B8447 NYC Immersion Seminar: Real Estate Development

Professor Chris Mayer cm310@gsb.columbia.edu

TA: TBD

Friday 10:00 a.m. – 3:00 p.m. Dates TBD

Immersion Description This immersion course is designed to introduce students to the business of real estate development. Through a “tour” of different types of ground-up projects (rental housing, mixed-use development, and public-private development) in different locations (Long Island City, Brooklyn, Manhattan) under different business arrangements (family business, young entrepreneur, corporate, and joint-venture partnership), the course will provide a broad-based overview of the development business. Given the block of time in each session, we will be able to delve into many of the granular aspects of development that make this field of endeavor so demanding and so dynamic.

At every level—physical site, program and design, financial feasibility, construction, tenant marketability, project management—real estate development is a detailed business. It also is singular in its impact on the built environment. Two of the projects we will visit are designed to shape a new district, a “place” in the argot of planning and urban design. From this perspective, the aspirations of developers extend beyond the monetary, especially when it comes to large-scale development, and therein lies the excitement—and the creative drive and boldness to take on the significant risks of big complex projects.

Date TBD Value Creation in Development: An Entrepreneurial Perspective Firm Visit: Lonicera Partners, Principal, Demetrios Yatrakis ‘10 Site: 415 Red Hook Lane, Brooklyn

Date TBD Selecting Sites, Assessing Risks, and Determining Program Firm Visit: TF Cornerstone, Executive Vice-President Jeremy Shell ‘04 Site: East Coast, Long Island City

Date TBD Getting It Built: Design, Engineering, and Project Management Firm Visit: Related Companies, Senior Vice President, Philippe Visser ‘04 Site: Hudson Yards, Far West Midtown Manhattan

Date TBD Large-Scale Public-Private Development: Mixed Uses and Affordable Housing Firm Visit: Taconic Partners, Co-founder Paul Pariser ‘78; Chris Balestra

L+M Development Partners, Isaac Henderson The Prusik Group, Rohan Mehra

Site: Essex Crossing, Lower Manhattan

THIS IS THE SYLLABUS FROM 2018. READINGS AND SITE VISITS SUBJECT TO CONFIRMATION AND CHANGE

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B8447 NYC Immersion Seminar: Real Estate Development

Requirements and Grade Composition

Each session will consist of an in-class hour (Uris 140) followed by a site visit. There will be assigned

readings to prepare you for each session. I have selected these readings because they are interesting and informative. Through these readings, your immersion in the four development projects, and insights from my four decades of real estate development practice, it is my goal to help you understand why real estate development is so challenging and exciting.

Pre-Class Readings: See Files

Weekly Readings, Attendance, Participation (in-class/at site visit) and Short Assignments: 40%

The logic for the assignments is to have you come to the in-classroom hour having reviewed important information about the particular development project and the related topics to be covered for the session so you are prepared to ask questions and express viewpoints in the classroom before we leave for the project site, and during our project site visit. With that objective, there are:

Readings from which you will be required to pick a topic or issue of interest to you andwrite a short (minimum: 250 words; maximum: 300 words) viewpoint essay to besubmitted by NOON two days before the date of our in-classroom hour;

The requirement that you submit 3 questions, two of which must pertain to thedevelopment project, and the third question which must pertain to one of the sessiontopics listed for the session. These questions must be submitted for each weekly sessionon Canvas under the Quizzes section by NOON two days before the date of our in-classroom hour. From the topic-questions submitted I will select questions toincorporate into the in-classroom discussion, where appropriate. From thedevelopment project-specific questions I will select questions that will facilitate ourdiscussion with the project developer representatives.

Each week’s viewpoint essay and three questions count a combined 7 points. The distribution of those points is: Up to 3 points for the viewpoint essay; up to 2 points for the Session Topic question; and up to 1 point for each of the two development project questions. [4 Sessions x 7 = 28 points]

Because attendance and participation at both the in-class lecture and the project site visit are critical to the learning objectives of this Immersion course, attendance and participation count a combined total of 3 points––1 point for attendance at the in-class lecture; 1 point for attendance with the class at the development project site; and 1 point for participation (in-class and at project site). [4 Sessions x 3 = 12 points]

We will all have the best learning experience if you devote a couple of hours ahead of time to prepare for the class.

Final Assignment: 60%

Separate assignment sheet to be posted.

Due Date: May 6, 2019.

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B8447 NYC Immersion Seminar: Real Estate Development

Required Pre-Class Readings:

For an understanding of how the market has evolved since the 2008 correction:

Robin Finn, “Real Estate: Return to the Fray: Real Estate Developers Adopt New Approaches,” New York Times, October 25, 2013. Posted on Canvas.

Emily Nonko, “NYC Real Estate Experts Offer Their 2018 Predictions,” CityRealty, Dec 29, 2017. Posted on Canvas.

Patrick Sisson, “The 10 Top Emerging Trends That Will Shape Real Estate in 2019,” [ULI’s Annual Look at Year Ahead] Curbed, Dec 26, 2018. Posted on Canvas.

Patrick Sisson, “10 Challenges That Will Define Cities in 2019,” Curbed, Jan 2, 2019. Posted on Canvas.

Miriam Hall, “The #10YearChallenge: 5 NYC Neighborhoods That Have Transformed in The Last Decade,” Bisnow New York, Jan 23, 2019. Posted on Canvas

Stefanos Chen, “What’s Coming in New York Real Estate in 2019,” New York Times, Jan 4, 2019. Posted on Canvas.

Lynne B. Sagalyn, “A Short Note on Real Estate Development Financials,” CaseWorks, February 21, 2018. Posted on Canvas.

To really understand the path of development, it is essential to understand how cities grow and evolve. The following article provides a succinct statement of the basics of urban economics.

Mario Polèse, “Five Principles of Urban Economics: Things we know and things we don’t,” City Journal, Winter 2013. Posted on Canvas.

Suggested Reading - References:

Columbia Real Estate Association, Glossary of Terms. Posted on Canvas

Lynne B. Sagalyn, “Note on Income and Expense Analysis”. Posted on Canvas

New York City Department of City Planning, Zoning Handbook, Glossary of Planning and Zoning Terminology. Knowledge of these terms is important to your understanding of planning and zoning regulatory concepts that affect development in NYC. Posted on Canvas.

Selected Readings on Real Estate Developers (Compiled by Prof. Lynne Sagalyn). Posted on Canvas.

Peter Hendee Brown, How Real Estate Developers Think: Design, Profiles, and Community (Philadelphia: University of Pennsylvania Press, 2015). Posted on Canvas Also available as ebook available on Columbia University library website: http://site.ebrary.com.ezproxy.cul.columbia.edu/lib/columbia/detail.action?docID=11041575 (Selected passages from this book are listed in the required readings for Week #1 class)

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B8447 NYC Immersion Seminar: Real Estate Development

Informative Websites:

newyorkyimby.com [Yes In My Back Yard!]. See, Scott Beyer, http://www.forbes.com/sites/scottbeyer/2016/06/30/what-is-a-yimby/#6925685067b5

ny.curbed.com, see for example: NYC Development News https://ny.curbed.com/2018/2/5/16974964/willets-point-queens-citi-field-restart

ArchNewsNow.com, a daily newsletter of articles of interest to the design and development communities. See for example, https://archpaper.com/2017/01/pier-55-underside-proposal/#gallery-0-slide-0

Greenwich Village Society for Historic Preservation (GHSHP) tracks anything and everything having to do with landmarking and historic preservation in NYC. See for example, http://www.gvshp.org/_gvshp/index.htm

Highly Advised Museum Visits:

“New York at Its Core,” a permanent exhibit of what has made New York City New York, Museum of the City of New York, 1220 Fifth Avenue at 103rd Street. See Sam Roberts, “This Museum Show Explains Why New York Is So New Yorky,” New York Times, November 17, 2016; https://www.nytimes.com/2016/11/18/arts/design/this-museum-show-explains-why-new-york-is-so-new-yorky.html .

Skyscraper Museum (skyscraper.org), an architectural museum located in Battery Park City (39 Battery Place), founded in 1996. Current Exhibition is “SKYLINE: Exhibition Devoted to the Invention and Evolution of Manhattan’s Skyline, Past, Present and Future.” (Through April 2019) Also see a review of the museum’s exhibit “Sky High and the Logic of Luxury,” by Martin Filler, “New York: Conspicuous Construction,” New York Review of Books, April 2, 2015. http://www.nybooks.com/articles/2015/04/02/new-york-conspicuous-construction/

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B8447 NYC Immersion Seminar: Real Estate Development

March 29 Value Creation in Development: An Entrepreneurial Perspective Firm Visit: Lonicera Partners, Demetrios Yatrakis ‘10

Quinlan Development Group, John Evans Site: 415 Red Hook Lane, Brooklyn

Topics to cover:

Overview of the course Development as value creation The path of a young, start-out developer Raising capital for the first projects

ASSIGNMENT: (1) Read all the preparatory material; (2) compose three questions (two development project-specific; one topic-specific) and submit them on Canvas under the Quizzes section by NOON on Wednesday (March 27); (3) submit on Canvas your viewpoint essay on a topic or issue from the readings by NOON on Wednesday (March 27). Bring inquisitiveness and enthusiasm to our in-classroom hour and the project site visit.

PREPARATORY READINGS:

1. On development and developers:

Peter Hendee Brown, How Real Estate Developers Think: Design, Profiles, and Community(Philadelphia: University of Pennsylvania Press, 2015), pages 1-15, 17-37. Posted on Canvas.Also available as ebook on Columbia University library website:http://site.ebrary.com.ezproxy.cul.columbia.edu/lib/columbia/detail.action?docID=11041575

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B8447 NYC Immersion Seminar: Real Estate Development

2. On land assembly and entitlements:

David L. Huprich, “The Mechanics of Land Assembly,” Chapter 6 in Brian W. Blaesser and Thomas P. Cody, Editors, Redevelopment: Planning, Law, and Project Implementation ((ABA Publishing: 2008). Posted on Canvas.

Brian W. Blaesser and Thomas P. Cody, “Entitlement Processes in Redevelopment,” Chapter 11 in Brian W. Blaesser and Thomas P. Cody, Editors, Redevelopment: Planning, Law, and Project Implementation ((ABA Publishing: 2008). Posted on Canvas.

3. On the rise of downtowns and the Brooklyn market: “Why (Some) Downtowns Are Back,” City Journal, Winter 2014. Posted on Canvas.

Ari Harkov, “Brooklyn’s growing global ‘brand’ is boosting the borough’s real estate values,”

Daily News, March 10, 2016. Posted on Canvas. Charles V. Bagli, “’The Market Is Saturated’” Brooklyn’s Rental Boom May Turn into a Glut,” New

York Times, August 29, 2016. Posted on Canvas. Daniel Bukszpan, “ As New York’s real estate market cools, Brooklyn neighborhoods stay hot for

buyers and renters,” (CNBC: Jan 26, 2019). Posted on Canvas.

4. Information about the Brooklyn project we are visiting:

Quinlan Development Group, LLC and Lonicera Partners, 117-127 Livingston Street Predevelopment Loan Request, November 2013, selected pages. Posted on Canvas. Stephen Smith, “21-Story Tower Planned For Downtown Brooklyn: Permits Filed At 117 Livingston Street,” New York YIMBY, September 11, 2014 Posted on Canvas. Amy Pitt, “One of Downtown Brooklyn’s Myriad Rental Buildings Wraps Up,” Curbed, Aug 24, 2017. Posted on Canvas. Carter Horsley, “The Lane, 415 Red Hook Lane,” CityRealty (Building Review) (2019). Posted on Canvas.

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B8447 NYC Immersion Seminar: Real Estate Development

April 12 Selecting Sites, Assessing Risks, and Determining Program Firm Visit: TF Cornerstone, Jeremy Shell ‘04 Site: East Coast, Long Island City

Topics to cover:

Site acquisition and control Long Island City as a hub of development activity

ASSIGNMENT: (1) Read all the preparatory material; (2) compose three questions (two development project-specific; one topic-specific) and submit them on Canvas under the Quizzes section by NOON on Wednesday (April 10) ; (3) submit on Canvas your viewpoint essay on a topic or issue from the readings by NOON on Wednesday (April 10) Bring inquisitiveness and enthusiasm to our in-classroom hour and the project site visit.

PREPARATORY READINGS:

1. On the development process: Peter Hendee Brown, How Real Estate Developers Think: Design, Profiles, and Community

(Philadelphia: University of Pennsylvania Press, 2015), pages 61-73. Posted on Canvas. Also available as ebook available on Columbia University library website:

http://site.ebrary.com.ezproxy.cul.columbia.edu/lib/columbia/detail.action?docID=11041575

2. On choosing a site: Excerpts from Mike E. Miles et al. Real Estate Development Principles and Process (Washington,

D.C. ULI, 2007), 5 pages. Posted on Canvas.

3. On planning for LIC: LIC Partnership, “LIC Comprehensive Plan”, Executive Summary. Posted on Canvas.

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B8447 NYC Immersion Seminar: Real Estate Development

4. On the current state of development activity in LIC: LIC Real Estate Snapshot Vitali Ogrodnikov, “Long Island City Rises: Tracking 2016 Skyline Progress and Looking Ahead,” New York YIMBY, September 30, 2016. Posted on Canvas.

LIC Neighborhood Snapshot (June 2018). Posted on Canvas. The Editorial Board, “Amazon Escapes from New York,” WSJ (Feb. 14, 2019). Posted on Canvas. Bill Parry, “LIC Partnership tremendously disappointed with Amazon’s decision — but optimistic for future,” (LIC Partnership: February 18, 2019). Posted on Canvas.

LIC Partnership, Development Map (2019): https://longislandcityqueens.com/do-business/economic-development/development-lic/developmentmap/

5. TF Cornerstone—read about the company https://tfc.com

http://tfc.com/about

ADDITIONAL MATERIAL AVAILABLE ON CANVAS: Site Acquisition, Sample Definitions. Posted on Canvas.

Packet of news articles on LIC from the New York Times. Posted on Canvas.

Additional materials on LIC - Links provided by our host, Jeremy Shell ’04. Posted on Canvas.

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B8447 NYC Immersion Seminar: Real Estate Development April 26 Getting It Built: Design, Engineering, and Project Management Firm Visit: Related Companies, Philippe Visser ‘04 Site: Hudson Yards, Far West Midtown Manhattan

Topics to cover: Mixed-use megaprojects under a master developer Complexity of construction and its team management Platform development over an operative rail yard

ASSIGNMENT: (1) Read all the preparatory material; (2) compose three questions (two development project-specific; one topic-specific) and submit them on Canvas under the Quizzes section by NOON on Wednesday (April 24) ; (3) submit on Canvas your viewpoint essay on a topic or issue from the readings by NOON on Wednesday (April 24). Bring inquisitiveness and enthusiasm to our in-classroom hour and the project site visit.

PREPARATORY READINGS:

1. On construction and engineering of high-rise buildings: Joe Morgenstern, “City Perils: The Fifty-Nine-Story Crisis,” The New Yorker, May 29, 1995.

Posted on Canvas. If that article made you want to read another, see: David Owen, “Department of Architecture:

The Anti-Gravity Men: Cecil Balmond and the structural engineers of Arup,” New Yorker, June 25, 2007.