Jason Muss | Source | President at Muss Development

Commercial Observer - Owners Magazine 2024
https://commercialobserver.com/power-series/2024-owners-magazine/player/jason-muss-2/

Are you going to buy in `25? If so, what asset class?

We will hopefully buy — if circumstances permit. Any asset class that makes financial sense will be considered, but most likely retail and residential.

Is there a single “good” sign you see in a distressed property?

If the property was burdened by an outrageously high amount of debt in the heyday of low rates and is now under distress, that could indicate the property itself is solid. However, if the property has a persistently low vacancy or a use that is outmoded and not easily converted to something else, that’s a bad sign and something to avoid.

What real estate or tax policy would you like to see from a Trump administration?

First, do no harm. Real estate needs consistent tax laws since they are long-term assets that require constant investment via capital improvements, tenant improvements and all kinds of local law compliance. Without that, you’ll see more people walk away and fewer landlords maintaining their properties properly.

Second, remove unfunded mandates from the real estate landscape. Local laws of various types regularly require buildings to meet a new requirement within a certain amount of time without a corresponding funding source or matching tax savings. This is both unfair and bad policy.

Finally, create a national database of medical space. As the population ages and hospitals continue to face challenges, privately owned and local medical space is going to become much more important. The federal government can help the industry adapt as to where more facilities are required by allowing the private sector access to where urgent care, local doctors’ offices, outpatient care facilities and other medical uses are located.

Let’s talk about office. Is the worst over?

The worst is over as far as vacancy and work-from-home challenges. The financing challenges are now in around the sixth inning, and relief pitchers are being brought into the game.

Let’s talk about retail. What’s the kind of tenant you want?

We love medical tenants since they are unlikely to easily move, and serve a growing need within the community. As far as more traditional retail, a blend of national, regional and local tenants usually serve our centers best.

There have been a few instances recently where we stuck with a local retailer when we could have perhaps gotten more rent from a national type of tenant, but we are generally cognizant of the fact that retail needs to serve the micro-local community — and, if it does, those are the repeat shoppers who will keep a center healthy.

What’s going to be your biggest expense in 2025?

Real estate taxes, insurance and capital improvements.

How’s the financing climate for new development and redevelopment — hot, cold or just right?

Cold, but getting warmer. Much is dependent on the tax incentives offered from project to project.

What are your predictions for the mayor’s City of Yes, especially given the controversies within the Adams administration?

I think the desperate need for both the specifics and the spirit of City of Yes gets it over the finish line — albeit watered down a bit during the process, which is unfortunate.

Do you still like Eric Adams? (Did you ever like him?)

Mayor Adams, like any other politician, has his strengths and weaknesses. What I appreciate about him is his passion and dedication to keeping the city safe and not accepting the “inevitable” lawlessness on the streets of New York City. He was elected for a reason, and should be given every opportunity to serve his full term and perhaps another.

Lightning Round:

Social media of choice?
Telegram (just kidding) — LinkedIn.

AI: Helpful in CRE or a fad?
100 percent helpful and potentially transformative.

Last movie you saw in a theater?
Can’t even recall — pre-COVID for sure.

Tesla or BMW?
Tesla.

Will interest rates be below or above 4 percent on July 1, 2025?
Above — if referring to 10-year [Treasury] or SOFR [secured overnight financing rate]. Way above if you are asking about ultimate pricing after a spread is applied.

If you could partner with one person in the business on a property, who would it be?
One of our wonderful existing partners. Won’t single out any of them.

What are you tired of talking about?
Politics — but there’s no avoiding it.

MOB Tenants Pay a Premium for These Markets
Commercial Property Executive
https://www.commercialsearch.com/news/mob-tenants-pay-a-premium-for-these-markets/

Places with access to a tremendous pool of people, like Manhattan, have a large concentration of MOBs, too. With ready access via trains, cars and subways, certain parts of the city have a dearth of medical space available to a list of waiting potential tenants, said Jason Muss, president of Muss Development.

“Then there are specialized areas like Boston, Miami and Los Angeles that present tremendous medical benefits,” Muss continued.

Locating in a big urban core as a top doctor provides an access advantage as well as a centrality benefit, pushing rental rates up. Many medical uses—surgery centers, hospitals, cancer treatment facilities, etc.—seek out urban centers before the suburbs. For these types of tenants, brokers must study the surrounding population first to then understand the real estate need.

CPE’s Midyear 2024 Outlook Roundtable
Commercial Property Executive
https://www.commercialsearch.com/news/cpes-midyear-2024-outlook-roundtable/

What is the most notable trend shaping CRE today and how will it play out for the rest of the year?
Muss: The most notable trend is the lack of available capital from traditional lenders and equity providers. This ultimately creates an environment where only the most committed and knowledgeable operators get deals done. The lack of confidence in CRE as an investment is a partial undoing of years of progress where real estate became a larger percentage of the portfolios of pension funds, community banks, private equity firms and family offices—the effects of which will be felt well past this cycle.

Why is (or isn’t) this a good time to get active and make deals happen?
Muss: This is still a very good time to get into CRE. The fundamentals of most sectors are still strong. There is a lack of retail and residential product, and the economics of new construction are still not there in most areas of the country—so if you can find a deal that pencils out, you’re likely to make your numbers in the longer run. The need to amortize most loans and put more equity into transactions will further insulate deals from unwarranted risk.

Looking ahead to the second half, what are your predictions for CRE?
Muss: The further away we get from the rapid run-up we have seen in interest rates the longer we all will have had to adjust accordingly and figure out how to make deals happen even in a challenging environment. As a result, we will see transactions increase dramatically, especially in the last quarter of 2024.