Architecture’s new blueprint: the profession adapts to a new real estate mindset

May.May 01, 2013 07:00 AM

From left: Dan Shannon, Nancy Ruddy, Morris Adjmi and Eran Chen

When the construction pipeline slows down, it’s not just developers who suffer. The architects who are usually brought on board to design the projects get hit, too.

But while new building slowed down during the recession, it’s been heating up lately because developers are rushing to bring apartments online to deal with the shortage of inventory that resulted from the halt in construction (see related story, “Midtown West, Tribeca, Chelsea rank as Manhattan ‘hoods with steepest inventory plunge”).

In this month’s Q&A, The Real Deal talked to a number of local architects and architecture firm principals to find out what their workloads are like and what sorts of new trends they’re seeing in the New York City development world.

What we found is that business, especially for residential projects, is on the rise. Many of the sources TRD talked to said that while there are major differences between now and the boom — on everything from the type of projects architects are working on to developers’ expectations for how quickly projects should get done — the amount of work coming in the door is mostly back up to pre-recession levels.

Still, competition is fierce. “Fee cutting is still common,” said Bradford Perkins, co-founder of megafirm Perkins Eastman. “It’s not as bad as it was in 2009 and 2010, but it is still worse than in 2007.”

In addition to the solid levels of residential business, architects say retail and hotel development is also taking up a good chunk of their time. And, unlike in the past, they are getting more queries about designing micro-units and prefabricated buildings.

For more on which current New York City projects architects think will be most transformative, what’s going on with hiring in the industry and what other challenges architects are facing, we turn to our panel of experts.

Gregg Pasquarelli, principal, SHoP Architects

NYC is facing a residential inventory squeeze, but development for new projects is heating up. What are you seeing in terms of new residential projects in NYC in the design phase?

There is an inventory squeeze and there hasn’t been a lot of product completed in the last four years, so there is a very short supply. But we see things heating up on the residential development side and our business is up. But we try to be very selective in the number of residential projects we take. So while it is up, it is not something that is dominating our workload.

In the wake of NYC’s micro-apartment design competition, we wrote about how more developers were growing interested in pursuing their own micro-units. Are developers approaching you about that?

A lot of people have approached us. There is a really strong interest in a product type that doesn’t really exist, but that there’s a great demand for. If you were a young person, would you rather live in 250 square feet [on your own] or in a 750-square-foot apartment that you have to share with three other people?

Prefabricated buildings have also gotten a lot of buzz lately. I know you’re working on Forest City Ratner’s prefab residential tower at Atlantic Yards. But do you think the trend toward prefab is a blow to the architecture industry or another avenue of business to pursue?

We designed the modular housing for Forest City and we are doing the first three towers there. No, I don’t think it’s a blow to architecture at all. This is something we’ve been talking about for a decade, and Bruce Ratner had the vision to figure this out. It’s ridiculous the way we are still building. It’s time we came into the 21st century. This is not about building cheaper or faster, this is about building higher quality. When you crack the code, you can get more architecture at reasonable prices. I think this is a fantastic thing for designers.

Are developers considering going with smaller, untested firms than in the past?

What’s interesting right now is that there is a kind of new breed of midsize firms — firms that are tested, but nimble. There is a little bit of a blurring. It used to be the boutique firms and then the big corporate firms. If you look at the new Madison Square Garden renovation competition that’s coming out — there is Diller Scofidio + Renfro, Santiago Calatrava, Skidmore, Owings & Merrill and SHoP. That’s very interesting because 10 or 20 years ago they wouldn’t take a mix like that to tackle these big projects. I think it’s the midsize firms where most of the interesting work is happening right now.

What do you think are the most exciting projects taking shape or coming down the pike from an architectural point of view in NYC right now?

I think the Whitney is very interesting. The fact that a museum of that caliber wants to go to the Meatpacking District and the West Village and connect with the Hudson River Park and the High Line is remarkable. It’s something no one could have thought of 10 years ago. I think Norman Foster’s project for the Public Library is going to be great. And I think [our project at] Atlantic Yards, when the towers get built and the 6,000 apartments are online and you’ve got that density connected to the public transit, that’s going to be transformative in a big way.

Is there anything interesting going on architecturally in the outer boroughs that you’re noticing these days?

It’s called Brooklyn. It is absolutely the coolest city in America bar none right now. You will see a new generation of developer emerge. They are pushing the envelope on design. It’s not seen as an either-or [in terms of] making a lot of money or designing differently… The Howard Hughes Corporation and JDS Development are [also] doing amazing work.

Bradford Perkins, co-founder/chairman, Perkins Eastman

What are you seeing in terms of new residential projects in NYC in the design and planning phase? Is your architecture business up or down on that front compared to last year, and two years ago?

Starting two years ago we have seen a steady increase in demand for our residential design services — both in New York and in the corridor from Washington, D.C. to Boston. It appears that the small inventory is pushing rents and sales prices to a new level that is stimulating a resurgence in development activity.

Which sector of the market is most of your firm’s business coming from these days in New York?

Our practice is a mix of private development such as corporate, residential, hotel and retail/mixed-use; as well as institutional like healthcare, schools, higher education, science and technology. All areas have recovered over the last two years to the point where we are back at pre-recession levels in terms of staffing, numbers of projects and fee volume.

Are you working on a lot of projects that have been restarted after faltering during the downturn or are the projects you’re working on mostly new?

We did not have a lot of projects that went on hold. Most of those that did are still on hold or dead. Most of our increase in volume is new work.

What sorts of new trends are you seeing in NYC that are impacting architecture firms?

We’re seeing [office] rents escalating to much higher levels in the neighborhoods where many architects have space. Architecture is a narrow-margin business and this trend may force many of us to move in the future.

What’s the competition like among architecture firms for projects these days?

The competition remains fierce for the good projects. Fee cutting is still common. It’s not as bad as it was in 2009 and 2010, but it is still worse than in 2007 when almost everyone was busy.

Are developers approaching you about designing micro-units and prefabricated projects?

We have one project that’s based on a variation of the micro-unit idea, but we do not see it as a major trend at this time. [For prefabricated designs], we have done some work, but we don’t think it is an applicable construction method for most projects. It is not a threat to architects because these buildings still must be designed and documented.

What’s the job market like these days for new architects out of school? Is your firm hiring?

The job market for architects has been improving steadily. In New York, we have added over 130 architects since the bottom of the recession. There are still some firms that are struggling, but the majority seems to be cautiously hiring.

Are more developers going with smaller, untested firms than in the past?

We believe most developers have become more conservative in their architect selection since the recession. We do not see them hiring untested firms for major projects.

Is there anything interesting going on architecturally in the outer boroughs that you’re noticing these days?

The renaissance of Brooklyn and certain parts of Queens — such as Long Island City and Flushing — is creating the opportunity for good architectural assignments. I think there will be some good buildings built there. We are doing the [Ferris] wheel on Staten Island, which is a unique development and architectural project.

Dan Shannon, principal, Moed de Armas & Shannon Architects

Which sector of the market is most of your firm’s business coming from these days in NYC?

Seventy percent of our projects are office buildings. There has been a definitive increase in activity. We were fortunate to have been working on several large projects that had been approved to proceed, including Vornado’s 330 Madison Avenue and Brookfield’s First Canadian Place. Both of these were complete redevelopments. Projects like those sustained our activity during the slower period. The current load has steadily increased.

What sorts of new design trends are you seeing in NYC architecture today?

There is a tremendous focus on retail projects, either new retail buildings such as 120 West 42nd Street; the complete redevelopment of projects like the Herald Center; or repositioning the retail at buildings like 1633 Broadway for Paramount, which is developing the available concourse space below the plaza. Leaders like Apple and Uniqlo have transformed the marketplace and the way owners perceive and value these kinds of tenants.

What do you think are the most exciting projects taking shape from an architectural point of view in NYC right now?

Galleries and museums are providing some of the most exciting spaces. The new David Zwirner gallery by Annabelle Selldorf on West 20th Street has some of the most exciting spaces I have seen recently.

Is there anything interesting going on architecturally in the outer boroughs?

Every week there appears to be a new, interesting building or a retail or restaurant space in Queens or Brooklyn. Some are using materials in a more progressive way that will definitely be incorporated into other projects. City Point [in Brooklyn], the Barclays Center and the new entry to the Brooklyn Botanical Garden, among others, are important contributors. We recently completed the first building at Gotham Center in Long Island City. The new concentration of buildings there has created a new city center. And we are currently working on 10 Exchange Place in Jersey City, where there is a substantial amount of work on the commercial buildings now.

Eran Chen, principal/design director, Office for Design & Architecture

Is your architecture business up or down compared to last year and two years ago?

Business is up significantly compared to the past two years. Volume is higher than it was in 2007–2008. There is more activity in the marketplace and much more activity for us as an individual firm in the condo market. What I see in post-recession development is that the quality of the product overall is superior to what we built before. Part of it is the change of perspective of the buyer and the higher expectations of value.

What sorts of new design trends are you seeing in NYC architecture today?

New materials like terra cotta are being used. Rainscreen systems, meaning masonry systems that are integrated in curtain walls, [are also being used]. A general trend is big apartments. Three-bedrooms are the majority, whereas in the past it was one or two. So the premium market is the dominating market.

What are you doing differently for developers these days that they weren’t asking for in the past?

We are doing total design, meaning we are doing the architecture and the interiors. Sometimes we do custom furnishing work. I think it’s a trend because the level of sophistication of the buyer dictates a more unique approach to developments that has a more integrated character.

Prefabricated buildings have also gotten a lot of buzz lately. Is that a blow to the industry or another avenue of business?

I think [it’s] another interesting avenue. I think it’s going to become more and more successful in the hotel industry and not as successful with condos because condos are driven more toward custom-made, bespoke-type of apartments, while hotels, even on the high end, are based on repetition and modulation. I think that trend is going to grow tremendously in the next few years.

Is the architecture business expanding/contracting in general in NYC?

The business is expanding after the huge shrinkage of the recession. We grew by about 15 people in the past two years, so I think it’s going to get better and better. Generally speaking, we are hiring.

A lot of the city’s most exclusive residential buildings are being designed by starchitects — like Christian de Portzamparc at One57, Herzog & de Meuron at 56 Leonard and Rafael Viñoly at 432 Park Avenue. That’s not a new trend, but during the downturn, the use of starchitects was on the decline. Are they back or is this just a trend at a handful of exclusive buildings?

I think they are back, but by the same token there are more local firms that have emerged after the recession that match those capabilities and design aspirations. So I definitely think there is a new generation of local starchitects.

What are the most exciting projects taking shape architecturally in NYC?

The new extension of the Whitney Museum on the West Side Highway creates another gateway to the High Line and reiterates how that area is booming. The decision of the Whitney to open their new location there was a very smart one and shifts a lot of the cultural center of the city from the Upper East Side to that area.… I wouldn’t be surprised if the Guggenheim was next. I know they’ve been looking for a location for a long time. The West Chelsea art gallery district is the most condensed area in the world for art galleries. What used to be 23rd–24th Street now extends up to 29th–30th Street.

Nancy Ruddy, principal, CetraRuddy

What are you seeing in terms of new residential projects in NYC in the design and planning phase?

The market has heated up for us over the past two years, with projects coming to market at this point. We are very busy with new residential projects in two areas: high-end luxury condominium projects and rental building projects.

Which other sectors is your firm’s business coming from in NYC?

In addition to residential, we are involved in a number of hospitality projects. The first step when a developer brings the site to us is to analyze the property for both residential and hospitality use or a combination of both. In the largest-scale projects, providing a hotel at the base and residential above is a model that has come into the mix more.

Are you working on a lot of projects that have been restarted after faltering during the downturn or are the projects you’re working on mostly new?

We are completing only one project that sat in the drawer for two years because of the recession: 200 East 79th Street. All of our current work consists of new projects with existing and new clients.

What are the most challenging aspects about working in architecture in NYC?

After the long recession we lived through, our clients want to bring properties to market with shorter design schedules.

Morris Adjmi, principal, Morris Adjmi Architects

What are you seeing in terms of new residential projects in NYC in the design and planning phase?

There is a lot more new development in the pipeline than even a year ago. It was the very top end of the condo development market that started the growth trend we are in now, but we see it trickling down to the middle-income rental market, where relief of demand is most needed.

What are the most challenging aspects about working in architecture in NYC?

Speed and the need to get things done fast. Developers feel the pressure to get in the ground because competition is heating up. It still takes the same amount of time, though, if not more, to get work approved through the DOB, the Board of Standards and Appeals or the Landmarks Commission. We architects get sort of crunched in the middle of these opposing forces.

What’s the job market like these days for new architects?

It’s certainly a better time to be entering the job market than at any time in the last five years. What we are going to miss is all the experience that got pushed out or left the profession during the depths of the recession. The architecture, construction and development industries have all woken from a long slumber, and they are all hungry.


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