Secret formula for development? Vision + Guts + Thrift + OPM

February 5, 2005 | Uncategorized

What does it take to be a developer?  A lengthy New York Times article (subscription required) that opens by showing how real estate is often the road to wealth:

 

In a little over two years, Shaya Boymelgreen, an Israeli immigrant who came to New York in 1969 to study at a yeshiva, has gone from being an obscure builder of low-rise apartment houses to become one of the city’s busiest residential developers.

 

Shaya Boymelgreen

 

The Times article neatly illustrates many qualities needed in a developer, starting with

Vision:

 

But perhaps the most intriguing thing about Mr. Boymelgreen, 53, is his ability to see real estate gold in the most disparate places.

 

then Guts:

 

Richard Marans, a lawyer … has seen Mr. Boymelgreen plunge into risky ventures before, in fringe areas shunned by others. “It’s an example of his convictions, his vision for the market and where things are going to go and his ability to stand by those convictions,” he said. “You have to be a tough guy to do that. He’s not afraid of the risk.”

 

then Thrift:

 

Time is the essential, invisible component of a developer’s work. Delays of weeks or months can mean enormous extra costs as interest payments pile up on large construction loans.

 

Time was clearly on Mr. Boymelgreen’s mind last month during a visit to River Lofts, the TriBeCa development, where about 125 workers bustled around the two buildings, old and new. “Every day costs me over here,” he told Alan J. Krause, his director of operations, urging him to coordinate the work of the many subcontractors to avoid delays.

 

Much of the work at River Lofts and virtually all of it at 60 Spring Street and several other projects has been done without union labor, and this has put Mr. Boymelgreen on a collision course with the city’s construction unions.

 

Mr. Boymelgreen said he decided to handle the conversion of 15 Broad Street without union labor for the simple reason that it was cheaper that way and it allowed him to bring his condos to market at a more competitive price.

 

and last but certainly not least, lots of OPM: Other People’s Money, in the form of an angel investor:

 

[Leviev Boymelgreen is a] partnership with Lev Leviev, an Israeli billionaire and diamond magnate.

 

Mr. Leviev was ranked at No. 277 last year on the Forbes magazine list of the world’s richest people, with an estimated net worth of $2 billion.

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