07.09.13 | New York Times

The 30-Minute Interview: Samuel Schneider

Mr. Schneider, 35, is a managing partner of Imperium Capital, a real estate development and investment company based in New York; its holdings include the Apple Store in SoHo.

Mr. Schneider started the company more than three years ago with Daniel Glaser.

Q. Tell me a little more about your company.
A. Multifamily, retail and office is really what we focus on. Our strategy is to buy in irreplaceable locations and hold as long as we possibly can.
We started our company in January 2010 with the goal of going out and acquiring all different asset classes. The first property we acquired was on 60 Wooster, a 15,000-square-foot property on the corner of Wooster and Broome; and we bought that for $5.7 million. About a year later we bought the building in SoHo where the Apple Store is.

Q. How big is your portfolio now?
A. It’s just under $400 million. We have 11 properties: We have about 750,000 square feet of office, which is one office complex, and that’s One SoHo Square – two building on Avenue of the Americas and Spring Street – and we own the Apple Store at 103 Prince Street. We bought 103 Prince last December; they’re the only tenant in the building.

Q. Some might question your decision to start a real estate company during a recession.
A. Yeah. But we thought it was the best time to start a company, because we’re very confident and bullish in New York City. There were very few transactions for a couple of years. We knew Manhattan was always going to be a destination for capital around the world and that people wanted to be here.

Q. Where do you get the funds to buy these properties?
A. We have institutions and private individuals that we’re partners with. We have different partners for different deals.

Q. Who are some of them?
A. We’re partners with Stellar Management, Centurion Realty, Bronstein Properties and some funds. And every one of our deals is structured differently.

Q. I know you also borrow. Has credit loosened since you started out?
A. Yes. Lending has definitely thawed over the last 18 months. But I don’t think there’s any danger of a lending bubble. The interesting thing now is that there’s so much equity being put into deals. We prefer light leverage for our properties. We want to make sure they’re stable so we can weather any fluctuations in the market.

Q. Would you describe your business strategy as “value-added”?
A. Yeah, definitely. Our goal in all of our properties is to add value over time, to improve everything about the property. Some of them involve a lot of physical work and redeveloping, renovating apartments and office space. For the Apple Store, there’s nothing to do until the lease is up.

Q. Is the lease with Apple a triple-net where the tenant pays for most of the property expenses?
A. Yeah. And they actually last year put $20 million into their space. Couldn’t ask for a better tenant. There’s obviously a lot of cachet with them being the tenants.

Q. How long is the lease, and how much does Apple pay?
A. They go out till 2020. I can’t say exactly the rent they pay.

Q. What is the range of rents portfoliowide?
A. It’s a completely wide range. We have retail rents that are over $400 a foot and under $50 a foot. We have residential rents that are $20 a foot for rent regulated/stabilized tenants; we have free-market apartments that pay $75 a foot.

Q. What’s your occupancy rate portfoliowide:
A. We’re over 90 percent.

Q. Let’s talk about some of your other properties, like 161 Avenue of the Americas and 233 Spring Street.
A. We bought that a little over a year ago and we love the location. It’s sort of on the border of Hudson Square and SoHo. Its office and retail. It’s over 90 percent occupied. The location will continue to improve with the residential rezoning; it’s going to be much more of a 24/7 community.

We haven’t really done anything yet to that property. We have tenants whose leases go out a long time. We’ll renovate their space as they come up.

Q. Where would you like to see the company in, say, the next five to 10 years?
A. I would love to keep on expanding and acquiring property in Manhattan and Brooklyn. And also in the future in other gateway cities: in Miami, Los Angeles, Chicago, Washington.

Q. Do you own your own home?
A. I rent an apartment on 22nd Street.

Q. Why aren’t you buying?
A. It’s too expensive.