CRE News Hour 6/7/2019
From the business desk at st broadcast news this is the c. arena news hour. I'm steve lubeck. It's friday june seventh two thousand nineteen here some of the stories. We'll be looking at in this edition of the the sierra news hour. We'll have a conversation with lauro. Veroni jones lang lasalle director of investor research about investor sentiment for the second half of twenty nineteen. We'll talk with developers and attendant at the largest commercial office building going up in chicago in thirty years one ten north wacker drive being built right right on the chicago river and the developer of workplace housing for teachers in new jersey is taking his concept nationwide. We'll be back with the top news stories right after these messages <music> turn earn your podcasting passion into profits the book the business of podcasting describes the business side of podcasting including how to become a professional national podcast. You'll learn about position your clients expertise who podcasting to plus the best business models how to find clients and much more visit the the business of podcasting dot com oh today you can't wait for the media to cover your company buzney. You have to be the media. Take advantage of the power of audio and video. It's the best way to showcase your expertise to prospective customers. Let the lupatkin you bet can media companies handled the technical side. We're award winning audio and video producers. We can help you produce podcasts and video programs remotely or in our fully fully equipped studio in cherry hill visit being the media dot com for more information well. This is the fourth week of our c._r._m. Newshour programs and we appreciate your support. If you you have any interest in sponsoring these programs you can write to us and get information on sponsorship and other opportunities to support the program. If you have story ideas as you can send them to steve at st broadcast news dot com you can also leave us your comments in audio form by clicking on the voice mail icon right on the homepage of our website right. We look forward every week to keeping you informed about things going on in the commercial real estate markets. Thanks for joining us as we do. Every week we start with a roundup of news and headlines from the c. r. e. market space the real estate developers and community leaders were honored wednesday night for their efforts to bring six unique and innovative development projects to completion state broadcast news was at the newark museum as nonprofit new jersey future gave out. It's smart growth awards for the project which included ironside newark the redevelopment of an abandoned printing warehouse in newark into a twenty first century office in retail destination the nation with direct connections to transit open space and nearby attractions peter reinhart the director of the kisluk real estate institute at monmouth university is chairman of the new jersey future board of trustees. I would say it's growth that is in the right place and at the right density that incorporates incorporates <hes> all the things that we need affordable housing good quality open space <hes> green infrastructure environmentally sensitive but at the same time fits the needs for the community and the and the market other projects recognized included redevelopment of historic art deco office towers in newark and passaic a twenty twenty two mile walking trail between lawrence township and hopewell a youth center in plainfield mercer county community college's reactivation of long dormant buildings in in downtown trenton and hoboken's plan for smart growth wendy kelman new chairwoman and chief executive officer of the hugo new corporation received the group's carry kari edwards leadership award for her firms work redeveloping carney point a former industrial site into office and retail facilities. We'll have a complete wrap up of the in new jersey future smart growth awards presentation dinner in next week's c._r._a. News our podcast for now you can check out the winners at nj future dot dot r._r. Partner of miramar enterprises unveiled the second phase of modernisation plans for the historic wanamaker office building at one hundred ten square east and philadelphia talk this week. The wanamaker is a one point four million square foot office and retail property next to city hall in center city philadelphia. Mayor jim kenney welcomed participants to the celebration in the updated atrium on the ninth floor of the building outside the legendary crystal tea room one of the ways we can ensure that are stark sites remain in good condition is is by repurposing them for the needs of the community. That's exactly what rubinstein partners an m._r. Enterprises did with the prestigious wanamaker office building the sprawling space now as newly renovated floors office space and even a fitness center that means more people can utilize the building for years to come phase one which focuses on modernizing the wanamaker office buildings building's main lobby to improve its aesthetic appeal and pedestrian flow and create a more inviting entry experience was completed in april. We'll have a complete report on the redevelopment. In next week's podcast new jersey governor phil murphy red bank mayor pasqual de mena project partners and members of local community joined with executives from dan holz properties for ribbon cutting for dentists new headquarters in downtown red bank. That's in monmouth county new jersey governor murphy who lives in nearby naveh i think part of middletown township maiden appearance at the reception to praise dan halts for its investment in the economically challenged west side of red bank justin. Oh you've chosen rent bank. Is your home joe. Zindler the west side of a red bay on this love and back on this part of town. It's thea by the way not just the headquarters a rail which is which is sitting on an opportunity zone. We have one hundred sixty nine of them in the state so you jersey ours the first state to get them in new jersey. The new offices adjacent adjacent to dan holds properties the rail at red bank rail station a mixed use project. That's currently under construction that project will bring fifty-seven luxury residential angel units and more than six thousand square feet of retail space to downtown red bank. The rail at red bank station project and then halts properties new office are we're speaking to the firms renewed commitment to real estate investment in emerging markets and the large role the company will play in red banks continued growth in the coming years in connection action with the office opening dentists rebranded itself slightly. It was formerly known as denholm associates now. It's done holtz properties. The company says its new twelve thousand mm square foot office and corporate identity signals the next evolution for the firm. It's been a privately held fully integrated commercial real estate development and investment company company for nearly seventy years stephen. Dan halts the company's c._e._o. Spoke about his collaboration with red bank mayor squalid under mazing place a great place and difficult place the mayor's fantastic listener a great arbitrator of disputes and as you will say i just trying to do the right thing. I think we all try to do the right thing. Take one step at a time you things happen and mayor men who was anxious to remind anhalt set that is companies new office and new development project have put significant properties back on the red bank tax rolls walk around and people don't understand adult and some funds yuppie trade and when i look around this whole block at one the time when i was first on the council generated approximately four thousand dollars in acts revenue worthy it doesn't support even you want to use your properties and your public properties as a result of this will develop. This is a point two thousand dollars in tax revenue will the now. Let's take a quick look at some headlines. Mac cali realty corporation is urging stockholders to vote for all of the company's eleven director nominees as no surprise there. The company's annual meeting of stockholders is scheduled for june twelfth company says dissident investor bo streets actions made clear that it's attempting to who profit at the expense of all other kelly shareholders now we've asked mac kelly and bow street to appear on the news hour several times both have declined the discovery goverry labs a platform company formed by m._l._p. Ventures is going to redevelop collapses smithkline's one million square foot campus in upper merion pennsylvania outside outside philadelphia on what's called the mainline discovery labs will also redevelop the six hundred forty thousand square foot innovation at renaissance campus in nearby king of prussia discovery discovery calls it the largest co working ecosystem for healthcare life sciences and technology enabled companies in the country. We're going to get a tour and will report on the facility in in greater detail in a future episode of the sierra newshour j. l. L. completed the sale of the former mcdonalds. Global headquarters campus in oak brook illinois john paul de jewelry is buying it. The acre site includes the mcdonald's former campus office building hamburger university training facility and the hyatt branded and managed hotel l. The hyatt lodge just works fast growing h._r. Technology company is committing to a long term headquarters lease at fifty five water street in downtown manhattan. It's a building yeah. I know well. I worked there for standard and poor's until about two thousand in a transaction arranged by c._b._r._e. Just works as taking two hundred seventy thousand square feet on the twenty seventh floor at the three point eight million square foot office complex the companies relocating and more than doubling its office space. It'll move into fifty five water street in the second quarter of of twenty twenty and new coal to the netherlands based specialist in automated cold storage announced the opening of a ninety million dollar one hundred eighty thousand square foot facility the way up in burley idaho. It's one of the largest cold storage warehouses in the nation. It'll employ one hundred people new colds facility in burley which took twenty five thousand tons of steel to construct is using advanced conveyance and stacking technology and they're going to be loading and storing frozen food pallets for french fry maker mccain foods which recently underwent a two hundred million dollar expansion in burley mccain foods is new colds largest idaho customer. You're listening to the c. R. e. news hour from st broadcast news. Dot com twenty nineteen started as as many people expected with a somewhat slowed pace of transactions and investors a little bit wary of market volatility jones. Lang lasalle is come out with its. It's first quarter u._s. Investment outlook and it says transaction volumes decreased about two percent from the prior quarter to about ninety eight billion dollars as with every asset class showing declines except for multifamily we spoke with lauro ferone jails director of investor research about about the trends that he's seeing in the markets in the various sectors and some of the advice that he's giving to clients about positioning themselves for investments points for the rest of the year. Give me your sense of <hes> where investor sentiment is going and where you think that leads them to make decisions about to what they invest it well. How would characterize the investment landscape currently in the u._s. and investor sentiment is really things are moving in line with expectations. The transactions market is is performing. You know kind of congruent with what i think. Most market participants would have you know are sort of a expecting for for the current times oh last year transactions activity exceeded what we were initially initially forecasting and we saw more large-scale ends at the level transactions <hes> come to the forefront which overall like seventy going into two thousand nineteen and you know we have been saying all along. We expect to see about ten percents decrease in overall u._s. Trend actions <hes> volumes and as expected but first quarter of this year as the press release mentioned saw a bit of a decline <hes> you know in all of the sectors with the exception of the multifamily sector and again. That's one where you know. We've been thinking all along. It's going to be the the sector that will hold up the best in two thousand nineteen and also be the one that sees the most favorable year-over-year liquidity trap. What is it about multifamily. That's making it stand out from the others. The others earl showing these first quarter volume declines for multifamily. It's what goes back to the big theme of defensive strategies jeez right so investors wanna place capital where they're seeing the strongest amount of wrench growth than if you look at the multifamily sector and also the the industrial sector both know together they've been seeing about twice the pace of growth in and run at the national level as we're seeing seeing in the office sectors and that's something that investors you know. Investors are taking note of and really what is underpinning the multifamily league sector. It's not just you know that the sector is doing well in the current market environment that in this currently relatively robust economy but some of the changes that we're seeing impacting that sector and leading to greater investor sentiment are really also kind of a structural driver driver so not just cyclical one but also structural drivers industrial had been going very strongly for a very long time and rents. It's particularly in places like the northeast were <hes> rising to levels that hadn't been seen before <hes>. Where's that going and why was the transaction volume al-yaum in decline in in the first quarter industrial sector very much moved in line with expectations. It does appear on a european basis. This is to be a decline but because of the absence of some of these larger <hes> you know portfolio transactions and or entity level transactions so as it relates to the industrial space on the reason for a bit less activity throughout the year as a whole is because these large-scale deal there. There's not as much liquidity for those at the moment you know you're generally have only a handful of buyers they can take down a portfolio of they <hes> a billion dollars or more you know in kind of one on swoop and and those buyers have been particularly active last year also in the years before a lot of them are now kind of focusing on on acid managing their purchases as opposed to you know buying even more so they we are at the moment identifying which assets within those portfolios. Are you know perhaps non core and spinning off some smaller portfolios portfolios that are more regionally based. That's really where we're seeing the dutch of investor interest at the moment in the industrial sector. It's for these kind of regionally on line. You you know some smaller or folios onto not as much anymore with the mega or folios now. You're also seeing a flight to quality in the office. Sector tur- people are more interested. I guess in the class a. and then the trophy class a. properties what's behind that kind of a move trend we've been measuring for you know a couple of quarters now and it really just intensified even more in the first quarter of this year and then you know generally how i would characterize that it's a bit more of a risk averse behaviour right throughout two thousand sixteen and and seventeen office investors were casting a wider net. They were looking for more yield. They were going farther afield into secondary markets and this this coin with where investors feel you know we are in the cycle. They're really doubling down on assets that they can feel you know that they feel best weather weather on any softening the overall economy or softening and in the office market fundamentals so it's going into markets that are deemed to be more secure. It's an asset types within the office sector that are that are going to be the most liquid that i've proven throughout various economic onyx cycles over the past to be the most stable and the most liquid so as you look out over the entire investor market and the decisions that that investors are making how much of their decision making is being influenced by the tax cuts that were passed last year <hes> <hes> and how much of it's being influenced by the trade war that seems to have developed between the u._s. and some of our trading partners is any of that factor into the investor mr decision process well those two factors that you mentioned so the trade <hes> the trade centers in a tax cut. I mean those of course have avenue impact on the economic performance of the u._s. As a whole in terms of the the growth of g._d._p. Growth in employment and and kind of the you know the nets in or out migration of americans throughout different cities in the country so really where where we're seeing the impact is on the economic run as a whole bad of course then does trae translate into <hes> leasing activity and and property <hes> performance which which then does influence investor behavior but it's a little bit less of a direct linkage so we're we're generally not seeing investors saying they're altering their investment strategy. Today you know directly because of the trade tensions they would more so you know down the road be. I'm the product of any shift in the economic for duxbury as a whole and again. Even those two factors are are one that you know. We've been talking about for for a good bit of high right. Now you know even throughout two thousand in eighteen when transactions activity increase <hes> by a by a healthy clip again if something that everyone today kind of already expects and is contending ebbing with and it's not really a new course that has no catching from guard as and when you are providing your advice and counsel to j. a._l._l. Clients would are you telling them or the best things they can do to position themselves for the rest of this year it very important at the moment to think about your eventual unsual exit strategy when you trade out of the asset three to five years from now so we wanna think about you know what we want to correct african one rule the economic environment look like at that point <hes> what will kind of the business context look like for the the the industries that relate to the major tenant in the building. <hes> you know what type of international buyer interest. I mike you see three to five years from now. When you're trading out of the asset you know how deep that pool <hes> liquidity and of course those are all the factors that <hes> you know the impact <hes> kind of the pricing today and what someone is willing to pay a and again because it's more difficult today to have in the line of sight into what your exit will look like then it was perhaps earlier in the cycle so two or three years ago and that's the reason why live we are seeing a bit more though like typically from investors at the moment and expect to see as the year progresses lauro. Caroni is the director of investor research for jones lang lasalle in chicago. Laura thanks very much for joining us on the podcast today and the tallest skyscraper burn chicago in the past thirty years is under construction. It's a fifty five story class a plus building now under construction <unk> at one ten north wacker drive in downtown chicago. It's being built by the howard hughes corporation and riverside investment and development element and they've just signed the international law firm perkins cohee to a multi year lease for one hundred thousand square feet of office space in the building. It's the third lease announcement within two months for the building and we thought it might be worth talking to the developers and to the tenant about the decision making process just to get into one ten north wacker drive joining us to talk about the transaction are richard civic the chicago office managing partner for perkins cohee paul lane the central region president for the howard hughes corporation to mccaffrey the senior vice president of development for howard hughes. We're also joined by drew neiman executive vice president of riverside investment and development so we're talking about a multi year lease <hes> and it's a fairly big piece of space one hundred thousand square feet at one hundred ten north wacker drive <hes>. I'd guess i'd like to start with rick if i could <hes> you've been in the office or you've been in the market. I should say according to the press release nearly twenty years <hes> you've obviously grown the office. What made you decide to commit to this much space for this. Many years collapse of major office decisions are never easy. <hes> we were convinced that making the move to one ten north wacker <hes> what have a very positive impact on for office <hes> but for the firm as well as for the clients we represent <hes> we are confident wouldn't that <hes> this new space will allow us to better meet our short-term as well as our long-term growth needs in the chicago market. How far are are you moving. <hes> where is your current office. And how far away is it from the one north wacker. Our current office is located at once thirty one <hes> south dearborn borne which is roughly five or six blocks away from <hes> our new location in two thousand twenty one what kind of reaction you're getting from clients. Have you notified clients. Obviously the its its public <hes> news now. Have you notified the more today saying direction by our clients has been very a positive the reaction of our chicago office. <hes> has been <hes> also very positive and we're very excited to be moving to the new location location now. Let me turn to the howard hughes representatives that paul lane. Yes sir. Thank you hi paul. Thanks for being with us yeah and jim mccaffrey. Yes this great. Tell me a little bit about the building. <hes> it's a relatively new or it's new under construction <hes> and is going to be the tallest commercial building and in chicago built in the last thirty years absolutely first off. I just like to say that we're so proud to have our new customer <hes> with perkins <hes> you know understanding about their firm they had been <hes> name for seventeen years among fortune one hundred best companies to work for which is a phenomenally oppressive achievement. We're very pleased to have them as our newest customer <hes> at at one ten <hes> you know the building is outstanding quality. We think is absolutely in the best <hes> as you could guess we would think but the best location shen of <hes> any new building <hes> site in the city <hes> and we're we're really delivering something think very special. <hes> with one ten or wacker unbeatable location the architecture is stunning best in class amenities for all of our customers <hes> with great white and air <hes> on all sides of the building every floor longest substantial open park space along the river for our visitors and customers to enjoy <hes> in addition we're offering market leaning technology and efficient floor plates with fourteen corner offices <hes> per floor so all these things combine to make a <hes> great firms like perkins <hes> take notice and and we'd love the fact that they're going to join us at our one ten adventure now this <hes> this site is right on the river. What was there before war. And what kind of challenges did that present for you in getting the project off the ground jam. Do you wanna take that one sure there was an old existing five story building on the site and it occupied the entire site <hes> virtually from edge to edge so <hes> you know it was a demolition project. There was a little bit of discussion about the building that was in the place but but really there was more more outcry to take it down. Then there was to contemplate any kind of preservation <hes> we've dramatically increased the open open park space on the site and you know we're putting a first class <hes> building in a high rise befitting the hottest upmarket in chicago in the heart of the city whereas <hes> what was previously was a pretty significant underutilization of what many considered to be the best site site in the city now <hes> you've obviously <hes> the market has spoken because the building is sixty or seventy percent leased. I guess at this point so <hes> that says there was definitely demand for it. But what was it at the time that you decided to do this. You didn't have those leases in hand. What what was it about the chicago market the economy your outlook for the future that led you to conclude you could build this and then they would come <hes>. This is paul again <hes> because of the site where do g._p. Headquarters were and we felt that it was such an outstanding view the light and air air wacker being as wide as it is river <hes> being wide and bring into phenomenal reviews and then we were able to uh-huh partner with <hes> riverside with john o'donnell and then bring on drew neiman who's on the call and his his team <hes> and john donald team with the police graco in the rest of the team. We just felt it was <hes> the stars ars had line to have a a world class development team. <hes> it's the biggest building that howard hughes building you know howard hughes <hes> publicly traded <hes> almost six billion dollar market cap than we have properties from a wide to manhattan kind of everything in between wayne <hes> and we just felt that the momentum in the chicago market about two years ago really he picked up it seemed really dynamic and there it appeared that there would be a window for a major <hes> triple a statement quality the our <hes> for the type of tenants that <hes> like perkins and others you know bank of america that <hes> <hes> it would align with the timing of when they're lisa's expired and <hes> we were able to get the building started we had complete complete support from our board of directors and our senior leadership team and <hes> we were able to act extremely greenlee quickly. Get this out of the ground. It's i can just get on with paul. He's he's hit all the topics. This is drew <hes> kind of i've been in the market thirty thirty four years and <hes> we had to go back almost thirty five years to find the next best site that would be equivalent excellent this site at one time and that is literally just down the street which was the mercantile exchange at ten thirty south weapon which had the wacker aca joy to address which is the number one. This is address in chicago <hes> and then the other side was the river still he's got an instructive us his <hes> driver's boulevard and then <hes> still get tunnel site. We haven't had that kind of site and then put that will and we have to block and look at it from the metro stations <hes> in the west. It's you know it's kinda. One of those i hate to say i'm not doing the job. It's almost a can't miss strikes and it's it's proven i i <hes> you know in so so. We've you know they dialed up. <hes> jim gets and probably one of the best architects check in the country but cargo is done several very successful other office buildings on wacker drive so we brought jammed into the mix along with howard hughes and riverside and <hes> just the combination with the architecture the pure location of being very close to the trains every black guy down the last of long which is also the most important is tiny and we're delivering this building steve <hes> <hes> order next year actually october twenty twenty doors will open bank of america but the remainder of eh tenants in the building along with perkins and others <hes> with the you know dirtying in twenty twenty one no other new development will really that'd be opening still kind of a first or second quarter twenty twenty two always kinda got free run you know with not as much competition that that also helps do in terms of <hes> being successful and being received <hes> as we have been perspective tenets in chicago. This is paul lane again with our jus. I would be remiss in not saying we still have rate office office space to lease so this is a shameless plug but <hes> you know call early and often and we we'd love to <hes> get you into our program spoken like a man who has property the lease now. I have to ask the question <hes> in so many of the newer office buildings <hes> there are all always seem to be carving out space for one of the co working companies. Do you have any co working space in the building. We we actually do but when took a different tack <hes> we took <hes> probably the most well <hes> one which is regis <hes>. That's an and i say well they've been around around one thirty years or so so they'd seen the highs and lows in surviving done an excellent job but they deliver a lot of different products addicts within their own working area. <hes> and we chose was called <hes>. It's the highest end of delivery <hes>. It's more like a high end club. It's called number eighteen. <hes> you can google it. You'll be shocked to see it in stockholm. Sweden <hes> just open wine <hes> <hes> in the inbox cat <hes> it is a <hes>. It's co working. Meanwhile with constantine <hes> won't be through tubing's kind of more of a club and then to co working like you might find it like a we were so it's a it's a difference either in its appropriate or wacker drive fifty five story glass laugh a little more. I n wait. What's interesting is we've attract good. <hes> the fourth man is all mentioned fourteen corner officed tooth really well for the affirms financial firms consulting firms so our tenant roster is very very blue chip and <hes> and so all righty <hes> as a result of the success of the ducal have <hes>. I'm actually in space. <hes> in building for growth would see a lot of seventy inquiries in we're already goals goals in plastic for molly's users being hostile last <hes> because we know where that's going to be on the most in in the building four and smaller users that we like i in target amazingly <hes> sometimes we'll still up early because they want to get the right orientational on the floor. You know if they think of us something to work with the east or the west. Whatever <hes> they're pretty good where when the river <hes> but <hes> it's it's really been a serious that <hes> at least <hes> this'll be my fifty story tower and i would say that the <hes> <hes> the rapid pace of easy <hes> men. I'm here at the at the top of anything move. I've worked on. It's pretty exciting. Drew neiman is executive vice president of riverside investment and development also joining us on the call homeward. Jim mccaffrey senior vice president of development for the howard hughes corporation and his president central region president paul lane from howard hughes. We also heard from richard subject the chicago office managing partner for perkins co the law firm. That's taking a multi year hundred thousand square foot lease in and the brand new office tower being built by riverside and howard hughes one ten north wacker drive. You're listening to the c. r. e. news news hour. I'm steve <music> <music> <music> <music> <music> <music> in newark new jersey a development element. That's gotten a lot of positive attention is the teachers village a six building development in downtown newark. It contains two hundred three moderately priced. Apartments and nearly seventy percent of them are occupied by teachers. It also includes three schools with over a thousand students and eighteen in retail outlets. The development was funded by one hundred and fifty million dollar public private partnership with investments from goldman sachs urban an investment group and prudential financial and it's become a model for teacher and workforce housing developments in other cities run bait is the developer oliver who came up with the concept and rolled out the teachers village and he's expanding the concept to other cities throughout the northeast and midwest a couple of months ago. He announced an opportunity zone fund based on the teachers village concept. It's kicking off with a forty million dollar investment from david and leila leila center. That'll leverage over one hundred fifty million dollars of additional equity from high net worth and institutional investors. That's the purpose of opportunities zone. Tax incentives is to get high net worth and institutional investors to build in economically disadvantaged zones all across the country entry. We decided it would be worth catching up with ron to find out how this project in how the fund was going to develop over the next several months. What i wanted to do is just talk about this thing that you've got <hes> announced about <hes> moving the teachers village concept to the opportunities -tunities zone <hes> world yeah interestingly enough. <hes> teachers village was already rolling out in these distress census tracts because we were tracking other programs that follow the same census tracts right so we were already in opportunity zones. We've been building for over a decade in an opportunity down but they weren't called opportunities down still about a year ago right right when the federal legislation kicked in exactly so <hes> you had great success with the model in newark <hes> where are you going next and how do the opportunity zones make it easier easier better. Whatever <hes> you have the finished teachers village the first one in newark new jersey and a second one it opened in may in hartford connecticut and the third one is in chicago. The third one will be before the end of the year in chicago. <hes> and we have a site in miami and atlanta. We've identified for the next teachers villages and so <music>. I'm mean the the opportunities from our perspective do two things number one and probably the greatest short term mm impact we've had is it really <hes> really opened up the universe of investors that even talk to us about these types of projects right and so it's a much broader arena for us which is very exciting more for more people to talk about the you know the sort of complicated finance we need to do to accomplish these projects <hes> and and but more importantly it now provide provides rides inequities source that is generally on a i mean you know by definition has a longer term view at least ten years probably longer <hes> and that's really sort of very interesting for the types of projects we do because you know we are building in emerging urging markets and they do and we do have significant affordable workforce housing components and so it takes time to ramp up <hes> the economics economics of the project and so <hes> so i would say the the greatest benefit we see so far is that we have more investors to talk to and investors actor that are <hes> have long term <hes> horizon the whole concept it depends upon having some component of housing that's affordable notable or workforce housing and another component that would be at a market rate of a higher luxury kind of approaches that my understanding it correctly yeah. There's i mean you know you know. I don't know so we do build of high-quality so i think all of the residences we build our luxurious. We would say an dr you know specified to to sort of would you would envision as luke suri's market rate apartments <hes> so all of that is built to that standard parts but correct we generally have twenty percent affordable as what sort of traditionally known as affordable thirty percent workforce housing and all of that deed restricted and then fifty eighty percent market rate and so in that market rate piece <hes> you know you have you know opportunities <hes> four were you know economic development of the markets because we're generally a first mover <hes> so yeah <hes> and and and sort of fifty percent of the units indeed restricted although even in our market rate units we are <hes> targeting <hes> teachers in the <hes> we have units that are size and price to the upper end of the teacher salary curve and so we aim even only fifty fifty percent of the units of deed restricted we ain't to have at least seventy percent of our community be educators <hes> and then thirty percent be what we call lifelong learners ars or other professionals have to think that that kind of an approach ought to be welcomed with open arms in the communities that you're going into. We've found yes <hes>. We've found that you know a few things that communities understand the need for workforce housing <hes> <hes> the communities understand the tool that teachers villages beyond the housing. We have an educational component. That's not only the teachers but for the community as well and so oh they understand that with our educational components where you can have we will be offering credits towards an m._b._a. Masters in education masters in public policy all kinds of professional certification professional development programming. We've all kinds of remedial english math and reading for the community so we have value added programs for the teachers i live on site and the teachers in the municipality in general we've all kinds of entrepreneurial programs for educators <hes> and then really fun stuff like wine and gardening so really education is that not only is it housing but we have this educational component. That's really part of the lifestyle really part of the community benefit also oh so when we come into community getting audible housing workforce housing to getting this cool destination for with educational offering <hes> for all kinds of lifelong long learners and for the teachers and they understand ultimately that this is a tool to recruit and retain teachers to their neighborhood and so we generally being being received very openly an open arms in the communities recovery so now taking the concept into an an actual opportunity zone fund <hes> you got an initial forty million dollar investment <hes> there's other people looking into it. <hes> what reaction are you getting to the concept of a nosy fund for this purpose and where do you think it will go next so i think people are really honing joining in on the fact that this you know this is the type of project opportunity zones were designed to build so i think <hes> so i think that you know you know and sort of the social impact related sorta projects. I think as an initial look they're saying okay. These are the type of project object that the program is intended to build. Here's a developer who's been building in these communities <hes> and here's the developer with pipeline <hes> in these communities and so i think at the outset it sort of you know for them. It's sort of an interesting and we've gotten a lot of <hes> attention. Shen <hes> i think the other piece of this that's really interesting. Is that that we're finding. Is that <hes> we're point in the market work in the real estate market that people think that we may be approaching you know a top and interestingly enough. The investors are looking at this as sort of a counter cyclical play. You know it's really emerging market. <hes> it's real you know you got workforce and affordable title housing that you know teachers aren't going anywhere in a downturn right and their salaries is things stable <hes> and so. I think you know even and you just by virtue of where we are in the cycle. We're getting a lot more attention that we otherwise what up and i think there's opportunities programs. Just sort of introducing them to that concept tampa ron bait is the c._e._o. Of rb h group the developer of the highly regarded teachers village project in newark new jersey he starting teachers here's village opportunities zone fund and rolling out teachers village models in hartford connecticut and other cities throughout the country ron. Thanks for your time. The prophet sierra newshour from state broadcast news. We'll be back in a minute <music> sean. This is rabbi richard address join us for our podcast series from jewish sacred aging entitled entitled seekers of meeting will explore some of the issues and events that impact ourselves our families and our jewish world at large in light of the current revolution in eiji the seekers of meaning podcast airs every friday morning at eight a._m. At jewish sacred aging dot com <music> today. You can't wait for the media to cover your company. You have to be the media. Take advantage of the power of audio oh and video. It's the best way to showcase your expertise to perspective customers. Let the lubec in media companies handle the technical side. We're award winning audio audio and video producers. We can help you produce podcasts and video programs remotely or in our fully equipped studio in cherry hill visit being the media dot dot com for more information new york city's charter review commission recently came out with a series of proposals that have potentially dramatic effects exxon. How new york city handles zoning in development russ moskowitz is a partner at the law firm of stricken levion. He's an expert advisor to new york real estate developers investors and other entities about land use zoning and other matters. Tell us a little bit about how that got started and what does it mean for developers investors in <hes> in new york real estate near city council <hes> last year announced that they were going to do a wholesale look at a series of things <hes> that the new york city charter governs including financial governance in particular to the real estate community land use and zoning in new york city and what they are doing now now is in the middle of sort of a listening exercise where they created a commission made up of various leaders throughout the city though some from i'm the executive branch as well as from the legislative branch to determine what if any changes could be made to how land uses done in new york city if if there are any changes made it would be the most significant changes done since nineteen eighty nine when the whole <hes> charter commission in created after the <hes> the supreme court ruled that the board of estimate which was the governing body for new york city land use at the time was unconstitutional and what happened happened after nine hundred eighty nine was basically a lot of the powers got divvied up between the legislative branch and the executive branch so we're talking almost almost thirty years ago this would be the most significant changes since then <hes> if they were to be any significant changes made <hes> during this period of time so where we are now is there has been a series of proposals recommended by staff and now these proposals are being discussed publicly. There's been testimony. There's been <hes> experts given even by many people on the different <hes> fields that are impacted and now the commission is taking <hes> dish testimony throughout the city all the fiber <hes> and in particular talking <hes> in <hes> in each borough and holding hearings so that community in the and and citizens can come speak so what are some of the changes that they're looking at <hes> and how radical these changes is going to be well. Some of the changes <hes> well. It's it's still to be determined exactly clear what those changes will look like but it runs the spectrum. There are many people and i think this is somewhat symbolic of the of the mood of the city in terms of development right now but there are many <hes> and it's a small group but it's a very vocal group. They're they're advocating for no more whereas of right development so right now in new york city <hes> somewhat unique in that most a lot of other major cities don't really have as right development but as long as you're complying applying the underlying zoning and you are building to the barnum building code fire code safety code you can build a building there are many who are again minority but very vocal vocal or advocating that the city no longer allow for as the right development so that each project will be subject to scrutiny beyond just <hes> the department of buildings as but rather community input community involvement and perhaps even <hes> political <hes> <hes> involvement so that's one end of the spectrum one of the issues. That's come more recently that we've seen is the <hes> pushback on very very large m- multi mega million dollar <hes> luxury developments elements and <hes> they're <hes> not being <hes> subject to sufficient tax in the city to <hes> support <hes> services and there was a move to <hes> add some taxes on that is going to be part of this. That's that's not happening <hes> generally speaking through this <hes> commission commission but you're you're absolutely right steve. There is a general <hes> desire to limit the amount of tax benefits. Some of these mega luxury buildings are getting and in fact <hes> you're referring to in fact what's called the four twenty one a <hes> program and that program which i believe is created in the mid eighties has slowly. We slowly been watered down so to the extent now it is no longer available in certainly most of the central business districts. It's certainly is no longer available almost in manhattan certainly south of ninety sixth street and is really only available in in most of the outer boroughs but again only if there's any affordable housing housing component attached to it but the city has been doing recently is emphasizing that any kind of rezoning or any kind of increase in the residential component owning any project if someone were if our clients are seeking an increase through a rezoning or something along those lines that affordable housing is actually we <hes> not a <hes> <hes>. It's it's mandatory. It's actually call mandatory. Inclusionary housing is the program so similarly with the tax benefits. You must now begin the and to build affordable housing onsite as opposed to off site in order to obtain those benefits but these are all subject now as you know in albany there there is a there are nine bills that are currently being looked at by the state legislature all having to do with rent protection rent stabilization and the like so within the next next to two weeks or so before session ends. I think we'll find out exactly where those those laws will will stand. So what are the things that you're recommending to your your clients that they look at whether it's <hes> just keeping an eye on things were there are actual actions they can take to position themselves most effectively to deal with whatever might come out of these regulatory changes. We think best practice is to always have <hes> a project indeed is that's going to require any kind of community. <hes> city council input we think early <hes> early showing the project <hes> <hes> being strategic meeting with key community folks early on understanding <hes> every community has to file <hes> with the the city for budgetary reasons sort of their statement of needs. It's really important so what we do. Best practices is to read that statement and easy even before a project is as you know off of the off the drawing board to make sure we understand what is being looked at so for instance. We recently finished a rezoning in queens. We're one of the the statement the needs as as we identify was to <hes> school seats so we knew going in there was likely that part of the negotiation or part of the need from the community community was to be to create a school and in fact <hes> as part of our negotiations to secure all of approvals are client. <hes> is building coming to school with anna's facility <hes> for the neighborhood. Are there any other hints that you're getting of what other kinds of <hes> changes might be proposed stores. It's still a wait-and-see situation. It's still a bit of a wait and see the way. The process is set up now. The community is an advisory role in in this in this process and i think one of the again going to sort of both sides of the spectrum. I think one of the the goals for a lot of the community members is is to see if their if their role can be more binding rather than advisory so in other words even if a community board which is <hes> there are fifty nine community boards in new york city and they're appointed by the local council members and the borough president if they were to say no to project the project could still proceed within the process. It doesn't mean it's approved or disapproved. It just means you can continue to go. There's there's definitely been some rumblings about trying to secure more <hes> wait to the vote of the community board so therefore make it binding as opposed to just advisory <hes> i don't candy. I don't think that's going to change but certainly <hes> that is something that many many of the community and boards are looking to achieve and one of the one of the concerns that we in the industry would have with that. Is that the community boards vary in terms of <hes> sophistication sophistication in terms of resources and one of the one of the things. I think that could be improved. Support is giving more resources to community boards but you know community boards in more socioeconomic areas can't have much more sophisticated members and can be much more diligent and <hes> in in their negotiations or what they're asked for as opposed to areas where products are where perhaps they're not as sophisticated and therefore not necessarily are negotiating from sort of <hes> <hes> you know sort of an even playing field. Do you have a timeframe for when these changes might get introduced and then potentially when they might be enacted into law they will be the the the schedule is set up so that the proposes will come out in july and they will be on a referendum in november so they will do whatever they a are will happen this year and which <hes> you know which is even candy <hes> somewhat concerning depending on what these proposals look like like because it's an off election year and last year there were three <hes> recommendations for changes to the charter that were <hes> brought on by <hes> instituted by executive aided by the de blasio administration and all three past <hes> and of those who were voting last year in an election year so basically thirty percent of of those who voted voted for these charter proposals which means very few people ultimately decided these changes these are potentially much more significant can changes and in an election year that means even fewer people will be voting on it so <hes> well now come november <hes> exactly what it will mean and it will likely go into effect presumably there'll be a period of time <hes> but presumably will go into effect as of <hes> you know twenty twenty and in terms of the referendum it's and up and down vote on each of the proposals or all of them together strategically they will probably put it out as individuals because it may be a little harder than to <hes> <hes> to vote it all down so i think if i'm trying to push these through <hes> i'm probably doing them <hes> individually and so that people will have some choices but yes they could ultimately put it. Put it as as one slate but i think it's probably unlikely we'll do that. Rose moskowitz as a partner at the law firm strokes drew can levin. He joined us over skype from his office in new york city ross. Thanks very much for taking the time. Thanks so much for speaking and that'll wrap things up for this edition of the c._r._e. News hour you can send your comments suggestions and story ideas to steve at st broadcasts snooze dot com or you can leave an audio comment for us using the voicemail icon on the homepage at st broadcast news dot com. We're coming coming to you from studio a. At state road kiss news in cherry. Hill new jersey join us again for the next episode of the c. R. e. news our next friday at eight a._m. Eastern time at st broadcast news dot com or wherever you get your podcasts be sure to tell your friends and colleagues about our program and thanks as for listening. I'm steve and we'll see you out there on the net. Take good care.