Building Blocks

How many buildings do you own?
We own about 13 buildings, mostly in Manhattan, and approximately 700 rental units. The smallest building is 16 units, and the largest, Tower 31 at 9 West 31st Street, is a 283-unit, 42-story building we built from the ground up. We also own an office building in Connecticut.

By Katherine ClarKe

How did you get into real estate?

The bottom line

My father [was] in the real estate business. He How has the recession impacted your business? did some condominium converIt was a mixed bag. A 260-room hotel develsions, a little office and a opment deal we were working on at 11 little bridge lending. East 31st Street stalled because construction lendHe was a big ining evaporated. We are fluence on me. close to restructuring When I gradthat deal, and hope uated colCompany: Simon Development Group to break ground at lege, most of Age: 46 my friends year’s end. Our multiHometown: Roslyn, N.Y. were going family portfolio expeto Wall Street, rienced weakness in Currently living in: Scarsdale, N.Y. rents. However, that but I always wanted to go into has all turned around. real estate.

Name: Jonathan Simon

Vital Stats:

How did you end up forming your own company?
I started with the Donald Zucker Company, a property management firm, out of college in 1988. I did briefly work for my father around 1990. When the market collapsed in the early 1990s, he wasn’t doing any new projects, [so] I started my own company. … I bought my first building in the Bronx, at 952 Aldus Street.

Are you currently raising or lowering rents in your residential properties?
We are raising rents across the board. It has definitely swung back to a landlord’s market. Our portfolio was probably running a 4 to 5 percent vacancy after the financial crisis, and now it’s probably back to 99 percent occupancy. I would say [we’re raising rents by] 3 to 6 percent, depending on the building.

Landlord Life
What’s been your strangest development experience?
I did a gut rehabilitation of five dilapidated walk-ups in Brooklyn Heights/Cobble Hill. … There was [only] one apartment that was occupied. We wanted to move the couple to a much better and safer apartment during construction, [but] they didn’t want to move. So we constructed a brand-new, 58-unit luxury building around them. It was challenging, and we had to set up some temporary ways for them to enter and leave the apartment. Luckily, they were on the first floor. We eventually received an award for the renovation, and the tenants still live in the building.

Tell us about your recent acquisition of the Crescent Club condo in Long Island City, which you’re planning to convert to a rental.
I liked it the minute [I] saw it. It was directly over the 59th Street Bridge, 100 yards from the subway and one stop to midtown. It takes seven minutes to get to midtown. … There is still a lot of upside left in Long Island City because the neighborhood has not yet matured with retail and other conveniences.

Tenant horror story?
I had an old guy try to attack me with a baseball bat in one of our Soho buildings. I’m still not sure why. We were fixing up the building, and he had lived there a long time. He was a little nuts. Tenants don’t like change sometimes, especially when they’re there a long time.

As a landlord, what keeps you up at night?
I don’t really worry too much about the residential side of the business. I have owned property for about 25 years and have lived through a few recessions, and the residential side has always been very stable. It can get soft, but always comes right back. You can always pay your bills if you don’t take on too much leverage. The side of the business that keeps me up at night is the development business. You are planning years ahead and there are so many moving pieces. You need a lot of patience and money. … It’s also the most exciting side of the business because you get to really create something from scratch. We started working on our hotel deal in 2006. … Hopefully, the hotel will open around 2015. That’s almost a decade of my life in one deal. TRD

— Simon’s New York properties

72 Charles Street

52 May 2012 www.TheRealDeal.com

PHOTOGRAPH FOR THE REAL DEAL BY CHRIS MARTIN

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