How Designers Are Helping Developers Finance New Construction

V Starr’s Sonya Haffey on the role of the interiors team in getting projects off the ground.

Sonya Haffey
Sonya Haffey

It takes a team to envision, build and lease up a new multifamily community. And in today’s challenging business environment the creative partners are stepping up earlier with visuals that convey exactly what the interiors will look like, including finishes and other details pertaining to units and amenity spaces. The ability to secure financing depends on it.

Savvy developers are discovering that bringing the entire team together at the beginning of the process has other benefits as well. When the interior design team is there at the beginning with access to plans and measurements, there will be no surprises later on and no need for costly do-overs. Multi-Housing News spoke to Sonya Haffey, principal of V Starr—a South Florida-based interior design firm established in 2002 by Venus Williams—about working with apartment developers and the business value the interiors team can bring to multifamily projects.

Tell us about the financing challenges investors face?

I am very interested in it. Venus as well. We speak to investors regularly and the more we learn, the better we can support our partners in getting their projects off the ground. I have been with Venus for 15 years running the company and we’ve always referred to our clients as partners. At the end of the day, even if the project is beautiful, if it doesn’t lease up or it goes over budget then we have not been successful. Our goal is always to partner with our client and create a successful project. We’ve had that idea for years. We always have encouraged developers to bring us on sooner than later.

What are the benefits of bringing you in early?

On a lot of our ground-up projects we are the ones selecting the exact desk that’s going to go in the management office of that multifamily leasing area. If we’re brought on later in the project and given a plan with walls that are already intact and the desk won’t fit in that room, then we have to go back and change the drawings. At that point the client’s soft costs just went up, so they need more financing or they need to shift things in their budgets. They probably had a contingency for it, but financing is really tight now. They’re more amenable to having us involved very early on to help narrow down those budgets and define them more. The preliminary budget is becoming very well defined so that when they go to financing it’s not a haphazard discussion. They have solid numbers. They know whether the project will pencil or not.

Do you typically partner with the same developers?

Of late, it has been happening; and because of the difficulties in finding the financing or the investors they understand that their deck and their informational packages need to be more robust. It’s not just data now. It used to be that you just punched the numbers. You had a proforma. You went into a bank or other lender with the data. If it looked good, they’d give you the money. Now, because that money is so tight, you have to first be able to show how it’s all going to work. You have to have visual presentations including the three-dimensional architecture, and they want to see the interiors as well. We’ve had several new clients coming to us to just create this investor package.

Research for the surroundings is done way in advance too. Some clients have always worked that way if they had their own money, and then they were just looking for a JV investor. But this has become the way that a lot of developers are going.

What does the package include?

The package would include information from the interior design team and the architect. You might have a landscape architect on board, and you might have branding involved. Each of those various components are shown within the package.

You also have the numbers. I’m going to purchase the property for this amount. I need to build it at the cost of this amount. You have a GC that you’re already working with to give you numbers based on imagery that the team is pulling together. It should cost about this amount, it should take this much time. These are the soft costs because I already have all of my structural architectural landscaped interiors. I already have them involved.

Depending on the client or project, the visual imagery is either a master plan or the layout of the community and then the imagery that goes along with those various buildings. It could be complete renderings of the exterior of a building and then a few visuals of what the interior could look like. Historically, developers have always gone in there with an exterior rendering, but now they’re getting more involved in interiors because that’s where the costs come in that didn’t always get considered at the beginning.

Does thinking about interiors earlier mean that value engineering is happening even earlier in the process?

Haffey: I think it always should have happened earlier. Now it’s being forced to. Now the interior design team is creating bid sets at the beginning of the project with some solid numbers to get that financing or to get investors involved. The best projects can happen if you have all the numbers, and your team knows how much money they have to spend. Then your team should be able to design to that. Some things are out of our control—obviously inflation, increases in cost and materials, pandemics, the availability of materials. Then you have to re-spec. But the more communication there is with your team upfront, the less value engineering you need to do.

Do you also work on the naming of the project and other marketing elements?

We have done that, yes. We’ve worked with branding agencies. We’re not creating the graphics or a logo. But we’ll work with the team to suggest the fonts or color story or the name for a community. That’s all part of the narrative of the building. We really enjoy that. It makes it a holistic project. It’s cohesive.

We completed a stunning community in Coral Springs with Mill Creek. That project is called Modera Coral Springs. Central South Florida hasn’t had a lot of multifamily construction in years. This was an amazing new development. It’s the first phase and a really beautiful project. We’ve had a lot of locals walking in saying, ‘Hey, is this a hotel?’

That was a huge compliment to us. The team did a wonderful job on the project. It’s really unique. There’s a nearby butterfly park that has over 200,000 types of butterflies from around the world. We took that as part of the storyline for the interior design.

What else would you like to say about the role of interior design in multifamily marketing?

Everything’s moving much more quickly. In the past, there might have been a leasing center across the street, which meant procuring that space and getting the leasing agents. Now visuals can help save on those costs and show prospects what the space will look like before construction is complete. Technology enables us to render various spaces and do a fly-through of the building so that investors or future residents can visually walk through the space.

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