Rudin Management Company Part 2
CEO and vice chairman Bill Rudin and Samantha Rudin Earls of Rudin Management Company speak with EisnerAmper Real Estate Services Group Chair Ken Weissenberg about the development and design of the futuristic Dock 72 at the Brooklyn Navy Yard and their repositioning strategy for NYC.
- Understanding NYC urbanism, providing the right environment for tenants and the importance of making long-term decisions when redeveloping
- Balancing the different tastes of Baby Boomers returning to the city and the younger generations
- How the right restaurant can highlight a property
Ken Weissenberg: Hi Ken Weissenberg from EisnerAmper I'm here at Greenwich Lane with Bill Rudin and Samantha Rudin and we're here to talk about what's going on in their lives and in real estate in New York and in general. Welcome.
Bill Rudin: Thank you. Thanks for joining us here at our model apartment here at the Greenwich Lane.
KW: It is absolutely stunning. I'm very impressed, and I wish I had the cash to buy a place like this. Samantha you are going to tell us about the design of the lobby?
SR: Yes. So we worked with Fogarty Finger to design the interiors of Dock 72. Robert Finger and his team came in, and the challenge was that there's this long corridor that you walk down to enter the building. WeWork’s aesthetic is very much of this, sort of, you know, you come and you sit and it's a very livable approachable aesthetic, and there was a sort of long cold corridor so how do we infuse it with the WeWork essence? And what they're looking for? Also, it's a main thoroughfare. People are going to be walking through there, and some people are going to want to where they're going super-fast, and other people are going to want to sit and have their coffee. So we went back and forth and Robert Finger and his team really came up with this beautiful optimal solution. They created a series of rooms to break up this long hallway and allow people to have the opportunity to sit and talk and relax, but also not block the flow. I think their design really honored this sort of, you know, futuristic or sort of the need for people to live and breathe and experience where they're working, but also not have it be just a common and relaxed. So that there's this nice flow and grandeur that you experience, but it's also balanced with this wonderful ease and comfort that you'll experience that really I think is important to WeWork.
BR: The lobby has two entrances, one coming from the river where the ferry service will literally dock a couple hundred feet from the entrance to the western lobby. Then the eastern lobby where you're coming from the main entrance of the Navy Yard, and it connects in the middle where it will have a coffee bar, and food service. You can then sit, you can also sit outside, look at the basketball court, look at the garden, the grass, have your coffee, have your lunch, and or sit inside depending on the weather, but you have water on three sides of a very unique site. You have water on three sides, and then you have the industrial part of the Navy Yard. It’s still a major working yard for rehabilitation of ships. So you have a NOAA ship, or you have a tugboat, or you have a major ship coming in the cranes. It’s a lot of moving things, a lot of action, so it's very dynamic.
KW: It'd be an incredible place to work.
BR: We think it will be an incredible place to work, and it will also have as I mentioned before. In terms of infrastructure it was designed if you go to a building in Chelsea or in Soho they're beautiful architectural cast-iron buildings, but they weren't designed to have one person for every hundred feet within the space. That’s where everybody is moving to that type of density. So we've put in our design the bathrooms that will hold that capacity, the mechanical systems will hold that capacity the electrical systems the elevators all of those things are in there so….
KW: The AC to keep a building like that cool when it's fully occupied is massive.
BR: So everybody's driving down to save money to get more people in. but you need to again retain that quality of environment and attractiveness. Also because it's a long design center core, you’re very close to the windows. there's I think it's 30 feet from the core to the to the exterior with 14 foot floor to ceiling heights eight feet of vision glass so it's going to bring.
KW: The views must be incredible.
BR: The views are amazing, the light and air,-they'll come in- so it's very exciting. It’s a European model where you will always see light and air coming into the space. So we're very excited. We’ve broken ground. We’re out marketing. we brought in again, part of this collaboration effort, we brought in both Chrisman & Wakefield and CBRE to help us on the leasing, and its really been a great team experience working with all these great minds together to create what we think is the office building of the future. It will it be a LEED standard. We’ll be putting our very unique building operating system called Nantom within the building that provides data to our building managers to increase or decrease air conditioning and heating based on population. Very energy efficient, and so it's really very exciting to be a part of it, and again to work with my kids and my cousin Eric and the rest of the Rudin team.
KW: Eric’s son must be college age by now?
BR: Now Eric has two sons and they're still in, one's in high school and one’s in middle school, but my cousin Madeleine- her son graduated college I guess last year. He’s been involved he's a screenwriter and a director, but he's involved with working with Michael and our ventures related to technology. We’re starting to invest and look at opportunities, particularly in real estate, and how to use real estate technology to enhance our product. We’ve already invested in a few companies. We’ve invested in WeWork when we've enlisted a few other companies, and we've created our own business to utilize technology.
KW: I'm fascinated by the marriage of technology and real estate and I think it's really the next big thing that's going to change the way people live and work.
BR: Well literally next week, and in middle of June, we'll be announcing our product; it's called Nantom. It really is on the cutting edge of creating the brains for operating any type of building, and giving data to the manager of the building so he and his engineers can increase decrease the flow of air conditioning. We use machine learning algorithms to help create the database, and so we know on a particular day, on a Friday in the summer, at two o'clock the population drops very fast so we can start pulling back the fan speeds in the in the HVAC systems, reduce energy costs, without reducing comfort and save money.
KW: You won’t overcook people in the winter or freeze people in the summer.
BR: Exactly. We’ve actually, in the buildings, we've put the system in our buildings right. Now we've had a forty percent reduction in hot or cold calls from the tenants, which then allows the engineers to focus on other things as opposed to just going up and adjusting the air conditioning or heating in the space. It’s very exciting. One thing I forgot to mention in terms of the Brooklyn Navy Yard is, besides the ferry service -we've created with the Navy Yard a shuttle service- connecting our building, and the entire Navy Yard to the major subway stops that are by the shuttle service; about seven minutes away with Wi-Fi enabled shuttles, air-conditioned comfortable chairs. That’s one of the initiatives that we've worked on. then the City and the mayor, in his State of the City address, announced earlier this year a serious proposal related to what's called the Bronx/Queens connector-the BQX-we we'll connect northern Queens on the on the water, coming all the way down through Williamsburg, into the Navy Yard and literally through the Navy Yard, down to Dumberg and then down to Red Hook. We’re very excited about that and working with the coalition that's come together to really make sure that that project does get funded. We’re very key I think to the long-term viability of Brooklyn and Queens in terms of economic development.
KW: Now your company's always had an affinity to mass transit in terms of that.
BR: Oh definitely. My grandfather built his first building up in East Tremont and Westchester Square in the Bronx. 1400 Ben Street, a building that we still owned. He built it there because it was the terminus of the subway, that was done in 1927. He was a true pioneer in understanding mass transit connectivity to living and working and his philosophy was if I can't get there by subway, I don't want to own it. So we have fulfilled that the mission, and all of our developments- you look at all of our projects- are very close proximity to mass transit. Even in some of our buildings like at 560 Lexington Avenue, which I talked about before. We have a subway entrance there. We just went back and rebuilt the whole ground floor, we designed that, reimagined that, with Skidmore and something Samantha also worked on, and so that's very much a part of our ethos, that there has to be a mass transit connectivity to our projects.
KW: That's really terrific you seem to be retrofitting a lot of your properties recently. 68th Street 70th street what's your goal and repositioning those properties?
SR: I think that the buyers are, in this case, renters, people who are looking for a certain aesthetic and want to live as nice a way as possible. So I’m always juxtaposing, like the condos, and seeing the level of finish, and learning about that. Then also, when I walk through the buildings built by my great-grandfather, by my father's grandfather Samuel, and kind of walking through, I'll open the door and I'll see this giant closet and I’ll be like they had it right the whole time! The bones are really there, and then it's our job to sort of come in and say okay maybe someone is looking for a little a nicer kitchen design, not designed, but finish level, and so we're really looking in terms of going back in our existing portfolio where all the bones and everything is there, but it's maybe just giving it a little lift and upgrade, and I've always loved a good makeover so there's nothing better.
KW: And you’re adding amenities that people are craving.
SR: We're adding playrooms. We’re adding children's play rooms,, gyms especially in the winter when people can't go outside. There’s nothing better than being able to take your kids to a playroom that's inside, and there will be other families and other kids from other buildings that come by, and our building uptown at 211 East 70th Street has a courtyard in front. Literally, it's as if you'd think there was, I don't know what, I mean people come from all over to this garden, a courtyard with their kids to play and enjoy. It’s really, when the need and the appetite, when people want something, I think it's our job to listen and hear, and try in this best way, if possible, respond and answer that.
BR: I think it's also about urbanism. People, families coming back into the city. That’s something my father, and uncle, and Sam Rudin - my grandfather, always believed it in during the 70s. When people were moving out of the city, and the building that we live in now- I'm very lucky to have my daughter and son-in-law and granddaughter live in the same building. So Elle comes up to visit, we take her down to the garden and play, and that and so it's that urbanism. People wanted to be in the city, so we have to provide the right environment for our customers, and our clients, and when we started redoing 211 Park- maybe six years ago- I didn't know when Samantha was going to get married, and when she was going to have a kid, and where they were going to live, but it was that lot. That plaza was done in the in the 70s, and it was dated, and it needed a refresh. So we really did a great job. When I leave every morning, or come back at night and I see the Elle playing with her friends, and the literally the hundred year old man who lives in the building down there smiling, enjoying it, that gives me the greatest pleasure, because I know we've done something right.
And we did that at 215 East 68th Street; a building I grew up in when I was a young boy. We totally redid the façade. It’s a million foot building, over 600 apartments, and the first terracotta screen wall redo in the city of New York. It’s amazing. The aesthetic is amazing, and then we did all the outdoor spaces, and built playgrounds, and passive play areas and seating.
KW: It's really it's a beautiful building.
BR: It's amazing, and it was a difficult process because tenants were in the building when we were doing this work. At the end of the day, it's really come out.. It’s beautifully designed, and I think people appreciate it. I think that's our responsibility as stewards of this incredible portfolio that we've inherited. To make sure that it's optimized in terms of its’ look and its’ feel, and that hopefully translates into a more positive bottom line for us. Sometimes we spend the money even though we know we're not going to necessarily get that return back so quickly. We look at our investments on the long-term basis. So we could have just replaced and patched the bricks at 215 but we made a decision as a family. This was a very unique opportunity to reimagine this building. We made that decision and spent a lot of time and effort doing it. We continually do that within our whole our whole portfolio. Samantha mentioned before we go back and redo the bathrooms, and the kitchens, and something that that Samantha has really taken on, in terms of responsibility, in the hallways- and making sure that when you come home- that you feel like it's a home. It’s as top quality as buying a co-op or a condominium. So that's our philosophy, and it's always been our philosophy, and as I said before the young folks- I call them the younginns or G4- that they really brought their sensibility. They’re in viewpoint to the table just like when I start out in the business. in the in the late 70s, Eric and my sister Beth and cousin Madeline, we all brought our view and my father and uncle took their sensibility, and combined with our cinema. We got to the point where we were all working in a very positive way to fulfill our mission.
KW: From our generation that, the baby boomers are moving back into the city, I can't yet, my kids are only 14 and 16 but the baby boomers…
BR: I’m sure they want to move back into the city.
KW: My daughter's here today, running around with her friends. For the younger generation, they seem to be staying in the city longer, and having their children here in the city. How are you balancing the different taste between the baby boomer generation and the millennial generation and your designs?
BR: I'll let Samantha answer that one.
SR: I'll just speak generally. It’s always hard to know exactly what people's tastes are and what people are going to like. So we kind of take the perspective of -like our building at 211 East 70th Street -we redid the lobby, and we made it all white. It was a darker wood before, and the older generation really bucked and had had a hard time with it because they were used to this darker wood lobby that I think they found more traditional and classical. So when they came in and they saw that it was all white, and more modern they really had a hard time adjusting at first. I think that, you know you're never going to make everyone happy, and people resist change as well, so it's always hard to, sort of, you know, it was the same with the Greenwich Lane. We were tearing down certain buildings, and so I think at the end though, people do like if you're upgrading and trying to make something new and fresh and trying to improve upon what was there before. It’s always nice to honor the past, and not totally flip it over. That said, if you see that there's an opportunity to improve something and improve people's quality of life, I want people to come home and be happy. I want it to be bright now. Maybe not everyone likes everything white and bright, but I think that there is a real effort to just sort of create something that feels as livable and as fresh as possible for people.
BR: I think at the end of the day good design - whether you're a millennium, or you know, of our generation -good design stands out. I think in terms of the kitchens and the bathrooms, they’re good design, but nothing too crazy on either side of the spectrum. We just try to make sure there's a nice balance and how it's clean. So I think and we again the diversity of our tenants in our residential buildings are younger people just come out of college, to literally hundreds you know a gentleman at 211, is a hundred years old, and he's been there a long time.
KW: You seem to be creating communities instead of just little individual dwelling units.
SR: And I think also then people adjust the things and then all of a sudden the next thing you hear -they're like, oh I love it. Definitely, we do try and take the approach, not to in general, unless it's someone's personal home and they want to paint the walls whatever color they want -we try not to rock the boat too much. I always say, like vanilla ice cream- you may not love it, and want to order it every time, but if someone puts some vanilla ice cream in front of you it's, good it's okay, you're going to be okay.
KW: Now you rent to a lot of restaurants for of your retail spaces. Is there a particular slant towards restaurants?
BR: Well I think it just depends where the space is in the market. We just added two at 136 East 55th Street. We divided a space. There was a bank space, and again it's all tied into providing amenities for your tenants and for the neighborhood. So very important that these type of restaurants are really, you know, whether it's Juice Press or Organic Avenue, which is coming back or Pret A Manger or Starbucks. These are all part of the amenity package that you need to provide for your customers and your tenant so they're filling in a very important niche in the marketplace.
KW: That’s great any particular plans for the old Sports Authority store?
BR: Well it's still in bankruptcy proceedings so we're not sure what's happening there yet. But there could be companies that buy that lease or if not. We’ll get it back, and we'll then figure out what to do. It’s a very vibrant neighborhood on 51st and Third Avenue, and so we'll figure that but I think a little early to tell what we know what the status is of that.
EisnerAmper Real Estate Services Group Chair Ken Weissenberg talks about 100 years of Rudin real estate development in New York with CEO and vice chairman Bill Rudin and Samantha Rudin Earls of Rudin Management Company. Bill shares how he started in development, and how the next generation of Rudin developers is coming up in the family business.
Bill Rudin and Samantha Rudin Earls of Rudin Management Company discuss how the condo market has changed since they started leasing The Greenwich Lane, the role of high-end amenities in marketing units, and designing unique family communities.