MAG Partners, Safanad, Atalaya Capital Management and Qualitas, with Urban Atelier Group, top out 241 W. 28th St.
By: Owners Developers & Managers
Manhattan, NY MAG Partners topped out construction on a 480-unit rental residential building at 241 W. 28th St. in Chelsea. The development is expected to be complete in late 2022.
The first development project of MAG Partners, founded by MaryAnne Gilmartin, is being designed by celebrated architects COOKFOX Architects. The building will include 8,000 s/f of ground floor retail. Developed under the Affordable NY program, 30% of the project’s units are reserved for low- and middle-income New Yorkers. Urban Atelier Group is the construction manager for the development.
The project is a joint venture between MAG Partners, Safanad, Atalaya Capital Management and Qualitas.
MAG Partners previously announced that it had secured a $173 million construction loan from Madison Realty Capital for the project.
The exterior of the building is designed with contextual masonry inspired by the historic architectural fabric of the neighborhood, while the residences will incorporate biophilic design strategies that connect its residents to nature. A landscaped canopy will welcome residents at the 28th St. entrance and a central courtyard and garden will unite the amenities and lobby areas. Above, alternating piers of hand-laid, angled brick and expansive windows allow light and shadow to dance across the façade. A series of outdoor terraces offer residents rooftop gardens and panoramic views of Midtown, Downtown, and the Hudson River.
241 West 28th Street’s Brick Façade Begins Installation In Chelsea, Manhattan
By: Michael Young
Construction has topped out on 241 West 28th Street, a 22-story two-tower residential project in Chelsea. Designed by COOKFOX for MAG Partners, Atalaya, Safanad, and Qualitas, the 235-foot-tall, 400,000-square-foot development will yield 480 residential units with 30 percent reserved for low- and middle-income households. King Contracting Group is in charge of brickwork and Urban Atelier Group is the general contractor for the complex, which is located between Seventh and Eighth Avenues. MAG Partners acquired the Midtown, Manhattan property in December 2018 when it was still an open-surface parking lot and established a 99-year ground lease with Edison Properties.
Work has progressed rapidly since our last update in October, when the superstructure was less than halfway to topping out. Now the reinforced concrete has reached its pinnacle and work has shifted to window installation and the assembly of the walls.
The first lower levels on the main southern elevation are having the waterproof membrane installed around the tight grid of windows.
The opposite northern side of 241 West 28th Street is at a comparable state of progress.
The start of the brick envelope can be spotted on one of the windows above the sidewalk scaffolding, providing a preview of the quality of the hand-laid craftsmanship. The surface of each stretcher is not a flat solid color, nor does it look too stale in its textural appearance, and thus makes it look more like a traditional brick façade with light and dark shades. On the lower part of the columns is a series of subtly protruding strips of bricks. This design feature will only be implemented on the first two levels of 241 West 28th Street. At the top is a rectangular spandrel divided into flat square panels and above that are bricks laid in soldier orientation. There is also a decorative dark metal screen with a symmetrical pattern of curving and intersecting lines that will be installed in front of every windowsill.
241 West 28th Street is aiming for LEED Silver certification, and is expected to include about 8,500 square feet of ground-floor retail space. Residential amenities include lounges, a fitness center, a children’s playroom, and an outdoor lounge with a swimming pool and adjoining terrace. Thirty percent of the units, or approximately 144 residences, will be designated as permanently affordable housing.
The following aerial and street-level rendering depict the two buildings, which will be separated from each other by a private central courtyard. On the upper setbacks are landscaped terraces reserved for a select number of units. Around the center of the walls facing the interior of the lot are flat walls lined with what seems to be a dark gray metal surface that would contrast with the overall construction. These external parts of the edifice rise and extend toward a pair of mechanical bulkheads that follow the pattern of upper setbacks.
241 West 28th Street is slated for completion in July 2023.
MAG Partners celebrates topping out of first NYC project; COOKFOX-designed rental to bring 480 mixed-income apts to Chelsea
By: CityRealty Staff
Just south of the slow-as-molasses and desperately needed metamorphosis of Penn Station, the area once known as the ‘Fur District’ is transforming into a vibrant mixed-use community. 2021 began with the opening of Moynihan Train Hall, the transformation of Farley Post Office into an airy, welcoming train station. Plans are moving forward for the Penn District, the transformation of the area around the much-maligned Penn Station that will also bring aesthetic and infrastructure improvements to the station itself.
A few blocks south, construction has topped out at 235 feet high and 22 stories at 241 West 28th Street, a 400,000-square-foot through-block development between Seventh and Eighth Avenues. MaryAnne Gilmartin, Jeff Rosen, and Susi Yu of developer MAG Partners, as well as Rick Cook and Brandon Specketer of designer COOKFOX Architects, were on hand to mark this milestone, which puts the building well on its way towards its target completion of late 2022.
The project will comprise two 22-story towers, individually fronting West 28th and West 29th Streets, and a private courtyard in between. There will be approximately 8,500 square feet of retail space on the ground floor, and apartments on all floors above. As part of the Affordable NY program, 30 percent of the units (or approximately 144) will be permanently affordable to low- and middle-income New Yorkers. Permits filed in September 2019 show that amenities will include a children’s playroom, pet spa, fitness rooms, bike room, lounge, and pool.The project is targeting LEED Silver certification, and COOKFOX is well known for its work relating to sustainability and occupant wellness. Released renderings showing details of 214 West 28th Street’s facade show the building will have a planted canopy above the entrance, beautifully-articulated brickwork, and deeply-inset windows with chamfered surrounds to augment views. Additional outdoor offerings will include a central courtyard and garden, as well as a series of terraces and rooftop gardens with views of Midtown, Lower Manhattan, and the Hudson River. Examples of the firm’s commitment to biophilic design include 550 Vanderbilt Avenue, 150 Charles Street, Google’s expansion in Hudson Square, and a nearby condo development at 39 West 23rd Street.
“We have never met a surface we haven’t wanted to plant green” — Brandon Specketer, COOKFOX
The new building is being developed in a joint venture between MAG Partners (led by Ms. Gilmartin), Safanad, Atalaya Capital Management and Qualitas. The lot was previously owned by major parking landlord Edison Properties and was acquired by MAG Partners in December 2018 by way of a 99-year ground lease.
The property had long been slated for development, and a 2011 rezoning allowed for new residential uses to breathe new life into the shrinking Fur District. Fast-forward nearly a decade later, the acquisition of a $173 million loan from Madison Realty Capital allowed construction to proceed.
“As true believers in the future of New York City, we are thrilled to be able to begin construction on this innovative project that will bring mixed-income housing and hundreds of jobs at a critical time for the City.” — MaryAnne Gilmartin, Founder and CEO of MAG Partners
“This marquee 480-unit multifamily rental building, located within a few blocks of Hudson Yards and other prominent tech tenant expansions on the west side, will be one of the only new multifamily rental projects built in Manhattan in the next few years,” said Josh Zegen, Co-Founder and Managing Principal of Madison Realty Capital. “We were pleased to fill a void which would customarily be financed by conventional banks, and provide our flexibility, certainty, and conviction.”
241 West 28th Street is taking shape in what is rapidly becoming a central live-work-play community. The site is a few doors west from Maverick Chelsea, an eye-catching new building where current availabilities start at $1.5 million. Around the corner, MAG Partners and COOKFOX have teamed up again to transform 335 Eighth Avenue, an affordable housing cooperative, into a 200-unit building with commercial space, including a grocery store.
These projects will provide much-needed affordable and market-rate apartments to a central Manhattan location within walking to distance to thousands of office tenants in Midtown, the Garment District, Chelsea, and Hudson Yards. Facebook is set to occupy the office space in the James A. Farley Building, and industry giants like Apple, Google, and Amazon are among the firms embarking on expansions nearby. The area has also seen a commercial building boom over the past few years with developers undaunted by the pandemic and growing work-from home arrangements. Around this building alone, Fashion Institute of Technology is planning a multi-layered glass academic building designed by SHoP Architects across the street, and construction is winding down on 28&7, a sleek new commercial tower designed by Skidmore Owings & Merrill.
“As a firm, we continue to believe in the future of cities as places where the world’s most talented and creative minds congregate – we expect New York City to continue to lead the way on that front and the Chelsea neighborhood to strengthen its attributes as a highly desirable place to live, work and play. We are excited to commence building this project.” — Mark Fischer, Global Head of Real Estate at Qualitas
The site is also a stone’s throw from the new Penn District plan set to transform the decrepit Penn Station and the surrounding area. Andrew Cuomo called for a new business district of 10 skyscrapers to be built, and for using the money from those buildings to finance much-needed infrastructure upgrades. More recently, Governor Hochul has called for revisions of the plan, saying, “It’s time for a Penn Station that meets the needs of New Yorkers.” Her vision calls for the same number of buildings, but not as dizzyingly high as the supertalls previously proposed. It also calls for 540 permanently affordable housing units among the 1,800 new ones proposed in the plan, as well as eight acres of public space and a plaza that would limit car traffic.
It is unclear how Madison Square Garden would fit into all this. The arena was granted a 10-year permit in 2013 so the owners could find a new home; eight years later, ownership has not revealed plans for that, but did announce that they had signed a lease for a 428,000-square-foot corporate headquarters at Penn 2, one of the new office towers in the Penn District. Some critics say that moving Madison Square Garden would let natural light into Penn Station and improve conditions from a safety standpoint. Governor Hochul’s plan calls for keeping Madison Square Garden where it is, but requiring the Hulu Theater to be demolished to accommodate a grand entrance to Penn Station.
Q&A with MAG Partners’ head of development Susi Yu
By: Atticus O’Brien-Pappalardo
PincusCo connected with MAG Partners’ head of development, Susi Yu, to discuss MAG’s topping out at 241 West 28th Street, their recent new development plans just around the corner at 335 Eighth Avenue, and more.
MAG Partners is a woman-owned, urban real estate company whose principals have designed, built, and operated over seven million square feet of office, residential and mixed-use projects, including over 2,000 units of housing. On December 7, the firm topped out their project at 241 West 28th Street and provided PincusCo Media with the following photos of the event.
This interview is part of a new series of Q&As with industry thought leaders who invest, develop, broker, or provide professional advice related to New York City real estate.
Atticus: Just this week MAG topped out their project at 241 West 28th Street, could you tell us a bit about the development?
Susi: This is our first ground-up development. It is a 480-unit multifamily rental unit project and 30 percent of the units are affordable. We closed on the site in 2019 and started working with COOKFOX as the architect. We’ve been working on this now for close to two and a half years. We closed on the project financing in November of 2020 and started the foundation shortly thereafter and topped out December 7th. We will bring the project online in January of 2023, and are currently on schedule to meet those deadlines, so we are super excited.
Were there any unexpected elements that facilitated development, or others that slowed it down?
COVID was a huge curveball. We had to close on our construction financing in order to start construction and the pandemic made us take a different route to get that done. Before the shutdown we were speaking to traditional banks about getting a construction loan and after the shutdown we had to pivot and look at different sources of capital. It took us about four or five months to find the right partner, which ended up being Madison Realty. Interestingly, because of the pandemic we were able to buy the project with favorable economics. We had awarded 60 percent of the project when the market was very competitive and relied on local sourcing to avoid supply chain issues.
Earlier this fall MAG filed plans for another Chelsea project, a 128-unit mixed-use development at 335 Eighth Avenue, could you talk a little about the project and how the deal with Penn South to develop it came to be?
MAG Partners was fortunate to be on a list of selected developers that Penn South asked for proposals from in early 2020. We submitted a residential building, designed very contextually by COOKFOX, and at the end of 2020 we were selected. We worked through the business issues with Penn South and executed the LOI earlier this year and we are now working on the ground lease and designing the building. Penn South is one of the few thriving NORCs (naturally occurring retirement communities) in NYC and it is an affordable cooperative housing with a long list of people wanting to live in the development. The revenue produced by commercial buildings, including our site, offsets the operating expenses and is critical for Penn South’s ability to keep the co-ops affordable.
According to an analysis of DOB filings since the start of 2018, Chelsea was among the most active neighborhoods in Manhattan for new development both in terms of number of new building plans filed and total dwelling units filed for. What has made this neighborhood so appealing for new development in recent years?
I think it depends on what your boundaries are of Chelsea. A lot of people push it far west, more than I would, and much further north than I would. But what I think is interesting about Chelsea is there are very few sites and I think a lot of the projects that were filed since 2018 were probably for condominiums, not multifamily rentals, given where the market was in terms of land value, like the Edison projects sold to HFZ. Companies like Facebook relocating to, I’d call it Penn Station west area, and Google literally taking over Chelsea Market, I think it makes the existing neighborhood fabric of Chelsea that much more attractive to potential tenants or condo buyers. The neighborhood also has fairly contextual zoning, so you can’t really build a tall building. So it’s an interesting neighborhood with very few available sites and then what you build has to fit in the zoning of the neighborhood. You can also walk everywhere, to Union Square, Madison Square, Meatpacking, Hudson Square, it’s very accessible but still feels like a neighborhood.
MAG’s website states that construction on the new project at 335 Eighth Avenue is expected to begin in 2022, do you have an estimated completion date?
Likely the beginning of 2026 or the end of 2025.
Do you have any other projects lined up? How are factors such as Covid-19 and the expiration of 421-a impacting development decisions?
We have another residential project that we’re working on to beat the 421-a deadline, it’s a 200-unit, multifamily rental building with 30 percent affordable. We also have a boutique office building that we have been working on for the past year and a half or so. It is about 200,000 square feet and it’s in a very strong location. We are also looking at other projects outside of New York City in order to increase our footprint. New York City is becoming a harder and harder place to develop so we are looking elsewhere, some are pretty large scale projects.
Looking even further into the future, what is the biggest change you anticipate in NYC’s development market by 2031?
I think what you’re going to see is a market where there is a dearth of rental housing because of expiring 421-a. You’re going to start to see a shortage of housing. I hope the city really focuses on how to deal with the homeless situation, in terms of providing supportive housing for the homeless population. As the city gets wealthier and wealthier, those at the bottom of the economic ladder continue to suffer because of the lack of good and safe affordable housing.
MAG Partners is a woman-owned firm, do you want to speak about the significance of that?
70 percent of our firm is made up by women, which we are very proud of. We are very committed to diversity and it is something we practice not just with our team but also with other partners we deal with. For example, we demand with our consultants that there are women who are interfacing with ownership representing their firms. You know they’re at the office doing all the work but they’re not getting the opportunity to interface with ownership or developers, and that’s how you grow business, so that is something that we do demand of our consultants. It is the same with our equity partners, our LP partner out of Australia, Qualitas, is an investment firm that was started by a woman named Carol Schwartz. We want to make sure that everyone who we work with understands what our goals and values are. That’s something that is really important for us.
MAG Partners has topped out construction on a 480-unit rental residential building at 241 West 28th Street in Chelsea. The development is expected to be complete in late 2022.
The first development project of MAG Partners, founded by MaryAnne Gilmartin, is being designed by celebrated architects COOKFOX Architects. The building will include approximately 8,000 s/f of ground floor retail.
Developed under the Affordable NY program, 30 percent of the project’s units are reserved for low- and middle-income New Yorkers. Urban Atelier Group is the construction manager for the development.
The exterior of the building is designed with contextual masonry inspired by the rich historic architectural fabric of the neighborhood, while the residences will incorporate biophilic design strategies that connect its residents to nature. A landscaped canopy will welcome residents at the 28th street entrance and a central courtyard and garden will unite the amenities and lobby areas. Above, alternating piers of hand-laid, angled brick and expansive windows allow light and shadow to dance across the façade. A series of outdoor terraces offer residents rooftop gardens and panoramic views of midtown, downtown, and the Hudson River.
The project is a joint venture between MAG Partners, Safanad, Atalaya Capital Management and Qualitas.
MAG Partners previously announced that it has secured a $173 million construction loan from Madison Realty Capital for the project.
Pictured top are project team members MaryAnne Gilmartin, Jeff Rosen and Susi Yu of MAG Partners, Rick Cook and Brandon Specketer of COOKFOX, Andy D’Amico, James Palace, and Tom Alaimo of Urban Atelier Group, and Jon Mechanic of Fried Frank.
241 West 28th Street’s Reinforced Concrete Superstructure Climbs Over Chelsea, Manhattan
By: Michael Young
Construction is rising on 241 West 28th Street, a 22-story residential project in Chelsea. Designed by COOKFOX for MAG Partners, Atalaya, Safanad, and Qualitas, the 248,000-square-foot two-tower development will yield 479 units with 30 percent reserved for low- and middle-income households. King Contracting Group is doing the brick work and Urban Atelier Group is the general contractor for the complex, which is located between Seventh and Eighth Avenues.
Progress has been swift since our last update in June, when work was still progressing below grade. Now the reinforced concrete superstructure has reached the ninth floor, and could feasibly top out sometime this winter.
Crews are also about to assemble a construction crane tower.
MAG Partners acquired the Midtown, Manhattan property in December 2018 and established a 99-year ground lease with Edison Properties. The exterior of the building will showcase a richly textured brick façade and a tight grid of recessed windows. The property will yield 214,000 square feet of residential space and about 10,500 square feet of ground-floor retail space. Residential amenities include lounges, a fitness center, a children’s playroom, and an outdoor lounge with a swimming pool and adjoining terrace.
Below are additional aerial and street-level renderings of the project showing how the two towers are spaced out with what will likely be a private central courtyard, while the upper setbacks make way for numerous landscaped terraces for a select number of units. Depicted around the center of the flat inner walls are dark gray panels running down the middle, highlighting the core of each tower. These extend toward a pair of mechanical extensions that contrast with the lighter brick color facing the street. A metal canopy topped with shrubbery will protrude above the main entrance along West 28th Street.
241 West 28th Street is slated for completion in July 2023.
Excavation And Foundations Progressing At 241 West 28th Street In Chelsea, Manhattan
By: Michael Young
Below-grade work is progressing at 241 West 28th Street, a 22-story, 479-unit residential project in Chelsea. Designed by COOKFOX for MAG Partners, Atalaya, Safanad, and Qualitas, the two-tower development recently acquired $173 million in construction financing arranged by Maverick Commercial Properties. MAG Partners acquired the Midtown, Manhattan property in December 2018 and established a 99-year ground lease with Edison Properties. 241 West 28th Street is located between Seventh and Eighth Avenues and will have 30 percent of residential units reserved for low- and middle-income households. Urban Atelier Group is the general contractor.
Recent photos show numerous heavy machinery onsite and steel rebar protruding along the perimeter of the foundations awaiting work on the first level of the superstructure. We also spotted the first segment of the construction crane tower around the center of the rectangular lot.
241 West 28th Street. Photo by Michael Young
241 West 28th Street. Photo by Michael Young
241 West 28th Street. Photo by Michael Young
241 West 28th Street. Photo by Michael Young
YIMBY also spotted another COOKFOX rendering of 241 West 28th Street. The illustration is looking east above the streets toward the two buildings that are separated by what could likely be a central courtyard, and gives us a much better idea of the final appearance and tight grid of windows. The rendering also highlights the upper setbacks that make way for numerous private landscaped terraces. The inner walls appear to be completely flat with gray panels running down the center, highlighting the core and mechanical extensions of each tower.
241 West 28th Street. Rendering by COOKFOX
The rendering below is from ground level across the street, and highlights the metal canopy topped with shrubbery above the main entrance along West 28th Street. Dark stone panels will line the walls at the ground-floor retail frontage, above which the main fenestration begins with its warm-colored brick masonry surface arranged in varying horizontal and vertical running bond patterns, metal railings, and dark gray spandrels.
241 West 28th Street. Rendering by COOKFOX
Permits filed with the Department of Buildings in September 2019 listed 241 West 28th Street to yield just over 248,000 square feet divided into nearly 214,000 square feet of residential space and about 10,500 square feet of ground-floor retail space. Amenities include residential lounges, a fitness center, a children’s playroom, and an outdoor lounge with a swimming pool and adjoining terrace.
A completion date of July 2023 is stated on the construction board.
MaryAnne Gilmartin’s development firm struck a deal to redevelop a corner site on Eighth Avenue in Chelsea.
MAG Partners signed a long-term lease with a sprawling, multi-block affordable housing complex for a dilapidated retail building at 335 Eighth Avenue, The Real Deal has learned. The firm plans to redevelop the site into a mixed-income apartment building with a grocery store and community space. Construction is expected to start in 2022.
The seven-story project will qualify for the Affordable New York program, with 30 percent of the approximately 200 set aside as affordable.
The Penn South complex in Chelsea was facing a conundrum as its 60-year-old retail building on the northwest corner of West 26th Street and Eighth Avenue needed significant repairs that the low equity co-op could not afford.
At the same time, leases with current tenants — Gristedes, McDonald’s, a tennis center and other services — were set to expire, meaning the co-op was facing a substantial drop in income. As a result, its 2,820 apartments would be due for a $500 monthly increase in maintenance fees.
The board had hired Paul Travis of Washington Square Partners as its real estate advisor in 2008 and he provided several options. Earlier this year, the co-op’s 5,000 residents voted to create a 99-year lease on the property so the rent payments would replace the lost income.
“The top priority for the Board of Directors is to preserve the affordability of Penn South for current residents and future generations,” Ambur Nicosia, the board’s president, said in a statement. “We needed a solution that does not require our shareholders to pay major increases in monthly maintenance fees. The stores are supposed to subsidize the apartments, not the other way around.”
After interviewing and getting bids from seven developers who specialize in such projects, the board agreed to lease the site to the woman-owned MAG Partners.
“They want to build affordable housing and do the right thing,” Gilmartin, CEO of the firm, said of the co-op board. “They were concerned about the views [of current residents] and space around the new building.”
Her company is currently constructing a similar but larger project at 241 West 28th Street, on land owned by Edison Parking. “The [board was] watching from afar and saw how we designed the building,” Gilmartin said.
The architect of the West 28th Street building, Rick Cook of COOKFOX Architects, will also design the Penn South project with an eye on the red brick of the 10-co-op buildings and the historical character of Chelsea.
“Obviously, it’s an incredible perch,” said Gilmartin of the site and the possibility of a roof deck for the occupants. “It’s something we will study and also the placement of the building, and then go back to show it.”
During her tenure at Forest City Ratner, Gilmartin oversaw the development of the New York Times Building on West 41st Street, the Barclays Center in Brooklyn and the Frank Gehry-designed 8 Spruce Street residential tower in downtown Manhattan. She also recently helmed the real estate investment trust Mack-Cali through a transition period.
Gilmartin announced the launch of her firm in December 2019. In addition to the 28th Street project, MAG is the development partner on a 6-acre development in Long Island City.
MAG Partners Selected to Develop Residential Co-op in Chelsea
By: Andrew Coen
MaryAnne Gilmartin’s MAG Partners has been tapped to redevelop 335 Eighth Avenue into a mixed-income apartment building with ground-floor retail space, the developer announced Thursday.
Penn South, an affordable housing cooperative based in Manhattan’s Chelsea neighborhood, selected MAG Partners for the 200-unit development that will be built under New York state’s affordable housing program, with 30 percent of its units reserved for low- and middle-income residents.
MAG Partners will develop and operate the seven-story building under a long-term ground lease with Penn South. A grocery store and other retail stores are planned on the ground floor, with construction slated to commence in 2022.
The Real Deal first reported the selection of MAG Partners.
“It is an honor to partner with Penn South and join their long legacy of community-building in Chelsea,” Gilmartin said in a statement. “We are committed to building in a way that enhances this beautiful neighborhood and provides value to the co-op’s long-term sustainability.”
Paul Travis of Washington Square Partners provided real estate advisory services to the co-op. Susi Yu, principal and head of development, led the deal for the MAG Partners team.
MAG Partners chose Rick Cook and COOKFOX Architects to design the building with plans to bridge the historical character of Chelsea. The developer is also currently working with COOKFOX on the nearby 241 West 28th Street, a 480-unit apartment building slated to finish construction in late 2022.
Ambur Nicosia, president of the Penn South co-op board, said in a statement that the deal will replace a commercial building that required huge repairs and provide revenue “to preserve the affordability of Penn South. We needed a solution that does not require our shareholders to pay major increases in monthly maintenance fees. The stores are supposed to subsidize the apartments, not the other way around.”
Covid is Forcing Real-Estate Developers to Rethink Buildings
By: Katy McLaughlin
Someday, years from now, a resident will wake up in their luxury condominium at developer Gregg Covin’s The Cedars Lodge & Spa in Hendersonville, N.C. They’ll make breakfast on the island in their big kitchen and sit on their heated balcony. They’ll walk out of their private entrance and use an elevator that serves only three other units. They’ll work out in a series of small exercise rooms and gather with friends at a restaurant in a glass atrium.
Hopefully, Covid-19 will be a distant memory. But every aspect of these homes will have been shaped by the pandemic.
Mr. Covin tore up his original plan for a part-hotel, part-condo project with small kitchens, few balconies and large amenity spaces, and began redrawing the concept in March. “For sure, there are going to be long-term changes in behavior because of this,” said Mr. Covin, who still aims to break ground this year.
One of the trickiest parts of a luxury real-estate developer’s job is divining what buyers and renters will value—and pay top dollar for—in the three, four or even five years it takes to go from design to completion. Covid-19 has made that more complex, as developers try to tease out which parts of the pandemic experience will fade away and which will remain as part of the culture.
Some costs can be passed on to the renters or buyers who want the changes enough to pay more for them. Mr. Covin, for example, was originally planning units in the $300,000 to $500,000 range, but now thinks buyers will pay $350,000 to $750,000 for larger units that can be used as second homes.https://tpc.googlesyndication.com/safeframe/1-0-37/html/container.html
Rental developers also are betting the postcrisis market will reward them for adding or installing specialized furniture that can make a small space seem larger so residents can work from home more comfortably. Other changes aimed at improving air quality or enabling distancing from other residents—such as re-engineering ventilation systems, adding elevator banks, or reconfiguring common areas—may help lower resistance to high-rise living, a lifestyle that has taken a beating in this crisis.
There is evidence already that the amenities and elements valued by the rental market have changed since the pandemic hit. Luke, a conversation-friendly real-estate chatbot that texts listings to apartment hunters in New York City, analyzed 30,000 messages from potential renters between December and February and compared them with those between March and May.
The New York-based company found that requests for home offices rose from 0.5% of messages prepandemic to 3% once the pandemic hit. Private outdoor space requests jumped by 20%, while requests for in-unit laundry (a rarity in New York City) went up 17%. Interest in gyms plummeted. Requests fell by 10% for in-building gyms and by 50% for gyms nearby.
In San Francisco, 30 Van Ness, a 47-story multiuse building with 333 condos located a block from Twitter’s headquarters, is slated for completion in late 2023, said Arden Hearing, executive general manager, West Coast, for Lendlease. Even with that distant time horizon, the pandemic prompted numerous design changes.
“Because of Covid, we’ve thought a lot more about stairs,” he said. To encourage residents to use them, and decrease elevator density, the project will now have stairs that are wider and carpeted, with art and natural light, he said.
Until March 15, the amenity plan also featured an open 12,000-square-foot space for co-working by day and lounging by night. New blueprints, Mr. Hearing said, divide that space to include a music studio, a fitness area, art space, a cooking-and-dining area and a screening lounge.
Some sections will have glass partitions, to give a sense of togetherness while creating physical separation. Many will exit to an outdoor area. The building also will include horizontal ventilation, with each residential unit having its own system, as opposed to the traditional vertical system that filters air throughout a tower, he said.
The HVAC upgrades alone will add several million dollars to the project, Mr. Hearing said. The investment is expected to differentiate the project from older buildings and help with marketability, he added.
In New York, MaryAnne Gilmartin, founder and chief executive of MAG Partners, plans to begin construction later this year on 241 West 28th Street, a 480-unit rental building in Manhattan’s Chelsea neighborhood.
She said much of the original plan should play well in the postcrisis era, citing its two towers connected by a garden, allowing for shorter and less-crowded elevator rides than with a single tower, and more outdoor space. Still, the crisis has inspired her to upgrade air filters, create a separate entry for deliveries, and add touchless elements that let residents use their phones to call elevators and open doors.
At Echelon, a 14-unit project in the design phase in Delray Beach, Fla., developer John Farina had planned four elevators. In early April, he changed to eight elevators, so that no resident would have to share an elevator with more than two other units.
Mr. Farina, president and chief executive of U.S. Construction, said he made the change in light of how successful another Delray Beach project, called Ocean Delray, has been. The 19 units, priced from $5 million to $9 million and slated for completion in early 2021, are half sold, he said. Each unit will have a private air-conditioned garage, and four will have private elevators.
The pandemic has made some developers re-evaluate the economics underpinning their projects. Mr. Covin said that after a long career developing luxury projects in downtown Miami, he is switching to North Carolina because he believes there will be heavy demand for second homes at the midpoint of the East Coast—and less interest in dense city living.
Scott Brennan sees a strong market for luxury single-family homes in Florida. He developed an 8,000-square-foot house on the market for $14.5 million in Boca Raton. He had an additional piece of land on which he planned four townhouses with a common pool and green space.
Now, because the pandemic has reduced interest in shared amenities, he plans to build just two homes, with private yards and space for home gyms and offices.
“The original house suits the Covid discussion perfectly,” said Mr. Brennan, who happened to have opted for expanses of retractable glass doors that give the home plenty of flexible indoor-outdoor space. The new homes will be similarly designed, he said.
Colin Behring, chief executive of Behring Co., based in San Ramon, Calif., already has 1900 Broadway in Oakland under construction, but he has planned alterations.
He said working from home will be increasingly important, but it isn’t financially viable to make the apartments larger. Instead, more units—25% rather than 5%—will have furniture by a Boston-based startup called Ori. Designs include beds that drop from the ceiling to the floor at the push of a button, or that retract into a home-office module. The 39-story building is set to be completed in late 2022.
A Rental Complex in Quincy, Mass.
This project, in the permit stage, had to be altered to allow for more access to the outdoors. The solution, shown in this rendering, was to add balconies that will give some tenants a way to get fresh air and sunshine. PHOTOS: LBC BOSTON AND PCA (2, RENDERINGS)
Among the most common design changes made by developers is adding outdoor space or increasing access to those spaces. In a rental project in Quincy, Mass., now in the permit phase, developer LBC Boston is adding balconies to about a quarter of the units, said Margarita Kvacheva, senior vice president. “We are strategically placing the balconies on the south side, because those get the daylight and that’s where people can go out and get vitamin D,” she said.
At Natiivo Miami, a 51-story multiuse building in the Florida city slated to break ground this year and to be completed by late 2022, developer Keith Menin is planning retractable glass walls. Though expensive, he said they would be valuable in linking common areas—such as a gym and a walkway to the pool—to outdoor spaces.
“This could be the new norm,” Mr. Menin said.
Touchless systems, already a luxury amenity, are becoming necessities, developers said. Ric Campo, chairman and chief executive of Camden Property Trust, began rolling out Chirp, a virtual leasing platform, in the company’s 164 rental buildings last year.
The system lets prospective renters set up an appointment, be guided by a map from a parking space to the unit, gain entry via a code, tour the unit alone, and sign the lease online. Residents can use fobs or their phones instead of keys, Mr. Campo said.
Home is Where the Stethoscope Is
Several Florida developers are linking projects to the medical industry, giving buyers technology, service and access to special care.
Buy a House, Get a Year of Telemedicine
Miami-based developer CC Homes, which builds about 500 single-family homes a year, will provide buyers at its Canarias in Downtown Doral development with a year subscription to Baptist Health Care on Demand, said chief executive Jim Carr, who is also chairman of the board at Baptist Health South Florida. Buyers of the $500,000 to $2 million houses will receive a home-exam kit with stethoscope, tongue depressor, otoscope for ear exams and a thermometer that feeds information to telemedicine providers at Baptist. The year’s subscription costs about $1,000 per family, Mr. Carr said.
Someone Hot Just Entered the Building
2000 Ocean, a 64-unit condo building in Hallandale Beach, Fla., will have infrared cameras in the lobby to detect when someone walks in with an elevated temperature, said developer Shahab Karmely, of KAR Properties. Buyers of units, opening in May 2021 at $2.7 million to $12 million, will also receive an iPad and home medical kit. The developer said he won’t dictate how the fever information will be used, nor will he link the iPad to a telemedicine service. “We are supplying the technology,” he said. “How it will be used is up to the homeowners themselves.”
Neighbors in Scrubs
Developer Daniel Kodsi is negotiating with a medical center to occupy the 100,000-square-foot medical building abutting his 55-story Legacy Hotel & Residences in Miami World Center. The project, due in 2023, was originally meant to capitalize on the booming medical-tourism industry. Now that coronavirus is upon us, Mr. Kodsi believes it will be viewed as a benefit to buyers of the $300,000 to $2 million condos. “Imagine a shelter-in-place situation, and having doctors, nurses and a pharmacy right downstairs,” Mr. Kodsi said. “Health is the new wealth,” reads the website for the project.