NEW YORK CITY—Given the consistently high water marks the city has achieved in a number of metrics, from job growth to tourism, “New York City's in a virtuous cycle,” RXR Realty's Seth Pinsky said at this year's RealShare New York conference Thursday. However, Pinsky pointed out, one byproduct of this success is a challenge in producing enough supply to keep up with demand, especially when it comes to affordable apartments. Moreover, he said, “our infrastructure is literally crumbling,” and not only transportation infrastructure.
The challenges and opportunities arising from the disruptors that have manifested in each of the major property sectors drove the conversation in the conference's first two panels. Pinsky, EVP and fund manager, metro emerging markets with RXR, offered one possible solution for keeping up with growth: look beyond the city limits to suburbs that are well served by transit.
And speaking from two different vantage points—brokerage and ownership—Douglas Elliman Real Estate's Faith Hope Consolo and Westfield's Michael McNaughton—each charted the ways in which new thinking has helped keep retail offerings relevant to would-be shoppers. “You have to have the pulse of the neighborhood,” said Consolo, chairman of retail leasing, marketing and sales with Douglas Elliman. A shotgun approach no longer suffices, she added.
SVP of development with Westfield, which operates the retail component in the World Trade Center complex, cited the cross-pollination between WeWork's presence in the Fulton Center and the transit hub's retailers, which include Shake Shack. Along similar lines, Vivianna Schwoerer, director with WeWork, noted that ready access to amenities, including compatible retail, is among the key factors the coworking giant considers when choosing where to locate its facilities.
In fact, said Bryan Woo, VP with Youngwoo & Associates, sector disruptors have been encroaching on the major food groups. “Airbnb has turned residential into hospitality,” said Woo. “Amazon has turned industrial into retail. WeWork has turned office space into mixed-use.”
As for actual mixed-use developments, Woo said, those that are most successful are the ones that cater to their immediate communities. “What this market has taught us is that you really have to sharpen your listening skills,” said Consolo.
Pinsky and David Ehrenberg, president of the Brooklyn Navy Yard Development Corp., provided illustrations of overcoming community objections through just such use of listening skills. RXR won a bid to serve as the master developer for the revitalization of downtown New Rochelle, a Westchester County suburb of about 80,000 “where redevelopment projects have gone to die” amid acrimony among the city council. Under the rezoning plan which RXR drafted and the city adopted, up to 12 million square feet of new commercial development will be permitted.
The key to the difference between failure and success in such an endeavor, Pinsky said, was to “spend the time to listen” to the community, which RXR did. Similarly, a proposal to open New York City's first Wegmans as part of the redevelopment of Admirals Row at the Navy Yard initially met with opposition from the surrounding community, who thought the grocery chain was too upscale for the neighborhood. What changed community members' minds, Ehrenberg said, was taking a busload of them to shop at a Wegmans in New Jersey.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
