What Working With Local Government Got This Multifamily Firm

Like everyone else multifamily owner, operator and developer Sinatra & Co. went through the great reset in construction pricing during the pandemic, experiencing a doubling of costs on some projects. “We were able to lock in good rates on some projects but for others we had to put up more capital and take lower proceeds on the front end,” Matt Connors, vice president of development tells GlobeSt.com.

Connors is a participant of GlobeSt.com’s multifamily event being held in New York City next week.

The company took away many lessons from that time but paramount of them all was this: value engineer projects or tap into other incentives that could offset some construction costs. And, as we will see in a minute, sometimes that includes working with the local government to create the necessary incentives. The company remains faithful to this hard-earned lesson as it expands into new activities. With hopes high for interest rate cuts, Connors says now is the time to buy and approach specialized opportunities so when rates do fall it is ready to go. This includes residential conversion opportunities.

Interestingly, for all the talk of solving the problem of half-empty offices around the country by encouraging residential conversion, not that many local governments have incentives in place to reward developers who take this risk. But Connors is seeking to change that by working with local governments to establish the necessary incentives that will make these projects pencil.

For instance, the firm is currently working on a large office conversion in Buffalo, NY, and has found that additional incentive packages, including a historic component, will aid in the repurposing since it is an atrium-style building dating to 1882. “It will lend well to apartments,” Connor says. “So we are working with counsel to essentially create a tax credit on the local level,” Connors says. The firm has already met with the city on this and Connors believes the tax credit is on track to pass.

It is also working with local regulatory bodies to get more leniency to spur development. Connors notes it can take 6 to 12 months to get approval for certain projects so “it is important to establish those relationships.”

Multifamily Spring:

Multifamily Spring is coming to New York City this April 18. This year’s program will bring together the industry’s most influential and knowledgeable real estate executives from the multifamily sector for 5 hours of face-to-face networking and over 5.5 hours of can’t miss sessions. Learn more or register here.