What’s Old is New Again with GDC
- Aug 23, 2012
New York—GDC Properties, a Westchester, N.Y.-based real estate firm, recently completed an adaptive-reuse luxury community in DUMBO, Brooklyn, called 220 Water Street. MHN speaks with Adam Ginsburg, co-chairman of GDC Properties, about this development and why he feels there’s a benefit to rehabbing older commercial properties into residential communities.
MHN: Tell me about your adaptive reuse luxury property in DUMBO.
Ginsburg: It’s an old factory built in two stages—the first stage in the 1890s and the second stage in early 1900s. It was originally a shoe factory, and it still had a manufacturing use, in part, when we acquired it. The owner was the operator of a business, and he was relocating to something that was more modern and could better deal with the deliveries and processing that are involved with manufacturing these days. We bought the property back in 2005. The area was not landmarked, it was not zoned for residential, and we rode out the land marking process, the rezoning process, the financial crisis, and we were one of the first construction projects that managed to get a construction loan coming out the 2008 Lehman failure. We got into the ground in earnest in the summer of 2010 and delivered the project in about 16 months. We’ve been leasing up since early 2012, and we’re really on the verge of stabilization now. We’re north of 90 percent. It’s exciting for me to see something come to life—whatever you do, the building doesn’t really start to breathe until people move in, and so far we’ve got a diverse and interesting group of residents that are enjoying DUMBO and enjoying our building.
MHN: What attracted you to this property to begin with, especially since it wasn’t zoned for residential use?
Ginsburg: The building itself has great bones, it’s really characteristic of a 19th century manufacturing building, but it has some things that specifically made it work well for residential conversion. Often times, large manufacturing buildings have huge floor plates that make it difficult to fit apartments and provide light and air that’s required without carving in—at great expense and inconvenience—courtyards. This building already had an interior courtyard and a side yard that allowed for the more efficient conversion to residential. The other outstanding feature that the building offered was tremendous windows—the windows are 10 feet tall by 8 feet wide. On the older half of the building they all have an arch detail, which is really attractive. We’re a very design-oriented company. We’re founded by an architect, and we spend an awful lot of time on design.
We have a firm belief that good design brings good value, and it certainly makes us proud and happy to own and manage properties that look and work great. We knew we could make something special out of the building, and ultimately we decided to develop the property under the Federal Historic Tax Credit program. Not only did we meet the New York City landmark requirement, but also our design was fully vetted and reviewed and ultimately signed off on by the national park service. That impacted things like windows—the replacement windows that we put in are historically accurate—and as a result, the windows that are on the older half of the building don’t match the windows that are on the newer half of the building, because at the time the building was built they had different window patterns. There are details on the building that I think we would have preserved anyway, that the National Parks Service appreciated and required so that the building is historically accurate. And it has a sense of authenticity—something that is not so easily recreated today. I think in the DUMBO market in particular, people are attracted to living in that neighborhood place a high value on that sense of “real,” and the sense of history, of what the neighborhood used to be—that connection to the past. This building really was a great building, especially for that submarket.
MHN: Is that something you try to do frequently—do you always look for cool older buildings that you could adapt?
Ginsburg: We’re starting construction on a 1960s-era office building that we’re converting to a loft hotel in downtown Orlando, and that’s actually interesting for other reasons. That National Parks Service hasn’t considered too many 1960s vintage buildings as historic, but this particular building is iconic, and the architecture is very much of that time. And in a newer city like Orlando, that is its heritage. It took some convincing, but in that instance we were able to. Besides that, it’s no secret that the capital markets world has completely changed since 2008, and for a lot of developers you’re required to fund significantly more equity than we’re used to doing. The Historic Tax Credit program gives us a way to help offset some of the high costs of building, while we are able preserve something of historical note.
MHN: It’s nice to see such attention to detail.
Ginsburg: It goes not just to the physical things. We spend a tremendous amount of time laying out the interiors of apartments—how they flow and how they work, trying to make them as efficient as possible—focusing on details such as closet space and bathrooms, down to the quality of the hardware. Things that don’t necessarily show up readily when you look at a place. But I think over time people appreciate that there is a solid feeling of quality there. Ultimately our goal is to keep our customers happy for as long as possible. We want the people who are renting our apartments there for a long time. And even if they consider moving out for whatever reason, when they’re looking around I want them to feel like it’s going to be very hard for them to match all of the benefits and details that they’re finding in the apartments that we rent.