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Category ArchiveRheingold Brewery

Amid Flat Market, Wells Fargo Ekes Out First Prize for 2017 NYC Commercial Lending

The Wells Fargo wagon pulled ahead of its Big Apple competition this year, as the global bank slid into first place among originators of commercial loans in New York City, according to new data from CrediFi.

The San Francisco-based institution wrote 49 commercial real estate loans cumulatively worth about $4 billion in New York City in 2017, edging out Morgan Stanley and Deutsche Bank, which held the top spot a year before. Signature Bank and JPMorgan Chase, which each originated nearly 400 commercial financings with much smaller average loan amounts, rounded out the top five.

The achievement represents less of a resounding Wells Fargo success than a slide in the fortunes of its competitors, the data show.

“In terms of raw dollar amount, Wells Fargo isn’t originating more in New York City now than it did in the first nine months of 2016,” the CrediFi report says. “But while financing by Wells Fargo remains stable, several other top lenders saw their origination decline this year, pushing Wells…to the top.”

While overall commercial lending in city was flat for the year, residential lenders found fewer opportunities to dig out their checkbooks. Compared with 2016 numbers, multifamily lending was down 19 percent to $26.3 billion in the city, according to the report.

Wells Fargo’s claim on the ranking’s No. 1 spot will come as a welcome counterpoint to an embarrassing stretch of bad headlines for America’s third-largest financial institution. Last September, the Consumer Financial Protection Bureau charged the bank $100 million in fines for creating around 2 million unauthorized consumer bank and credit accounts. Just two months later, Wells was forced to reach a $50 million settlement in response to accusations it had overcharged residential borrowers for post-default appraisals.

A spokesman for Wells did not immediately respond to a request for comment.

Meanwhile, two fresher faces had banner years of their own. LoanCore Capital Credit REIT, an investment vehicle of privately held LoanCore Capital, saw originations balloon nearly sevenfold during the year, growing to $400 million in the third quarter from just $60 million in the first.

And Madison Realty Capital found a home on CrediFi’s quarterly top-10 list for the first time in the third quarter, inching ahead of Bank of the Ozarks and Citigroup for the eighth slot in the standings.

“It’s been an active year, and we’ve definitely been filling the void in the market in terms of speciality finance and construction financing,” said Josh Zegen, one of the firm’s co-founders. “We’ve been finding some unique opportunities.”

Zegen cited Madison’s $300 million loan on Ceruzzi Holdings138 East 50th Street and a $270 million construction financing on All Year Management‘s apartment project in the old Rheingold Brewery building in Bushwick as two of the deals that rocketed his company onto the top-10 list.

Source: commercial

City of Goldman: The Mysterious Developer Who’s Transforming Brooklyn

Standing 23 stories and 250 feet tall, the William Vale Hotel towers over North Williamsburg, dwarfing virtually every other structure in proximity—a fact that affords the hotel panoramic, 360-degree views of New York City from its rooftop cocktail bar, Westlight, which attracts droves of young, sharply dressed New Yorkers who willingly stand in line to sip its $16 cocktails.

One person who, by all accounts, wouldn’t be caught dead drinking at the William Vale is the man who built it.

Yoel Goldman is a member of Brooklyn’s ultra-Orthodox Satmar Hasidic Jewish community—a sect that doesn’t usually go for rooftop outings. But that didn’t stop Goldman and his partner on the William Vale project, Zelig Weiss of Riverside Developers, from knowing that a 183-key luxury hotel on the corner of North 12th Street and Wythe Avenue with a sleek design and the right food and beverage offerings would be a roaring success.

“We can talk about what it is to go to a cool bar and have a cool restaurant, even though he doesn’t spend any time in cool bars at all,” said Eran Chen, the founder and executive director of architecture firm ODA New York and a frequent collaborator of Goldman’s (albeit not on the William Vale). “His feel and understanding of that context, and his thirst for knowledge and information, is huge. I was surprised, and consistently surprised, by his knowledge of what’s going on—what’s cool and what’s hip and what’s done in other places. And that’s been brought to the table in conversations.”

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The William Vale Hotel in Williamsburg.

The opening of the William Vale last year represented a pinnacle for Goldman and his real estate firm, All Year Management. Having spent much of the 2000s gradually acquiring modestly sized multifamily properties across still-gestating Brooklyn neighborhoods like Crown Heights and Prospect Heights—often partnering with equity investors from the Satmar community—Goldman parlayed early success into a buying spree in the years following the financial crisis in 2008. His business plan, according to partners and collaborators, sought to capitalize on plummeted property values and Brooklyn’s promise as a burgeoning residential destination.

“He was one of our top two buyers in the early years of the recovery,” said Marcus & Millichap broker Shaun Riney, who specializes in the Brooklyn multifamily investment sales market. “Most of what he was buying was 20 units and less in these emerging neighborhoods. [All Year was] buying when no one else was buying. They were the ones cutting checks when you couldn’t get financing—when these neighborhoods looked nothing like they do today.”

Gradually, Goldman built a portfolio that now includes no less than 150 properties, the large majority of them residential and in Brooklyn. In the past several years, he’s pivoted toward more ambitious, ground-up projects like the William Vale and a massive residential development on the former Rheingold Brewery site in Bushwick that promises to bring more than 900 new rental units to the neighborhood. Having had the foresight to profit from Brooklyn’s relentless gentrification into a core market, Goldman is now facilitating that transformation as a builder.

In turn, Goldman, who has yet to reach 40 years of age and who one would be hard-pressed to find a photo of online (All Year Management did not return multiple requests for comment for this article), is only furthering his own status as one of New York City’s most active and influential real estate players—a devoutly religious man of modest means whose ambitious plans are reshaping the very face of Brooklyn.

“I think he’s transitioned from a very secure kind of business [as a multifamily landlord] to not only developing but developing new typologies,” said Chen, whose firm is designing the Rheingold Brewery project, as well as Goldman’s under-construction residential tower at 436 Albee Square in Downtown Brooklyn and a planned hotel on Bedford Avenue in Crown Heights.

“He’s attracted to bringing innovations to places that are underestimated and underdeveloped currently,” Chen said. “Anybody can buy land in Manhattan, but to buy 1 million square feet in Bushwick three years ago, when it still is to some degree not a mainstream place for high-end living, was a bold move.”

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The William Vale Hotel in Williamsburg.

To help fund the William Vale and the Rheingold Brewery project, among his other developments, Goldman has issued roughly 1.7 billion shekels, or $485 million, in low-interest, publicly traded bonds on Israel’s  Tel Aviv Stock Exchange. The bonds are backed by a portfolio of All Year’s New York real estate assets—the sorts of cash-generating, income-producing rental and hotel properties that Israeli institutional investors love to buy debt in.

Goldman, likewise, has shown an enthusiasm for the Israeli bond market as a vehicle to raise funds at cheap borrowing costs. With nearly $500 million in debt traded in Tel Aviv, All Year is one of the largest issuers among U.S.-based real estate companies to have completed bond offerings in Tel Aviv—a group that includes the likes of Related Companies, Lightstone Group and Extell Development Co., as well as more modest multifamily landlords like Spencer Equity Group, led by Goldman collaborator and fellow Hasidic community member Joel Gluck.

While not all of Goldman’s real estate assets are tied up in the holding portfolio backing the bonds, roughly three-quarters of them are—and those holdings have a combined equity value of around $480 million and a total asset value of nearly $1.5 billion, according to Israeli financial filings. Goldman does not own all of the assets in their entirety; to the contrary, he has partners on many of them, such as the William Vale. Still, for a man yet to hit 40 years of age, he has managed to build an impressive business out of virtually nothing.

Unlike some in the Hasidic real estate investment community, Goldman did not rely on family connections or inherited funds for his entrée into real estate. Rather, he got his start at a very early age—sometime around his late-teens and early-20s, according to people who have worked with Goldman—through partnering with investors in the Satmar community to acquire and renovate small apartment buildings. (Like many in his community, however, Goldman was also married with children at a young age and by that point trying to earn a living for his family. Goldman’s youngest child was just born earlier this month, according to sources close to him.)

The work could be hands-on, with Goldman often laboring alongside subcontractors on the nitty-gritty of renovating properties. But he was able to stake his claim in the years leading up to the Great Recession, which prompted Goldman into action.

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Rendering of 436 Albee Square in Downtown Brooklyn. Image: ODA

“These are guys who are opportunistic investors—they had a clear vision and saw opportunity and upside,” Derek Bestreich, the president of commercial brokerage Bestreich Realty Group and a former Marcus & Millichap broker, said of working with Goldman and his team at All Year Management. “They were able to take advantage of [the market] well in advance of that vision materializing. They saw the changes happening in Brooklyn and saw where things were going.”

The business model was simple: buy an undervalued building in a not-yet-gentrified neighborhood, fix up and renovate the property, charge higher rents for a better product and, as property values climb, refinance and reap the benefits (though seldom, if ever, sell).

“He was successful at executing his business plan,” Riney said, describing Goldman’s approach as done in the spirit of “If you build it, they will come.”

“They were buying 15 to 20 buildings a year, renovating these properties, refinancing them and doing it all over again,” he said. “As they were buying these properties, the rents were going through the roof. It was the right timing and the right location.”

Bestreich said that around the turn of the decade, Goldman and his associates were “the best buyers” a broker could ask for. “When they wanted something, they would pay the most, and they were the most hassle-free buyers imaginable,” he noted. “They would move really fast and get things done.”

He recalled one Prospect Heights building that “had all sorts of issues” including New York City Department of Buildings violations, cracked plumbing pipes and a crumbling façade. “I walked Yoel and his team through, and they looked at that stuff, but they didn’t acknowledge it,” Bestreich recalled. “He took me outside and said, ‘We’ll pay this price,’ and it was under contract two or three days later.” (All Year Management acquired the building, 690 Prospect Place, for a little over $1 million in 2011, according to city property records.)

“They knew where the market was going. We kicked up deal after deal after deal, and they gobbled it up time and time again,” Bestreich added. “They would pay the most—nobody else was going to pay what they were going to pay—and it turned out to be so true. Nobody knew it at the time, but they were so smart.”

Today, Goldman’s team at All Year and its sister contracting firm, Brooklyn GC, is said to number anywhere from 50 to 100 people—with Goldman’s empire far from a one-man operation.

Sources spoke at length about the caliber and competence of the people who work for Goldman, and they role they have played in building up his business. While many are members of the Satmar community, Goldman is also said to employ those of different religious persuasions in executive positions.

“He’s the head of the organization and the ultimate dealmaker and money guy, but he’s got a great team and network of really smart guys handling everything related to his business,” Bestreich said. “It’s not only him, and he would never say it’s only him.”

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Rendering of 123 Melrose Street in Bushwick. Image: ODA

Talk to those who have known or worked with Goldman and one gets the impression of a charismatic figure for whom real estate is everything. Standing over six feet and decked out in traditional Hasidic garb, words like “presence” and “gravitas” come up when discussing Goldman, as does an appreciation for the man’s acumen and understanding for the way the business works.

“He looks at every single real estate project as a knot that needs to be untangled,” said Gary Katz from alternative lending firm Downtown Capital Partners, a frequent partner of Goldman’s. “He loves looking at a building and seeing how he can get more value out of it. He looks at everything as a problem he can solve.”

Riney described him as “an extremely humble, inquisitive, optimistic, visionary type of dude,” and said he believes intellectual challenges are what drive Goldman as a businessman. “I think people love to work with him. He has a smile on his face at all times and loves doing this—he lights up when he’s talking about [real estate]. It’s an outlet to exercise his mind.”

Goldman’s pivot into the realm of ground-up development was motivated by a couple of factors, sources said, including making the best and most efficient use of All Year’s resources and searching for greater value than could be found in a now-inflated Brooklyn investment sales market.

“If you’re doing a one-off transaction and trying to add 500 units to your portfolio, there are two ways to do it: one big project or you buy 50 10-unit buildings,” Riney said, recalling a conversation he had with Goldman on the matter. “His comment was, ‘I don’t have time to go to 50 closings and deal with 50 brokers and 50 attorneys.’ It’s too much of a headache; they literally have to focus on bigger projects.”

Bestreich noted that, in his estimation, All Year’s move into more ambitious development projects “is not a far-fetched transformation,” but “a logical next step” for a firm that has found its bread-and-butter market oversaturated in recent years.

“They were buying small buildings, renovating them, adding value and carrying out their vision—and then the market started to pick up, a lot of buyers started entering the market and doing the same thing,” Bestreich said. “Prices went up, and it became more expensive, and they weren’t able to do the same deals they were able to do previously. They had to find efficiencies, and that turned out to be in bigger deals.”

Over the past five years, All Year has partnered with Weiss’ Riverside Developers on the William Vale, Joel Gluck’s Spencer Equity on projects including the Albee Square development and, until an acrimonious and litigious split a couple of years ago, developer Toby MoskovitsHeritage Equity Partners on a number of developments, including Moskovits’ Brooklyn Generator office project at 25 Kent Avenue in Williamsburg. (Moskovits declined to comment for this story.)

And in July, The Real Deal reported that Goldman was teaming with Kevin Maloney’s Property Markets Group—the developer of the supertall Steinway Tower on Billionaires’ Row—and the Hakim Organization to acquire a Gowanus development site for $50 million.

In addition to funds raised on the Israeli bond market, All Year also relies on financing from alternative lenders like Downtown Capital Partners and Madison Realty Capital—which earlier this year provided a $270 million construction loan on the Rheingold Brewery project—to fund its operations and activities. Sources said Goldman is happy to accommodate the higher borrowing costs associated with such lenders in exchange for greater flexibility to withdraw funds.

That flexibility enables All Year and Brooklyn GC to pay their subcontractors on time and often finish work ahead of schedule—a commitment to efficiency that, along with a zero-tolerance approach to construction or safety violations, collaborators consider a secret to Goldman’s success.

“He once told me, ‘Gary, on a spreadsheet, [finishing a project early by] three or six months looks like nothing,’ ” Downtown Capital Partners’ Katz recalled. “ ‘But if you finish a rental building in June of 2008 instead of September or October of 2008 [after the onset of the financial crisis], that’s the difference between a profit and a loss.’ ”

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Rendering of 123 Melrose Street in Bushwick. Image: ODA

According to Israeli financial disclosures, Goldman’s assets have only appreciated in appraised value since he first tapped the Tel Aviv Stock Exchange in 2014, as has the cash flow coming into his portfolio as projects like the William Vale and his new rental development at 1040 Dean Street in Crown Heights have come online. The portfolio backing All Year’s Israeli bond issuance features roughly 1,500 operating rental units; factor in Goldman’s assets not included in the portfolio, and that number ranges anywhere from 2,000 to 2,500 total residential units, sources said.

Goldman’s success has not come without controversy, however. In 2015, Crain’s New York Business reported that All Year had attempted to raise rents on tenants at a number of Crown Heights buildings it had acquired in 2014—a move that would have violated Department of Housing Preservation and Development affordable housing regulations. While All Year eventually withdrew the rent increases—telling Crain’s that the hikes were “erroneous”—the episode was portrayed as an example of New York City landlords attempting to skirt rent regulations in search of profit.

In June, housing advocacy group Stabilizing NYC named All Year on its list of 10 “target landlords” that it said had exhibited “predatory” behavior—a list that included the likes of convicted slumlord Steve Croman and notorious property owner Ved Parkash. (Curiously, as of early September, All Year had been removed from Stabilizing NYC’s list. The advocacy group did not return requests for comment on All Year’s inclusion and subsequent removal from the list.)

And there has also been controversy over Goldman’s affordable housing plans for his Rheingold Brewery development at 123 Melrose Street in Bushwick. In June, DNAInfo reported that All Year and fellow Rheingold developer Rabsky Group had backtracked on nonbinding commitments made by the site’s previous owners regarding the number of designated affordable apartments at the development—a decision that would drop the project’s affordable unit count by as many as 88 units.

In addition to the question of affordable housing at the Rheingold project, there is also anxiety over the very nature of the development—one that promises to change the very makeup of the neighborhood via more than 900 new apartments and an innovative, outside-the-box design by Chen’s ODA.

Nearby 123 Melrose Street, Goldman’s friend and fellow Hasidic community member Simon Dushinsky, of Rabsky Group, is planning his own sizable residential development on the Rheingold site at 10 Montieth Street—one also designed by ODA and slated to bring around 500 rental units to market. Work on both projects is underway, and with Goldman and Dushinsky set to bring roughly 1,500 brand new units to the heart of Bushwick in a couple of years, questions have been raised about whether the market will absorb such an influx of supply in a timely manner—particularly at a time when rents have shown marked signs of softening.

“If you look at the very short term, it’s definitely going to be too much, too soon,” Bestreich said of the influx of units promised by the Rheingold developments. “But I do think it’s going to fill in. Real estate is not a quick, short-term game…I’m sure from the outside looking in, maybe it’s too much. But from the inside, I can almost guarantee it’s going to be a very good deal and work out just how [Goldman] expects and wants it to.”

Riney said that, in his estimation, Goldman’s Rheingold plans and his other designs on the city are about taking the next step as a developer and businessman—rather than just putting up more buildings for the sake of it.

“If you meet the guy, he wants the challenge” he said. “He’s someone who is not in need of money; he truly believes he’s now at a level where he can influence an entire area, like a Walentas and Dumbo. He’s looking for bigger swaths of land so he can create something special.”

Source: commercial

ODA’s Eran Chen on Eliot Spitzer, Gentrification and Those Crazy “Floating Gardens”

ODA New York’s offices take up a full floor at 250 Park Avenue South, just a couple blocks north of Union Square. On a recent afternoon, the lofty space was abuzz with activity as the firm’s 80-something staff of architects and designers shuffled between desks, surrounded by dozens of renderings and scale models dispersed throughout the room.

This is where Eran Chen, the 46-year-old founder and executive director of ODA, has built one of New York’s most talked-about architectural firms. The Israel native (the Hebrew pronunciation is closer to “Hen” than “Chen”)—who says he was drawn to his field by a natural interest in “psychology, sociology and human interactions”—got his first professional assignment designing a McDonald’s while he was still at Bezalel Academy of Arts and Design in Jerusalem. By the time he graduated, he had helped design 35 separate McDonald’s across Israel.

Chen eventually made his way to New York, landing a job at Perkins Eastman in 2000. Since starting his own firm in 2007 alongside former Perkins colleague P. Christian Bailey (the pair would later bring in Perkins alum Ryoko Okada as a principal and director of interior architecture and design), Chen has overseen the design of 13 completed buildings around New York City, plus more than 20 presently under construction and around 15 that are currently in the design phase.

While ODA—which stands for Office for Design and Architecture—has predominantly worked on residential projects to date, the firm has steadily increased its exposure to office and hospitality development. What’s more, Chen’s growing reputation has helped ODA gain a foothold with projects around the U.S. and Europe.

With ODA now helming some of the New York’s most notable new developments—including Spitzer Enterprises’ sprawling residential complex at 420 Kent Avenue on the Williamsburg waterfront and two major rental developments on the former Rheingold Brewery site in the Bushwick area of Brooklyn—Chen’s influence on the cityscape is only due to expand. He sat down with Commercial Observer to discuss those projects and more.

Given the scale, ambition and pace of the projects you’re currently working on, what’s the secret?

I don’t necessarily think we do more with 80 people than others are doing with 80 people. This is a very energetic, young office. We work around the clock. If you come back tonight at 9, 10 o’clock, it’ll still be humming. It’s a demanding field; you’ve got to be passionate about it, and you’ve got to love it.

Your first job as an architect in New York was at Perkins Eastman. Can you talk about how you got that job and how it helped launch your career?

I came to New York like any other immigrant: I was looking for a job. I had a resume and a portfolio, and I went door to door. The funniest story is that I was invited to an interview [with an architecture firm] in New Jersey. I didn’t want to work in New Jersey, but I thought, I’ll give it a shot, what’s the big deal? I was so unoriented at the time that I took a cab, and it was like an hour-long drive into the heart of New Jersey that cost me like $150—and I was broke at the time.

So I got there and met this really nice guy, in an office with maybe 10 people. And he said, “You’re extremely talented. How much are you looking to make?” I said about $50,000 a year. He said, “We don’t pay that kind of money here. But, my best friend from school is Brad Perkins, and he owns this firm in the city. Let me call him.” I interviewed with Brad, and he hired me immediately. I was just glad to land a job, to be honest.

My first project at Perkins was no other place but Israel. Perkins is considered to be an expert in health care, and they were invited to design this hospital in Tel Aviv. So they put me on the team, and very quickly I become the team leader and lead designer. I was the only Hebrew speaker, I guess.

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Rendering of 416-420 Kent Avenue in Williamsburg. Photo: ODA

From what Eliot Spitzer has said publicly, it seems like he chose you for Spitzer Enterprises’ 420 Kent Avenue because he thought you’d bring a unique approach. That appears evident through the towers’ distinct, geometric design.

I think it’s fair to say that we have different expectations from our buildings than usual. Part of it is because so many parts of our lives that used to be in public spaces, like our streets and parks, have been taken away from us by density. I always come back to my memories as a child; I lived in a big city, and the apartment building was only a small part of our livelihood because we lived in the streets, we lived in the park next door, there were communal spaces. The apartment I lived in, there was nothing special about it architecturally, but it was complemented by a lot of urban support. What happened through the years—and New York City is such a great example—is that we lost a lot of those qualities. We expect to bring back some of those qualities to the buildings themselves.

When Eliot and I met, it was clear that there is something about the building along the front of the East River that is very generic right now, partially because the neighborhoods had been undefined—and to be fair, they are now much more defined and have more character—and partially because that was the expectation. But the potential of living right on the East River and the openness of the views that you get are insane. So we laid out the floor plan in a way where every apartment, from a studio to a three-bedroom, would have a corner living room with a view.

What was your working dynamic with Spitzer like?

Eliot is an extremely intelligent guy, very open and surprisingly knowledgeable about real estate and housing. I say surprisingly because it hasn’t been his field, but he grew up into it—his father was a legendary developer.

It was very easy for us; from our first conversation, we talked about ideas and clicked. There was also a little caveat. I promised him that he would be able to get his approval for 421a [at 420 Kent Avenue before the program expired] even though there was a very short deadline to get [into the ground]. I said, We’ll jump on it and make it happen—it was crazy, because we had to do the whole thing in two months. He said, “If you do it, then I will increase the construction budget by $50 a square foot, because it’s that worth it to me, and we’ll do an amazing building.”

ODA is designing two separate, sizable residential projects for All Year Management and the Rabsky Group on the Rheingold Brewery site in Bushwick. Some people who live in the neighborhood are skeptical about the scale of the developments and fear Bushwick will become like Williamsburg. What was your vision for those projects?

We don’t take lightly the fact that the two biggest projects in Bushwick currently are designed by ODA. Frankly, there’s no doubt that they’re going to transform some of the character of that neighborhood. And that’s a huge responsibility.

Part of the problem that I see with gentrification at large is that it’s inherently bringing totally different typologies of architecture and different groups of people [to neighborhoods] that are taking over the existing ones.

I was taken on a tour of the neighborhood by a son of one of the clients, and I was shocked to understand how deeply he is involved in the life in Bushwick. He knew all the bars, all the galleries, all the cool places to go that I would never know about otherwise. The fact that you can reach those untraditional venues and find untraditional subcultures is partially because of the architecture, which allows for that activity—people with back gardens growing vegetables, wineries and self-makers of furniture. So we thought, How can we implement that in an urban project?

That was the guiding thought there, and the end result [at the All Year project] is a series of five courtyards that are interconnected through what’s typically called amenities—but here, the amenities are really acting as street programming. They open to those gardens, and there’s an in-and-out interaction. Some of them are retail, some are cultural like galleries, some are just typical amenities, and they’re shared by the people in the building but also open to some degree to the general public.

For the Rabsky project, we had similar ideas. But in addition, we thought about the idea of roof gardens. In my mind, roof gardens are always thought of as a secondary or compromised garden to the real one—which is the park. We thought, well, the roofs have a typology that you can control; with a building, you can control the landscape. So we started sculpting that roof in a way that it’s not flat—you have hills and valleys that generate different types of activities.

And because [the roof gardens] are sloped, they intersect with different floors. So if I live on the third floor of the building and not the 13th, I can still go to the end of my corridor and end up at the roof park without going up the elevator. This immediate connection, between every floor of the building and the roof garden, is the main idea here.

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Rendering of 10 Montieth Street in Bushwick. Photo: ODA

You’re also working on an ambitious residential skyscraper for Triangle Assets at 303 East 44th Street in Midtown that features exposed “floating gardens,” occupying gaps within the building itself, hundreds of feet in the air. It seems like a logistical nightmare.

[Laughs] This was sort of an experiment. Slender towers are exactly the opposite form of what ODA and I believe in. Slender towers touch the city in the smallest, most insignificant way but impact the skyline in the most significant way.

When we were approached to design this, the immediate reaction was, What is it that we’re going to do with this? But then came the thought of the advantage of living in the suburbs: Why are people still drawn to that? And partially, it’s the formula of a house with a backyard or a front yard—the idea that you can be in your living room, open the door and the kids can play out in the garden. And that’s something that obviously cannot exist in the city.

But the nice thing about slender, vertical towers is that they have no height limit. So we thought, if we can stretch this building beyond its program, we can create, literally, gaps in the building—and that gap could become, instead of a backyard, a “down-yard” or an “up-yard.” And that would be fascinating, because that could really change our perception of how we can accommodate that kind of experience in cities.

Everybody thought it was a crazy idea in the beginning. First of all, people said, it’s going to count as floor area. Well actually, a covered outdoor space does not count against FAR [or floor area ratio] if it’s more than 67 percent open on all sides—and obviously, if this [space] is open all the way around, it’s not floor area.

Number two, people said, who needs outdoor space at 600, 700 feet in the air? Everything is going to fly off from the wind. This is probably true if you have a balcony or an open roof.

But the fascinating thing about this—which we didn’t know in the beginning and which we learned through testing in wind tunnels—is that when that gap in the building exists that high up, there is air that is captured within the building envelope. And that air, when the wind hits it, kind of diverts the wind to the other side [around the building]. The results were amazing! Because at any given point, even in the worst conditions, the maximum wind speed was 15 miles per hour—the maximum, throughout the year.

That says that if you compare these outdoor spaces at 600 feet in the air to a roof on the seventh floor of a building, it’s exposed to less wind throughout the year than the roof on the seventh floor. Which means that they’re not only beautiful, but they’re usable. We made them 16 feet high so the sun would come through, and we have a buffer zone for dirt so people can plant their own gardens.

The real question is, What’s the added value of this non-FAR area? I made a prediction once—and I still stand behind it—that in like 15 to 20 years, even high-rise apartments with views, without outdoor spaces they’ll be hugely devalued. It’s going to feel like, Why would I ever live in an apartment without properly designed outdoor space?

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Rendering of 303 East 44th Street in Midtown. Photo: ODA

Despite delays in the renewal of the 421a tax abatement that hindered rental development in New York City, ODA has kept up a pretty active and interesting pipeline.

We’ve been very busy, and we have the ability to choose which projects we want to work on. Also, we’ve been involved in more national and international projects, which we weren’t so much before. New York is still our biggest market, but it’s changing. We’re now active in Boston, Atlanta, D.C., Los Angeles, Pittsburgh, and we’re also doing projects in Rotterdam [in the Netherlands] and London.

As far as your aesthetic and design philosophy, where does it come from and what is it based on?

Look, I think the aesthetic of our design is driven by the ideas that they represent—not the other way around. If we have ideas for housing, you’d see those ideas for housing development throughout our projects, and it might look like they have similar aesthetics. If we were to design for other [building types], the aesthetic might change altogether.

But I would say they all follow the idea of more fragmented, more porous and better functioning buildings—that drives everything we do. The rest is understanding materiality and what’s reasonable to build in what location and making those choices. And beauty—I don’t think beauty is a bad word. I think aesthetics and beauty are extremely important for us in terms of composition, but they come almost as natural things that have to be in every project.

Beyond your own firm, who and what do you see in New York City architecture that you like?

I’m a big fan of Herzog & de Meuron. I think this is an office that has been consistent with their ideas and very diverse in their style, which is something I admire.

What’s happening along the High Line is definitely spectacular, because it feels to some degree like an experiment. The buildings that are being built along the High Line are different in that they’re not facing the street—they’re facing this linear park that acts as a street. That, by itself, forces architects to make different types of decisions.

I think that Brooklyn is now the new frontier in terms of great architecture, more so than Manhattan. A lot of mixed-use conversions and additions in neighborhoods like Williamsburg, Dumbo and even Brooklyn Heights are bringing new typologies that are really great.

Source: commercial