Despite tighter lending restrictions, some niche developers are successfully hatching plans that will help add units to New York’s dwindling housing inventory.
For instance, Boaz Gilad, founding partner of Brookland Capital, lost nearly everything during the recession – even his Park Slope brownstone. But today his company, which focuses on condo conversions in Brooklyn, is back on its feet with $100 million invested in conversions. Gilad’s new strategy: go old school.
“[The recession] turned my beard gray, but it turned me into an old-timer in the way I do business,” Gilad told the New York Times. “When I buy land, I pay cash. I only build condos. And I only buy in Brooklyn, because Brooklyn is what I know.”
And at the husband-and-wife team of Anbau Enterprises, a developer converting Manhattan properties, Stephen Glascock and Barbara van Beuren have learned to avoid overexposure.
In 2007, the couple had three hot Manhattan projects in the works: a waterfront site on South Street, an Upper East Side site on York Avenue, and a project at 124 West 23rd Street. But when the market collapsed they decided to drop their other plans and concentrate on their Chelsea project – their smallest and safest.
“We picked the plan we felt was the most sustainable,” Glascock told the New York Times, “and then we put it in hibernation. We had the mentality to hold on through the bottom of the cycle, knowing we’d have something solid to sell into a rising market once it came back.”
Today that project, dubbed the Citizen, is 95 percent sold with some units seeing $2,600 per square foot sale prices.
But for David Ennis, the principal of the Daten Group, which seeks value investments in destination neighborhoods, it is all about reputation.
“The last piece of property I attempted to buy was near the High Line,” Ennis said. “Our group was bringing in all the new equity on what was to be a $100 million development, but I walked away from the closing table because they wanted to restructure the terms of a joint venture, and my desire to protect our equity was greater than the need to do an amazing ego-driven development.”
For Ennis, being choosey about his projects and building a strong reputation paid off in the form of financing, when Valley National Bank backed his project at 48 Laight Street in Tribeca. Today all of the building’s 14 units are on target for completion in June 2014.
“They are a prudent bank,” Ennis said. “They took a chance on me, and now we have a great relationship and we’re bringing a great product to the market.” [NYT] –Christopher Cameron