Miki Naftali walks us on white marble flooring to an indoor pool on the prime of an Upper East Side rental tower. He’s keen to speak concerning the ceiling’s heights.
“I imply, take a look at the dimensions of the home windows right here,” Naftali says, pointing to massive arched openings that produce unobstructed views, all desired options of the constructing on East 83rd Avenue.
Listening to Naftali on the minutia, you momentarily overlook he was the man whose most sweeping deal was shopping for The Plaza Resort in 2004 for what was then a document value per room.
Now, the brief and upbeat 63-year-old in clear-framed glasses has paid a couple of document value per sq. foot for a residential growth website at 800 Fifth Avenue, the place he plans to demolish the present construction and put up a 26-story Robert A.M. Stern tower for New York’s blue bloods and billionaires.
It’s a venture that superstar dealer Ryan Serhant believes would be the one the “world talks about for the subsequent 30 years.”
If Serhant is correct, Naftali might be etching his identify beside the town’s actual property legends, together with Gary Barnett, the Dursts, Rudins, Silversteins and Elghanayans.
Naftali turned a significant participant in New York actual property seemingly in a single day when he purchased The Plaza for $675 million whereas at his former employer El Advert, ruffling feathers of the town’s highly effective lodge union and over plans to transform lodge rooms to luxurious condos.
That splash laid a basis for Naftali as a dealmaker – even earlier than ultimate numbers for the Plaza conversion got here in. After that, he struck out on his personal and did small however profitable initiatives, gaining a popularity as an uptown tastemaker. His buildings are refined, typically with limestone facades, according to the neighborhood and their residents’ disdain for glass and metal buildings favored by New York rental kings. His initiatives have introduced in $1.6 billion price of financing this yr, he mentioned.
“These are usually not initiatives which are performed in three years.”
Even earlier than 800 Fifth, Naftali had begun doing offers on the extent of The Plaza, whereas additionally increasing outdoors Manhattan. He’s bringing 950 residential models to North Brooklyn with a venture known as the Williamsburg Wharf, a 67-story tower to Miami and a luxury-branded rental to Fort Lauderdale.
“It’s loopy proper now,” he mentioned. “Within the subsequent couple of years, now we have about $5 billion between New York and South Florida to promote, and that is along with about 2,000 rental models, proper?”
The query is whether or not Naftali can work on this scale with the laser precision and method to home windows and ceiling heights which have made initiatives like 200 East 83rd Avenue so profitable. Apartment growth is all the time dangerous, in sway to international forex fluctuations, timing and the whims of some patrons whose complaints about finishes can halt gross sales.
Naftali combats the uncertainty with diligence. “If you happen to don’t do your analysis, you haven’t any likelihood to achieve success. And even in case you do your analysis, typically you may make errors,” he mentioned.
Singles and doubles
Naftali moved to the US from Israel within the Nineteen Eighties and studied engineering on the College of Southern California. He bought a job at El Advert Properties — run by Israeli billionaire Yitzhak Tshuva — in 2000 and was shocked to be engaged on easy initiatives out of a nondescript workplace in Fort Lee, New Jersey.
However he picked up larger and larger offers till he bought The Plaza, which in a single day made him a significant participant.
Naftali had wished to strike out on his personal, however the monetary disaster delayed his plans to exit El Advert. In 2011, he opened the Naftali Group.
“Folks had been skeptical, and rightly so,” he mentioned. “So I needed to begin with smaller properties and begin to develop the enterprise and get the arrogance [to] faucet into traders in fairness funds that I didn’t know earlier than.”
Naftali’s first impartial offers had been a handful of rental buildings in Brooklyn; condos in Gramercy Park, Chelsea and the West Village; and a slew of uptown buildings on both facet of Central Park.
“I are inclined to shrink back from the ultra-tall buildings,” he mentioned.
He gained a popularity for luxurious, extremely amenitized buildings that catered to Manhattan’s higher crust. Whereas he’s ventured downtown and put up just a few glassy buildings, he’s largely identified for the quiet limestone look that evokes previous cash standing.
“He’s extra of the Robert Stern college of structure: limestone facades, traditional finishes, probably not pushing the envelope however extra timeless,” Craig George of Sotheby’s mentioned.
George added that whereas Naftali may not have the worldwide recognition of a developer like, say, Extell’s Gary Barnett, he’s undoubtedly bought clout with native patrons: “New Yorkers know his popularity.”
He’s performed 4 buildings to date with Robert A.M. Stern’s workplace (800 Fifth would be the fifth and, presumably one of many final that the famed architect ever labored on — Stern died final yr; see web page 56).
Compass’ Alexa Lambert, who’s headed gross sales on lots of Naftali’s buildings, agreed with the developer’s personal evaluation that the small print matter, even when development is longer and costlier.
“He guess that individuals will recognize it in case you do issues the precise manner,” she mentioned. “And to date he’s been each proper and fortunate.”
“It’s no shortcuts, no noise, no ego,” Serhant mentioned. “That’s the trifecta for creating greatness within the growth enterprise, it’s arduous to discover a developer who has a kind of themes, not to mention all three.”
Naftali’s character units him other than different builders. He’s not brash or bodily imposing. When he was working in Israel, he mentioned he felt misplaced as a result of folks had been all the time yelling to get the eye of contractors or subcontractors.
“He doesn’t assume that he is aware of all the pieces,” mentioned Glenn Grimaldi, the previous head of U.S. industrial actual property at HSBC who now works at Naftali.
“I’ve labored with him on a dozen initiatives over 15 and 20 years,” Stuart Saft, who leads Holland & Knight’s actual property apply group, mentioned. “I’ve by no means heard him elevate his voice, he has authority, he delegates, however he’s not one in all these guys when an issue arises he begins screaming at everybody.”
Taking Fifth Avenue
Bernard Spitzer developed 800 Fifth Avenue in 1978 on a first-rate nook at East 61st Avenue, a stone’s throw away from Grand Military Plaza on the southeast nook of Central Park.
The constructing by no means actually match the situation. Constructed in the course of the monetary struggles of the Nineteen Seventies, models have low ceilings and primary layouts; the facade by no means stood as much as its grand limestone neighbors.
After Naftali went into contract in March to purchase 800 Fifth Avenue from Spitzer Enterprises and the Winter Group for $810 million, Adam Doneger of Newmark took to LinkedIn to announce that it was the very best value per sq. foot for land ever. Based mostly on sq. footage from Property Shark, that will put the value per sq. foot at about $2,275.
Naftali acknowledged the excessive value.
“We checked out 800 Fifth and we mentioned, there is just one,” he mentioned. That is the one alternative anybody will ever should develop such a first-rate piece of land overlooking Central Park. “We predict that you just pay an enormous value for a particular property. So, time will inform if we’re proper.”
The chance is just like what The Plaza provided in 2004. The condos there drew in patrons like Harry Macklowe, Tommy Hilfiger and New England Patriots proprietor Robert Kraft.
However The Plaza’s conversion had obstacles.
“It’s loopy proper now. Within the subsequent couple of years, now we have about $5 billion between New York and South Florida to promote, and that is along with about 2,000 rental models.”
In February 2007, Russian hedge fund supervisor Andrei Vavilov went into contract to purchase two of the venture’s condos for $53.5 million. However he sued El Advert, insisting the residences had been “attic like” as a result of small home windows, low ceilings, obstructed views and ugly drainage grates — demanding his $10.7 million deposit again and $36 million in damages.
El Advert countersued, saying the lawsuit was stuffed with false and defamatory statements, and that Vavilov was simply attempting to get out of his obligation to purchase the residences.
The 2 sides settled, and Vavilov agreed to purchase the smaller of the 2 models for $11.2 million, which he rapidly circled and offered for a $2.8 million loss.
Numerous house owners, in truth, have offered their properties for a loss or simply damaged even.
Hilfiger purchased his two models for $25.5 million and reportedly spent one other $20 million, combining them right into a penthouse. He put it up on the market — at one level asking $80 million — and after 11 years offered it for $31.5 million.
Consultants have mentioned that The Plaza’s greatest gross sales occurred throughout pre-sales earlier than folks may see their models, and resales had been damage by competitors from newer buildings like One Central Park South and 432 Park Avenue.
Venture to Brooklyn
As Naftali was promoting out new rental towers uptown, he had his eyes on a website throughout the East River. Naftali was among the many many Manhattan luxurious builders over the previous decade who noticed potential in a 3.7-acre website in Williamsburg.
They noticed the property because the final undeveloped land website in North Brooklyn. It was owned for the reason that Nineteen Eighties by Abraham and Isaac Rosenberg, for his or her lumber enterprise. They’d their very own plans to redevelop the property however had been stalled by infighting inside the brothers’ Satmar Hasidic group, the place two factions, the Aronites and the Zalmanites, had been bickering over one of the best use of the property.
The Rosenbergs put the property available on the market in 2013. HFZ Capital and Vornado Realty Belief each checked out it, in accordance with The Actual Deal articles from the time.
However the Rosenbergs found that petroleum, pesticides, PCBs and different pollution had contaminated the positioning, quashing curiosity. Three years after that, Isaac died in a drowning accident whereas swimming off the coast of North Miami Seaside.
Naftali mentioned he turned pleasant with Abraham in some unspecified time in the future that decade. In 2019, it emerged that he’d persuaded Abraham Rosenberg to promote.
“It took me about two years to get them to comply with promote it to us,” Naftali beforehand instructed TRD.
Naftali may make the deal work, in contrast to builders who’d been scared off. He had the money and time from a big-money fairness associate in Len Blavatnik’s Entry Industries to undergo the cleanup and remediation course of. Naftali paid $180 million in 2019 and $100 million in 2020 for the parcels.
“Lots of [other potential bidders on the site] couldn’t work out the complexity of a sophisticated vendor counterparty. Additionally they knew that given the quantity of buildable sq. footage that it was going to be a really vital fairness requirement,” Jonah Sonnenborn of Entry Industries mentioned.
Entry additionally wasn’t fearful a couple of difficult deal. It was the agency, together with Witkoff, which finally took over the unfinished XI rental venture on Manhattan’s Excessive Line when HFZ Capital collapsed.
Entry and Naftali plan to convey a mini-neighborhood to Williamsburg. Williamsburg Wharf will span 5 residential towers with 500 rental models and about 450 condos.
“In initiatives which are bigger and extra bold, it requires extra affected person capital. It requires everlasting capital. These are usually not initiatives which are performed in three years,” Sonnenborn mentioned.
Apartment gross sales have already impressed the business. Williamsburg is a much less examined market than the Higher East Facet as a result of there are fewer comps. However Naftali is already setting information. An 89-unit rental portion of the venture offered 50 % as of April, making it the town’s top-selling constructing, in accordance with Marketproof.
Expansion Mode
Naftali just isn’t a pattern follower.
So when his friends began constructing in Miami Seaside and Miami’s Brickell neighborhood within the late 2010s, Naftali stayed put in New York. He missed the wave of rich New Yorkers in search of new condos in South Florida throughout Covid.
In 2022, Naftali noticed a possibility in a much less glamorous a part of Miami. He joined with Cara Actual Property Administration and paid $40.5 million for a 1-acre website in a growth website dubbed The WorldCenter. The constructing might be Naftali’s tallest, a 67-story tower with a mixture of condos and rental residences.
In Miami, Naftali’s pitch is just like that of different New York builders: that he can convey New York-level dwelling to Miami.
“It’s very troublesome to get the standard in South Florida and in Miami. I imply, we’re sitting in a constructing that’s not the costliest constructing in New York by any stretch of creativeness, however the high quality right here is basically good high quality,” Naftali mentioned, gesturing across the East 83rd Avenue rental’s amenity flooring.
“It’s troublesome to get it in New York,” he mentioned. “It’s harder to get it in South Florida.”
Miamians roll their eyes at these types of claims, and Naftali makes clear there are proficient builders in South Florida. Nonetheless, fewer rental builders are in a position to meet purchaser expectations, in accordance with Naftali.
“Converse with brokers in Miami, and I believe the final couple of years, they see it an increasing number of, there’s a large distinction between a few of the initiatives, between the gorgeous renderings initially and the tip product,” he mentioned.
Outdoors of Miami, Naftali is making a fair bolder guess in Fort Lauderdale. The town is in search of to alter its popularity as a hub for spring breakers and boat fans, and Naftali is betting on this potential with a 45-story branded rental.
He has additionally expanded into the debt enterprise, launching a credit score arm in 2019 and hiring Grimaldi in 2022. The enterprise focuses on mezzanine loans to different builders.
Miki’s daughter Danielle is head of promoting gross sales and design — she retains him on his toes, he mentioned. Collectively, the 2 assessment each supply they get.
“If, God forbid, I don’t see it for 5 minutes, Danielle instantly texts me and — she doesn’t name me dad, she calls me Miki — ‘Miki did you see this supply?’”
The Cycle
Naftali’s buildings are inclined to mix admirably into their environment as an alternative of standing out just like the towers on Billionaire’s Row or these with flashy structure.
And the identical might be mentioned concerning the man himself.
But 800 Fifth will inevitably draw comparisons to the Zeckendorf’s Stern-designed “Limestone Jesus” at 15 Central Park West, the supertalls on 57th Avenue and, to some extent, Naftali’s Plaza conversion.
(Issues didn’t go effectively for the final developer who sought to do large-scale rental developments uptown: Ziel Feldman’s HFZ Capital collapsed throughout Covid, shedding historic Beaux Arts buildings such because the Belnord and the Astor to foreclosures. HFZ’s managing principal Nir Meir was indicted in early 2024, accused of masterminding a $86 million fraud scheme wherein he allegedly siphoned cash out of the venture accounts. Meir has pleaded not responsible.)
So what provides the developer the arrogance he can pull all of it off? It’s the small successes, constructed over time. The eye to element that hasn’t wavered as initiatives have grown extra bold.
“We began to construct it, and now we’re 14 years after that,” Naftali mentioned of what would possibly look like a quick rise. “So this didn’t occur in a day or a month.”
Naftali additionally factors again to The Plaza. He’s already bought the expertise, he mentioned.
“I did it again at El Advert.”
