Simpson: “We generally focus on opportunities in established cities that have a strong housing market.”
NEW YORK CITY—Looking at Greystone Development's properties, one might see a range of property and location types in the portfolio. That's no accident, company head Jeff Simpson tells GlobeSt.com. While the firm likes creating multifamily properties in major markets, it invests in other asset classes and would consider secondary cities, he says, noting, “It's all about the opportunity.”
GlobeSt.com: Greystone is typically described as a developer focused on gateway cities. Do you continue to like these markets and, if so, why?
Jeff Simpson, head of Greystone Development: We're generally focused on opportunities where there is an established city with a steady or strong performance in the housing market. Presently we're in in the boroughs of New York City, in Miami and Palo Alto. We like to be in core locations. But we would consider Chicago, Boston, Washington DC and Philadelphia—it's just a matter of the opportunity.
As an agency lender, Greystone & Co. invests in secondary and tertiary markets but for the development group, we like the risk profile of major markets.
GlobeSt.com: Do you see conditions changing?
Simpson: The market changed on Jan. 1st. There are supply issues in both the condominium and rental markets in Manhattan, as well as the outer boroughs. A lot of conversions and new development inventory will come online in the next two years, and certain neighborhoods are more saturated than others. If we're going to get involved in a project, it needs to be insulated from a deep pipeline.
The only exception is Long Island City. It has demonstrated itself to be a strong market and a great transportation hub. Even though there are thousands of units coming to market, we believe they will all be absorbed.
GlobeSt.com: How does Greystone hedge potential softening in the market from a development standpoint, and how do you approach new opportunities?
Simpson: Our development portfolio is 55% to 60% multifamily but it also includes an office building in Palo Alto, a nursing home in Long Island, and some pre-leased office/retail in other regions. We aim to diversify in location as well as in asset class.
Many of our properties originate as joint ventures. We often will meet with a group that puts a property under contract and wants our expertise. That gives us a chance to structure a deal that makes us comfortable, assuming we like the real estate.
We have our own capital so we can make a decision and get a deal done quickly. We provide comfort of execution to lenders and buyers.
We've also evolved as a full-service development group with in-house capabilities in acquisitions, asset management, marketing, operations and construction.
GlobeSt.com: What areas are of interest now and why?
Simpson: We're comfortable pushing boundaries with multifamily projects if there's transportation and infrastructure nearby. We did this in Williamsburg, Brooklyn at Printhouse lofts at 139 N. 10th, at Waterbridge 47 in Dumbo, Brooklyn, and at 79 Horatio in the West Village. In Coral Gables, FL, our property is located at 3622 Coral Way. In these projects we were in and out in 18 to 30 months, and we sold with attractive returns.
We're more mindful than ever of the supply issues ahead for multifamily investment sales. For example, there may be too many apartments in West Chelsea but that is separate from other neighborhoods in New York City, such as the Upper West Side, which does not have a similarly deep pipeline of units coming to the market.
We are developing condos in that neighborhood because it's a highly desirable area, there are permanent residents and pricing will be competitive for the middle income New Yorker.
Steady gains in the US economy have resulted in net positives for the multifamily sector—will this wave continue for the foreseeable future? What's driving development and capital flows? Join us at RealShare Apartments on October 19 & 20 for impactful information from the leaders in the National multifamily space. Learn more.
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
