The Insider's Edge To Real Estate Investing w. Rosie Tilley

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Hi, everyone. I am here with Rosie Tilley today who is head of development for Charney Companies, a vertically integrated real estate construction and brokerage firm based in New York City. And in this role, Rosie oversees their pipeline of 2000 units of built to rent and condominium units, a vertically integrated real estate construction and brokerage firm and based in New York. We're going to try this again. Okay. Try again. Yeah, you got. Yeah, you're good. You could just. You could just speak. Was it coming back through her channel or my channel or I was odd. That has not happened before. Okay. All right. We're gonna try this again. Okay. Okay. In case we got an echo for to be certain, I am here today with Rosie Tilly who is head of development at Charney Companies, a vertically integrated real estate construction and brokerage firm based here in New York City. And in this role, Rosie oversees their pipeline of two plus units of built to rent and condominium units from project inception and acquisition through construction completion. Rosie has an incredible background. We're going to get into this today. We had the pleasure of sitting on a panel and while this with Connect Media. Was that Right. That was a lot of fun. So welcome, Rosie. Thank you so much for joining us.

I'm so glad to.

Wonderful. Okay, so why don't you tell us a little bit about how you got into the business. I saw that you were at Columbia. Now did you study real estate there or what was the.

No, no, I studied urban studies and economics.

Okay.

Which is the coolest combination, you know, especially in the city. And I didn't know when I came to Columbia what real estate development was or really what I wanted to do. But you know, you get to the city and you experience the magic of the city.

Right.

And I wanted to be a part of that and make that I didn't want to be an architect.

Got it. Is that what you were actually learning in school then or. I mean, as far as like the planning aspect. What does that mean? Or what was the. What was your coursework like?

They're very interdisciplinary. I mean, urban studies was the, you know, this is the stuff I like to read on my own time. I'm a, you know, geek about Robert Moses and the built environment and all of that.

Yeah.

And then combined with a quantitative support economics to got it real.

So you've read the Power Broker?

Of course.

Yeah.

And listened to it again recently.

You know, I had this was probably before the. The E Readers and so I had this, the hard copy book. But it was so big. I mean, I think it's what, 1500 pages that like carried around. I had actually maybe this sacrilege, but I'd actually separated. Yeah. I put the book in two pieces, but wild. I mean to think about what was kind of done. And I know that there's. I mean, any thoughts on his approach? I mean, he got a lot of stuff done, but you know, definitely was a kind of a wrecking ball at times in the process.

When I was in school, Ken Jackson, who's a professor at Columbia, was leading a kind of like revisionist history kind of revisiting of Robert Moses legacy in a more positive light. Of course it's of kind controversial, but I don't know, I think, you know, especially when we think about the problems facing cities today. Sometimes you need big infrastructure, big moves.

Right.

Like he was able to effectuate.

He really liked cars and highways. Right. Maybe not so much about the public transportation. So that I think that was some of the criticism that it kind of cut off, you know, some of the accessibility at times.

Yeah. And turned our back on the waterways. And every time you drive the LIE five hours out to the Hamptons.

Yes.

We can thank him that we're not riding a train.

So if you're into this kind of thing, not sitting on the LIE for five hours, but, you know, studying urban planning. You know, I just finished Dan Dr. Off's book. Have you read that?

No, not yet. I'm an analyst at my library.

Outstanding. And I didn't realize that. And I had the chance to hear Dan speak and he talked about. I mean he came from private equity and his passion was bringing the Olympics to New York City. And with his 2012 plan, I mean that was the basis that would ultimately encouraged 40% of the city to be rezoned. And a lot of it was around that Olympic plan. But. And I didn't at that point Bloomberg had had reached out to him. So it's a great, it's a great read. So, so interesting. Okay, so you, you graduated from Columbia. Now what?

When I was in school, I cold called around to developers in the city and in Boston over summers. And so I got to work when I was going to school for developers. I'd go to class in the morning and then take the train downtown and work on job sites or work in offices, kind of doing anything I could do with different developers.

My first before we get to this. Okay. Because we do get students who certainly listen to the show. In fact, we have a student in our studio today from Fordham, and we love Fordham, but I want to go back to what you said. So you're at school and you're cold calling developers. I mean, a lot of. I mean, my, you know, my sons and love them to death, but God help them if they'd ever have to, like, pick up the phone and call somebody, you know, as opposed to sending an email, texting or snapping or whatever else they do. But you just picked up the phone and you called a developer. And what did that conversation go like?

I grew up in Boston, so I was going home for the summer, and so I made a list of Boston developers from Googling Boston developers. And I would call the front desk and ask to speak with someone who dealt with hiring or intern programs.

Okay.

And I finally made my way through to WIN Companies. They're a major developer in Boston, big affordable housing developer. And I got the ear of, you know, someone there, the. Essentially the assistant to Larry Curtis, who led their development practice at the time.

But were most people, like, hanging up on you when you called, like, oh, we don't have a job.

Yeah, yeah, yeah. Or our intern program isn't live. Our intern program window closed six months ago. I mean, developers are lean, right? There aren't a lot of internship opportunities.

So were you just saying, hey, I just love to come and learn and I'll come work for free, or like, what was.

What was there anything you need doing? I just want to learn. This is about. So much of this industry is about osmosis.

Right.

And apprenticeship.

So what was. What did you end up doing at Wynne? And they're, if I'm not mistaken, one of the largest affordable work workforce. Housing, I think is really their. Their niche. So what kind of things were you doing?

I led a lot. Or I worked with the woman leading their green building work at the time, which was very nascent. This is like 2006, you know, lead was kind of a new thing. So thinking about this, all of these units which, you know, need to run efficiently and productively, how can they leverage green programs to do that? That was a new thing to me I had to learn about.

So I saw somewhere in your bio. So you ended up getting LEED certified. Is that the designation? So did that come later, I guess, or.

Yeah. Well, when I graduated college, no one was developing anything. It was the great financial crisis.

Right?

Sad, sad climate.

Yes.

So I went to work for a sustainability consulting firm where I worked with developer clients to incorporate efficiency measures in their buildings. And through that, I spent a lot of time on construction sites, you know, learning construction. How's how stuff Supposed to translate from the page to the field. And then I was hired away by Steiner, who was one of my clients.

Yes. Okay. And I want to get. And he's, he's actually been on the show as well. Oh, yeah, he's got an amazing story, but. Okay, so you working as a sustainability consultant. So I think, I mean, a lot of people, I think, or hopefully everybody would agree with the need to be more environmentally friendly, but I would imagine so as a consultant, you're asking these developers to spend more money to do certain things. So. And interestingly, I actually just had Douglas Durst on the show as well, and he was talking about his passion for sustainability, but then he also said that most of these sustainability measures are paid back in six, seven years. So again, you make, you outlay the investment, but then there's a return. And then obviously for the life of the building, then you have a much more efficient building. Energy costs are reduced, better for the environment. So was that kind of the case that you were trying to make at the time?

Yeah, yeah. It's just smart, right? As an owner, especially if you're talking to an owner operator, it's just smart, Right. Like there may be marketability to having a credential on your building.

Right.

You know, you're doing good intangible things for the environment by selecting materials which are low impact. But the easiest way to get a developer to front load costs or do something new and take a risk in their building is to explain payback and economics.

So what were the top two or three things that you would recommend that a developer does?

A good tight envelope building envelope.

Okay.

And actually now so much of code has caught up with all of this. You know, when I was doing this 15 years ago, longer than that, like, it was, it was pioneering. Now you essentially have to do stuff and, and the city's really supportive in rewarding that too. Now there are zone deductions for doing that.

How much? So I'm getting ready to build a project. It's a vacation home, but I'm looking in and kind of studying ranging from the traditional way of stick built to. Then you've got modular, then you've got sip insulated paneling where it comes almost in a Lego set and you kind of assemble it on site. Uh, I've heard also here in New York that we've had passive houses that are, you know, they, they've got redundancy and insulation, and the energy costs are so much better. So how much of that were you studying? Methodology of construction? Just because you, you, you brought up, you know that it's so important to have that tight envelope. So how much of this new technology and the way people build is helpful to achieve that today?

I think that all of those means are so smart. And there's a lot of interesting work being done right now with modular, whether it's panelized or volumetric. And how can you bring efficiency to time in the minimize disruption on site? It's just so hard to do. When we, when I was working in California, we spent a lot of time assessing this and there's so much innovation in this space, but it's just hard to get right and do in a way that's cost effective in the way that a developer would want in order to take a bet, that new approach.

So after when, and graduating was. And you said you went to Steiner then, who is one of your clients? Right. So now Steiner, who has a pretty large retail footprint across the country, but also a very prolific developer here in New York. And Steiner Studios, one of the first, you know, new film studios here in New York. So what type of projects were you working on for him?

I was working on multifamily and condo. We built a condo in the East Village.

I remember that one. Avenue A, was it? Yeah. That was great. You all did really well with that.

We did really well. That was a phenomenal building. When we acquired that from the Archdiocese of New York, people thought that we were nuts for our basis at the time, which I think was like low 200s. And we did so, so well at that. It's a phenomenal building. It's really, it's a building that doesn't feel new in that, in that location. It was so important.

So Doug had done retail, he'd done kind of large scale and film studios and then doing a condo in the East Village. I mean, you could say, oh, well, it's all development, but it is very different. So was it just being opportunistic and kind of thinking where the opportunities were or was there kind of a certain path that you were.

No, I think it's, it's being opportunistic and that's what's, that's what was fun about working at a family office. You know, you can, you're, you have a different calculus. Right. Than an institutional owner does. And you can push the envelope a little bit and do passion projects and things that seem fun. Like building a movie studio in the Navy yard.

Yeah.

Or doing this condo. We're building a 53 story building in downtown Brooklyn.

Wow. You know, I Don't know why I'm remembering this, this point in particular, but I remember Doug saying that and I don't even know how it came up, but he, we talked about insurance. He says, I don't do insurance. I mean, like, what do you mean you don't do insurance? He's like, you know, what's the point? You know, I could self insure. I mean, he just, he has a very different perspective on how he approaches things. It's like to me, it seems like he just doesn't take the status quo for granted on like this is how you do in a development. He's like, okay, well I don't, I mean, I'm sure for some projects you have get insurance if you're going to do, you know, get, get a construction loan or whatever. But, but it really seemed like he just was. Again, he just kind of marched to the, the beat of his own. I forget whatever the cliche is, something about drumming and you're, you're not drumming with them. You're, you're. But I mean, was that was this kind of a unconventional way to learn the business and his approach?

Yeah, yeah. But I learned so much, I mean, from Doug and from his dad, David.

Right.

Who died last year. I think I learned so much from him about building and what kind of.

Things in particular about how you're supposed.

To build and how you build for generations and what quality means in the field. He'd come around and watch, you know, he was in his 80s. He'd come and watch concrete pours. He'd come and watch the crane be jumped. You know, he knew every detail.

Right. So, and that's kind of counter to you think, oh, some developers, I mean, obviously their profit is tied to not only what they could sell the units for, but what it costs to get there. So you always worry like, did the developer cut corners, did they build it on the cheap? So like, why would they, I guess, over engineer a building, if you will, or you know, really build to that in perpetuity? I mean, certainly they're going to hold. That makes sense. I guess if you're going to condo, you're going to have to, you're going to be responsible for what you build. But that's interesting. So it was really. There was a real emphasis on doing things right.

Yeah. And quality. And I mean, I've had that I've had at every place that I've worked. That's been directive. A lot of it is reputational too.

Right.

You know, this is a small business. People are Entrusting a lot with you. When they are buying a home or renting a home, quality is paramount.

So was most of your construction knowledge, was it picked up along the way of just observing, or are you actually like, going to school to learn construction?

No, no, Just all in the field.

As I go, just figuring it out.

Asking a lot of questions, asking every question. You can't be embarrassed to ask questions.

So what is that just. I mean, again, if you remember those early days of like being on the job site, like, what are you. What are the questions you're asking? Who are you spending time with? And figure, I mean, if pouring a foundation, I mean, like, what are the kind of things that you're observing and learning?

Yeah, well, say, you know, drilling piles. You know, okay, you do test piles, but you do like five different kinds of piles. Why, why is one better than the other? And what does it mean for the cost of the building when you're designing your foundation? How can you be efficient with that?

Right.

And through everything, you know, quality but efficiency.

Right, right.

And that, that kind of striking, that fine balance of quality and efficiency. And if you have really smart subcontractors, you know, some of these field guys are the smartest guys, right? Jobs and really smart engineers and smart ownership, then there are enough people around you can just pepper them.

I mean, how much of development is kind of cookie cutter? We're like, oh, well, of course these are the kind of pilings we need because this is the water tables here, and this is what we need to do, and this is how you execute it, or is it like, you'll get one engineer says, okay, well, this is what we need to do, and we need to drill down and hit bedrock or, you know, whatever it is. But like, how much of that kind of figuring out the best development course is, you know, are you trying to figure out day in and day out? And I mean, do you get different recommendations from different professionals? And then how do you know what's the best advice?

Well, I have learned you can't take anything as, as a given. Right. Everyone in this. There are lots of very experienced people in this business who have seen everything, but they may have a standard operating procedure of the way that they may design something. And also, maybe it's easier just to copy a detail from the last job to your job, but is it right for my job and is it the best approach for my job and the most efficient approach? You have to question every single assumption from all the way from the beginning of design, especially at the beginning of Design when you're setting out, you know, your. When you're building the foundation blocks, if you will, of what the building will become.

And how many times. I mean, I'm sure learning along the way also involves making mistakes. I mean, I'm sure there's things that happen where, you know, and again, maybe there was the best intentions, but, you know, construction can be messy and it's not always predictable. Right. So were there things along the way where you learned, okay, well, maybe we should have done things differently.

Yeah, yeah. I'm from a development perspective, too. And sometimes that winds up being all right. Like Steiner East Village, we designed essentially just short of a building permit as a rental, and it would have been a good rental, but it was a little iffy. Like we needed really top of market rents, you know, trending. Everyone had faith in the market, and I think it would have done well as a rental there. But condo was really the best execution.

Right.

So we wound up scrapping that design all the time that we'd spent and re going it as a condo, which wound up being the best.

Right option.

Condo was risky, though, right?

Yeah.

But we would have saved some time, maybe met the market earlier, saved a lot of money.

So in my book, I talk about the different ways to get involved in real estate investing, and I say that, you know, development is. Is the one. I mean, if you look at kind of the risk spectrum, right, where, you know, as core, core plus value add, opportunistic. I mean, of course, you know, if you're developing, you know, you're taking on a lot of risk and looking for outsized returns. That being said, I mean, it would seem that in development, when you're coming out of the ground, there is the most, you know, the highest likelihood that there could be an issue. Cost overruns, whatever it is. So what I say in the book is that if you have not done development before, I would not, you know, encourage you to just jump in, certainly for your first project to build out of the ground. I mean, does that make sense to you where, like, this is really a business where you don't want to try to attempt something ground up if you've never done this before?

Yeah. It takes optimism, it takes patience, and it takes a lot of resources.

Right.

We're doing brownfield redevelopment right now in Gowanus, and we're. It's taking us longer to come out of the ground than we'd like. You know, it's.

Right. And this is someone who's, you know, Charney, who's in the Business of, you know, construction, has done this before, has tackled brownfield sites and even then, you.

Know, our third one in the neighborhood.

Right, right. So I guess then the answer is, you know, for you, if someone did want to eventually go out and do development on their own, I mean, to actually work for other developers would almost be a prerequisite.

Yeah. Someone else's.

Yes.

Learn how someone else is done.

So, okay, so you finish that sense of ownership. So was it so Steiner and then you spent some time at Twining, was it then that you went out to the west coast or.

No, after Steiner, I worked for rxr.

Okay.

RXR building here when they were building out their development team.

Okay.

In New York City, we had folks who were working on stuff in Rochelle, folks who are working on things in the city. And that's what I was doing.

And did you find, I mean, when you made transitions from Steiner to rxr? I mean, you've worked at a lot of great shops. Like, when did you. And this is probably a great question for those listening who are probably, you know, five, 10 years into their career, how did you know when it was time to make a transition? And it's like, you know, that's always a tough choice. And you're, you're, you know, good people and you're grateful to everything they've taught you, but it's like, okay, thanks, now I'm going to go work for a competitor. Right. I mean, maybe that's not what obviously was said, but it's like there is that, you know, when you make that transition. Right. So how did you navigate that? When did you decide was the right time to move on? I mean, was there ever a thought, well, hey, maybe I'll just spend my entire career at Steiner.

Yeah. Sometimes opportunities approach you. Right. And I have always tried to keep an open mind. And, you know, sometimes this becomes deal based too, and deal flow based. And you look at the pipeline and you see, you know, the direction of what's coming. And do I want to work on this or do I want to grow, you know, in this other aspect of my job? It's hard to know when to take a risk and when to move and.

What'S the right way to transition. I would be surprised if you just told me, just showed up to Doug's office and you're like, here's my two weeks notice. I mean, was it. Was this or sometimes, I mean, maybe it's. You kind of have to be that way because you're just kind of the way things line Up. But how did you make that transition? You know, and it sounds like you're still on great terms with everyone you've worked with. So how do you. How do you make that transition?

Well, it's a small community in real estate, not just in New York, even nationally. I mean, in California, I was always bumping up against people from New York. So you got to keep your friends.

Right.

And I think that that's the. It's so important wherever you work to build strong relationships eventually, I think, you know, people. Of course, in the short term, it's disappointing to lose a team member whom you've invested in. But also, people want what's best for you and what's right for you. Right. And I've always had the good fortune to work for people who are very supportive of me and my career and my growth.

And do you feel like you train people along the way? Because I'm sure, you know, the beginning, I mean, you probably start off as a junior, so as soon as you get more seniority, then you have people working under you. Right. I mean, how many people right now are kind of on your development team? Or would you.

We have a lean and mean team. Right where. And it's really an all hands on deck.

Okay.

Our development team is maybe eight people at two team. At lendlease, we had a bigger team.

Yeah, that's what I was thinking. I mean, that's a lot more people. So I would think even if you're moving on from, you know, one of these firms, that hopefully you've trained some people on the way also who. Maybe it's an opportunity for them to step up and continue to grow as well.

Yeah, yeah, exactly. I mean, if I've done anything right, then that's exactly what's happened.

Yeah. I think, you know, one of my mentors still to this day, Paul Massey, would always say that, you know, when you're in, maybe it doesn't have to be a crossroads in your career, but you're kind of looking for that next step and you know how to have that conversation with your current employer and to kind of talk about the things that you're looking to do and kind of making an open conversation. And, you know, again, people, you know, if they're doing the right thing, they want. An employer wants the best for their people want to continue to grow. I mean, we've certainly had plenty of salespeople who've been on our team and then move on. Many of them actually go to the principal side, which I think is like the highest Compliment like, hey, you start as a broker and now you're going to be a principal. And now, hey, guess what, we have a contact at that. Yeah, you know, that, that firm now. So it's always, you know, great to continue those connections. Okay, so eventually though, you did head out to the West Coast, Palo Alto. Right. So you're working with lendlease. And this was specifically, this was a joint venture master plan in Mountain View. So what, what was that? So I mean, lendlease was then kind of the third party developer for Google. Is that what.

Yeah, lendlease had a very innovative joint venture agreement with Google to design and entitle master plans on Google's holdings in the Bay Area, of which there are many.

Yeah, how many acres? Like, what are we talking about here?

Millions of square feet. We broke them into four different master plans and they would all be 24. Seven communities. Live, work, play. Everybody knows there's a housing shortage in the Bay Area. I mean, the statistic for a long time was that for every six jobs created, there was one unit of housing created. There was a poll at one point saying that more internal to people who worked at Google, but more people wanted to work at Google in Pittsburgh than in the Bay because you just couldn't buy, rent a house.

So Google said, we're going to build housing for our employees, not specifically for.

Their employees, they're going to build housing, free market housing that's going to be in these areas where our employees happen to work, as do plenty of other tech communities. No one wants to live in googleville. That's not any fun.

Right.

But if, you know, we designed these master plans that were very compelling with open space and retail and innovative design and a very sustainable community, and you roll out of bed and go to work, or you hop on a bike and head to your office a couple miles away.

And what was your role in all this?

I was leading the residential development of our 7,000 units in Mountain View at Google's headquarters.

7,000 units. Okay, so how do you go about doing that?

26 buildings. You know, you think about scale. It was a really, really great intellectual exercise about how a community built from scratch should work and what's the most efficient way to strike that balance. Yeah, and without it feeling like a company town, without, without it feeling, you know, big and oppressive where every building looks the same. So we, you know, we broke the, we broke the residential piece of this master plan into subphases, broke the buildings into small, large enough buildings so that they would be cost effective to build and to operate, but then could also fit as part of a little neighborhood of buildings. And so, you know, our idea was that you would have this passport essentially within your community. And you can live in this building, but you go to the gym in this building, you go to the pool and.

Yeah.

And you have friends all over the place throughout this community. And you feel connected through kind of a scheme of communities from the very intimate of your building up until the. To the more macro of the whole community.

And even though this wasn't specifically for Google, I mean Google owned and I've seen some of their properties, I mean nothing that they do is cookie cutters. So I mean, I would think, I mean this probably, I mean, was there just one architect and one plan or were you like bringing in different design professionals? So every building had its own look and feel?

Yeah, we had a very talented and large crew of architects and design professionals on the team from master planners and then also through to the vertical. And we were taking an approach to hire one or a few. We called them executive residential architects. So folks who could implement standards and efficiencies across all of the buildings, like say for the buildings backbones and skeletons. So we don't need to draw the same roofing detail 26 times. We don't need to draw, you know, the same elevator plan 26 times. But each, they would partner with design architects on each distinct building to get that diversity of place.

So I mean this is a massive job. What is your typical day look like doing that? I mean like, are you just, you know, you're overseeing the other, you're working with architects. Are you on site, you're watching them, you know, pouring foundations. I mean, what would a typical foundation.

We didn't make it that far.

Oh, so you were just getting the plans approved and teed up and then.

Yeah, essentially putting the whole building, the business plan and putting the development framework in place for execution. You know, the.

How long did it all take? I mean, and you're. Yeah. And you're working with the municipalities. Right. So you're, you're building roads like you're. Yeah. I mean, water. I mean.

Yeah, we, the master plan. How long did it take to get entitled. I think five years to entitle the master plan, which would have facilitated the. Essentially as, as of. Right. As you can get in that, in that market for the vertical buildings. You know, the, the market in the bay is just challenged right now. You know, and real estate came to mean after the pandemic something very different to the tech community than it did when this agreement was struck, when this joint venture was established pre pandemic.

So I had Philip Huffines on my show from Huffines Community down in Texas and his whole business is actually getting sites not just entitled, but getting all the infrastructure work and basically getting them shoveled ready. And I asked him, like, why at that point, like why wouldn't you see it through? I mean, but that, that's, I mean the actual like entitlement and all that work is so intensive. Right. It almost becomes its own business of itself. So.

Okay, very successful doing that too.

So. So you're out in Palo Alto and then, I mean, working for an incredible company and then like, then you're thinking, I got to come back to New York or what?

I'm back. Yeah.

The.

Unfortunately, lendlease and Google ended their partnership.

Okay.

You know, the, essentially everything about the post pandemic world.

Right. Okay.

Where construction costs were, where office was, you know, where Google wanted to invest their money.

Yeah, right.

I mean the world just changed right. Between 2018 and 2023. So, you know, faced with what to do next, just, you know, I came home back to the city.

Got it. Okay. You got the family at the time as well. So people are coming back with you. So how did that go?

Yeah, they took a bet on me.

Right.

My husband, you know, left his job here. You know, we had lived here for many years, but took a bet on me and take this role.

That's a big move. Like, I, I think a lot of people, I don't know my, I have no backup data to support this, but like picking up and moving to a new market, like that's. And how. I mean, you were already pretty advanced in your career. I mean there was plenty of. Was it just the opportunity where you're saying I gotta just go wherever this is or were you just looking? I mean, you don't get a call.

Like that every day. Yeah, it was just such an amazing opportunity and there's such smart people who are working on it.

Right.

You have to be smart to work in this business. But I think that really some of the brightest people were working on this and to, so to join that, you know, to do something which really felt transformational, that was really gonna push me, you know, to do something more than I was doing here. So, you know, we moved our three year old. We, you know, all of our stuff settled in a new place. We'd never, I'd never lived outside of New York City except for growing up. I mean.

And did you already. Did you already have the job at Charney when you came back or like, were you like, I'm just gonna come back and figure it out?

No, I, I, you know, I led a job search from there, you know, talking to folks in every market I had, like.

And you're still calling the offices? No, you are. You're not using.

Leveled up a little bit, but no.

Not with networking, asking connections.

Yeah. I had 116 different networking calls. I had a spreadsheet of all of my phone calls.

Wow, you are super. Wow. That's okay. This is no, no, no surprise where you are today. I mean, it's. And maybe this. And you know, for those listening to this right now who are really senior in the careers and it happens. Like a good friend just said, hey, James, we're, we're downsizing. We are not active in this market anymore. I mean, this is a person with, I mean, 30 plus years experience, like very high level. And it happens. And it's like, so at this point, you're really senior. You got a lot of incredible experience. So like, at this point, are you thinking, okay, I can go work with another big shop? I've done worked on some of the biggest projects. Do I go start my own thing?

Yeah.

Do I go work for a boutique? Like, what was the thought process there?

Yeah. Well, I would have loved to have started my own thing, but at the time that I was doing this also, I was six months pregnant.

Okay.

Which adds a twist.

Okay. All right.

Taking a risk like that just wasn't something that I was going to be ready for. I mean, also, you know, lots of headwinds against development nationally, you know, in the last 12 months.

Yeah.

I was looking a lot at institutions, you know, educational institutions, hospitals, healthcare, things like that.

Like in house. In house. Real estate.

Yeah, yeah, yeah. More resilient.

Yeah.

I mean, those guys still build institutions.

But tell us about Charney, because this is like very entrepreneurial. Right. I mean, like you said, Lane and Main. So how did that, how did you end up deciding on Charney?

Well, I was so fortunate to be introduced to Sam Charney and Justin Pelsinger, the president CEO, through a friend of mine here in New York. And you know, we had a Zoom call. I came out and sat with them in their office and we just really hit it off. I mean, these are good people, smart people, passionate people.

They started on the construction side. Right. They were doing a lot of third party stuff. Right. They didn't.

Sam.

Oh, always developers.

Sam came out of two trees and learned that kind of.

I knew that.

Yeah. So building what it means to build for yourself and then, you know, hold and operate the asset. And of course that makes you a smarter builder. You're thinking about the long term and developer in general. And then he went out on his own maybe 10 years ago, a little more than 10 years ago. And he and Justin, lean and mean, you know, built this incredible, you know, track record.

And then how do they find the capital for that? That's always the big thing when you go out on your own. It's like it's. Development is obviously very expensive. And again, we talked about, you know, this is kind of can be up the. The risk scale. It's up there. So like finding believers. It's like, okay, well, you did this for a big giant, you know, organization, but now it's you. You know, how do they find the backing to do that?

Really good relationships. Yeah, really good relationships.

Institutional or like friends and family or.

Starting Friends and family, but now institutional. I mean, we've really, you know, antied up. If you go with our work in Goannis, right Now we have four buildings under construction with 1200 units.

Wow.

You know, the highest quality institutional partners related is a partner of ours. You know, Phineas, we have, you know, now stellar capital partners.

Yeah.

Nice validation of the quality of work we're doing.

So is that kind of what attracted them to you, is that you had kind of this institutional backing where they. Or was it just kind of. You kind of have the same vision as far as kind of how to approach development. Like when you said that you just hit it off, what was it that.

I think, you know, both. Both of those things, you know, and also now, you know, they're. They're poised to grow. Right. So how can we grow the company to scale up to meet this growing pipeline and the requirements of more institutional capital partners? And my experience is useful there.

Right. So I got to know Sam. I'm sure I knew him from back in my Massey NACL days, but, like, the first major deal that we worked on was what ended up becoming the dime. Yeah, Right. So I sold on behalf of Dime Savings, sold that site in South Williamsburg. And so I. And I think. I don't know how the partnership with Tavros came about on that one. If, like, Tavros found the deal and brought in Charney or they found it together or partnered together. Do you. Was that before your time?

That was before my time. You know, I don't actually know the origin. Origin story other than Nick Silvers and Sam knew each other. I think from growing up in New York City together.

Okay, got it.

But the dime, you know, the dime is a great testament to our general thesis, which is high quality design.

Yeah.

You know, efficiently but expertly designed units.

Right. A little pioneering of a location. I mean, now you see it, it's so obvious. But at the time it was like, okay, well, North Williamsburg. That's cool.

Yeah.

But when you go south of the bridge, it's like, okay, well, now it's starting to get a little. You know, it's just, you know, it was still. It really wasn't developed like this was, you know, to build a tower.

Yeah.

In that location. I mean, it was an incredible site. It's a. Like a full. Almost a full city block.

Yeah.

You don't get that opportunity a lot, but I mean, at the time, it was pretty gutsy.

Yeah.

On their part.

And now it's cool.

Yeah. Oh, totally. No, but back then, that was. Yeah.

Yeah.

Pioneering.

Yeah. Yeah. You had to have foresight. I mean, I think that a lot of that is relevant to our work in Gowanus.

Yeah. So how did. So I guess by the time you join, I mean, they were already underway with Guanos. Are you really helping them kind of dig in there and learn the market or.

Yeah. And now really execution mode.

Right.

It's a lot of construction. At the same time, it's a lot of work to keep, you know, 1200 units marching towards the.

Yeah. So you all were one of the first major developers, right. In Goannas, or were there? I mean, I'm sure there was others.

But there's a. I mean, the. The Goannas pipeline is kind of a who's who.

Yeah.

Of real estate. There were so many great partners there after the rezoning.

When was the rezoning?

Do you remember the rezoning? I think it was finalized when I was out west or just when I was out west. 20.

20.

20, 21, maybe.

Okay, so this is all there before. This is all pretty new. So. So, I mean, what's amazing. And again, for those listening and in New York, we have, as of. Right. Zoning. Right. So that's. That's. That's good in that you know what you can do. But then, of course, you know, if you can benefit from an up zoning, which is what happened. And I believe that a lot of the Gowanus was manufacturing and they got up zone for residential.

Yeah.

So, I mean, I don't know how they did that. If they tied up land and they said, hey, it's contingent on the rezoning or do they just buy it, you know, on that, that hope, do you know, or bought it kind of making.

A bet on the successful rezoning?

I mean, that's, again, that's pretty gutsy, especially if an equity partner saying, hey, we hope we can build residential, but, you know, things can change. You know, whether or not city planning approves. Does it go through the process? I mean, and even now, I mean, we've got a major rezoning that's being hopefully going to be approved here in New York with city of. Yes, but we're not even going to know until, you know, city council votes on it. So, you know, there is that risk when you're going into a site where you don't know ultimately what you're going to get. Right? Yeah.

Yeah.

What is it about the goannas? And for those of you. Maybe for those of you that don't know about it. So we're in Brooklyn. It's on the Guanis Canal. Right. I mean, which, you know, the history was this was a very industrial area with a lot of environmental contamination. So I think this is part of it. So what was it that attracted Charney companies to the Gowanus in the first place? Like, what. What was it about it where they saw it and said, this is something that's. That has great potential?

Gowanus is the hole in the donut.

Yeah, right.

Like you look at a map of Brooklyn.

Yeah.

And, you know, to the. To the west, it's Carroll Gardens and Cobble Hill, north is Boreham Hill, and to the east, Park Slope, these highly desirable, you know, beautiful neighborhoods.

Right.

It made no sense, right, that Gowanus would be a place where you park food trucks.

Was there transportation there?

Yeah, the. The F is in. Is on Smith Street. The car is on fourth Avenue. It's well served by transit. Hop on a city bike and get up to Atlantic Terminal.

You know, and I mean, now every. Like you said, everybody's there, and now it's. It's. Obviously there's so much critical mass, but I mean, sometimes being the first developer, it's like, okay, are you early? Or like people. I mean, it's. It's. I mean, how do you know that ultimately when you build it? I mean, I get it, like, you're in the center of everything, as you said, but you don't have any comps. Right. And then you have to go to equity partners, you have to go to lenders and say, okay, hey, we see this amazing opportunity, and this is what we think we can build. And here's our projections. But then they're like, okay, well let's see some comparables. And this doesn't exist in the area. So how do you.

There were a few. 363 and 365Bond were successful projects on the other side of the canal right there. A lot of it was telling the story about the trajectory of growth in New York City and where did that growth go? And this is a natural place to fill in.

So as head of development. So they're charney. They have whoever heads up acquisitions. And you know, I know Sam gets pretty involved in the deal making too. So, you know, Rosie here, you know, here's our site. We're in contract. Like, are you getting the call? Like, okay, we're ready to roll, or are you even before acquisition looking at this and you're saying, okay, let's. Are you actually helping with the modeling? Because again, we were going over a development model this morning. You can get a model to tell you anything you want. But like a big question mark is like, okay, well, rents. We talked about how you can go try to get comps and figure that out. But like, construction costs, like, that's tough. How do you estimate what it's going to cost to build something? Because you're buying a site where you might not be building it for a year from now.

Yeah.

So how do you figure out what labor is going to cost? Materials. How do you do that?

You know, we're doing that now. We're in contract now on what we think is the best site in Goannas. It's the large site at 1:75, third on third and third across Whole Foods.

Yeah.

Fun fact. That is the second best performing Whole Foods in the whole country.

Wow.

Second to Columbus Circle.

Wow.

Okay, so this is a large site. It's the full block. We're from RFR and we're doing exactly that. Now this kind of foundational business planning, what does this building want to be? We have 1200 units under construction in this neighborhood already. But do we want to do 1,000 more of those? Is a million square feet.

Right.

What an opportunity to get. Right.

And is it all rental or do you do condos as well?

This will be rental, but what does.

Why not some condos?

For a variety of reasons. I mean, this is an opportunity zone. It may be an opportunity zone project.

Okay. So you want to keep it for the long term.

Okay, yeah. And also we. We do condo.

Yeah.

But you know, we think that rental here is an incredible opportunity.

Okay.

And it's a421, a vested site, which has a lot of value.

So you're meeting with architects, right, to think about how this all lays out. Like, are you holding kind of like mini competitions of like, hey, come in and pitch us on what you think.

Yeah, we've seen some wonderful proposals and.

New architects, like, when they pitch for that business, are they just doing this all on spec or. They're doing it on spec, like, and it's pretty. I mean, pretty well thought through. I mean, they're going really deep on this stuff.

Yeah. Stunned by the quality of the analysis that people have done and the excitement that there is. This is. This site is next to Powerhouse Arts, which is an incredible arts facility that reopened last year. And across from this Whole Foods, it's kind of this gateway to Goannis.

How do you choose an architect? I mean, I know, and this was in Dr. Off's book as well, talking about the World Trade Center. Right. And they had this huge design competition and, you know, you had design architects, I guess, where, where this is this beautiful, you know, looking building. And it's like, okay, this actually doesn't work when you build it because functionally, it just, you know, the way the floors lay out or what. So, like, how do you balance that aesthetic and also the functionality?

Yeah, Execution ability.

Yeah.

We were just talking yesterday about our selection criteria, because this is a hard decision to make. So it's not only aesthetic vision and ensuring that the vision is aligned with us. Right. And that they understood our design brief, but also, do they have the ability to execute? Do they experience in New York City getting things passed? Right. You have to separate, you know, the aesthetic concern of what is the beautiful building, but also the execution. And this is the, like, efficiency person in me. How can this selection de risk.

Yeah, my deal. So another guest I've had on the podcast, Amit Kharana, prides himself in bringing new architects to the market, you know, from all over the world. Now he's doing, like, condos that are selling for three, four thousand dollars a foot. Like, it's a different, you know, and his passion, I guess the answer. I'm probably answering my own question. He brings in his own local partner. Partner architecture firm to do the code and the compliance. So I guess it's a balance. But. Okay, so you, you do your architecture competition. That's what you want to call it. But then how are you kind of comparing where, like, wow, this is an amazing plan, but this is probably going to cost more than something else. So how do you Decide what's appropriate to build for the area and then ultimately how much it's going to cost.

We now have the benefit of a lot of data from the neighborhood. Right. We have a lot under construction. We have great relationships with our contractors. We build ourselves. Also, Charney holds the contracts with subcontractors. We get very into the weeds on construction.

See, that's what I thought when I was asking about. I thought that you all. So maybe you didn't come from the construction side, but you do self perform, right?

Yeah, yeah, we have.

I mean, that's a lot of units to do something like that. I mean, is that, I mean, is it like working with a big contractor that's bonded and all that? Like, there's no, I mean, to do it yourself. And I mean, again, equity banks, they're. I mean, obviously they have confidence that you all can execute.

Yeah. It's the importance of relationships and I think knowing too, the level of attention that we pay to every detail.

Is there a savings there too? Because obviously if you're going with an outside gc, they're. They're obviously charging an override on the whole thing until they get paid.

Again, speaking to efficiency.

Right, Right.

This is the. We view this as the most efficient way to do it.

Yeah.

Then you don't have, you know, there's contingency hidden here. Or these are my savings. These are your savings. And it's. And it lets us keep good control of the field. If you lose control of the field in a development.

Yeah.

You lose the deal. You can't just give someone the keys for a couple years and come back to start renting or selling units.

So as head of development, I mean, in my mind you're meeting with brokers, you know, to find out, you know, what is the market command and like, what are we building. You're coordinating and heading up the architecture. You're meeting with the contractors. Like you're literally overseeing the physical development. All, all the steps. Is that the sequence? Like brokers understand what you want, the architecture, bidding it out and then actually seeing through the actual development until lease up. Like it's the entire life cycle of the deal.

The whole life cycle. I mean, right now we're getting ready to Start Leasing at 585Union, which is our first building in Goannis that will hit the market. So we're putting together that plan. Yeah, right. What, Preparing all of the marketing materials, establishing all the pricing, getting ready to open.

So there's probably, I'm sure there's a lot of people Listening to this right now saying, wow, this sounds like an amazing job. And yet, like, you don't have. You never went to school to learn construction, so you learn the entire way. And I would, you know, that now makes sense in retrospect. But, like, obviously if someone knocked on your door tomorrow and said, hey, I'd love to work for attorney companies fresh out of school and I want to learn construction, you probably say, you know, good luck, kid. But, like, we need, like, we're lean and mean. Like, I need skills. So, like, how do you, I mean, is the advice for someone who'd want to get into this to, like, go and, I mean, what's the degree? What would they need to figure it out? Or do they just, you know, start off as an intern and just like, literally learn on the job? What, what's the, the advice on that?

I think I lucked out that I found people who were willing to take a bet on me not only as an intern, but also, you know, Doug Steiner in my first development job. Yeah, I didn't know how to do all of that, but I, you know, when I, we, We were hiring recently, and you meet a lot of really smart people, and if you find people who are smart and curious and want to learn and who are into it. Right. Like, you can't hire someone. This is just a job. They're just making money.

Right.

You have to be into it and, and want to grow and want to learn and find the right person.

Yeah, no, I, I can. And everyone could tell. I mean, it's so, you know, clear about, you know, your, your passion for this. I guess it was just the way you're, you're wired. So it's like, I mean, because development, I've got to think, like, these projects, I mean, this is not like a 9 to 5 job. You tell us. No, no. So, like, what is, like, is the phone ringing, like, all the time or like, what happens on the weekends? Are you able to just be a family or how do you navigate all that?

I mean, I'm on. I'm on mom time, too.

Yeah, that's good.

Like, you, you know, I get my kids off in the morning, come to work, got to get home and, you know, get them down to dinner and bedtime, and then I'm on again. Yeah, I know that, that. Yeah, I try to tell people, don't. I don't expect you to respond when I email. I'm just trying to, you know, work when I am able to work.

Yeah. So you're able to figure it out. And have that live work balance.

Yeah.

Wow. Well, this is amazing. I mean, you got an incredible story and it's. It's just really incredible what you all have accomplished. I mean, what, what advice would you give for the listeners again? I mean, we kind of talked about how to get into it, but like, what, what do you say to that person who wants to go get into development, I mean, or find a place to start work? What, what should they be looking for?

I think a place that. I think a vertically integrated or a looking for a place where a role is 360 degrees. There are some developers that silo, some big companies that silo roles. You know, a person who's a modeler, you have a person who's a construction person, a design person.

Yeah.

If you can find a place where you're allowed to touch all of those pieces of the deal, that allows you to learn and carry forward.

Yeah.

Right. So you're not just iterating on the same widget over and over again. It's all about the application forward and learning and pushing and how do you.

Find to work for the right people? I mean, you've worked for a lot of incredible firms. Like, was it just who had the opportunity or were you actually thinking about, wow, this is a place where I can really learn and grow?

I think both. I got lucky.

Yeah, but how do you know, like, I mean, you've worked at a couple of places. Were you calling and checking them out beforehand and figuring out, okay, these are good people to work with.

For sure. For sure. And that's the importance of relationships.

Yeah.

You know, kind of extracurricularly in the industry too.

Yeah.

What do you hear about so and so?

Yeah, so I mean, I guess the last question would be, I mean, what does the future hold for you? I mean, what, what? I mean, like five, ten years from now? What. What are you doing?

Well, I hope that we continue to build on our really great pipeline and expand our work too.

Yeah.

Like now we're talking about looking at affordable development. Can we grow to meet that market.

Like all over the country or we still just talking New York in New York?

I think that there's, you know, unlimited opportunity in New York. And I love this market and I think that, you know, we have great relationships in this market, particularly with construction.

Yeah.

Kind of bringing value to a wider range of housing in New York. That's something that we'd love to.

Yeah. And it seems like, I mean, New York is such a big market that you could spend an entire lifetime working here. But Just doing different things.

Yeah.

Yeah. And learning along the way.

Yeah. And never getting bored.

Yeah. Rosie, this was awesome. Thank you so much for joining us. I know people are going to get, like, so much out of this, so we really appreciate. It was so great to. To meet you on the panel and then have a chance to really get to know you better. So thank you too. Wonderful. And thank you, everyone, for joining. As always, you can go to james nelson.com which is where you can find the show notes for this episode. You figure out how to connect with Rosie. There's also a lot of helpful articles there as well. We write for Forbes every week, put out a lot of content videos. We're here to help you gain the insider's edge to real estate investing. So the most helpful thing is if you really like this episode, maybe it's someone that you know who's thinking about. Maybe they're at a point in their career where they're looking to make a transition. Maybe they're interested in development. This would be a really great episode to forward to them. Think about that. I mean, I do that all the time. I consume a ton of podcasts. When I hear some, I, you know, I send it along. That's a great thing to do. So we appreciate you getting the word out there. And as always, thank you. Thank you for joining and investing the time. Until next week, thank you.