Joe Beninati, principal at Antares, is most famous in my book for his boastful brag that “hedge funds treat rent payments like lunch bills” meaning that he could rent out his new office space at $100 sf even if comparable space rented for $70. I wondered then what would happen if there were no hedge funds to move in to buy lunch or pay rent and reported last month that Duff Associates was trying to sublease the 15,000 sf it had agreed to occupy. Now comes word that Duff as we knew it is no more, having “rightsized” (don’t you love that term? New to me) by firing 80% of its workforce.
According to insiders, Duff’s expenses in building out his hedge fund have raised eyebrows and have caused a rift between Duff and Lindsay Goldberg.
Sources said Duff last spring spent approximately $70 million hiring a posse of hedge-fund management teams as well as constructing new office space at 100 West Putnam Ave. in Greenwich, Conn., spurring insiders to criticize Duff for having spent too much money before his firm made even a single investment.
A spokesman for Duff said the firm is facing the same headwinds that all hedge funds have and has been “rightsizing,” but declined to comment on Duff’s expenses.
At this point, it’s unclear if Duff is still running the firm he founded.
As long as Antares’ hedge fund tenants exist and can pay their bills, the landlord will make out – lease or sub-lease, the funds will remain liable for their rent. But if the funds disappear, so too does their rent and, Joe’s optimism to the contrary, commercial rents are sinking, not rising. He couldn’t replace these guys at $50 a foot, I bet.