Q&A with Gabe Pasquale, SVP of Sales and Marketing at Landsea
- Aug 29, 2016
Irvine, Calif.— It’s been a couple of years since Landsea, one of China’s top 100 real estate companies, entered the U.S. market with plans to purchase and develop properties in gateway cities. Avora in Weehawken, N.J., and Pierce Boston in Massachusetts’ capital city are just two of the company’s projects currently underway, with several others taking shape on the West Coast.
Gabe Pasquale, senior vice president of sales and marketing at Landsea, discussed the company’s expansion to the U.S., the challenges in the market and the modern amenities it provides for its residents.
MHN: Landsea’s expansion to the U.S. happened roughly three years ago. What are the company’s operations here focused on?
Pasquale: Our strategy is to focus on gateway cities in the U.S. such as New York, the New York metropolitan market, New Jersey, Boston, San Francisco and the L.A. market area. So basically, the larger gateway cities that have both a strong suburban as well as a vibrant urban marketplace.
MHN: Have you reached the goals that you set? I saw an announcement saying that Landsea would invest $1 billion in the U.S. market. Have you reached or exceeded that threshold?
Pasquale: I don’t believe we’ve exceeded it, but we have been very, very successful in acquiring Class A residential assets in superior, prime locations, and therefore, highly desirable for the various target markets that we set out to reach.
MHN: Are there any particular development projects you would like to zero in on?
Pasquale: I think one that is very iconic for the company is the project that we are about to launch. It is based in Weehawken, N.J., and is set right across from the island of Manhattan. It’s an eight-minute ferry ride. The name of the project is Avora, and it’s part of a master-planned community called Port Imperial. Once complete, Port Imperial will comprise roughly 6,500 residential homes, which will include luxury rentals, for-sale condominiums, a mixed-use hotel and retail. We broke ground in January and we are going to be launching sales in the very early part of September. Avora is a 184-unit luxury condominium building with 11 stories, more than 35,000 square feet of world-class amenity space and approximately 6,000 square feet of retail. It’s a building of approximately 255 million square feet.
MHN: Do you have a completion date for Avora?
Pasquale: We plan to complete the building in 2018.
MHN: Are your customers foreigners? I read that 30 percent of Landsea’s customers are Chinese.
Pasquale: That will vary by market, but typically we have a very strong international sales practice, obviously, because of Landsea’s expertise and successful reputation in China, and we generally target somewhere between 25 and 30 percent of the homes in any of our communities to go out to international purchasers.
MHN: What other developments are you planning?
Pasquale: We’ve got several on the West Coast. Sunnyvale, Calif.; Portola, Calif. We have a large master plan that we just purchased that is almost adjacent to Google’s headquarters in Northern California, and then there are several other projects that are under the entitlement process, but I cannot specifically talk about them.
MHN: How do you see the residential market in the U.S. right now?
Pasquale: I think it’s very interesting. Obviously, interest rates are at record lows; the economy is sluggish, especially in the urban markets; there seems to be a very strong desire for empty nesters to infiltrate that marketplace, so these are generally well-heeled, experienced home purchasers. They have owned several homes before, and that is one of our core target markets for our urban projects, in addition to couples of young professionals who are looking to purchase a first home or move up to a larger home and purchase it in an area that is a safe, grown community with great schools. That is also an important target market for us, and in addition to that, it could be for our international purchaser.
MHN: How do you think things will change in the coming years?
Pasquale: I think there will be a continued, resurgent and strong growth in urban transit-oriented marketplaces. Today’s younger families want to commute less or they’re willing to purchase smaller square footage as a sacrifice to spend more time with their loved ones and family members. I think that is a trend that we will continue to see grow, and I think there’s a continued desire for a seamless lifestyle and maintenance-free living.
MHN: Are there smaller units that are appealing for these customers? Do you take into consideration the fact that they are willing to compromise on size?
Pasquale: Yes, definitely. As an example, in the Avora project the average square footage is roughly 1,500 square feet. Many of the buyers would be empty nesters coming from larger homes. They are selling homes that are 3,000 to 4,000 square feet, so they’re scaling down, but also they have another home that is a vacation destination or in a warmer climate. Although it’s a primary residence and it’s a smaller square footage, typically they do have multiple homes.
MHN: What can you tell us about the challenges in the market right now?
Pasquale: One of the challenges is with construction financing, specifically for company projects. The challenge that all developers are facing is that Wall Street and the commercial banks seem to be very guarded, and I guess many have fulfilled their pipeline or their appetite for construction financing. As a developer, this is one of the biggest challenges. The other challenge is the cost of materials and cost of labor. Especially in urban markets, there is such a deep pipeline of projects that are still being built out, therefore unit capital is more costly and, to some degree, limited because everyone’s working.
MHN: How would you describe demand for luxury units?
Pasquale: Demand for mid-level luxury in both suburban and urban transit-oriented markets still remains strong. The marketplace for uber-luxury (prices above $1,500 per square foot) has become more discretionary and not as robust or deep as it was 24 months ago. It is not a market we are specifically focused on. We would be more focused on mid-level luxury.
MHN: Are there any modern amenities you are including in your projects? For example, to meet the needs of resident shopping online.
Pasquale: In our Avora project, we have a walk-in refrigerator so that the concierge can receive packaged grocery goods and put them in the refrigerator and have them ready for pick-up when a resident comes home from work. We call it an “at home” service or “while you are away” service. We provide a variety of those services. In all of the urban scenarios, everyone does most of their shopping online. A distribution system for management of the packages that are received is absolutely paramount, and we do have a receiving area and a room that residents can access on a daily basis, once they are notified by the computer system that is Wi-Fi based. It sends you a text message on your mobile device indicating that you received a package, so you know to stop in.
MHN: What are Landsea’s long-term objectives?
Pasquale: Our long-term objective is to further expand and develop our brand and grow in the U.S. The company is very focused on developing first-class communities that are amenity rich and offer a higher level of quality living, in addition to being environmentally sustainable and having a lot of green living attributes.