Knowing what buyers want is great, but first, developers have to get in on development sites. Our panelists shared four tricks with the 300 who joined Bisnow for our recent Residence of the Future event.
1) If you can’t beat ’em …
In Williamsburg and Dumbo especially, longtime landowners are reluctant to give up what they know is valuable land, says Slate Property Group’s David Schwartz (whom we snapped with SK Development’s Scott Schnay), so developers are doing long-term ground leases or JVs. He noted one deal in which the developer built a resi building and then gave the retail condo back to the previous landowner. The only other way to get in is assembling land, Scott says, and that means dealing not only with multiple landowners but also their tenants.
2) The road only slightly less traveled
HFZ Capital COO Laurie Golub (with DDG CEO Joe McMillan) says her company is doing strategic JVs and tapping into neighborhoods where prices aren’t as inflated yet. The 123 units at her company’s Halcyon Condominium in Turtle Bay are flying off the shelves at just under $2,000/SF while many other Manhattan units are trading for $2,500 or $3,000/SF.
3) Take the risk
Forest City Ratner keeps interior design and construction in house, which makes taking on entitlement risk a little less scary, says the company’s Melissa Burch. Forest City Ratner is starting the ULURP process to activate 1M SF of air rights over a retail center, she says. And there’s the 8M SF planned at Atlantic Yards, 3.3M SF of which will sit on a platform over the railyard. A 250- to 300-unit condo building that’ll benefit from an eight-acre park the company is building next door breaks ground this year, along with an affordable housing apartment building. Also, 250 of the 930 modules at its modular-construction high-rise experiment there are up, reaching nine floors.
4) Find the holes
JDS Development’s Simon Koster (snapped with our moderator, Town Residential’s Anna Zarro) notes that developers can't solve economic problems or change Manhattan’s land basis. All they can do is find new neighborhoods or build rentals when others are doing condos. Consider that there were no comps available for some of the most intriguing projects of late like JDS’s Walker Tower and Forest City’s New York by Gehry and Atlantic Yards. That’s a good indicator that you’re in the right place, he says. And JDS is going rental for its 626 First Ave in Midtown; you can’t build condos at that volume (770 units in two towers), he says.
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