Commercial developer Robert P. Weisz calls himself a “contrarian” in his business views and dealings. That quality has shown itself in the 50 development projects he has done over 30 years in real estate, transforming vacant and underused properties into vibrant retail spaces and amenities-loaded class A office buildings. His unchanging business model has helped make his company, RPW Group Inc., the largest private commercial developer in Westchester County.
It has been “a long dry spell,” Weisz recently told a gathering of real estate professionals, since RPW Group”™s last acquisition in late 2006, the 600,000-square-foot former IBM headquarters at 1133 Westchester Ave. in White Plains. The property purchases stopped then because he anticipated an economic slowdown.
In the recession that Weisz and many others expect will worsen this year, that buying drought might end. Being a contrarian, “We are preparing ourselves to be acquiring in the next year or two,” Weisz told members of the Commercial Investment Division of the Westchester County Board of Realtors. “We think the economy is going in that direction.”
After more than 30 projects in Westchester, the developer has set his sights on New York City for opportune acquisitions, while “not so much in Westchester.” Office building owners in the city face a give-back of about 30 million square feet by financial industry tenants, he noted.
“We all know that 2009 is going to be a difficult year” with continued job layoffs, frozen credit and a battered housing industry that may start to recover by the second half of the year, Weisz said. “People will just face the music and they will be trading properties for numbers they would not have been willing to accept before.”
He predicted commercial real estate will be “very segmented” this year, with “a lot of fireworks in New York City” and “front-page names” involved in trades of major properties.
Compared to that dealmaking, “Westchester County in the big picture is a boring county,” he said. “We don”™t do anything very exciting when things are great and we don”™t do anything very dramatic when things are bad.”
“Boring” could be a good quality here. While commercial properties have been devalued, especially in the New York City market eyed by Weisz, the price erosion in Westchester “will not be as dramatic,” he predicted.
“We don”™t see the situations that we see in New York,” with buildings going dark, vacated by financial companies and by single-tenant occupants. “We think that within this very serious and very drastic situation, Westchester is going to weather the storm better than New York City and New Jersey and Long Island and certainly better than Fairfield County.”
Weisz said Westchester is “an exception to the rule” because of its multi-tenant buildings, a supply of office space limited by a 20-year lack of new construction in the county and with three major building owners ”“ Mack-Cali Realty Corp., SL Green Realty Corp. and RPW Group ”“ that are “very stable.”
The developer still plans to be active in Westchester, continuing upgrades at 1133 Westchester Ave., where occupancy has grown to 80 percent from 20 percent when Weisz made his $76 million purchase a little more than two years ago, and at 440 Mamaroneck Ave. in Harrison, the former Bank of New York building. Weisz said that building is 50 percent leased and the remaining space is in “very active negotiation.”
“We think at the end of the day, that”™s going to make a difference,” Weisz said of the upgrades. He said RPW Group in these difficult times will continue working closely with tenants, some of whom have signed extended leases in exchange for giving back space. “We have always worked with our tenants. This is the time to work even more with them,” he said.
Weisz plans to begin construction this year on a 160-room extended-stay hotel that will front the 1133 Westchester building on the 74-acre property. He estimated that project, for which a hotel operator has not yet been secured, at $30 million to $35 million. Completion is expected in 2010.
When 1133 Westchester is fully leased, the developer plans to start work on an approximately 300,000-square-foot office building at 1135 Westchester Ave. estimated at $80 million to $90 million. It will be the first office building in Westchester built as an investment product since 1988, he said.  Â
Weisz had just returned from Inauguration ceremonies in Washington, D.C., when he offered his market predictions. With the new administration, “There”™s a tremendous amount of optimism. That fuels the economy,” he said.
“We have an economy that is in intensive care, but it”™s not dead and it”™s going to get better. Even in this rough stage of the economy, business can get done.”
Weisz said he did not want to “minimize” the severe economic troubles facing the nation and world, but remained optimistic. “I believe that by the time we get to 2011 and 2012 we”™ll probably be bouncing back very strongly,” he said. “Certainly by 2011 we are going to be talking about a completely different environment” of economic growth, companies hiring and solid banks.                         Â
