D.C. Developer Leaves Market To Launch New Company On Martha's Vineyard
A multifamily developer who has built hundreds of units throughout the D.C. region is now taking his talents to the beach.
Brook Katzen last month left Urban Investment Partners, where he worked for nearly five years as senior vice president of development, and launched his own development company based on Martha's Vineyard.
Since he was a child, Katzen has spent his summers on the Massachusetts island resort community. As he began to grow his real estate development career in D.C., he began to look at the community in a new light.
"After developing workforce housing in D.C. for nine years and continuing to visit the Vineyard, I started to pay more attention to the housing situation," Katzen said. "The last few years, their affordable housing crisis has become particularly acute and debilitating to the local economy. It reached a point where I feel like my expertise and the skills I built in D.C. could be applied on the Vineyard."
The Katzen Cos. will focus on building workforce housing for year-round residents of the island whom Katzen said are priced out by wealthy summer visitors. He said the ability to keep project budgets down and build market-rate housing that people can afford was one of the skills he learned at UIP.
"My biggest takeaway from UIP is learning how to position a building at a significant rent discount to the top of the market, and then exercise significant discipline to deliver your product at a cost that makes sense given the market positioning," Katzen said.
Katzen said he also learned how to convert office buildings and hotels into apartments, such as the Frequency project in Tenleytown and the Boathouse project in Foggy Bottom. Prior to his time at UIP, Katzen worked for SB Urban and The JBG Cos.
UIP principal Steve Schwat, in an emailed statement to Bisnow, said he and the rest of the company wish Katzen well in his new endeavor.
"He did great work while at UIP and were are grateful for the partnership and friendship," Schwat said. "We look forward to hearing about Brook's success, as we know he will be. Of course it's not the most optimistic of times to go out on your own and start something. But Brook has had a positive and enthusiastic approach to things, and I don't think a little corona or some economic turbulence will foil Brook."
In addition to the challenges of starting a business during a pandemic and an economic crisis, Katzen will also face headwinds in receiving support to build apartments on the island.
Wealthy homeowners in New England vacation getaways like Martha's Vineyard and Nantucket have been resistant to new development, and Katzen expects he will face hurdles. He said local zoning regulations create barriers to apartment supply that he will have to work around.
"This is not an easy place to do development," Katzen said. "There has been little to no multifamily development on this island ever, and people might be nervous about something happening that hasn't happened before, but it is critical for the community to be able to function."
While Martha's Vineyard is a popular summer home destination, it is also the permanent home for many middle-class residents. Katzen said he expects some of the units in his projects will be income restricted, and he is also considering requiring that renters be year-round residents.
"I'm targeting year-round residents of the island," Katzen said. "You still need teachers, cooks, grocery store workers, landscapers, policemen and firemen all year round. Where are they supposed to go in the summer when the seasonal people come in and take up all the housing?"
Katzen said he has identified multiple potential development sites, primarily in commercial areas where the apartments do not sit next to existing single-family homes.
"My ideology is it makes sense to build housing within walking distance of jobs and make use of existing infrastructure," Katzen said. "These sites are not in anyone's backyards ... I'm looking for the types of sites that don't require clearing forests; the types of sites where people can walk or bike to work and neighborhood retail amenities."
Katzen's company is a one-man team as of now, based out of his house in Chilmark. He said he is looking to develop relationships with contractors, capital partners and the community. He is looking to partner with as many Martha's Vineyard-based companies as possible and will likely pursue partnerships with Boston-area firms, he added.
If his strategy proves successful on Martha's Vineyard, Katzen said he could expand it to other similar seasonal destinations where housing is not affordable for the permanent workforce.
"I'm taking it one step at a time," he said. "But other opportunities might exist in other seasonal resort markets in other parts of the country where real estate values and costs are driven up by visitors, and the year-round workforce suffers as a result."