The Lightstone Group’s latest major hire, Scott Avram, wants to put the company on the map as a homebuilder. The former Toll Brothers executive, who left the Brooklyn-based developer in August after nine years to spearhead Lightstone’s move into new development, said the firm has the appetite and the means to become a force in the world of ground-up construction.
Working under David Lichtenstein, the founder of Lightstone, and Mitchell Hochberg, the founder of residential developer Spectrum Communities and Lightstone’s president, Avram has begun to assemble a team of executives to seek out ground-up development opportunities in the five boroughs, he told The Real Deal.
Despite already having 2,000 units of housing in its pipeline, Lightstone is still in acquisition mode. Currently, it has 10 execs out in the market trying to source deals in both the residential, office and hospitality sectors, Avram said.
As a senior vice president, Avram will be responsible for the overseeing the development of the 58-story, 475-unit project Lightstone slated for 120 Fulton Street in the Financial District, as well as the 700-unit rental complex it’s building in Gowanus. At Toll, he had managed projects such as the Touraine, 400 Park Avenue South and 1110 Park Avenue as well Northside Piers in Williamsburg.
Avram said he was attracted to the opportunity at Lightstone because of the firm’s multi-dimensional focus. That differs significantly from the investment strategy of Toll, which prefers to operate solely within the residential sector – and only at its luxury end.
“Toll was looking at [the] small, high-end condo niche,” he said. “There are certain boundaries to that. Lightstone is much more opportunistic. We’re looking at hotels, condos and rental buildings. Whatever it is, if we can build it and make money, we’ll do it. When you’re so multi-dimensional, it gives you more opportunity to grow.”
Historically, Lightstone had forgone ground-up construction in favor of acquiring existing multi-family housing and hotels, primarily outside of New York. The strategy backfired in the wake of the financial crisis; in 2009, Lichtenstein filed for bankruptcy protection on a portfolio of 700 hotels he’d purchased for nearly $8 billion and spent the new few years recovering.
Lightstone’s new direction has brought it back to its own stomping ground: New York.
“None of [what Lightstone was doing] was in their backyard,” Avram said. “[After Lichtenstein, partnered with Hochberg], they saw a great opportunity in the city that the company wasn’t otherwise capitalizing on. They didn’t feel their resources here were being put to their best use. We were looking all over the country, but we weren’t looking under our nose.”