In less than a decade, Lendlease has become the go-to construction manager for Billionaires’ Row.
The Australian-based company is behind Extell Development’s One57, Harry Macklowe and CIM Group’s 432 Park Avenue, World Wide Group and Rose Associates’ 252 East 57th Street, Vornado Realty Trust’s 220 Central Park South and Hines’ 53 West 53rd Street. The company is also building Extell’s 217 West 57th Street, also known as Central Park Tower.
Ralph Esposito, 56, who heads Lendlease’s construction operations on the East Coast, credits his company’s relationship with clients and its ability to learn from job-to-job for scoring these luxe supertalls.
“It was a market that we got really good at, really fast,” he said. “You have to have done a couple of these to really understand the nuances and the complexities.”
Esposito joined the company 21 years ago, holding several positions over the years, including business development director and principal-in-charge before becoming president and general manager of the company’s East Region construction division. The New York office has 527 employees and roughly $7.6 billion of construction currently under management.
In addition to ultra-luxury residential buildings, Lendlease also does a lot of hospital construction, for clients such as New York-Presbyterian Hospital and New York University Langone Medical Center. It’s also the construction manager on Gamma Real Estate’s Sutton 58, the Upper East Side condo project stalled by a recently approved rezoning.
Esposito grew up the youngest of two in the Bronx before moving to Scarsdale, New York, with his family. He still lives in Scarsdale with his wife and commutes into the city every weekday by train. He and his wife have two sons, who are attending Fairfield University and Fordham University.
As part of a new questions-and-answers series with construction bosses in New York City, The Real Deal sat down with Esposito in Lendlease’s office on the ninth floor of the MetLife Building. The company has a front-row seat to the construction of SL Green’s One Vanderbilt, which is being built by one of the company’s biggest competitors, AECOM Tishman.
What was it like growing up in the Bronx and then moving to Scarsdale?
It was a big cultural change. My dad was a butcher on Castle Hill Avenue in the Bronx, my mother was a teacher, and both their families were in the Bronx. So, even when we moved to Scarsdale, it was always a Friday night commute back to the Bronx, to my grandmother’s house, where she would watch us on the weekends, and my parents would have date night on Saturday. It was an interesting transition going from the Bronx to one of the more affluent neighborhoods in Westchester County. But we acclimated pretty well. Kids do.
What was your first job?
I started caddying when I was 13 years old and developed a love for golf.
Where did you work before joining Lendlease?
I started my career building single-family houses in Westchester County. It was a family-owned business, and then I acquired some lots and was developing for myself. This was the late 1980s — interest rates went to 18 percent so it wasn’t a very good time to be in homebuilding, and I needed a job. So, I went to work for a company called Marsh & McLennan Companies, which is a large insurance and financial services company. I went from wearing boots every day to wearing a suit every day.
How did Lendlease become the go-to for Billionaires’ Row?
I think we had clients who really took us there. And I think by virtue of the things that we learned from one project, we were able to bring those lessons to the next big, tall projects. The higher you go, the more complicated the logistics and getting people to the workstations becomes. Certainly, the weather plays a very big part in the complexity of those buildings, particularly the wind speeds. The wind speeds at 1,000 feet in the air are very different than at a 400-foot-tall building.
With projects like those, how many other companies are you competing against?
You know, there are probably two that go into the supertall arena. Certainly, our big competitors in New York are the Tishmans and the Turners of the world.
You’ve done about a dozen projects for Extell. How did you start working with the company?
We did a very small project for them when Gary Barnett began his [NYC] business, probably 12 years ago. One project led to another. We don’t do all of his work because I think it’s a good idea to have options, but I think we do some of his more significant buildings. So, we did One57, the 680 Madison conversion and the Hyatt Hotel on 45th Street.
How far along are you on Central Park tower? Do you have any concern about the project’s financing?
We’ve probably built a third of the building already. Gary Barnett is a client we’ve worked with for a long time, and we have the utmost confidence that he’s got the project financed. We do a very good job of making sure our clients have the funding in place. We’ve worked for the dynasty people in New York, the Vornados, the Zeckendorfs, and they are savvy enough to know that they need the money to finish a project.
What’s it like working with starchitects?
There’s certainly challenges. There’s a building that we worked on in Lower Manhattan called 56 Leonard [designed by Herzog and de Meuron] that probably pushed the envelope in terms of complexity. But I think that we’ve been able to strike a balance, with all the designers that we work with, between cost and the ability to do it safely. I think that they are reasonable and practical about the developer’s pro forma and how much we can spend on a building.
What was challenging at 56 Leonard?
The concrete formwork in particular. It’s difficult to figure out how to build something when there’s nothing below you, nothing above you. Buildings like to be regular. They like to go up on a consistent floorplate. [56 Leonard] is like a deck of cards. Some people call it the Jenga building. We had to figure out on every floor, how we were going to go the next floor. So, on a scale from 1 to 10, this was, like, an 11.
With the shift in the market that we’re seeing now, there are likely going to be fewer of these tall residential projects. Are you now looking at other markets in New York?
We’re looking at more design-build opportunities, like the Javits Center. New York is a very special place to live, and I think people will continue to want to live and work in New York. There will always be a demand for quality residential. There maybe won’t be billion dollar towers, but there will be $200 million towers.
Are there any projects that you wish Lendlease had won?
I look at One Vanderbilt and I say, I wish I was building that because I look at it every day, so that’s kind of disappointing. But I look at other projects that we’ve been successful at, and I wouldn’t have traded building the September 11 Memorial for the world.
As part of his revamped affordable housing plan, the mayor is looking to do more modular construction. Is that something you are looking into?
New York is one of the more difficult places to do modular, and it’s just by virtue of the amount of property that you have to put materials on. In New York, if something comes to the job site, it has to go right up. It’s complicated. It’s something that we kick the tires on quite regularly because we recognize that someone can build something in a controlled environment on a factory floor instead of 1,000 feet in the air. Quality’s better. Safety’s better. It’s just much more efficient.
You’ve worked with Navillus, which recently declared bankruptcy following a $76 million court judgment against them. How do you deal with your subcontractor filing for Chapter 11?
So we’ve watched this unfold very carefully. I think it sends a message if people are going to have union agreements, they have to honor their union agreements. I think they are going to stay in business, that’s certainly their intent. We’d have to make sure, going forward, that they have the ability to pay their suppliers, pay their men. That’s paramount to us.
Do you have any hobbies?
I have two boys. One’s a Republican. One’s a Democrat. So, I need to stay incredibly well read about what’s going on in the world, what’s going on in the country or I get blown away at Thanksgiving dinner.
How’d that happen?
I have no idea.
Is there any music that you like but are embarrassed to admit?
Having two boys, I have everything on my iPad from Eminem to Frank Sinatra.
What’s your favorite? Do you jam out to Eminem?
I like “Lose Yourself.” Do you know that song? But I just saw Imagine Dragons at the Barclays Center. I don’t know if you like Imagine Dragons, but I thought they were extraordinary.