’s special sections in the New York Times or there was a report out this morning notwithstanding that politically, the administration has decided that the problem doesn’t exist or shouldn’t be referred to, it’s clearly a major problem and it is coming and it’s coming quickly.

At Time Equities, we’ve had a department of sustainability probably for 10 years so it’s certainly an issue that we pay attention to, it’s not a simple one and how you manage the risk in different situations requires a complex point of view, and it’s funny I spent this summer talking to my wife about our house, our beach house on Long Island…


GREENBURGER: And do we sell it and move inland, what do we do? And of course it’s problematic because we enjoy being there and our family members and friends do but when do you pack your bags and run? It’s complicated.

RITHOLTZ: So if you were — that raises an interesting question, if you are shopping for a new beach house today would you buy a place in let’s say the beachfront in Miami or even the Hamptons, is that something you would be reluctant to put a big investment into?

GREENBURGER: I would certainly be reluctant and the problem is of course the place that I have is attached to a lot of memories…


GREENBURGER: We’ve had it for 20 years, the kids grew up there and how do you separate from it?

RITHOLTZ: The problem with every real estate transaction is that you just described it.

GREENBURGER: It’s more than bricks and mortar.

RITHOLTZ: Right so I know I only have you for so much time and I have a bunch of more questions to get to including my favorite questions I ask all our guests. Why don’t we jump right into those and see where they go.

Tell us the most important thing that we don’t know about you.

GREENBURGER: Well although I am transparent and candid, I also know how to keep a secret and do, so…

RITHOLTZ: Tell us one.


GREENBURGER: No, thank you.

RITHOLTZ: Talk to me about your early mentors. Who helped guide your career be it in the literary agency space or in commercial real estate?

GREENBURGER: Well, I was blessed with several extraordinary mentors and these names won’t mean anything to listeners, but in the publishing business someone who in the industry is regarded as a giant, it was a German publisher named Rowvalt (ph) and he was almost like a second parent to me.

In the real estate business, there were two people, Charlie Benenson who is well known in the industry and certainly had a major influence on me in all respects and there was another man named Milton Newmark who was a real estate lawyer who also was a great mentor to me. Mentors are very, very important to me, I feel like I’ve learned more from them that I have in an academic study.

RITHOLTZ: Makes some sense. What real estate developers, builders, investors, influenced how you think about investing in the real estate space?

GREENBURGER: Well I spent my entire career, I always make an effort to listen to what other developers are doing, meet with them, read about them and learn from them.

However in the end, you have to make your own choices and decisions and I feel I do, it’s informed by understanding the experience of others, but it’s not determined by them.

RITHOLTZ: Fair enough. Let’s talk about some books. What do you enjoy reading? What are your favorite books be they real estate, non real estate, fiction or nonfiction?

GREENBURGER: Well I’m an avid reader and sometimes I’m reading about real estate sometimes I’m reading about history, biography, I think non-real estate, the recent book that is now shockingly in my mind on the bestseller list, I think it’s number one is “Sapiens” which is a history of mankind just shows you that there are an extraordinary number of sophisticated readers, a remarkable literary work on a remarkable history of mankind.

But I in real estate, it’s been a few months, I read Sam Zell’s new book on and there were a number of interesting insights and it, I also read the book that came out a few, maybe year ago about all the development that Zeckendorf did in New York that I thought was extraordinarily good and an interesting history of New York real estate.

RITHOLTZ: The Sam Zell book is “Am I Being Too Subtle?” is that the one?


RITHOLTZ: And what is the Zeckendorf? “Developing My Life.”

GREENBURGER: “Developing My Life” exactly…

RITHOLTZ: That’s it.

GREENBURGER: Exactly. Terrific book and it talks not only about Zeckendorf himself, but about the whole era in which he was such a dominant figure.

RITHOLTZ: So you bring so much of a publishing background to your personal reading, are you ever halfway through a book and you say I wish I would’ve found this book or the opposite, who the hell published this crap? This is terrible. How does your background affect what you read?

GREENBURGER: Well, I mean I do look at who publishes books and to some degree it can inform the quality of it, but it’s certainly not the sole criteria, but sort of interesting to me just like if I look at a building, I’m interested to know who developed it.


GREENBURGER: I should also, of course I left it out, I also read continuously the books that my literary agency produces, of course, I read Dan Brown’s book the second it arrives and many of our other clients.

RITHOLTZ: Who else — let’s let me give you an opportunity for some shameless promotion of your current client roster, who is — do you find especially readable, compelling, fascinating?

GREENBURGER: Well, I would be concerned about…


RITHOLTZ: I don’t want you to offend any…


GREENBURGER: I would be — you know, I will tell you a cute story. I got a new children’s book the other day and there is a — there’s an agent our office who is a — in addition to being an agency, she also writes books herself, and I didn’t realize that it was so prolific that she was so prolific but if I understand what I got the other day, it’s her 50th book.


GREENBURGER: So she’s both a very, very successful literary agent but also writes at midnight I guess and has produced an incredible library of her own work.

RITHOLTZ: 50, that’s a lot, although kids’ books don’t have a whole lot of text so maybe it’s…

GREENBURGER: Granted they were short …


RITHOLTZ: So let’s talk about real estate, what are you excited about these days in the commercial real estate area?

GREENBURGER: Well I’m excited about tilting our portfolio to a Europe centric one so both our presence in Holland and now in Italy and exploring new places is something that interests me a great deal.

The other thing and in my career, I spend half of that are more renovating half the world but I hadn’t done a lot of new development or new construction starting around 20 years ago or 25 — 20 or 25 years ago I got involved in the new construction and I find that very challenging and very interesting so I’m happy to be engaged in doing that and it’s exciting to me.

RITHOLTZ: Is it a different experience starting with a clean sheet presentation by an architect as opposed to here is the existing structure, here’s what we have to work around, they sound like two very different…

GREENBURGER: They are completely different, in one case, you’re correcting the mistakes that somebody made, in the other case, you are making your own mistakes.

RITHOLTZ: So what do you think is changing the most in commercial real estate, what is going to be very different 20 years from now than what developers are experiencing today?

GREENBURGER: Well I think as we were talking when we came in, the nature of the workplace as well as the nature of where people live are — have not move beyond programmatic needs, moved beyond space that you need for your work or for your living and we’re very much involved in what we call experiential moments. How is the space experienced, what is the user experience, what do they want to encounter and were seeing dramatic changes in that people want to monetize spaces where they can work in a different way is as you are commenting as we were walking in about Bloomberg’s…

RITHOLTZ: Right, you commented this building, all the elevators take you to the six floor which becomes the general lobby and the thinking behind that is you just end up with these serendipitous interactions with people that you may not otherwise see if everybody just takes an elevator up to their own floor and the whole idea of having food space and just it’s a different design philosophy and I like your use of the word experiential, it really is what it is, it’s not just physical space, someone has thought about flow and how people interact and in the real world.

GREENBURGER: And these days when we were retrofitting suburban office buildings which we do a lot or urban ones for that matter, we’re now introducing major amenity lounge spaces, co-working spaces, wellness spaces and food and beverage spaces, so they almost become a little hotel like beyond the typical office situation.

RITHOLTZ: That’s pretty interesting. So this is always an interesting question and I kind have a sense of where you are going to go with this from your book, tell us about a time you failed and what you learned from the experience.

GREENBURGER: Well I fail all the time, I always say that I don’t — about 1000, I got 650, that’s pretty good, and so I think I think recently I don’t know whether it was Bezos or somebody said if you haven’t failed continuously, you’re not making progress.


GREENBURGER: So I have many, many mistakes or many issues that that we deal with and I think when the business plan goes wrong, the important thing is to switch strategies quickly and either find a way to minimize your losses, or if it’s a market correction that you’re subject to perhaps, putting it — extending the business plan timeframe until markets recover, which for instance if it is a for-sale project going into a rental mode, would be a way to do that.

RITHOLTZ: What you do for fun outside of the world of real estate?

GREENBURGER: I’m a big traveler, I like new places, going to Copenhagen next week for the first time.

RITHOLTZ: Be careful of the bicycles, it’s a fascinating city.

GREENBURGER: I spent a lot of time in Amsterdam.


GREENBURGER: No place is more bicycle dangerous than Amsterdam.

RITHOLTZ: I have not been to Amsterdam but I have been to Copenhagen and even as many bikes are now in New York, it’s just astonishing.

GREENBURGER: You really have to know the rules of the road and basically know that there may not be any rules and just watch out.

RITHOLTZ: My rule is get out of their way.

GREENBURGER: I love my family like everybody does, I love my friends, I spent a lot of social time and I’m also a tennis player and a skier.

RITHOLTZ: Interesting. If you had a millennial or recent college grad come to you and say they were interested in a career in commercial real estate, what sort of advice would you give them?

GREENBURGER: I would I would tell them to learn as much as they can, of course, I would tell them to learn how to differentiate themselves and to see things — to try to see things that others don’t, because that’s really as we discussed earlier, where the margins are.

Think like everybody else, margins are thin.

RITHOLTZ: And our final question, what is it that you know about the world of real estate today that you wish you knew 30 or 40 years ago when you were really ramping up?

GREENBURGER: Well I’ve always had a sort of creative side, visual sensitivity but as I’ve gotten more and more into development, I realize that I really do have a very keen architectural sense and development is teamwork, it’s team between an architect and developer and if you bring that skill that way to see into things and to appreciate good architecture and also redirect architecture when it goes awry or it’s not serving the program, that’s a very beneficial relationship and I’ve enjoyed my working with a number of fantastic architects including some of the starchitects of the world, so that that element of creativity is something that I discovered a little later in my career and would perhaps like to have done sooner.

RITHOLTZ: We have been speaking with Francis Greenburger, he is the founder of Time Equities, international real estate development firm. If you enjoyed this conversation, be sure and look up an inch or down an inch on Apple iTunes,, Stitcher, Overcast, wherever finer podcasts are sold and you can see any of the previous 225 or so such conversations we’ve had.

We love your comments, feedback and suggestions, write to us at I would be remiss if I did not thank the crack staff that helps put together these conversations each week. Madena Parwana is my producer, Taylor Riggs is our Booker, Atika Valbrun is our project manager, Michael Batnick is our head of research. I’m Barry Ritholtz you’ve been listening to Masters in Business on Bloomberg Radio.



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