Will Millennials Ever Move Back to the 'Burbs?
Paraphrasing a line from Billy Crystal’s character in The Princess Bride, Spinnaker Real Estate Partners’ Clay Fowler says the traditional, drive-everywhere suburb is “not dead, but mostly dead.” Clay spoke at our 3rd Annual Westchester & Fairfield State of the Market event last week at BLT’s Harbor Point.
RPW Group Chairman & CEO Robert Weisz (left, with Forstone Capital principal Brandon Hall) says the suburban areas that’ll do well are the ones that can attract young folks. He points out that in the last two years zoning changes in some Westchester cities allow for high-rise residential, and now some office park conversions to live/work/play models are in the works, like Normandy Real Estate Partners and Toll Brothers’ plan to bring over 400 residential units and a new retail component to an office park district in Harrison. Robert says as more—and denser—rental housing is built, the push factor of high rents in the city will create an if-you-build-it-they-will-come effect as long as urban-type amenities come with the new housing units.
BLT’s Habor Point in Stamford, which hosted our event, is building it. The project has 12 restaurants as part of about 125k SF of retail space to complement its roughly 1M SF of office space and 2,300-plus residential units. Harbor Point COO Ted Ferrarone, snapped on the roof of Harbor Point's newest rental tower, says the tenant mix since Harbor Point’s first residential building opened in 2010 includes everything from 22-year-olds fresh out of college to recent empty nesters. Ted says the 2,360 residential units now on line in nine buildings account for only about half of what’ll ultimately be there.
But live/work/play isn’t easy to implement everywhere in the ‘burbs. Glenco Group principal Glen Vetromile (snapped above) says planning boards and residents in most Westchester towns aren’t going to roll out the red carpet for multifamily. He says a HUD mandate for 750 affordable units in certain towns has residents and local officials worried that any multifamily smells like affordable and they don’t want it. And DLC Management president Adam Ifshin points out that LCOR’s 55 Bank St in White Plains took longer to get approved than CIM Group and Macklowe Properties' 85-story 432 Park Ave in Midtown East.
On the office side, CBRE EVP Tom Pajolek says leasing activity’s been strong in Fairfield, even with negative absorption. Brandon points out that part of the reason is that companies with younger workers don’t look at price per SF anymore as much as price per employee because they’re condensing their footprints, just like companies that operate in the city. More attractive rents can be a draw for some companies like Kayak, which has an office in one of Harbor Point’s buildings, but access to transit sweetens the appeal, says Harbor Point chairman & CEO Carl Kuehner. He says transit improvements like a total overhaul of Metro North train stations would help do the trick, but says when he offered to buy and redevelop one from the State of Connecticut there were too many strings attached and a deal couldn’t be reached. Carl says public/private partnerships are the way those kinds of improvements will happen. That suggestion drew loud applause from our audience.
McGladrey partner Steve Kirn moderated the office panel.
SWC Office Furniture supplied the seating for the panelists. Here Bisnow's Miles Bloom chats with SWC president and COO Jon Malkin before the panels.