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(Joshua) Nachi Mostofsky

Finance
Harbor Group International

September 22, 2016

Harbor Group Management Company has an asset value of reportedly 4 billion, and the group manages 5.4 million square feet of commercial real estate in 21 different states. Its sister group, Harbor Group International, deals with the financial side of its property operations.

As asset manager, Mostofsky’s job was to act as the bridge the two companies, between the management company and the financials, “to make sure we’re giving the investors their funds and ensure everything is going on track with the investors’ timelines.” 

One of his main responsibilities was creating lease abstracts—condensed, outlined versions of all relevant information included in a lease. Because a lease is about 100 pages, and an abstract is just one/two paragraphs, it took a keen eye and attention to detail to be able to create the abstract.  When Mostofsky wrote the promissory estoppel for 25 tenants in one of their Washington DC buildings, each abstract included “when they started the lease, how many square feet, guarantors on lease, how much paid, and amendment information for each one.”

Mostofsky also learned how to write notices for “Right of First Offer” (“ROFO”). “There are article in many leases for a ROFO which basically gives the tenant the right, before the broker markets the space, to take a vacant space if he has the right for it,” he explains. “Let’s say your company rents space in one of our buildings. You’re on, say, floor 5, and you’re renting out suites 510, 520, and 530. If the tenant in suite 540 wants to vacate, we’ll give you a ROFO notice to ask if you want first dibs on the adjoining office space. If not, we’ll rent it out to someone else.” 

There’s no one-size-fits-all ROFO—each one is phrased differently. “Sometimes we have to say that a tenant wants to move in, other times we have to just say that a tenant wants to move. Sometimes they’ll have a right to adjacent space, other times the right to above or below floors, or sometimes on other random floors. Other times, according to what was originally agreed upon in the lease, we’ll only have to give them what’s called a ROFR (Right of First Return)- we give notice not when it becomes vacant, but when we find someone else who is interested in the tenancy.”

Mostofsky also had the chance to see the fruits of his labor. “When we went to our World Trade Center building in Norfolk, we went to all the vacant spaces to compare what I had on my ROFO stacking plan to the actual properties and ensure all my work was correct”—which, he was grateful, it was.  He also had the chance to visit Harbor Group’s other buildings in New York. “It was so cool to see the different way they’re all designed, the layout in each one. One of our buildings overlooks Bryant Park, and it actually has a new development going on… they’re making the office space into condo office suites, with each floor becoming one suite. Another one, on Broadway, is undergoing lobby renovation to make it more attractive for potential tenants. When we bought the building, we cut up the very large lobby in half, making the other half retail space available for lease. But the building’s still under construction. According to one broker company we met, who gave us advice on what to do to make the space more valuable and desirable, we should first finish it off. He told us to make the flooring even, paint the walls, and put a few pieces of furniture in there. That way, when passersby walk by, they can see the potential for that space, and it’s not hard for them to imagine what to do with that space.”

Another valuable experience Mostofsky had was joining asset manager meetings. “They brought all the asset managers, regional managers, and executives together to discuss all their properties and debts. While I didn’t actually participate, it was very cool to see all the quick decision making happen in those meetings by the execs and higher-ups. One of them would say, ‘let’s buy that building.’ Or another would talk about the problems with a retail building.

While Mostofsky doesn’t yet know what he wants to do with his upcoming degree in finance, he says real estate is definitely a possibility…thanks to this internship.