Multifamily Boom Takes Hold in NYC Suburbs
John Jordan | March 8, 2017
TARRYTOWN—The suburbs surrounding New York City, including Westchester County, are now in the throes of a multifamily development boom as major investors flock to downtown districts in White Plains, New Rochelle, Yonkers and Mount Vernon to build transit-oriented communities.
A panel of real estate investors at an event staged by The Business Council of Westchester on March 7th discussed the growing number of multifamily and mixed-use development projects under construction or near breaking ground in Westchester County’s major cities near transportation hubs.
The BCW’s newly launched “Urban Centers Initiative” kicked off with the program “Reimagining Our Downtowns: The Residential Model” held at the Tappan Hill in Tarrytown. The panel featured: Seth Pinsky, executive vice president, RXR Realty; Martin Berger, managing principal of Saber Real Estate Advisors; Anthony Vulpi, vice president of development for Mill Creek Residential Northeast Division, and Joseph Apicella, managing director, MacQuesten Development. Geoffrey Thompson, partner with Thompson & Bender, was the moderator.
“Over the past several years we have witnessed a phenomenon sweeping across the downtown centers of Westchester’s four most populous cities. The face, shape and dynamic of Yonkers, Mount Vernon, New Rochelle and White Plains are undergoing dramatic transformations, bringing new life and opportunities unlike anything we’ve seen in the last 50 years,” said Marsha Gordon, president and CEO of The Business Council of Westchester. “These are exciting times for our cities and our county. But to capitalize on these opportunities we must understand what is driving them and how we can ensure their continued success.’’
Thompson reported that in White Plains there are 4,000 multifamily units that are either under construction or in the pipeline and approximately 500,000 square feet of new retail/commercial space. In the City of New Rochelle there are approximately 1,000 multifamily units under construction or approved, with another 2,000 units in the planning stages. He added that in Yonkers there is approximately $1-billion in development projects underway. A total of 5,000 multifamily residential units have been recently completed, are under construction or approved for development. The hotel market in Yonkers is growing considerably with 1,200 rooms slated to be added to that sector. Finally, the City of Mount Vernon is also seeing significant development interest with 8,000 residential units either proposed, in the regulatory process or under construction. By 2018 the city expects to add more than 1 million square feet of new retail space, Thompson added.
Pinsky said the strong New York City economy has fueled tremendous commercial and multifamily growth in the New York metropolitan area. That development boon has fueled higher costs in not only Manhattan, but also in the outer boroughs of Brooklyn and Queens that have pushed some residents or apartment seekers out of those areas. He added that in two key demographics—millennials and empty nesters—“there is an increasing desire for walkable and diverse neighborhoods with character and transit connectivity.” Pinsky’s RXR Realty is currently building major residential projects in Downtown New Rochelle, Yonkers and elsewhere in the New York metro region.
He said another recent trend is that some suburban locations prime for multifamily development have reversed previous policies and are now welcoming new development. He said the suburbs in the past two decades had a difficult time retaining some segments of its population as well as businesses. Due to those market forces, government costs have increased, while tax revenues have declined or remained flat. He said that some communities are now welcoming new development and specifically cited major cities in Westchester County as clear examples of the new government mindset.
Another emerging demographic driving interest in new rental housing in Westchester are divorced parents that Pinsky noted are looking for a new lifestyle, but want to stay close to their children.
From left to right, Joseph Markey, senior vice president and middle market leader, KeyBank (the event sponsor); BCW Chairman Anthony Justic; Joseph Apicella, managing director, MacQuesten Development; Anthony Vulpi, vice president of development, Mill Creek Residential Northeast Division; BCW President & CEO Marsha Gordon; Martin Berger, managing principal, Saber Real Estate Advisors; Seth Pinsky, executive vice president, RXR Realty; and program moderator Geoffrey Thompson, partner, Thompson & Bender PHOTO BY JOHN VECCHIOLLA
Apicella said that municipal investment in its infrastructure is a critical component to bringing in new development. Apicella is a former executive with Cappelli Enterprises, which built or proposed major high-rise multi-family and condominium developments in White Plains, New Rochelle and Yonkers. He now is an executive with MacQuesten Development, which is building the 81-unit, 11-story The Modern and is looking to develop 22 S. West, a 20-story mixed-use residential project located near the Mount Vernon West Metro North Railroad station.
He praised Mount Vernon Mayor Richard Thomas’ recent efforts in securing state funding for infrastructure projects that will help attract investment in the city.
Vulpi, whose firm Mill Creek Residential is developing Palisades Point, a 324-unit high-rise on the Yonkers waterfront, said that at its projects the diverse mix of millennials and baby boomers/empty nester and divorcees have been driving sales throughout its portfolio.
He noted that the company forecast empty nesters and divorcees would make up about 15% of the leases signed at a property in Mineola, NY. In fact, the empty nester/divorcee niche made up approximately 50% of the apartment tenants at the property.
Berger stressed that a location in addition to having nearby transit, must offer diversity and cultural opportunities. His firm Saber Real Estate Advisors is looking to build “The Collection,” a mixed-use residential project to be built on the former Key Ford site on Westchester Avenue in White Plains. The project will feature luxury residential rental apartment units, retail space and a hotel
“No one is going to move into a Westchester city only for an apartment unit,” he said. “They want a unique experience. They want culture and they want it at their doorstep. So, for a city to be successful, it is going to have to offer that unique experience within a stone’s throw away.”
As part of its Urban Center Initiative, the Business Council of Westchester has scheduled, in partnership with Fordham University, a panel discussion titled “Urban Renaissance: Emerging Trends in Transactions, Technology and Transportation” on May 10. The program will focus on how cities can sustain the momentum once projects are built. It will feature a panel of prominent real estate experts to discuss the latest issues, economic impacts and emerging trends. Leading the program will be: Hugh Kelly, economist and special advisor to the Real Estate Institute at Fordham University’s School of Professional and Continuing Studies and author of the book 24-Hour Cities, and David Schiff, principal of VHB and chair of Westchester/Fairfield Urban Land Institute.
In the fall, the BCW will hold a series of focused meetings in each of the four cities with the mayors and commissioners as well as community and business leaders to create a “Playbook for Urban Centers.”
Editor, Real Estate In-Depth