John Catsimatidis Previews His AREAA New York Presentation
The Red Apple Group CEO says he would never live in the suburbs, even if given a house for free and paid to live there, and he tells GlobeSt.com why.
NEW YORK CITY—What’s the biggest CRE trend today? “Don’t get me started,” says John Catsimatidis, the CEO of the Red Apple Group.
“The whole market is changing and it’s changing faster than people expected and it’s true whether you’re in Florida or New York,” says Catsimatidis, who was also a runner-up for the Republican nomination for New York City mayor in 2013.
He’ll be one of the keynote speakers at the Asian Real Estate Association of America New York chapter’s main autumn event in two weeks.
The most striking CRE trend is how much internet shopping is still going to affect brick-and-mortar retail, according to Catsimatidis.
As the owner and CEO of the grocery chain Gristedes, he knows first-hand how online retail has affected even his own business. At Gristedes when rent, taxes, and the water and electricity bills went up, they raised prices 1% or 2%. But he emphasizes retailers cannot go above a certain ceiling because people can buy more cheaply on the internet.
He describes brick-and-mortar retail as becoming “convenience stores.”
“Modell’s, they are paying millions of dollars each year for rent,” competing with online Amazon fulfillment centers, he says. With the sporting goods store there will always be people who want to walk into the shop, try on a baseball glove and buy it. “But if you’re selling a glove for $99 and Amazon is selling a glove for $49, what do you do? The commercial rent market is at its lowest right now and they’re suffering.”
“No one’s going to rent 40,000 square-foot stores,” says Catsimatidis. “You can also always call Amazon Prime and they’ll deliver it to you in two hours. You can walk to the store and maybe they’ll be out of it?”
As another trend, he disagrees with experts who say millennials are heading to the suburbs. “I would never live in the suburbs even if you paid me. If you gave me the house for free I wouldn’t live there,” he states with conviction. “Because I don’t want to get a heart attack driving back and forth to work so many miles every day. Getting home by 8:00 with a two-hour drive and getting up at 5:00 AM to go to work again, with that commute, I guarantee, I’ll certify it’ll take 10 years off your life.”
With his development under construction at 3514 Surf Ave. near Coney Island in Brooklyn, he hopes to arrange for a trolley to go to the Stillwell Avenue subway station or to have high speed ferry service to Midtown and Downtown Manhattan. He predicts that the tenants will be 75% to 85% people who already live in Brooklyn or Queens and want to be near the ocean.
Catsimatidis will discuss additional real estate topics at the AREAA’s “East Meets West” conference. Other keynote speakers will include Susan Daimler, the general manager at StreetEasy, Jonathan Miller, president and CEO of Miller Samuel, and Adam Spies, chairman, New York investment sales at Cushman & Wakefield. Approximately 40 additional CRE professionals will serve on panels. The event will take place on Sept. 26 at The New Yorker hotel at 481 Eighth Ave., from 9:00 AM to 5:00 PM, followed by networking cocktails.