Monday, July 25, 2016

Forest City's fabulist Greene: buildings "very low density," modular provided a 20% discount

Forest City Ratner's Adam Greene is apparently willing say what it takes to create a new reality--the Brett Yormark of real estate. Consider his statement to the Daily News in June:
“The buildings were designed to be of the neighborhood,” Greene said. “They're very low density. There's a lot of sensitivity about scale. It has the scale of a (Robert) Moses plan but with the sensitivity of Jane Jacobs. This is designed to grow out of small stoops.”
That doesn't make a shred of sense. With 6,430 apartments over 22 acres, that's 292 apartments per acre. The ratio gets higher if you cut out the arena plaza and arena air space: call it 19 acres, which would mean 338 apartments per acre.

Small stoops? Jane Jacobs? Note that 535 Carlton (B14), pictured at right across the street from row houses with small stops, is the shortest and least bulky of the project's buildings.

The successful modular plan?

Now Bisnow, reporting 7/22/16 on Bisnow’s Residence of the Future panel, DEVELOPERS, FINANCIERS LOOKING FOR CLARITY IN A CHAOTIC RESIDENTIAL MARKET, tells us:
For Adam and his Prospect Heights master plan, for example, the solution was good design, with oversized windows to change the perception of the space. He also extolled modular construction—like Forest City is building at Pacific Park—pointing out that building units in a weatherproof factory gave his company a 20% discount and predicting the method would soon be the norm.
What? Building modular was supposed to save 20% if it worked as planned, since work could proceed simultaneously on site and in the factory.

But the plan sure did not work with 461 Dean Street, aka B2, which, rather than save time in construction, has taken twice as long.

Forest City Ratner had to buy out its investment partner, had to pay off a tax-exempt loan early (and not draw down the remaining expected tax-exempt financing) and has taken an huge paper loss (aka "impairment") on the building, the cost of which has grown.

If modular will be the norm, well, wouldn't they have announced new contracts for the modular factory? As of this past March, the lack of such contracts led to the loss of many workers.

The cost of density

Another issue raised at the panel was the cost of density:
The panelists of Bisnow’s Residence of the Future said while the market was holding for now and co-living communities, modular construction, and amenities keep spaces interesting and innovative, chaotic market forces and stifling regulations could do some serious damage if a solution isn’t found.

...“Even building for density doesn’t help,” ...Greene added. “It obviously depends on how you design the building, but more density means more bathrooms and kitchens, meaning higher costs.”
Interesting. Aren't there economies of scale once you get bigger?

Perhaps he was also acknowledging that a modular building is taller than a conventional one because each unit comes with both a ceiling and a floor, so that means redundancy.

No comments:

Post a Comment