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HALL OF FAME INTERVIEW

HALL OF FAME > INTERVIEWS > JONATHAN MECHANIC

INTERVIEW: JONATHAN MECHANIC
PARTNER AND CHAIRMAN OF THE
REAL ESTATE DEPARTMENT,
FRIED, FRANK, HARRIS, SHRIVER & JACOBSON LLP

The Legal 500 Hall of Fame highlights individuals who have received constant praise by their clients for continued excellence.

H A L L   O F   F A M E   I N T E R V I E W


What has been your greatest achievement, in a professional and personal capability?

Professionally I have to say that it’s a tie. The acquisition by international retailer Coach of a 750,000-square-foot condominium unit at 10 Hudson Yards was the seminal deal that led to kicking off the Hudson Yards mega-development – the largest private real estate development in the nation. We also represented Coach across from Related in the subsequent $700 million sale-leaseback of its global headquarters at Hudson Yards. Following the Coach transaction, Related, with the help of my partner and friend, Rob Sorin, leased up the balance of 10 Hudson Yards to L'Oréal, SAP and Boston Consulting Group and we then closed on the financing of the project with Starwood Capital.

On an equivalent scale was Condé Nast’s 1.2 million square-foot lease at One World Trade Center. This was a truly transformative deal for lower Manhattan and served as the impetus for numerous major firms taking space downtown. Now that 4 World Trade Center is leased and 3 World Trade is leasing at a steady pace, residential and retail has picked up steam and the entire area is extremely active.

To have played a role in these two developments, which forever changed the Manhattan skyline is extraordinary and I consider them to be true crowning achievements in my career.

On a personal level, I am very proud of my family. I have two great sons, one of which is currently working in the real estate business and one who will soon enter the industry. My elder son Mark is currently working with Meadow Partners, a real estate opportunity fund, which focuses on the New York City and London markets. Ross, my younger son, will be graduating from the University of Pennsylvania with an engineering degree in May and following graduation will be joining Cadre Technologies. Wendy, my wife for the past 30 years, has been a true partner with respect to everything I have accomplished and is also deeply immersed in developing a complex mixed-use development in Bergen County, New Jersey.


What do you do differently from your peers in the industry?

Early in my career, I spent five years as general counsel and a managing director of HRO, a real estate development organization responsible for the development of more than 2.5 million square feet of office space in Manhattan. The experience was invaluable as it enabled me to bring a business approach to real estate law. I truly think about each project the way I would if they were my own deals. As a result, I can serve my clients in a number of capacities including as a lawyer, advisor, intermediary and even real estate broker. One of my close friends from the Blackstone Group once introduced me to a developer by saying, “this is my friend Jon Mechanic, he is an investment banker masquerading as a lawyer.” I think that says it all.


What advice would you give to your younger self?

Never burn bridges. In the real estate industry, executives move from job to job, institution to institution, and take on different roles. The same people can come up in different contexts throughout your career. I always felt strongly that you have to conduct yourself with the ultimate professionalism. People judge you by the way you conduct yourself. There are certain clients that were once across the table from me that today I am representing. That is a reflection of the way you treat people even when you are negotiating a challenging transaction. While your goal is to achieve the best possible outcome, it is also important for all parties to feel good about the process and the ultimate outcome. The relationships you build today will last your entire professional life.


Can you give me a practical example of how you helped a client add value to the business?

Along with my colleague Melanie Myers, we represented a developer on the approval process for nine development sites in Greenpoint and obtaining a 25-year tax abatement. Our client wanted to move forward with the project and also leave a legacy for his family. The right approach was to bring in a joint venture partner that would put up construction guarantees and bring the construction skill set to the table. The developer had a clear vision for the design and development, so I was able to put him together with another client, a major public company developer. The alliance resulted in a joint-venture agreement on two of the sites which are now being developed into major luxury rental residential towers. Being able to facilitate an agreement and bring the two parties together instilled trust from both and kicked-off, as they say in Casablanca, “the beginning of a beautiful friendship” between the two partners.

Another example of relationships coming into play was with respect to 450 West 33rd street, a Class A office tower owned by Broadway Partners. A senior executive at Brookfield Properties called me on a Friday night to ask if I would put in a good word for him with the principals of Broadway Partners prior to a scheduled meeting they were going to have the following Wednesday about their doing a deal together. My reply was simple, “If you are seeing them on Wednesday, unfortunately you will be reading in the paper on Tuesday about who bought the building.” He asked what we should do to change that outcome. I immediately facilitated a phone call between Broadway and Brookfield and right then and there – and through the weekend – we were able to put together an agreement based upon Broadway Partners buying out its preferred equity investor and subsequently creating a joint venture between Brookfield and Broadway Partners as co-developers of the property. 450 West 33rd Street is a great success, boasting average asking rents in excess of $85-psf (when it was pro-formaed in the 1940’s) and it also serves at the gateway to Brookfield’s new Manhattan West properties.


Within your sector, what do you think will be the biggest challenge for clients over the next 12 months?

We are currently experiencing some uncertainty in the world, based on the changes of the political environment both in the U.S. and abroad. Specifically, there are a number of foreign policy challenges that could potentially affect the overall global economy. At this time, we really do not know how they will play out. It remains to be seen what the overall impact will be for the real estate industry. However, NYC’s real estate market is currently in good shape and doing really well. Business is fine, companies are committing to long-term office leases and developers are investing in the construction of new buildings. I love New York City and I am happy to have my practice centered here.

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