Bloomberg Businessweek Podcast Summary

Episode: Staying Bullish on Commercial Real Estate
Date: October 23, 2025
Hosts: Carol Massar, Tim Stenovec
Guest: Ron Elias, Founder and Managing Partner, Northwind Group

Episode Overview

In this episode, Carol Massar and Tim Stenovec dive into the evolving landscape of commercial real estate, focusing on New York City while making broader connections across the country. Guest Ron Elias, head of private equity firm Northwind Group, offers a deep dive into real estate trends, office-to-residential conversions, affordable housing debates, the role of private credit, the impact of political risk, and the state of office and senior living markets in the post-pandemic era.

Key Discussion Points & Insights

1. Northwind Group’s Focus and Business Model

• Credit-focused Investment:
  • Northwind Group operates as a Manhattan-based private equity firm focused on credit investments, especially in supply-constrained markets.
  • "We focus on credit investments, mainly providing acquisition bridge construction loans on residential properties and healthcare properties in supply constrained markets." – Ron Elias [02:22]
• Shift from Equity to Credit:
  • Transitioned completely from equity to credit in 2017 due to superior risk-adjusted returns in credit.
  • "We did not anticipate Covid or rate increases, but that definitely turned out into to be a great environment for credit." – Ron Elias [02:47]

2. Office-to-Residential Redevelopment in NYC

• Involvement in Conversions:
  • Northwind is actively engaged in office-to-residential conversions, responding to ongoing housing shortages in NYC.
  • "We’re personally involved with about eight office to resi conversions, including the largest one, which is the prior Pfizer headquarters building." – Ron Elias [03:19]
• The Pfizer Building Project:
  • "Five out of five buildings on that city block are being converted... We’re the first mortgage lender on 235 East 42nd street, which will be turned into...1,600 rental units." – Ron Elias [03:38]
  • Success of these projects due in part to city incentives like the 467M tax abatement program.

3. Rentals vs. Condos: The Residential Focus

• Rental Conversions Dominate:
  • Most conversions are for rentals, deemed more viable than condos for these buildings.
  • "When you’re buying a condo, you’re paying top dollar. You don’t want to compromise—in a rental, it works usually better." – Ron Elias [04:21]

4. Complexity and Economics of Conversions

• Challenges:
  • Office-to-residential conversions are "definitely more complex, more complicated than a ground-up" build. – Ron Elias [04:49]
• Financial Viability:
  • "What happened post Covid is some of these buildings traded at...rock bottom...so they ended up buying the building for less than what the land would have traded." – Ron Elias [04:55]
  • Crucially, such projects "would not have worked without the long term tax abatement program." – Ron Elias [05:16]

5. Affordability Crisis and Policy Debates

• On Affordability Approaches:
  • Elias criticizes policies focused on capping or freezing rents, advocating for increasing supply instead.
  • "To solve affordability you need to create more supply...in a city like New York, it’s very tough to do." – Ron Elias [06:04]
  • Suggests serious affordability solutions require a "10 to 15 year plan." – Ron Elias [06:36]

6. Nationwide Expansion and Lending Philosophy

• Beyond Manhattan:
  • "We lend across the country in about 25 states. If the land is priced right and you can understand what the construction costs will be...if you build it, they will come." – Ron Elias [06:48]

7. Banks vs. Private Credit

• Private Credit Advantages:
  • Private lenders can "move faster, slightly more efficient, slightly less heavy regulation" than banks.
  • "Banks...will always be able to provide a cheaper cost of capital... Private lenders, we typically move faster, sometimes more flexible solutions." – Ron Elias [07:32]
  • Banks have curbed lending in recent years, opening the door for private credit.
  • "Spreads are gradually tightening a bit, which is a good thing for the economy and for real estate." – Ron Elias [07:32]

8. Current Real Estate Activity & Risks

• Record Year for Lending:
  • "We had a record 2024. We’ve originated over $1.1 billion in new direct loans...volume pick up, not go down." – Ron Elias [08:43]
• Top Risk: Political Risk:
  • "Political risk has become the number one risk you have to underwrite...for the federal level, it’s true for the global economy, and it’s true for New York specifically." – Ron Elias [08:57]
  • Policy changes and election uncertainty significantly affect real estate dynamics.

9. Navigating Political and Regulatory Uncertainty

• Impact of Local Policy:
  • Real estate is "a local business, so it’s the local regulation changes" that can be disruptive.
  • Example: 2019 changes to rent stabilization laws in NY "almost got [the] entire industry decimated." – Ron Elias [09:43]
  • New mayoral election could fuel investor caution and pause investment activity due to aggressive policy proposals.

10. Senior Living and Healthcare Real Estate

• Current Activity:
  • Northwind largely provides "acquisition bridge loans on income producing portfolios of senior housing and skilled nursing." – Ron Elias [10:51]
• Policy Effects:
  • Policy risk is also present in healthcare real estate, such as with HUD refinancing delays caused by government shutdowns.

11. Post-Covid Office Market Dynamics

• Office Absorption Trends:
  • "Last quarter was equivalent to 2019 leasing volume, which is good." – Ron Elias [12:29]
  • While vacancies still exist, landlord sentiment is improving: "They’re starting to...look like less frowned as they did a year ago when it was a very, very tough lifting environment." – Ron Elias [12:44]

Notable Quotes & Memorable Moments

• On the need for supply over regulation:

  • "Most politicians are going about it the wrong way, about capping rents and rent, stabilizing rent freeze, where really to solve affordability you need to create more supply." – Ron Elias [06:04]

• On the impact of policy:

  • "Look what happened in New York post rent stabilized law change in 2019, an entire industry almost got decimated." – Ron Elias [09:43]

• On the pace of recovery in office leasing:

  • "The last quarter was equivalent to 2019 leasing volume, which is good." – Ron Elias [12:29]
  • "Office landlords...starting not to smile again, but...look less frowned as they did a year ago." – Ron Elias [12:44]

Timeline of Key Segments

| Timestamp | Segment Description | |-----------|-----------------------------------------------------------| | 01:37 | Episode introduction, macro real estate trends | | 02:22 | Northwind Group’s investment focus and shift to credit | | 03:19 | Office-to-resi conversion trends, Pfizer building project | | 04:38 | Economics and complexity of office conversions | | 06:04 | Policy and affordability debate | | 06:48 | Lending philosophy and activity outside NYC | | 07:32 | Banks vs. private credit discussion | | 08:43 | Lending activity, risk environment | | 09:43 | Local political/regulatory risk examples | | 10:51 | Senior living/healthcare investments and policy impact | | 12:29 | Office market post-Covid absorption trends |

Summary

This episode offers an in-depth, candid snapshot of commercial real estate’s state and outlook, with a particular lens on New York’s challenging dynamics. Ron Elias brings clarity to why so many investors are "staying bullish"—opportunities exist in a convoluted mix of politics, policy risk, and shifting demand, and actual activity on the ground underscores optimism after a tumultuous few years. The main consensus: solving affordability means more supply, not just more regulation; private credit is filling gaps banks left behind; and, even as uncertainty headlines the narrative, transaction volume and creative redevelopment (like office-to-resi conversions) highlight resilience and adaptability in the market.