The Real Deal New York

More architects don developers’ hats

By Alison Gregor | November 26, 2007 01:30PM

Property developers take heed: There’s a new guy on the block talking floor area ratios and pro formas. Your architect, that is, may be one of many in New York who’s found his or her way from the drafting table to the negotiating table.

A robust real estate market is spurring some New York City architects to venture into the development end of the business. They are finding more freedom and opportunity in their own projects, as well as a lot more money.

“We tend to have the equipment and training to do this,” said Van Brody of Van Brody Architects. He’s worked in development since the 1980s, and has completed eight projects in Brooklyn. “Until recently, one development project could pay you from five to 10 years salary as an architect, so why wouldn’t you do it?”

Still, most architects involved in property development will mention the bottom line only if pressed. They say the ability to earn more income from a project empowers them to create better architecture, which appeals to their professional abilities as much as their bank accounts.

“More architects should be doing this, because we need quality buildings,” said Cary Tamarkin of Tamarkin Architecture PC, which began developing its own properties in 1993 and has since done four significant residential projects.

“The business end of it decides the buildings,” Tamarkin said. “There are some developers who care, but there are many just interested in the bottom line, and architects would tend to be less so.”

New turf on the same ground
The world of property development has not always been terra incognita for architects. Adam Kushner of Kushner Studios Architecture & Design PC, who began as a general contractor and branched out into property development in Poland and Florida, said that architects have the training and skills to handle a development project from soup to nuts.

“Architects were traditionally the master builders,” Kushner said. “And we lost that somewhere in the Industrial Revolution, in the age of specialization.”

In fact, the American Institute of Architects prohibited architects from doing development work for many decades until 1964. Thus, a line was drawn between architects of record, who handle budgets, legalities and project schedules, and design architects, who deal in the loftier realm of aesthetics.

Now, as architects begin functioning as developers again, the schism between the two is narrowing.

Galia Solomonoff of Galia Solomonoff Architecture said a growing number of design architects and high-design firms are dabbling in property development. She found her way into the field with a small residential project on the Lower East Side as an innovative way to obtain her full architectural fee.

“Most of my architectural work is done with artists, and artists are not your typical client with a mortgage and steady income,” she said. “So we devised a different way of charging for architectural services, and part of that is an offer of equity. We can do a percentage of the architectural fee in equity.”

Some architects who develop properties say they can feel torn between grand design goals and costly construction realities. With the aesthetic interests of architects and the financial interests of developers typically at odds, it can be a schizophrenic existence. But Tamarkin said that there is no conflict when the architect and developer are one and the same person.

“I have to be responsible to my investors and to the business,” he said. “And I also have to be responsible to the art and design part of it.”

Being in charge improves bottom line
Other architects say they find themselves working more efficiently as developers. Architect Ron Castellano, who developed the Garfield at 142 Henry Street with architect Christopher Haynes, said a streamlined process is the hallmark of his projects, where he also functions as general contractor.

“I make decisions a lot quicker,” he said.

Castellano has offices in the former office building of the Forward newspaper at 173 East Broadway, which he is converting to residential units. Staying close to his projects has its advantages.

“My office is in the mezzanine of the Forward building,” he said. “We literally draw it, then go upstairs and build it sometimes within the same hour.”

A similar transaction between a developer, general contractor and architect could typically take weeks, he said.

“I feel that quality does pay,” Solomonoff said. “The market is such that you can add the value of the better materials to the product and still find a buyer that will be of your same aesthetic interest.”

Architects say that the phenomenon of architects going into property development is not to be confused with that of “starchitects,” such as Richard Meier, Frank Gehry and Charles Gwathmey, or the hiring of designers with enough cachet to warrant an open checkbook from developers.

“The current trend is that architects can bring X dollars to the table like a commodity,” Tamarkin said. “I would welcome all the well-designed buildings we could possibly get, but that trend may have more to do with name recognition than good architecture.”

For the right buyer, an ideal match
But a small contingent of buyers ignores the sleek veneer of marketing and can appreciate a finely designed apartment making them ideal clients.

“As a consumer, would I like to buy from a developer or from an architect-developer?” Kushner asked. “I would think I’d like to buy from an architect-developer, because at least he’s trained in aesthetics, space and construction.”

Jan Hashey, an executive vice president at Prudential Douglas Elliman, was so entranced by Tamarkin’s conversion at 140 Perry Street, she bought a unit in the building, which set price records on the far West Side in the mid-1990s.

“All the buildings I’ve sold of his have been raw space,” said Hashey, who has also marketed two other Tamarkin developments. “Even so, he doesn’t cut corners, literally, or make angles to squeeze in another unit per floor. He respects the nature of the building.”

Brokers for other architect-developers are equally as effusive about their projects. Frank Torre, an agent with the Corcoran Group, said the Garfield raised the bar for finely designed residences on the Lower East Side in 2004.

“Truth be known, the average price for a two-bedroom apartment was $500,000 or $600,000 prior to us coming to market,” he said. “We put $1 million in front of that, and sold it at ask and above.”

Architects are enthusiastic about their newfound freedom and have lots of advice for fledgling architect-developers. While Brody cautions not to be seduced by aesthetically pleasing projects where the numbers don’t work, Solomonoff says look for investment opportunities among current clients.

Castellano recommends starting with a small project and reinvesting the profit into something larger, while Tamarkin advises launching a big project to take advantage of economies of scale.

Either way, architects say they’re here to stay as developers, and they may even serve as better diviners of the market.

“I think architects see the potential of certain buildings or areas,” Castellano said, “even before developers do.”

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