Nightingale Village, a housing development project in Melbourne, Australia, is making a name for itself in the architecture industry for its innovative approach to sustainable housing. What sets Nightingale Village apart is the unique role of architects as developers, taking on not just the design but also the financial and construction aspects of the project.

The project was born out of a desire to provide affordable and environmentally sustainable housing that puts the needs of people and communities first. The developers believe that architects are uniquely positioned to drive the creation of socially and environmentally responsible housing models, given their training in design and attention to detail.

The development comprises seven multi-residential buildings, with a total of 209 apartments, all built with sustainable design features such as solar panels, rainwater harvesting, and green roofs. One of the key features of the development is that the apartments are sold at cost directly to owner-occupiers, cutting out the profit-driven middlemen that drive up housing prices.

Nightingale Village also places a strong emphasis on community spaces and facilities, such as a rooftop garden, shared laundry facilities, and a bike repair station. These spaces are designed to encourage social interaction and reduce the need for individual resources.

The project’s collaborative and innovative approach involves architects, developers, and community members working together to create a socially responsible and sustainable housing model. This is a departure from the traditional top-down approach to development, where developers dictate the design and function of buildings without input from the communities that they will serve.

By taking on the role of developers, architects in Nightingale Village are breaking down the boundaries between disciplines and redefining the traditional role of architects in the building process. They are demonstrating that architects have a crucial role to play in driving socially and environmentally responsible building practices and that they can act as a force for positive change in the housing industry.

The Nightingale Village project has received international recognition for its innovative approach to sustainable housing, and it has inspired similar projects in other cities around the world. The project serves as an excellent example of how architects can use their skills and expertise to create positive social and environmental outcomes, not just in the built environment but also in society as a whole.

In March 2023, Alexis Kalagas posted the article “Nightingale Village” at ArchitectureAU.com. See the full article at ArchitectureAU.com.

To see more about Drew, visit his website at: https://langarchitecture.com/

LinkedIn: https://www.linkedin.com/in/drew-lang…

Instagram: https://www.instagram.com/langarchite…

Urban Land’s Spring 2022 cover depicts a groundbreaking micro-housing project in the heart of downtown at 320 West Cedar Street in San Diego’s Little Italy. Designed, developed, owned, and managed by local architect Jonathan Segal, the 42-unit structure features 5 low-income apartments, two commercial retail spaces on the ground floor, and a distinctly separate single-family townhouse designed by Matthew, his son, that looks like a cube on the corner. And all on a 5,000-square-foot postage stamp size lot.

Like all of Segal’s projects—he now owns and rents 160 units in 5 buildings in and around San Diego—The Continental began as an experiment. This time, the architect cum developer (cum general contractor cum owner cum property manager) wanted to provide housing for people who worked downtown who didn’t have cars. The result: micro workforce houses at a price point of 65 percent of the average market rent. 

The architect’s penchant for experimentation has earned him dozens of top local, state, and national accolades from groups like the American Institute of Architects for residential and urban design. In mid-2020, he was awarded Master Architect for the City of San Diego, the youngest architect at then 59 to receive the honor in a field with 5 living recipients whose average age is 91. He was also awarded California State AIA’s 2021 Maybeck Award for career design work.

Urban Land spoke with Segal about The Continental and his innovative approach to projects that push the envelope of possibilities. 

What makes your firm stand out?

Segal: We don’t have any clients. We do our own work. We develop our own work. Each project that we do is sort of an experiment of what we think is pertinent to the time or germane to what is at issue at the time. 

Every time we do something, it’s rooted in architecture—it’s not from development. It’s not numbers. It’s not beans. It’s not density. It is: What is right and what are we trying to investigate as an urban architectural experiment?

The Continental was created because the housing downtown was expensive and we needed to create some kind of workforce housing so people who didn’t have cars and could not pay the extra freight for a parking space could have a unit and we wouldn’t have to build an underground parking garage, which would save us money. And that was the genesis of what we wanted to do. We wanted to provide urban workforce housing.

How was this project informed by the California housing crisis and what are the chief obstacles to getting this type of affordable project done?

Segal: This was our answer to the current housing affordability crisis. It’s the law of economics; it’s supply and demand. If there’s big demand, and little supply, things get expensive. There’s a whole bunch of supply and no demand, things get real cheap. 

I don’t think that the cities are allowing us to build quickly enough and easily enough and efficiently enough. They’re still getting in our way. They’re just not letting the gates open. It’s amazing to try and get something processed still. The fees are outrageous. I wish that we could work closely with cities to vet issues that would make it more efficient to process a building permit—clearly, that would be the key to the supply issue. 

What inspired the design of The Continental?

Segal: We wanted to develop a project with no parking. Its façade of balconies is patterned after a Lincoln Continental car grill. So if you look at the pattern of the late ‘50s Lincoln Continentals, the grills in front of the radiators have a pattern and that was the genesis of a pattern created with the decks. Everything is car-related for me. I collect ‘50s Italian cars and ‘50s and ‘60s American cars. There is an incredible design vocabulary in these cars that I build from.

When did it come online and who is your target renter?

Segal: It was two years ago in December 2019. What we’re trying to do is we’re trying to make it for the people who actually work in Little Italy to live in Little Italy. So if you’re a bartender and you walk three blocks to work, you don’t need to pay $400 for a car payment, another $200 for license and insurance, which is $700 a month. You can apply that to your lifestyle and/or your unit. And if I can make your unit $700 or $800 less expensive a month because it doesn’t have a parking space attached to it, there’s more savings. So it’s just all-around lifestyle savings for people that can’t afford expensive downtown. The rents for 37 of the units, which are 350 square feet or less, are $1,595 to $1,995 with affordable ones at about $900 a month.

Initially, when it came online, this was an experiment. This was sketchy, risky. They didn’t immediately rent up. We had to get our market of the people without the cars in and that was a tight, small market at the time; it’s grown significantly now. 

Social interaction is important in urban architecture, so we created an outdoor space at the top of the building, facing the ocean, facing the San Diego Bay. It then has its washer and dryer room connected to it so you can go up and be social, do your laundry, and then socialize with people in the building and have a fabulous view you couldn’t afford because you can only afford the unit on the second floor. So very democratic the way it enables all people to enjoy the best parts.

It is a very good product type to develop provided you don’t have to provide parking for it. And we’re seeing that all over San Diego now; we’re seeing a lot of developments. We do by example, and they copy. They’re everywhere now.

What makes your micro-housing design unique? 

Segal: Besides bringing a substantial reduction in parking, we brought large individual private outdoor living spaces to indoor living. That is extremely important in a small rental and also to capture the incredible San Diego weather. And we brought an efficient layout of living space. It’s 350 square feet or less and we have a big, huge sheet of glass at the end of it so the space feels like it’s larger whereas typical developers put a four-by-four or five-by-five window at the end, this is a full-blown, huge commercial-grade window system and a nice patio that’s eight by eight.

It’s only been two years but what kind of turnover are you seeing? 

Segal: Our tenants are staying. We were wondering about the units being so small if the turnover would be more than the larger complexes with the larger units and the answer is no, it’s basically the same. It’s crazy. It’s also important to remember Matthew developed a single-family residence and placed it over his Remedy Pharmacy. This living over the store row house is another typological pattern that needs to be understood in urban San Diego regardless of the unit type. We try to be a little less expensive, so we have less turnover because turnover is costly.

What are the sustainable elements of The Continental? 

Segal: No parking, no cars, more transit use, more walking, more healthy lifestyle. We have nominal parking, 9 parking spaces for 40 units. And if you’re walking and your neighbor’s not because your neighbor has a car and you’re walking a mile or two a day, you’re going to be healthier. Your being healthier is going to help with your longevity. It’s going to help the medical system—it’s on and on and on. Sustainability isn’t just using bamboo floors. You know, it’s an idea, not necessarily a product. People get that confused. High density is sustainable. Urban suburban sprawl is not. I don’t care if you’re making it out of recycled building paper—your whole house—it doesn’t matter. You’re burning fossil fuels to get from here to there.

I have the most efficient mechanical electrical units that you can buy. The building is made out of concrete so the maintenance on the building is almost nothing. I’m not painting it. I’m not staining it. I’m not doing any redos. The storefront is an expensive product that lasts longer than cheap builder/developer windows. Operable windows for cross ventilation so you don’t have to run an air conditioning system if you don’t want to. We have complete solar, as much as we can fit on the roof to offset the building expenses. We don’t have batteries.

How much does the solar offset the building expenses?

Segal: It covers about 80 replace of the building itself, not the units. We just don’t have enough physical real estate area up there. We would have put more but there’s the physical square footage of the buildable solar area limited us, which is pretty typical for urban housing. You’re limited by your roof.

Do the smaller units make the math work but also mean more management? 

Segal: Yes, smaller units allow us to charge less rent. And yes, you’re going to have a couple more units of turnover just by the mere fact that a percentage on a higher number is going to equate to more move-outs. So it is more labor-intensive or management intensive to manage smaller units. Without a doubt, there’s no question.

Does it have any green certifications such as LEED?

Segal: We don’t believe in that. We’d rather spend the money on the building making it green rather than spending ten grand on some certification expert to certify that we’ve done what we’re supposed to do.

This is also a mixed-use project… 

Segal: We have two retail spaces. Matthew actually lives above the store like my wife and I have done since 1989. He has a holistic pharmacy called Remedy with his wife and they’re raising their first child there, Oliver.

You mentioned another rowhouse development where you created fee simple ownership over 30 years ago…

Segal: I was trying to get a fee homeownership to downtown and I cut a 15,000 square foot property into 15-foot-wide lots. And then I created something I call ‘convertible housing.’ I’m going to give you the opportunity to have sort of an extra flex space that you can either have your home office in or you could rent out as a separate unit. And if you bought one of the homes that also came with a granny flat, there would be an additional commercial space under your row house. Physically you had your business below and your home above, no commute required. And you can also rent out those spaces for income. So if you get the down payment from your parents, effectively you can live out of it for free. And that was my first foray into developing fee simple living at home and working at home. That was ‘98 and we called the project Kettner Row.  

How do you replicate the best of The Continental in other projects?

Segal: We are now starting to incorporate micro-units as part of our product types. So the building next door, the high-rise—25 replace of the units are 350 square feet. 

What’s your next project?

Segal: It’s a high-rise that we’re currently getting ready to build next door to The Continental. And because we own contiguous properties next to each other, we are able to for a maximum building height basement of the Continental property and this basement allows us to have a glass wall on the property lines that we wouldn’t be able to otherwise have.

We bought a 50-by-100-foot lot and we developed a 73-unit, 23-story tower there on it. We have an automated parking system that goes with that, which is kind of a first of its kind in San Diego. Typically, a downtown building has got maybe six levels below grade of parking. So you drive into a hole and you spiral down six floors to a space that has bad air and maybe encounter unsavory people without any security.

Our system basically takes half the area of a conventional garage. Your car rolls into this little vestibule parking, and you get out and the machine comes and takes it away. And then it puts it on an elevator, and it stacks it on the eight-story parking area against the building where we don’t have windows. And we’re doing it on a non-buildable lot—50 by 100—in downtown San Diego, so there’s an experiment. There’s a demonstration. No one’s done it. So there’s an opportunity.

Where does the project stand now? 

Segal: We hope to break ground in September. We’re in the final process of getting our entitlements and our building permits. The cost of the building is around $31 million construction costs for 73 apartments. We’re giving away eight units to the city of San Diego free of charge for affordable housing. So the city doesn’t have to put a dime out and they’re getting these subsidized units that are about 35 percent on the dollar for rent so if it’s a $3,000 unit, it’s $1,000. If it’s a $4,000 unit, it’s $1,300. It creates a pretty good deal for everybody.

See more about Jonathan Segal {here}.

Also, check out the Context & Clarity show that I took part in earlier in 2021 {here}.

Mark R. LePage of EntreArchitect recently interviewed Developer Design/Build Architect Chris Krager from Austin, TX. Listen below to hear Chris’ story on how he began developing work right out of graduate school. See more about the EntreArchitect podcast at entrearchitect.com. See more about Chris at krdb.com.

Earlier this month, Sydney Franklin with AN interviewed Jared Della Valle of Alloy. Please find the original article at {archpaper.com} Find more information about Jared and his work with Alloy {here}, including my interview with Jared.

One of the most talked-about towers in Brooklyn is being designed—and built—at the hands of Alloy Development, the 13-year-old company responsible for residential structures like 185 Plymouth Street and One John Street in DUMBO. Led by CEO and founder Jared Della Valle and president AJ Pires, the firm has its sights set next on two projects along Flatbush Avenue in Boreum Hill—one of them which would become among the tallest skyscrapers in Brooklyn. These major developments are advancing their goal of shaping the real estate conversation in New York towards a more design- and community-centric outlook. They’re literally restructuring the skyline of the city’s most populous borough one project at a time, for better or for worse.

But getting the chance to take on an 860-foot-tall building like the one Alloy is putting up at 80 Flatbush didn’t just happen overnight. When Della Valle and Pires first started Alloy in 2006, there were hardly any companies sporting the title of architect-developer. Architects stayed in one lane and developers stayed in another, but that didn’t stop Alloy from stepping into unknown territory.

When the firm completed its distinctive 459 West 18th Street on the High Line, an 11-story residential structure with contrasting black-and-white, angular facade, both the design and real estate communities started to take notice. It wasn’t easy for Alloy to secure the millions of dollars needed for that in-demand site, but its success gave the company—then under the name Della Valle + Bernheimer—the confidence to do even bigger projects.

“We chose to pursue development as a way to have more agency over the process of design and to take control of the outcome,” said Della Valle. “When you can define program and priorities because you are taking on the risk and assembling all the capital, you get more design agency from every single perspective.”

In mid-2016 alongside co-developer Monadnock, Alloy completed One John Street, a glimmering, 12-story, 42-unit sustainable structure on the DUMBO waterfront just north of the Manhattan Bridge. The team considers it a major turning point for the company because of its integration into the local community. Though it’s a luxury residential property, it housed an outpost of the Brooklyn Children’s Museum for the last three years, and soon a Brooklyn Public Library annex will open in its stead.

From a design standpoint, One John Street was also a major step forward for Alloy. The firm teamed up with Brooklyn-based SITU Studio to create the one-of-a-kind sculptural panels made of concrete textured after fragments of fiberglass, pellets of beeswax, and salt granules that wrap the building’s lower core. In addition, because of the building’s noisy location next to an elevated train line, Alloy scaled up the windows and floors, decreasing the sun exposure at the same time.

Challenging themselves with innovation at One John Street also gave Della Valle and Pires the authority to cement their names alongside New York’s top developers, and its completion gave them a seat at the table. 

“I find it hysterical that now we are on the same panels as the very big guns of real estate in this city like Related and Extell who have existed for a long, long time,” said Della Valle. “On the architecture side, we’ve received a lot of admiration because we’ve made design a core value of our developments. We’re not interested in repeatability.”

Della Valle said that he’s met with plenty of famous architects who grill him on how Alloy makes it work. As a development company full of architects, he says the quality of the architecture and its impact on the community is most important. “We have to have economic output to achieve our work, but it’s not our reason for being.”

Alloy’s office is located at 20 Jay Street, a hotspot for many Brooklyn-based architecture firms because of the old building’s large floorplate. A small firm with just under 20 employees, the team has been based in the same space since 2001. On any given day, they’re only working on one or two projects at a time and don’t have to answer to any clients—ever. Things will continue to stay this way, according to Pires. 

“Jared and I both live 100 feet from the office,” he said. “We’ve gotten to know every single landowner in DUMBO and there’s an intimacy of knowledge here that, when you connect it back to the risk equation, is very valuable. We’ve often had a leg up on other developers in this neighborhood because we’ve been here for so long.” 

Alloy’s investment in DUMBO has long been clear and will continue with their upcoming three townhouses and 46 apartments at 168 Plymouth Street. Their proposal to take two, neighboring, century-old warehouses and turn them into condominiums was approved by the Landmarks Preservation Commission. It will be one of the last loft conversations in the area once finished next year. However, the East-River adjacent community isn’t the only part of Brooklyn that Pires and Della Valle aim to influence. 

80 and 100 Flatbush will be the duo’s first attempt at a true high-rise development. The mixed-use skyscraper at 80 Flatbush will feature 200 units of affordable housing while the proposed 482-foot-tall tower at 100 Flatbush will include a 700-seat elementary and high school (designed by ARO) for Khalil Gibran International Academy, the first English-Arabic public school in the United States. Two historic buildings will also be preserved on the site. Demolition began in October. 

To go after such a massive property—the block is spread across 61,000-square feet—Alloy had to work with the city’s Education Construction Fund in planning all that the future site would entail. It’s an overwhelmingly complex project, but Della Valle and Pires see it as another decisive moment in Alloy’s own development. They’ve been able to reach this point, Pires said, because of that innate attraction to risk and their constant reliability. 

“The exposure we’ve received on our past work gives us a lot of credibility,” he said. “We truly believe you have to be optimistic to be in development. The associated risk actually boosts our creativity and forces us to be more clever.” 

In summer 2019, I spoke with Architect & Developer Michael Kirchmann of GDSNY from New York, NY. See more information about GDSNY at gdsny.com. See more articles about Michael {here}.

Michael Kirchmann: My father was a contractor and real estate developer and my mother was an interior designer – so I grew up surrounded by art, architecture, design and real estate.. Growing up I spent a lot of time on building sites and in my father’s office. During summer holidays I would work in the offices of one of the architects he was employing. This was back when we did things the old-fashioned way with yellow tracing film and ammonia prints. But it gave me the bug. In South Africa, you go directly from high school to architecture school. What I like about the American system is that you do more general undergraduate studies, and then you specialize, whereas in South Africa, it is a seven-year architecture program with a narrow focus. You can’t steer too far from that particular course. When I was at the University of Cape Town, I already had an interest in development. You weren’t supposed to veer from the architectural program, but I actually completed a certificate in real estate development.

Right after graduating, I left South Africa for New York City. I had wanted to become a real estate developer but ended up getting a job offer from Skidmore, Owings & Merrill, and ended up spending more than 10 years there. That was a very interesting and fortuitous route. Shortly after I started at SOM, David Childs and Roger Duffy came to me. We had this great client in the 1990s who was taking the class A specification that he was building in New York and adapting that sophistication and that approach to Europe. His name was Howard Ronson. He was one of the biggest developers in New York City at the time. So off I go as a young architect to Paris. Howard, Roger Duffy, AlanRudikoff, and I sitting around the table and planning office developments in Europe. Over the course of the next ten years we built 23 class A office buildings, all around 700,000 to a million square feet each, in the UK, France, and Germany.

It was during this time that I realized that I had a penchant for development. Even though I was the architect at the table, I always had a genetic predisposition to both design and development. I very quickly was able to adapt to Howard’s language and was super interested from day one in the development side. Howard was a wealth of knowledge. Eventually, that table of four people grew into about 40 people. This relationship with Howard was really formative for me – that experience of working for SOM and working directly with a client of his caliber and also getting to work with the best consultants in the world was the best education.

MK: And so then in 2007, I woke up one day and thought about how I had worked for SOM for ten years and I was supposed to come over [to the United States] to become a real estate developer. Coincidentally at that time, somebody from NYU had invited me to present some lectures in their real estate masters program, which I really enjoyed. I saw the rest of the curriculum for the course and it had a lot to do with finance, which I was very interested in.

As much as we as architects love to convince ourselves that design plays a pivotal role in development, the reality is that development is a finance game. That’s why so many people in banking get into real estate development. You have some secret weapons if you come from the design side. But the truth of moving from architecture to development is that this is a finance game. First and foremost, it’s about debt, structure in a capital stack, the waterfall, where and how you make those returns, all that kind of stuff is paramount to even getting to the point of putting design pen to the page.

So, I saw what the students were doing at NYU and I said, “I need to do this too.” I was still teaching but became a student too. I finished my Masters in Real Estate in 2008, and by then I had started the company, GDSNY. At the same time, I had done some lectures at Harvard and the Architectural Association in London, and around 2010 I got an invitation from Columbia to teach in their Master of Science in Real Estate program. Columbia is a very special place; the campus is just so perfect and the architecture school so impressive.  I taught with Chris Cooper, who is now a partner at SOM. Chris and I ended up actually teaching that program for five years. That was a really fun thing where we were able to teach design within the development capsule.

James Petty: I feel like academia is a great pathway to starting a business and offsetting some of your own life expenses. I know there have been a number of prominent firms where the founders spent a bit of time teaching in those early years when money was tight. It helps ease the transition of being an employee of a firm to your own independence.

MK: Yeah, but it was also a way to surround yourself with an interesting and active bunch of people. The faculty were great and it was a great environment to exchange ideas and discussions.

So in 2007, we started the company with the intended purpose of being a developer. From the tail end of 2007 and going into 2008, we started looking for development deals. It didn’t take us very long to realize that 2008 was not the best time to be in development. One of the things I did when I left SOM was to make a commitment to myself to not poach any SOM clients. At the same time, there were some new relationships that I built that led to new projects, such as the Bahrain International Airport and 540 W28th Street. So luckily, we were able to fall back on to our original core competency, which is design. From 2008 to 2010, we actually ran a very successful architecture firm. We opened up an office in London and did a couple of towers in London, and a lot of really good stuff in the Middle East. For all intents and purposes, it was a good business, which we still keep today. We still have the architecture business.

JP: Where you work as an architect for a client?

MK: Yeah. We don’t do it much anymore, but we do have a few legacy clients whom we love. A good example of that is our low-income housing guys, L+M Development. Being involved in these projects is very important to me, because otherwise, we’re doing a lot of high-end condos and high-end boutique office buildings. It’s just a great counterpoint for us. We’ve designed and built around 4,000 affordable housing units.

We designed a project called Arverne View in the Far Rockaways. L+M closed the day after Hurricane Sandy. That project is on the beach and it was just destroyed, but they signed it anyway. We produced drawings very quickly, as time was very short and construction had to start almost immediately. It was remarkable to see how quickly and powerfully their company can operate. From there, we’ve done probably a dozen buildings with them. It has been a great relationship.

MK: Jump forward to where we are now. If you look through our work, we also like to have fun with design. We’re big automotive junkies, so we like to do some sort of car or motorcycle project from time to time. We like to do industrial design projects. We’ve done skateboards and surfboards. We’ve done some very big art pieces in New York and in London. This is where being trained as an architect and having an interest in design really influences the development work. We’re trying to overlap this idea that as designers, our developments are also influenced by a certain lifestyle. When you are a tenant or a purchaser of one of our properties, you become part of that design ethos. It brings a level of cool and keeps the interest high.

We learn a lot of things from doing smaller design projects. For example, we just completed designing and building a custom Land Rover Defender 90. We spent a lot of time customizing the seats with different types of stitching, and now those stitch patterns are appearing in our lobbies and VIP areas. We recently did a mini-documentary about the recent concrete pour at 1245 Broadway. Exploring all these mediums just makes the job fun as well.

JP: Absolutely.

MK: That’s why when you look at our website, you might wonder what we’re doing with art and design. We really are first and foremost design-led developers. That is what we hope differentiates us from the others who are out there in the industry. We aren’t the only ones though;  there are others clearly led by design, such as Alloy, Cary Tamarkin, DDG.

JP: Those are some of the larger players doing big work now in New York. Did you say that you started GDSNY as a development company?

MK: Yes.

JP: When you decided to start your own company, was it supposed to be a design-led development company?

MK: Always. Going back to the Howard Ronson days, we were participating by putting our design ideas on the table. He was participating by putting his development ideas on the table. I’m pretty sure he didn’t learn much from us. He already knew everything. But we learned a lot.

JP: That is a great opportunity.

MK: So going back to that table that we used to sit around in the 1990’s in Howard’s apartment. The other guy that was sitting next to Howard on his right-hand side was a guy named Alan Rudikoff.

JP: Who is now your partner.

MK: Yes. Alan was the guy who did all the finance and structuring. He did debt structuring, equity structuring, all of the financial modeling, that whole side of the business. He and I were the same age and over the course of many years, we kept in contact. He is a very successful developer and we just kept working together. In 2012, he moved back to the US from Sweden where he was living and working. He wanted to be back in New York. We thought this was the opportunity that we had been talking about for the previous 10 years and decided to do it.

By then I had already completed and sold 177 Franklin Street, our first office development in NYC. So Alan came over and we started looking at different platforms and various asset types. The project at 25-27 Mercer Street was the first one set up on this new platform that we started together.

JP: Those are condos, right?

MK: Yes. It was a great project for us.

JP: Is that when GDSNY took off?

MK: That put us into second gear. What kicked us off was 177 Franklin. 25 Mercer sold very well.

JP: Do you have your own in-house brokerage?

MK: No. I know some of the other companies do brokerage.

JP: I know DDG and Alloy do. I think most people are timid to do their own brokerage.

MK: We don’t do our own construction either. We hire general contractors. I just think that you have to know your own strengths and interests and there are aspects of this business that are better suited for someone else.

JP: I think a lot of architects see the broker’s fees and start to make assumptions about how little work is involved in that fee. They feel they are already making better marketing materials and selling the building to a client, why not try and sell it on the market and make those fees? I think when a lot of them actually get into it, they realize it actually is a real job that requires a lot of effort.

MK: We work with the best brokers and have great relationships. They have the infrastructure and the connections. They can pick up the phone and connect to real buyers. I think it’s futile to try and compete with that. It’s not about the marketing materials, as much as it is about buyer and leasing connections.

JP: What about acquisitions? How do you go about finding properties?

MK: We have an acquisition team in-house. They approach owners directly. We also have a great relationship with brokerage houses in the city. Our in-house team looks at nearly 200 properties per year.

JP: So they are constantly vetting through properties and looking for opportunities?

MK: Yes. If we are looking at 200 properties per year, we may be signing on two. It’s a hard slog. What is nice about it is that we keep a very careful database of all the properties. So very often we will look again at a project we looked at 10 years prior. We can go back and look up the drawings, photographs and pro formas. We keep everything well categorized. Our database has become very valuable to us because of that.

JP: It seems like a lot of the bigger actors in development around New York City are creating their own databases and sometimes even their own software explicitly for acquisition. It is one of the most important aspects of development. A lot of the money is made in the buy.

MK: All of it.

JP: If you fuck up there, there is really no way out.

MK: Exactly.

JP: With 1245 Broadway, why did you hire SOM to be the architect? Was it capacity within GDSNY?

MK: There were several reasons. SOM is one of the leading commercial architecture firms in the world. There’s a cachet to be coopted and cleverly incorporated into the projects. A part of it is my relationship with the firm. It is very strong and something that I value. You want to work with brilliant people, but you also want to work with people that you want to work with. On the investment side, sometimes it is actually easier to take a step to the side, and keep an arm’s length transaction by getting a third-party architect. That way there is no question who is the developer. A bank might say, “you’re getting a fee on this, and you’re getting a fee on that. Are you getting too much fee?” It does make things a lot cleaner from the structuring standpoint to have a separate architect. As we have grown, I still personally get very involved with the design. At this point, there are only so many hours in the day. I am still very involved in the decisions. It is always a close collaboration.

We are doing 1245 Broadway, 322 7th Avenue, aka 28&7, and we’re also now doing 118 10th Avenue. We just bought the Park Restaurant on 10th Avenue. We’re kind of between the Highline, the new Heatherwick project, and the Bjarke Ingels Project. Our project there is going to be really exciting. We’re in design right now. All total, we are building around a million square feet right now.

JP: With that amount of area you really need another firm that can take these on and produce the drawings.

MK: Especially in New York City where there are so many agencies involved. That is another reason we work with other architects as well.

JP: But you still want to continue designing?

MK: Oh yeah. We still continue to design. We just completed Dogpound LA, a gym project out there. We have a new car design coming out as well. We are still working with L+M Development and doing a few affordable and mixed-income projects with them. We are the design architects on our development at 500 W25th Street.

JP: That one is well under construction, right?

MK: Yes, it is almost completed. We have a model apartment that is opening at the end of October. It is going to be a beautiful project.

JP: I can only imagine some of their employees thinking, “I have to work for an architect now?” That sounds scary.

MK: One of the constant struggles with being an architect and a developer is that you want to make great buildings, but you have to constantly fight with the budget.

JP: There is a very real financial restraint that you actually have a position in.

MK: It is a lot like having two angels on your shoulder. “Just do the cantilever!” “Forget about those columns!”

JP: It’s easy.

MK: Ha!

JP: How does GDSNY finance the projects under development? Is it through private investment, bank loans, a mix?

MK: Some projects have a more traditional structure where we have equity and bring in some LP’s [Limited Partners] and then get bank debt.

JP: A construction loan?

MK: Exactly. Typically, you have a GP [Genereal Partner], LP, and debt.

JP: Are you always on the lookout for new partners either for current or future projects?

MK: We’re always looking for good partners. Having great partners is paramount to a successful development. It is kind of similar to when you are an architect, the most important thing you can have is a good client. As a developer, the most important thing you can have is a great capital stack. The reason I say capital stack is because debt falls into a certain category. You can have great debt providers, and you can have not so great debt providers.

JP: Are all of your residential projects condos that you sell, or have you developed rental units to hold for passive income?

MK: We have one for-sale condo project currently, which is 500 W25th Street. All of our other current projects are commercial office buildings that we will keep long term.

JP: That is definitely different than what most Architect & Developers are working on. Most of the others seem to focus strictly on residential development. You seem a lot more comfortable doing both.

MK: Sure. Both my and Alan’s experience has been predominantly commercial office. We have done some residential. I think there is definitely a healthy balance between residential and office. It is a good diversification. It is not that easy to do, because generally, architects and developers specialize in one or the other.

JP: How do you fund the architecture side of your business? These costs are generally seen upfront before you can capitalize on the development. Are you taking fees from financing or cash flowing this as you go along?

MK: Before or after we sign a deal?

JP: Before.

MK: Well basically that is our underwriting costs. We have to bear those costs ourselves. We hope to make up those costs. I was talking earlier about the 200 deals where we sign two. Factored into those calculations is the money that we need to try and recoup on the other 198. That is part of the risk that we take on as an underwriter.

JP: Some Architects & Developers will factor in their architecture fee to fund the practice. Others will use that as an equity position in a deal.

MK: It depends on who your debt provider is. Some have a problem with it but most of them don’t. As far as they’re concerned, it is a project cost. Whether you’re doing the architecture or somebody else is doing it, it is a consultant cost that needs to be paid. Somebody has to do that work.

JP: You mentioned that you have found some financial institutions start to question your business model of being the architect for your own developments.

MK: It wasn’t an issue on 500 W25th Street as we paid our own architectural costs. Generally speaking, you would include that as part of a deal. Let’s say something goes wrong and the bank has to foreclose on the property. There still needs to be some kind of budget in there for another architect to come in and complete the project.

JP: Do you feel like a business background or education is necessary for developing as an architect? Do you feel like a degree or certificate is beneficial?

MK: Yes. University provides you a vocabulary. It doesn’t really provide you with experience. When you come out of your studies, you come out with a vocabulary that enables you to conduct a serious conversation in your field. From there you can learn the craft. That is kind of a long way of saying you’re definitely going to save yourself a lot of time by giving yourself an intensified course at a college of some sort. But it’s not an absolute prerequisite. If you are able to get a job at a development company with whatever qualifications you have, you can definitely get back into that role. Chances are that as an architect, those entry points are in the management side. A lot of the time, depending on the size of the firm, that project management side will be somewhat divorced from the financial side.

JP: I have a lot of friends that were educated as an architect and went to work for a development company. Many of them are not exactly doing what they were hoping they might be doing in their daily tasks.

MK: NYU and Columbia compete with one another. Students have asked me over the years which one they should go to. Which one is better? My answer to that is always; if you come from a design background, go to NYU. NYU has a very strong financial program. That’s what I did. If you come from a banking background, and your deficiency is design or implementation, then I would recommend you go to Columbia.

JP: You recommend that they focus on learning what they aren’t already skilled at?

MK: It is asking yourself the question, “where are my deficiencies?” and then trying to fix them.

JP: Do you think partnering with someone who has had a focus on those deficiencies is critical to a successful practice? I think about Jared Della Valle at Alloy and Peter Guthrie at DDG. They each partnered with someone who had that experience in finance where they were perhaps a little deficient.

MK: In my particular instance, are you talking about my partner Alan?

JP: Yes.

MK: What is so great about our partnership is that we are both skilled at what we do. Together we form two very strong bookends. And together that is everything we need to do this job. There are things that he can do better than me and vice versa. But there is a very strong overlap in our knowledge base. He will always have the ability to do what I do to a certain extent. Likewise, I am comfortable with the financial side also. But he has exceptional proficiency in that. Bringing these two things together in a partnership is like a marriage. Finding the right partner, whether it is in business or in life, is paramount. One very important thing that I learned from Howard Ronson is that over the course of his 40 plus year career, he was able to understand every single aspect of development. We would go from a lawyers meeting, to a bank meeting, to a MEP meeting, to a dewatering meeting. He would have complete knowledge of all these disciplines to where nobody could pull one over on him. That has been a very clear goal of mine as well, to know every aspect of development and the process. That is why I wanted to do an NYU course. I recognized my deficiency on the financial side. That was a very important step.

JP: If you could go back, is there anything that you would have done differently?

MK: I don’t think there is anything I would have done differently. I think one thing I have learned is the importance of your network of investors and your network of debt. That is a key component.

JP: It is all about relationships.

MK: I was extremely fortunate to have had the opportunity to work for SOM all those years. I was extremely fortunate to have had the opportunity to work so closely with Howard. I was extremely fortunate to partner with Alan. At every stage, there has been something formative that has happened. It is hard to have regrets when you look at it like that.

JP: How big is your office now?

MK: We are about 20 people.

JP: How many of those people are architects versus employees from other backgrounds such as business?

MK: It is probably a third architects, a third business, and a third operations.

JP: For the architects that you hire, do they have backgrounds in real estate education such as the Real Estate Development Program at GSAPP? Are the architects interested in what you are doing beyond a design level?

MK:­ Sure. But we love to visualize our projects. We use a lot of in-house modeling and visualization. So that takes a certain kind of skill. Obviously, experience in the field. For the most part, operating in New York is a very complicated ecosystem of city agencies, neighbors, etc. Neighbors are a big part of development.

JP: Do you have any words of wisdom for younger folks still in college or just getting out on getting to your level of what you’re doing? Obviously, there are a million paths people can take in life.

MK: This is a difficult path to take, but I think exploring multiple paths at the same time can bring you to a point that you’re naturally meant to go towards. What I mean by that is if you’re an architect that is interested in graphic design, and you’re also interested in development or whatever else… you know there’s a limited number of hours in a day. People work nine to five, they get out, go home and watch TV, or go get a drink, or do whatever. You can spend a lot of those hours doing other things. You can have three jobs at one time. It sounds like a lot of work, which it is. By running three parallel paths and basically running multiple jobs, you’re educating yourself and putting yourself in multiple environments with more people and contacts. Suddenly those things start to merge. They come together. Unfortunately, there is no shortcut. It’s hard work. That is one way. You get one shot in life. There is a time limit to your valuable years as a productive professional. In my experience, the way we get to a point where everything comes together is to run multiple interests at one time and to watch as those interests merge together into something incredible.

For more on Michael Kirchmann, see the book Architect & Developer: A Guide to Self-Initiating Projects. See more articles about GDSNY {here}.