Josh Schuster, the principal at developer DHA Capital, seems to be on a contrarian streak, bobbing and weaving across trends that tacitly govern New York City’s real estate industry.
The young executive, who previously targeted a career in Wall Street, has had a hand in projects that carry unique elements, the type that makes life a lot easier for real estate reporters.
“We think that our project is different from the vast competition that’s out there,” he said of his company’s 12 East 13th Street project.
The building, which is nearing completion, has one distinguishing characteristic.
It comes equipped with a robotic parking garage, enabling residents to enter a street-level entrance and have their car conveniently transported to a second floor parking garage.
The building, which was once the site of a Hertz parking garage, is one of the first residential properties in New York City to include such an amenity. It shares that distinction with the One York building in Tribeca.
The project, which had a rough start in terms of generating interest from buyers, provided Schuster with a lesson in how people decide to spend millions of dollars on their living space.
“What we learned was that it’s very difficult for an end-user purchasing an apartment in the $13 million to $15 million price point without actually walking in the space, feeling the volume, appreciating the aesthetics and the finishes, actually putting a hand on the hardware and opening a refrigerator. It’s like buying a $250,000 Bentley without test-driving it,” he said.
“If they’re going to live there and spend time raising families and entertaining guests, (they would) want to be inside the space.”
Schuster’s firm first listed units in the building in 2013, when construction was still ongoing. They eventually took the property off the market and then re-surfaced with the listing last February.
Currently, three of eight units in the property have already been sold, and Schuster attributes the progress to targeting an underserved demographic.
“What’s interesting about 12 East 13th Street — and not to take on our competitors, the surrounding properties that are all targeting the same buyer, the same demographic, they all have zero sales. Whereas our building is nearly 50 percent sold,” he said.
The same contrarian approach extends to DHA Capital’s other projects.
The company’s 50 Clinton Street and 75 Kenmare Street developments veer away from the trend of building full-floor units and massive penthouses, instead targeting first-time buyers, or as Schuster calls them, “entry-level, mid-range, celebrity-type buyers.”
The 50 Clinton Street project, for instance, offers one-bedroom units that clock in at 600 s/f and start at around $960,000. This represents a steep discount from the average price for condos in Manhattan.
“Consumers in the marketplace are looking between $1 million and $4 million. And there isn’t a lot of product in that price point,” Schuster said.
The 50 Clinton project answered that demand, and Schuster wonders whether DHA may been the victim of its own success.
“What’s interesting, when you look at the pipeline of buildings coming to the market, everyone’s trying to mirror the 50 Clinton business plan, which is (building) these efficient-sized units,” he said.
“The big question is, moving forward, on some of these new developments, do we want to mirror that and face potential competition from all these new units coming on the market, also targeting the same price point, the same buyer? Or do we now want to be contrarian to that and perhaps build slightly larger, a little more luxurious space and maybe tap into the person who is willing to spend a little bit more.”
Meanwhile, 75 Kenmare is DHA’s new addition to its portfolio of “efficient-sized units.” The building, which is expected to stretch to seven stories, will contain 37 to 40 apartments.
In spite of being involved in about $500 million in residential mixed-used development and having $1.2 billion in the pipeline, Schuster said that he is still working on gaining a signature flourish, something that stamps his personality on projects.
“One of my mentors in the business is Jeff Levine (Douglaston Development) and he has two signatures that he does in all his condos, which is really cool. He does a safe in the walk-in closet and he does a lockbox in the medicine cabinet. And that’s how you know it’s a Jeff Levine project. It’s stamped with that. One day, I hope to have that kind of stamp,” he said.
For now, he’ll settle for something that is less self-indulgent. “Right now, what you get out of our projects is just a level of quality craftsmanship. We don’t cut corners.
“I think when you’re buying into or renting into a project that we’ve developed, something that we’re proud of, I think the end-user can take confidence in that brand.”