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September 23, 2019Cart

Business

by Westchester County Business Journal
by WCBJ

Future of Hudson Valley real estate: no longer ‘location, location, location’

What’s the future look like for Hudson Valley’s real estate?

That’s the question the Hudson Valley Economic Development Corp. put to a panel of top regional real estate professionals at Marist College in Poughkeepsie on April 13. The group gathered as the main event for the HVEDC’s “Hudson Valley Visionaries: A Look Into the Future of Commercial Real Estate.”

Half of the panel at the Hudson Valley Economic Development Corp. “Future of Commercial Real Estate” discussion. RXR Realty’s Seth Pinsky is speaking in front of the microphone.

One thing to know about the future is that real estate is no longer “location, location, location,” RPW Group CEO Robert Weisz told the crowd of about 400 in Marist’s student center.

“Today we are saying location, service, service,” said Weisz, the landlord and developer whose properties include 800 Westchester Ave. in Rye Brook and 1133 Westchester Ave. in White Plains.

“Companies are looking at real estate in a completely different way,” he added. While they used to locate wherever was most convenient for their leadership, companies are now focused on landing wherever they can attract top talent.

“Services are key for that employee retention and the attraction of capable talent,” Weisz said. “So amenities that we used to consider wonderful to have, now are must have.”

Those must-haves include modern cafeterias, fitness rooms, banking centers, beauty parlors, even nap rooms, Weisz said.

RM Friedland President Sarah Jones-Maturo said future real estate must accommodate “the time-starved nature of all of our lives.” She said this year 80 percent of mothers work, while the number was 60 percent in the 1970s.

“In a two-parent working house, efficiency and convenience are absolutely critical,” Jones-Maturo said.

What does that mean for real estate? Jones-Maturo said it could accelerate a decline for in-store retail and an increase in warehousing for online retailers, as busy parents eschew shopping for online ordering. And it also bodes well for the live, work, play model of real estate development.

“The concept there is you live, you eat, you work, all within one square block,” Jones-Maturo said. “And perhaps if we become less busy things will change, but I don’t see that happening.”

Seth Pinsky, metro emerging markets and public affairs director of RXR Realty, said he learned from working under former New York City Mayor Michael Bloomberg that talent was crucial to growing a local economy.

“Businesses will follow talent wherever they are,” Pinsky said. “And if you don’t have talent, you’re not going to succeed.”

But New York City, with its 8.5 million residents, seems unlikely to ever struggle to attract talent. Pinsky noted the number of people 18 to 34 years old in the New York region outside of New York City has declined in the past three decades, while the same age group has increased within the city. So how can smaller municipalities to New York City’s north attract a modern workforce?

“You need to invest in skills creation – universities and educational facilities are a very important part of that,” Pinsky said. “And you also need to make sure you can give people the types of lifestyles they are looking for.”

At the top of the list are walkable neighborhoods near transit, Pinsky said. Those types of neighborhoods can both retain the retirement age community and attract recent college grads.

Pinsky’s RXR is leading an effort aimed at creating just such a vibe in New Rochelle. The company has partnered with Renaissance Downtowns as the city’s master developer for a plan that will add offices and retail space, along with thousands of new housing units and hotel rooms. The process also streamlined the city’s environmental review of projects in its downtown.

RXR is constructing two major developments in New Rochelle’s downtown that will add more than 1,000 apartments and about 40,000 square feet of retail space.

A leader from the municipal side of that effort also was on the panel. New Rochelle’s Development Commissioner Luiz Aragon explained the city’s thinking in pursuing the master developer plan.

With a downtown just 25 minutes by train to Grand Central Terminal, Aragon said the city had the advantage of location. But that hadn’t historically helped it attract development.

“We had the location, but we needed to create the talent pool and the industry to support that,” Aragon said.

He said the city decided to embrace change to make the city viable for that new talent and industry. Officials worked with the community and developers such as RXR to specify the type of development it was looking for, and streamline how it reviews those projects.

“How many of other municipalities can guarantee site plan approval for a project within 90 days?” Aragon asked. “I can. That is because we put together a framework to get things done.”