Conference Tackled the Changes That Lie Ahead For Hudson Valley Commercial Real Estate Market
John Jordan | April 2018
POUGHKEEPSIE—A panel of Hudson Valley “real estate visionaries” detailed the many demographic, technological and economic changes that are taking place now and are on the horizon for the commercial real estate industry in the region at a conference on April 12 staged by the Hudson Valley Economic Development Corp. and the Hudson Gateway Association of Realtors.
The presentation entitled “Hudson Valley Visionaries: A Look into the Future of Commercial Real Estate” was held at the Nelly Goletti Theatre at Marist College. The program tackled such issues as emerging technologies, evolving tenant need and wants, how communities can attract new business and development and what future office space might look like.
Laurence P. Gottlieb, president and CEO of the Hudson Valley Economic Development Corp. and Richard Haggerty, CEO of the Hudson Gateway Association of Realtors, moderated the panel discussion. The panel featured an array of corporate and real estate development and brokerage professionals that included: Seth Pinsky, executive vice president, fund manager, Metro Emerging Markets and public affairs director, RXR Realty; Robert Weisz, CEO, RPW Group; Sarah Jones-Maturo, president, RM Friedland; Luiz Aragon, development commissioner, City of New Rochelle; Tim Smith, regional vice president, Crown Castle Fiber; Anthony Gioffre III, partner and chair of land use, zoning and development group, Cuddy & Feder LLP, and Frank Cuevas, vice president, real estate strategy & operations, IBM.
Weisz, who successfully redeveloped the former General Foods/Philip Morris headquarters building in Rye Brook, said the Hudson Valley commercial real estate market is definitely changing. “I think that when we look back many years from now, we are going to see this stage of the economy, particularly from a real estate point of view, as one of the key transitions that changed the environment dramatically,” he said.
One significant change in the past few years has been the modification of the tried and true real estate axiom, “Location, location, location” to “Location, service, service.” Weisz said that in years to come the saying might just be, “Service, service, service.”
While location is still an important consideration of any real estate deal, Weisz said that most companies are now employing a strategy of being located where they can access the best talent.
Cuddy & Feder’s Gioffre said that real estate development is definitely changing. “The only way to make sense out of change is to plunge into it, to move with it and to dance with it,” he advised.
He noted that technology can be a “disruptor” and specifically pointed to social media as a means for a small group of opponents to look to derail a real estate development project in the approval process. However, he said not all technological changes on the horizon are negative, such as autonomous vehicles, the future headquarters location of Amazon, Uber, etc. He concluded that local governments, the general public, as well as real estate developers, need to be ready to adapt to these changes that are coming fast.
Like others on the panel, Gioffre said that municipalities must update their comprehensive plans and not engage in band-aid changes to its zoning laws that are mostly instituted in response to a single project before them.
Gioffre said that local governments must look to make the necessary changes to transform their commercial districts into live, work, play destinations that are attractive to millennials and other key demographics.
RXR’s Pinsky discussed his firm’s development projects in New Rochelle, Yonkers and on Long Island and offered particular praise to officials with the City of New Rochelle that instituted significant changes to its downtown zoning that has led to expedited approvals for major redevelopment projects.
For municipalities to succeed in attracting business and the highly sought-after millennial demographic. “The key is to create, walkable, transit-accessible neighborhoods with character,” Pinsky said. The mix of uses in these neighborhoods should be designed to retain the empty-nester population, which is an important talent base for many companies, as well as attract millennials and young professionals, he added.
“The key to success is maintaining and growing the talent base and if you do that the companies will follow,” Pinksy related.
IBM’s Cuevas said the real estate industry has to date not really evolved or changed dramatically in response to the technological disruptions already taking place both here in the U.S. and across the globe. He believes that municipalities and developers need to create a much different suburban lifestyle that attracts and appeals to the new generation.
“Technology is going to impact everything from smart cities, smart communities, smart buildings,” he said. “Landlords are going to have to change how they operate buildings and facilities. Developers have to change the way they think about developing a property in many different respects.”
Cuevas and others differed on whether companies continue to want open concepts or now require more of a hybrid design that incorporates some enclosed conventional offices with collaborative open space.
“I think the real estate industry is about to see a tremendous amount of change over the next 10 years,” he predicted.
HGAR’s Haggerty said the panel provided a great deal of perspective and insights into the changes that are coming in the real estate sector. “We have been seeing change. It seems like it’s happening quickly, but it’s nothing like what I anticipate over the next five years. We are really going to see a lot of change and we can’t afford to debate forever. We have got to adapt and we have got to act,” he said.