The 30-Minute Interview: Hal Fetner
Square Feet | The 30-Minute Interview
By VIVIAN MARINO
Mr. Fetner, 51, is the president and chief executive of Durst Fetner Residential, a partnership formed in 2008 between Sidney Fetner Associates and the Durst Organization. The company focuses mainly on rentals, and its portfolio includes the 400-unit Epic in Midtown South and the Chesapeake on the Upper East Side.
Q. Did you always go by the name Hal?
A. Growing up I was either called Harold or a lot of my friends would call me Sid, because my father was Sidney and he was a bigger-than-life individual. They’d call me Sid or Little Sid but never Hal. The moment I got my diploma from high school I went by Hal.
Q. You followed in your father’s footsteps in real estate, though you once dreamed of going into politics, and even invited Richard Nixon to your bar mitzvah.
A. I did. But my father became ill, so I took over the family business at the age of 27. Somewhere I do have a letter from the White House thanking me for my invitation, but telling me that due to a scheduling conflict the president cannot make it.
Q. What are your main responsibilities at Durst Fetner?
A. I oversee site selection and ultimately putting the professional team together that will be responsible for designing a project.
Q. Are most of your projects in Manhattan?
A. Our primary focus is in Manhattan. We have some projects that we’re working on in the boroughs
Q. You have plans to branch out into Long Island City.
A. We bought the mortgage on a site in Long Island City. We refer to it as Vernon Boulevard, but it’s the old East River Tennis. It’s in disrepair. The owner has basically walked away from the project and we’re going through a foreclosure process; after that we’ll gain possession of the property or we’re going to get paid off. The unfortunate situation here is that the courts are going very slow on the project. Our best estimate would be approximately a year and a half from now. That project would be zoned for approximately 950,000 square feet of multifamily residential.
Q. Let’s move on to Manhattan.
A. We currently are designing a large building on West 57th right next to the Helena, a building owned by the Durst family. It’s a fascinating building — shaped like a pyramid — by the architect Bjarke Ingels. That is approximately 650 units. And then the other project is on 30th and Sixth Avenue. It’s a 550,000-square-foot building with a retail and hotel component, and there’s residential on top.
Q. What’s the status of 1212 Fifth Avenue, Durst Fetner’s first condominium project?
A. We’re selling. We have nine families already living there. Between sold and under contract we’re around 70 percent. We’ve raised prices twice. The average price per square foot was about $1,250 and we’re now at around $1,475. Of the one-bedrooms I think I have maybe two left. We have built this building to LEED certification. [LEED is the acronym for Leadership in Energy and Environmental Design.]
Q. So it’s safe to say there’s little negotiation going on.
A. The last six deals we’ve done we have not negotiated one dime on price and/or transfer taxes. Yesterday I got an offer on an apartment that was 11 percent off our ask. And so I wrote a nice letter back to the broker thanking them very much, but telling them we’re not going to do that. They have to come up full ask.
Q. Any plans to develop other condos?
A. Right now, no. It’s so hard to find the property, then design it and then build it. If you’re going to do that amount of work, I’d rather do it and create a reoccurring cash flow. We really are about long term.
Q. It’s a great time to be a landlord in New York.
A. Right now it is a great time to buy, but the banks are making it very hard to get mortgages. The person who could put down 20 percent can’t afford to put down 40 percent. And so they can’t afford to stay in Manhattan — they’re maybe looking in Jersey or Long Island City if they want to have homeownership. When we did our construction loan at 1212 Fifth Avenue, because of our relationships with our banks, we arranged for them to commit to doing some end loans. Even then it’s very hard to underwrite people. So a lot of people are paying all cash. We won’t sign a contract with a mortgage contingency.
Q. How much have your rental rates risen?
A. Our Upper East Side assets have not recovered to where they were in 2008-9; they’ve recovered but barely to that point. At the Epic we have surpassed the rental rates of 2008 and are probably about 5 percent higher than that at this point. And the same thing for our West Side projects on 41st and 10th. In our portfolio, the lowest rate is probably on the Upper East Side at around $47 a foot up to $85 a foot in some of the larger units at the Epic.
Q. What is your outlook for the real estate market this spring?
A. Those projects that have very strong sponsorship, that are well positioned in a great location are going to do well. But the projects that are in tertiary or secondary marketplaces are not going to do as well. We’re concerned about the tax structure that’s in this city and how rental buildings are being taxed.
Q. Your bio says you compete in triathlons.
A. You can tell I’m not anymore, right? Actually, I am signed up for the New York marathon. The triathlon really was just an offshoot of my always wanting to run, and as I get a little bit older I probably need some cross-training to save my knees. For me running is my Zen. I think I solve the world’s problems when I run.
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