Total existing-home sales—completed transactions that include single-family homes, townhomes, condominiums and co-ops—rose 3.1% from December to a seasonally adjusted annual rate of 4.00 million in January.
Five Questions With Veteran Developer Martin Ginsburg
As the COVID-19 pandemic continues to impact the Hudson Valley’s real estate market and overall economy, Real Estate In-Depth this month turned to a veteran real estate executive— Martin Ginsburg—who has for 57 years thrived in boom times and survived a number of major real estate downturns and deep recessions for some much needed perspective.
The 85-year old affable founder and principal of Ginsburg Development Companies has developed more than 10,000 housing units, mostly in the New York metro region, including Westchester, Rockland and Orange counties. The Valhalla-based company, prior to the Great Recession, mostly focused on condominium developments and built such notable successful and prestigious luxury developments, including: Boulder Ridge, Pondside, Mystic Pointe, Marbury Corners, Christie Place, The Fairways at Wallkill, Harbors at Haverstraw, Quaker Green and Gillette Ridge.
Some of its notable completed rental apartment projects and developments in progress include: River Tides, 1177 and Stratus in the Greystone neighborhood of Yonkers, The Lofts in Hastings-on-Hudson, Harbor Square in Ossining and Fort Hill Apartments in Peekskill, The Metro in Downtown White Plains and The Landing in Mohegan Lake. In 2020 the readers of Westchester Magazine voted GDC as “Westchester’s Best Luxury Apartment Developer.”
In response to the market forces after the Great Recession, GDC, whose motto is “Always with Integrity” has concentrated on rental housing development almost exclusively. The company began operations in the early 1960s in Tuckahoe and currently makes its home in Valhalla.
Let’s find out his views on the rental housing market today and the market forces that he believes will drive activity post COVID-19.
Real Estate In-Depth: What is the state of the rental apartment market in Westchester County and is the influx of New York City residents to the county driving leasing volume?
Ginsburg: I would say we are definitely seeing people coming out of New York City. We always had a flow of people coming out of New York City, particularly in our Yonkers apartments. I would say, however, that we are busy seeing people from New York City (Manhattan and Brooklyn) in our Peekskill property (Fort Hill).
Real Estate In-Depth: Has this exodus trend from New York City prompted GDC to invest in additional projects in Westchester and other Hudson Valley counties, and if so, where?
Ginsburg: We are active in Rockland County in Haverstraw (Harbors at Haverstraw) and we have been there a long time. We are starting a new 252-apartment project there. We just completed 536 units (apartments, condominiums and townhomes) and we are leasing the last part of the Harbors project there. We have very strong activity there from New York. This is very high-end, on the water apartments.
Editor’s Note: Ginsburg then discussed one of his more high-profile developments, the redevelopment of the former Westchester Financial Center in Downtown White Plains into the mixed-use City Square development.
We are leasing the offices and we are building the (188) apartments, which were converted from where Pace University had their school… We are keeping part of the offices—the top three floors are going to be retained as penthouse offices with their own entrance, which is what it was before. And then we are doing a pretty unique residential development there with a strong art focus. It is going to be a real atelier type of approach with high ceilings and we are going to expose the concrete and duct work. A very New York City type design that you might see on the Lower East Side. There aren’t too many things like that in Westchester, a very art-focused (project). Every apartment is going to have its own gallery. I think we will be marketing (the property) in the spring and we may even start earlier. We are busy building (right now). We will probably have something out on it maybe before the end of the year. Occupancy will probably be by early next year. It’s been really tough to get any momentum going because of this COVID business. It’s really hard to build right now.
Real Estate In-Depth: Do you believe this migration from New York City to the suburbs will be a short-term or long-term trend?
Ginsburg: I think New York City is still New York City and that is not going to change and I think as soon as they have this COVID business under control it will recover. I am assuming that next year is still a COVID year as people wait for the vaccines to come out (and be distributed) and become more secure. I think that in 2022 it (COVID) will already be part of history. They had this “Spanish flu” in 1918 after World War I (that killed 625,000 Americans) and after the flu came the Roaring ‘20s, that was one of the country’s hottest streaks as far as the ‘go-go’ times. People’s memories are very short that way. I think New York is still the commercial center of the country and maybe the world. (Post COVID-19) I think that people will not come to Westchester to get away from COVID like they are doing now. One thing I always felt is that Westchester is a hidden secret from New York City because all the people that have lived in either the Bronx, Brooklyn and Queens, think that Westchester is upstate… A lot of people are going to learn (just how close Westchester is to New York City. It is so much nicer. We are green up here. You drive around Westchester it is a beautiful county. We got parks, we got lakes, we got the Hudson River, it really is beautiful. I think people will have a lesson in geography. A lot of people are going to learn how close Westchester is (to New York City) and it will be part of their memory bank now and maybe it will register that way. And I think long-term it will be more important than COVID.
Real Estate In-Depth: What are the impediments to growth at this point, COVID-19, rising cost of lumber, natural gas moratorium?
Ginsburg: The major thing is high taxes. High taxes are a killer, both New York State taxes, local taxes and real estate taxes. That is a killer, certainly in our area. In order to attract investment, the numbers have to work out. When you put the taxes in, it is certainly an impediment. Almost all of the new development has definitely an IDA PILOT or you can’t make the numbers work… Right now, the (incentives) allow you to make the numbers work so you can get the financing. So, there has to be government flexibility to encourage development and a lot of parts of the state are not really that (business) friendly, which is holding down development there. That is not so much the case in cities in Westchester, New Rochelle for example has all that development because of its program.
Real Estate In-Depth: What was the most difficult time your firm has faced in its more than 57 years in business and what was the most rewarding?
Ginsburg: I would say the most difficult time was the ‘Great Recession.’ That was really a bad time. For us it lasted from 2008 to 2011, 2012. That was a long drawn out thing for us. We were deeply invested all over the place and we were building for sale (properties) mostly. So, when you are building for sale you are buying land and when you had a period like that, land was worthless. Nobody wants land. So, we ended up that we were in a deep hole that took us a long time to get out of. I still have debt that I am paying off from that period.
I would say in terms of the most rewarding is whatever I am working on currently. That is where my energy is. One of these days I would like to also write a book because I have done a lot of work over the years. I have probably done more residential work north of New York City than any living person. I am sure of that… I am always trying to do everything better. Whatever I have learned I am trying to make sure that I don’t go backwards on anything.
Editor’s Note: One of the lessons Ginsburg, who will turn 86 years of age next month, learned from those hard times was switching from for-sale projects to rental apartment communities, which afford his firm the advantage of retaining an asset as compared to the for-sale development. He quipped that at age 85, he at last is “in a good groove.”