Boroughs & Burbs, the National Real Estate Conversation
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Boroughs & Burbs, the National Real Estate Conversation
Boroughs & Burbs 190 || Large Luxury Renovation Projects
What does it take to pull off a large-scale luxury renovation? This week on Boroughs & Burbs, episode #190 we bring together a powerhouse panel of experts to find out. Join us as we talk with builder Vincent DiSalvo of DiSalvo NYC, architect Matthew Berman of Workshop/APD, designer Brian McCarthy, and Principal of LBI ConneXt, Lisa Ben-Isvy. From historic preservation to full gut renovations, this episode dives into the intricacies, challenges, and triumphs of high-end transformations. We explore project timelines, managing client expectations, and how teams collaborate under pressure to deliver exceptional results. If you're fascinated by luxury design and construction, this is the episode for you.
The Burroughs are New York City. The Burbs are everywhere else. Real estate is the ultimate game of risk and reward. It's the biggest investment most people ever make. Fortunes are made over a lifetime and lost in a day. And we're not playing with monopoly money. How do you stay ahead? Who's buying? Who's selling? And why? What do they know? We want the truth. You need an edge. Burroughs& Burbs is your secret weapon, giving you the insider knowledge and strategies you need to succeed in the high Welcome, everybody. Burbs and Burbs, Season 5,
SPEAKER_05:Episode 190. Today, large... luxury renovation projects, and we've got an all-star cast. First, I'm going to hit share screen and say you're going to find us at burrowsandburbs.com. You can find Apple Podcasts, Spotify, Amazon Music. You can find us YouTube. All the links are going to be right there. I want to thank Grace Farms, our sponsor. You can find them at gracefarms.org. You can check out the event calendar coming up this month. We've got a concert on the 19th, Learning with Nature, Making Herb Gardens, Art in Nature. And of course, it's always served with tea. Even the concert, they've got tea with Marcus and tea at 4 to 4.30. So make sure you check out Grace Farms later on this month and drink some tea with Marcus. Lisa Ben-Izvi, she's the inspiration for this show. She's joined us today. She said, I want to pull together the best architect, the best interior designer, and the best builder for today's show. And so she did. We've got DeSalvo Contracting in the house, specialist builder contractor in New York City. We've got Matt Berman from... Workshop APD. Let me see if I can hit that. Wait, not there, but there they are. Workshop APD. He's our architect. And we've got Brian McCarthy of Brian J. McCarthy, Inc. I want to introduce you to my co-host, Roberto Cabrera. You'll find him at RobertoCabrera.com. And this is your newsletter for this month. You'll find me, John Engel, at theengelteam, at theengelteam.com. And without any further ado, welcome, everybody. Glad to have you. Lisa, why don't you tell us about the inspiration for today's show? Why this subject, large luxury renovation projects? Why is it relevant today? And why this particular group?
SPEAKER_07:Okay, so large renovation projects in Manhattan and all over the country and also outside the country. I mean, this group is the most talented, in my opinion, also happen to be the loveliest people. It all looks gorgeous when they're done, but what goes into it and the process is really the most important and how... They manage the expectations of the client's expectations and also how they work with their teams. And it just seems to me like their teams love them. Every single person that is part of Brian's firm and DeSalvo and also Workshop, they glow, even though it's stressful, about working for these teams. companies and i think you'll get a feeling throughout the course of the show as to why they're so incredible as human beings talented and why they are the best in the business
SPEAKER_05:How about you, Roberto? What are your thoughts on today's episode? I think in the preparation for this show, I mentioned, you know, we're going to talk about$500,000 projects. And you said, oh, no, John. John, add a couple zeros to that. I mean, Roberto, you sell, what,$20 million,$40 million properties in New York City. And for somebody who's just bought a$20 to$40 million property who wants to do a large renovation project, It's a complicated thing. So I've got to imagine this is an important subject to you, a subject near and dear to your heart.
SPEAKER_06:Well, it's extremely complicated and there's a lot of players involved and you never kind of know who who's the first point person who's the second who's the third how's the collaboration going to go you know i have a client right now who's brought in a couple of matt's people they do something with matt and nantucket they're also looking at something here in in manhattan and they've been amazing so um you know this is very exciting there's i mean there's there's a lot that goes into it
SPEAKER_05:so who's matt matt why don't you tell us introduce yourself tell us where are you and where do you work
SPEAKER_02:oh sure well right now uh it is Howling outside. I don't know if it's doing that where you guys are, but it is pouring rain. I'm in Asbury Park, New Jersey, where we have a weekend home and we're here for the 4th of July week. But that's just where I am right now. It is literally pouring outside. So if you hear the thunder slamming, that's not me. We started our practice about 25 years ago. and really started in the single family residential world. And that's the world that we still occupy today. We've grown from two people. I started it with my partner and college friend, Andrew Kotchen. Started it 25 years ago, two people, and now we're close to 100 people. And we've grown from, it's a lot. It's amazing. Single family residential work, growing into multifamily residential work, hospitality work, and product design and branding. All of them are sort of natural extensions of one to the next. We sort of see design as being very fluid and we like to play in a lot of sandboxes. I think, you know, we're sort of designers in general are kind of curious and slightly ADD, so we sort of like to touch a lot of things. But because of that curiosity, it's really taken us really all over the country, working with a lot of the clients that you folks all service, clients that have incredibly robust budgets, but also very high expectations, are used to sort of living a certain way and being serviced in a certain way. And we've been doing that now for 25 years and we continue to push forward.
SPEAKER_05:I'm looking at your projects on the screen and I have to say that the guy like me is intimidated by the range and scale of these projects. Is it impolite for me to ask how small a project is too small for workshop APD?
SPEAKER_02:That is a really good question, John. And we argue it all the time. I think if you were to ask different people in my office, you'd get a different response. I think the reality, though, is when it comes down to it, It really has more to do with not size, but budget alignment. We've done some jewel box, one bedroom apartments that clients really want to make special, really want to turn it into something incredible. So it's really at the end of the day, more about, I think, budget alignment and goal alignment than it is really just about size.
SPEAKER_05:All right. Vincent DeSalvo, contractor. not all over the country. Once upon a time, you had more than one location, but you've decided to focus, concentrate New York City. Tell me about DeSalvo and tell me about why that decision.
SPEAKER_01:Thanks, John. Thanks for having me on. It's a little different for builders than it is for designers and architects. We are on the ground. We have to physically build things. So we have to have a presence, a daily presence. We have to have a team of subcontractors, suppliers locally in order to build and a reliable team. They're an extension of us. And any weak link in that supply chain in that group of subcontractors will sink us. So we did for about 10 years or so, we did have a second office on the North Shore of Long Island, the Gold Coast. And we had some really significant projects out there, you know, 20,000, 30,000 foot homes. It was wonderful. We were brought out there by one of our best clients. He brought us out there to work on some home that he bought. That was back in 2005. And we spent the next 10 years working on one project after another on Center Island, Locust Valley, and Millneck. And that work slowed down after the financial crisis took a toll on that type of work. And about 2015 or so, we closed that office and just decided to focus on our core business, which is the luxury market in Manhattan, in the New York City immediate area. And since then, that's really all we've done. We'll go outside of the city for the right clients or architects, designers that we have relationships with. So we'll continue to do that, but we don't pursue that type of work.
SPEAKER_06:You seemingly have a tremendous range. I'm looking at things that are extremely modern. I mean, there's one of those apartments in there that I've shown a couple of times that I recognize. But I mean, from something that's extremely ornate to something that's very sleek and streamlined modern. I mean, if these guys design it, you'll build it, right? That apartment right there.
SPEAKER_01:We've done, I think, seven very large projects at the Dakota, including three combinations, one being about 6,300 square feet. And it was a total... really elaborate, precise restoration of all Dakota finishes. It's a proper restoration. And then we've done some really contemporary, ultra-modern, minimalistic apartments and townhouses. That one right there in the center, which you're seeing is... It was a 33-foot-wide, yeah, that one. It's a 33-foot-wide landmark townhouse in Park Slope, just off the park on Montgomery Place. It's a landmark facade, so we restored the exterior, and the interior is very modern. We took out the center bearing wall and just opened the entire interior from the ground floor, from the cellar, all the way up to the roof. Added, you know, an open... terrace up on the top floor. We're very fortunate that we get to work with some really talented architects and designers, some wonderful clients that trust us, give us the range and the bandwidth to execute at this level. It's fun getting to work on these projects and working with the team of people that we've developed relationships with over the years. It's been wonderful.
SPEAKER_05:So when a guy like Matt says, we need to get rid of that wall in the middle, it's messing up my design, you're the guy who has to scratch his chin and say, well, you know, that's kind of complicated, but we can do it. We
SPEAKER_01:can do it. I tell him I have a guy for that. I have a guy for
SPEAKER_05:that. What's holding this townhouse up? I got a guy for that.
SPEAKER_01:Yeah, we figure it out.
SPEAKER_05:Brian. Tell us about Brian J. McCarthy, Inc.
SPEAKER_04:How long have you been in business? I've been in business for 32 years, and that was coming off the heels of being a partner at Parrish Hadley, working very closely with Albert Hadley and Mrs. Parrish, which was uh really an extraordinary education and an amazing way to kind of build on this foundation um and so my business is really about well it's it's residential primarily i have done some offices for clients um but what i really love to do is get to the root of the clients and what they love so that um what the end result is, is something that is a scrapbook, essentially, of their lives, of their families. I'm known for a very high level of finish. and which is something that I love to explore with each project and create something that's very different. We work with a lot of different contemporary artists, who we do bespoke pieces of furniture, which also really, creates a unique experience which is wonderful and I'm an art lover so you know the art component has also become equally important to me and I've been very lucky over the years to have some extraordinary clients one in particular out in California who when I started working for them the husband looked at me and he said I just want you to know I'm not going to buy furniture like I buy art well it took it took about, well, let's just say he was the American ambassador to England, and before they returned to Los Angeles, where we had done this tremendous project, I said, just so you know, when you get back, we are going to be redoing some major parts of your living room, and we're going to get rid of the old and bring something of the new back in, because they were very sentimental, but the things that they were very sentimental about had no business being a part of of their life at that particular moment in time. So yeah, it's great. Our relationships are really a marriage. Working so closely with these people, you are getting to know their innermost thoughts. You really get to know them on a very personal level in terms of their relationship and their relationships with their families. So there's an element of... I don't know, maybe psychoanalysis. It's very interesting. So, you know, that also, being able to navigate that minefield. I always refer to myself, if you remember the film, Hurt Locker, because, you know, we spend our lives diffusing bombs in a certain way, and problem solving, that's every day.
SPEAKER_06:Is that a conversation for the people who you're saying these are things that were in their life that no longer need to be in their lives?
SPEAKER_04:yes i mean you know you have um you have a client that comes to you you know with various different things sometimes sometimes nothing sometimes quite a few things very often those things don't really other than the art very often those things um don't really have a part in what you're currently doing for them. But I leave that behind and I don't really address that. I allow that to sort of happen naturally that, you know, as the projects evolve, these things either have a way of working themselves in or out, and you don't really have to make it that conversation. So in the case of my LA client, they totally got it. And we did this wonderful sort of pseudo redo of this already extraordinary room, and they couldn't have been happier. So it was fun to be that honest with them.
SPEAKER_06:Is that conversation more complicated if you, I'm just thinking of sometimes I sell someone an apartment, they renovate it, they live there, and then they eventually are gonna upgrade and they're gonna sell, and it's a different marketplace. Things are different, like, well, we bought this for this, but we're not only getting this for it, and it's like, It's just a different marketplace. Things change. Is it different when you were the prior designer as well, and you're like, you told us to buy this couch. You're like, but that was for then. This is for now.
SPEAKER_04:That I haven't had to do. I mean, you know, we we will sometimes I'm doing a project in Toronto right now, which is sort of the third refresh of a house. So, you know, I am using all the things that we used before. I am cleaning it up a bit. I'm introducing some more contemporary things. But, you know, generally with the clients, it's usually moving on to another project. And, you know, I am a firm believer in if you're going to have multiple homes, They all need to be different experiences. And I think in some ways should represent where they are. I did a project in Switzerland several years ago. And when it started, there was an architect that was working on it. And it looked like any luxury hotel anywhere in the world. And this is in the Alps. It's just a spectacular landscape. And I really brought it to the attention of my client that you should feel where you are within the space that we create for you. And that's something that's very important to me. And I care equally about the outside as I do the inside, what you see from inside out and what you see from outside in, if it's a house.
SPEAKER_05:I want to come back to the unsexy half of the business. Vincent, talk to me about these guys come up, they talk about their vision and how they're going to transform a place. But you work in New York City where there's a lot of rules and a lot of restrictions. So can you talk a little bit about maybe the horror stories? Can you talk about maybe some of the lessons learned from big ambitions and trying to get have done in a very fast and efficient timetable and when things go wrong?
SPEAKER_01:Yeah, well, it sort of thins the herd, having to deal with the restrictions, the aside from just making it to the job sites and getting to the elevators and getting up to the buildings, just the insurance requirements, the co-op board requirements, the condos that we work in, the complexities of navigating through the approval process, which Matt would know extremely well. It takes months to negotiate and navigate through the building review process before you get approval to renovate any apartment, whether it's a new condo that was just recently completed or a 100-year-old pre-war building. So by the time we start, there's been a lengthy process just to get to the point of being able to swing the first hammers. And then when we do get started, we are working under really stringent conditions. We have to manage dust control. We have to manage traffic in and out of the apartments. We have to manage all sorts of noise constraints. And then we have a very strict time constraint on every single project we do. Every building is different. And then, of course, we have to build a job under all of those conditions. And we have to manage client expectations regarding timing and cost. And there's a lot to navigate. Like I said, it thins the herd. We're approaching 50 years of doing this. My brother and I have owned this company since my dad retired in 1984. He started in 1977. We've had a bit of practice at it. We've gotten somewhat good at it. We have an amazing team and we know how to set expectations correctly at this point. And if we have clients that really don't understand what it's going to take and don't have realistic expectations of what it's going to take, they usually don't hire us because they'll hire people that will promise them things that are not feasible. and then they're disappointed. So what's
SPEAKER_05:the difference between Roberto hiring me as the architect versus Workshop APD and their team of 100 people from your perspective?
SPEAKER_01:Well, that happens. The difference is that you will spend a lot of time learning the process at the client's expense, both in terms of time and cost. Whereas a professional like Matt and his team will streamline the process, get them through the process quickly, both in terms of the design process, but also simultaneously getting them through the building review process and the DOB permitting process. All of those things happen simultaneously. And to add another element to it, if the clients want to engage a contractor simultaneously while designing, we simultaneously can work on budgeting as the design process and the other processes are taking place in a parallel path. We can work on budgeting as the design is being refined. So people that don't know better, sometimes they'll bring in an architect. He built my house in Westchester. If he's not familiar with the processes in New York. We try to warn people. It's a different world. Things work differently.
SPEAKER_06:Can you talk to us about, in a building, so for example, for you, I would imagine the gatekeeper is the superintendent, whereas perhaps for Matt, the gatekeeper is like the building engineer of a certain obstacle and someone who you have to manage. Can you talk to us about those relationships and how Because some of these superintendents can be very, very difficult. Some are more accommodating. How do you manage those guys?
SPEAKER_01:The majority of the superintendents, the vast majority of the building resident managers, not superintendents, superintendents manage superintendents. The low-rise buildings, resident managers is the title for the really high-end buildings, and they're professionals. Those are the guys that... really put the needs of the buildings and the residents before anything else. They are concerned with the process. They're concerned with traffic flow through the building. They're concerned with managing deliveries and elevator scheduling and managing dust and dirt and noise. So we meet with them beforehand. We talk to them about our process. We schedule inspections of all the neighboring apartments prior to any work beginning. We photograph and document. And this is most co-ops and condo boards require this now, but this is a practice we've been doing forever. We document any existing damage before any work begins for everyone's protection. Do you
SPEAKER_05:actually get work that way? Because you mentioned you did three projects at the Dakota. I would imagine after you've done three projects successfully at the Dakota, when somebody wants to renovate at the Dakota and they talk to the resident manager, the manager is like, yeah, who are you doing the project with i have to have confidence in them
SPEAKER_01:no i mentioned we've done three large combinations we've done i can't even remember how many projects we've done john at the dakota we we've done you know a dozen large renovations so
SPEAKER_05:these managers must be recommending you at this point after 50 years they're like you need vincent he's the guy
SPEAKER_01:The resident manager of the Dakota is a good friend. He strongly advocates for us. The building engineer strongly advocates for us and a number of board members are clients of ours and they advocate for us because we know the building. We know the process there. We actually helped the building develop how they expand the bearing walls because the Dakota is one of the few buildings that actually has bearing walls. It's not a beam and column building. It's that old that it has brick bearing walls. They had trouble for a long time selling apartments because they weren't allowing bathrooms to be expanded and they couldn't even meet ADA compliance. So we developed the ability to, the barren holes are 27 inches wide there. And with working with structural engineers, we developed a way to expand them. And they've since refined them. They're even a little more onerous. Because you
SPEAKER_05:can't say no to Matt. When Matt says we're expanding the bathroom, we got to figure out a way.
SPEAKER_01:And there's always a way. And there's always a way. But it took the board to come around to being more open-minded about finding resolutions. And the building engineer there is terrific. And they figured out how to allow these things to happen. And now the apartments are selling. And we've been doing some really spectacular work there.
SPEAKER_06:So Matt, I have a question for you because you're designing the layouts of these apartments. The apartments along Park Avenue and Fifth Avenue have suffered a lot, these old co-ops. And primarily, they're extraordinary spaces with commodious rooms. The volume is incredible. But you have this enormous master bedroom with a bathroom that's a sink, a toilet, and a tub. And now... you know, people, it's a very metrosexual world. People are spending lots of times in their bathrooms and they're huge. How do you, I mean, do you, I would imagine you're encountering some situations in these buildings where these building engineers are just like, you're absolutely not expanding your wet over dry or whatever. And how do you go about convincing them? And is it like, you know, you have to have monitors for if water leaks or, you know, how do you go about and battle with that?
SPEAKER_02:Sure, I mean, like Vincent was saying, it's a collaborative effort among everyone, everybody involved, but it's also a delicate dance. I think that a couple of things are true and can be true at the same time, right? You'll have buyers, as you know, who want to live in a certain part of the city and want maybe to live in a certain address, right? So that checks one box. It's a pre-war building in a particular area. But the way the apartment lays out doesn't really meet the 21st century needs that they have or the 21st century lifestyle that they have. So there's a reconciling that happens, right? Where you've got sort of these pre-war layouts, which were very separated, very cellular, and people want to open them up and have kind of more of an open plan. So we usually are going in, looking at the plan, looking at where the opportunities are for potential enlargement. Some buildings, and again, it's always a navigation, some buildings allow you to enlarge wet spaces into adjacent closets. or into adjacent areas that may have valves in them or risers or plumbing in them. So you're not technically wet over dry, you're not over someone's bedroom, but you can enlarge slightly depending on what the adjacencies are. So it's tough. And every building is a little different. One of the frustrations, Vincent would agree, that every building has different rules. It's really up to the building co-op board or condo board at the time and what their history is. Some buildings have gotten burnt in the past because some person did a renovation 20 years ago and had a leak, and that leak affected the whole building, and they said never again. We worked in... We worked in a building on the Upper East Side where you were not allowed to take out the bathtubs, right? You had to leave all the, the bathtubs had been, you had to work on all the bathtubs. And this was a very high-end building on Park Avenue on the Upper East Side. Other buildings are more flexible. Other buildings, if you really take precautionary measures, you really go into thinking about how we're going to waterproof the floor, what we're going to do to wrap the waterproofing up the wall. We're going to curb the bathroom, curb the shower, put water sensors in. Whatever we're going to do, we're going to make sure that we're doing it the right way and in a way that can be inspected periodically as we go through the process. So by the time we get to the end, the resident manager, the building maintenance people, everyone feels very comfortable that we've taken the right steps.
SPEAKER_06:Has part of your conversation with these people been like in order to persuade them to say, look, you guys have got to start opening your eyes towards this because you got your properties are your properties along park and fifth are suffering if you become one of these buildings you're going to start to allow people to actually put money into it and they're spending a lot of money and we can assure you because it's about certainty right certain they want to be certain that it's not going to leak and they want to be certain about this and the other you know is there ever part of your conversation like you you know you guys you got to go to the board you got to tell them you got to do this because this is what you know you're going to lose out to the people down the street
SPEAKER_02:So we're talking really to the managing agents and the building architects. at the end of the day, they're listening to the board of directors and the board of directors is being elected by the people who live in the building. So the people who speak the loudest are going to be the owners and the residents in the building who are ultimately gonna change the dynamic of the board, elect a new board if they feel like it's been too restrictive. But as you know, some of these boards, some of these people have been on these boards for a very long time. They galvanize their power. They're like,
SPEAKER_06:they never let me do that. So he's not gonna get to do that.
SPEAKER_02:That's right. So, you know, it is a very, very delicate dance. I think we always encourage all clients, whenever we talk to them, oftentimes brokers will bring us in beforehand. We've done it with you where we're looking at apartments and talking to clients. We always say, get a copy of the alteration agreement ahead of time, read the rules, know what you're getting in bed with, know what, you know, and we're happy to, you know, we're happy to have a call with the The resident manager, we're getting a flood alert. We're happy to have a call with the resident manager, find out what the best practices in the building are. Sometimes you'll see things written down in black and white, but then the resident manager will tell you, well, listen, in 4C, we did this. In 12D, we did this. So you just do your homework. You want to do your due diligence and make sure you know what you're gonna do. But yeah, we've done a lot of renovations in both pre-war and post-war. I think we have created some incredible spaces, but no, it's not always going to be the five fixture bath that you wanted because the space may just not allow it.
SPEAKER_05:Yeah. Brian. Talk to me about the market now and how it's changed over the last couple of years, specifically supply chain. It occurs to me that supply chain has been a big part of your business managing expectations. I can't imagine a conversation after Vincent comes up with a very specific calendar very specific timeline for the building manager and then you have to go tell him i'm sorry but the cabinets aren't arriving on time the appliances aren't arriving on time so talk to me about the what it's like to work now with these very tight timelines and we've had supply chain issues and everybody's been hearing about it for what five years now supply chains not reliable like they used to be
SPEAKER_04:Well, I think, you know, the first thing is we have an obligation to educate our clients. And for me, that really starts if I'm able to, you know, when they are first looking for an apartment. You know, I think what you wish is that, you know, a client is smart enough about what their needs are, that as you start looking with them too, they can point out, or you have a real understanding of how it has to function for them. And so you can really streamline the process. But to go back to the question, I think it also requires time. And I will always say to a client, time is your friend. particularly today, everybody wants to stick to budgets. Nobody wants an open-ended contract where it's cost plus and time and materials and all of that. So in order to prevent change orders, you need to have a finished set of drawings. And if you have that in place, even before demolition starts, you can be ordering hardware, you can be ordering appliances. We always start start with you know critical path you know what is critical path and even for the decoration we will create a critical path you know things that are along lead time making custom carpets and and things like that so you know it's and again this is also collaborative with the architect with the builder and and with the building you know back to what Matt and Vince were talking about you know with with you know building management building architects all of that you know that That's how you create a seamless timeline of actually getting it done. We're very good at managing schedules and that's very important for clients that you're able to do that and also the budget, really managing a budget.
SPEAKER_06:So talking about that, that's about managing expectations. So when you're dealing with a client that perhaps you're not familiar with, that you've been brought in, How do you, you know, and I'm sure every contractor hates the question, how much is this going to be per square foot to renovate this apartment? Because it's far too vague. How do you, but if someone, you know, a lot of people, you know, I understand you're not going to give me a price per square foot, but Is it a$2 million renovation? Is it four? Is it, you know, when you have to, when you're kind of put on the spot and you don't have the really the luxury of going back and running numbers and all that type of thing, they just want your gut. How much is this going to cost me? How do you manage that? What's the best? What's your process? And I'm sure every situation is unique, but give me just a scenario. Either one of you.
SPEAKER_02:Well, yeah, we get asked all the time. I mean, I think it's just part of setting expectations. I think that I think that anybody who's been doing work, Vincent certainly knows, you know, I'm sure, you know, everybody sort of knows where your work price is out in the market. That's not to say if somebody comes to me and says, you know, I want to renovate my kitchen or something like that, or I've only got$350 a square foot. I will say we're not the right fit for you, right? That's not to say you can't do it. You might go to a local kitchen company or Home Depot or Ikea and put a package together that works for your budget. We know where our work price is out in the market. We know what that starting point typically is. And so we can speak very confidently and say, listen, we think that Our numbers start at around$750,$800 a square foot and go up from there, depending on the choices you make, depending on the complexity of the project, and depending on a whole host of things that we can get into as we get more granular. But at the end of the day, it's going to be somewhere there and north, depending on what you
SPEAKER_06:want to
SPEAKER_02:do.
SPEAKER_06:But those figures that you're more or less quoting are an all-in. That's including Vincent. That's including Brian. That's including you.
SPEAKER_02:No. So those numbers, we're quoting them as cost of construction numbers. Cost of construction numbers is what you would pay to the general contractor. So it includes all of the fees paid for everything from studs to windows to tile to plumbing fixtures. All of the hard things that are attached to the home and includes their overhead and profit insurance, all that. So the entire general construction package does not include furniture, does not include professional fees. And then usually what we'll say, again, just for round numbers, is we'll say your budget, your construction budget, again, depending on where you are in the country, it'll fluctuate. Think of that, your construction budget, being about 70% of your total spend. So when you think of your total budget, your construction number is gonna be about 65, 68, 72, but it's gonna be about 70% of your total spend once you add in furnishings, professional fees, landscape, if we're doing a ground-up house, and A-B cost. That doesn't include the acquisition cost, but when you look at the total bubble of everything outside of acquisitions, the 100% cost, about 70% of it goes to construction.
SPEAKER_05:Now, when you said$750,000, I thought, that sounds reasonable, because I was imagining... That was for the
SPEAKER_06:one-bedroom. That was for the one-bedroom.
SPEAKER_05:No, but 750 per foot. And then I realized, oh, you're talking about single family houses in the country. What about in
SPEAKER_02:New York City? Listen, in New York, I think we used to say 800 and up. It's definitely climbed. I would say it's probably 900 and up now. Again, this is for our work, for the work we do, and for the work that our competitors do. I'm sure Vincent would say the same thing. When he's getting stuff from us or any of our competitors, it's going to price out more or less in the same basic tier. Can it go up from there? Sure. Have we done a project that's more expensive than that? Sure. But can it start at around, in the city, maybe$900 and up is probably where it starts.
SPEAKER_06:And it's always the client who really ends up pushing the budget. their
SPEAKER_02:choices. You know, listen, you go to good designers and you go to good architects because you want good ideas, right? You're not looking, you don't want to drive the train, you want them to drive the train. I think that good designers and architects are always, that's our love language, right? We are passionate about design. We are passionate about the details, about the quality of materials, about making sure that the whole experience is an incredible experience from beginning to end. That costs money. So we are sometimes our own worst enemy. I'm not going to sugarcoat it. We often have to edit and dial ourselves back and moderate, but it's a constant dialogue with the client. Where do you want to go? What do you value? I may value this. I want to know what you value because what I know you may not be what you value. So this is your home. Let's make sure we're prioritizing what you value. And so it is always about that, I don't know, call it a pod to do, right? You're sort of, you're dancing with somebody over the course of a few years to make something happen that obviously as a designer and architect, you're proud of, but you obviously want them to love it. You want them to come home every day and have that feeling of, wow, I can't believe I live here, right? I am so happy that I made this investment. That's not to say there isn't pain along the way, We talk about peaks and valleys in the process. Lots of peaks, lots of valleys. But six months after it's all done, you hope that a client walks back through the door and says, you know, that was in the past. I'm just really happy that I get to have this place.
SPEAKER_05:Let's go around and touching on that and talk about How to be a better client. It occurs to me that you guys have learned a thing or two about what makes a really good client and a bad client. And I want to be a good client. And it occurs to me, like, number one, I would say you want your clients to be decisive. You want them to make a decision on time so that it doesn't blow the timetable. What else can we add to what it means to be a good client? Because as you say, pas de deux, it's a two-way street. And we want you to be efficient. and we want to give you the information you need to do a good job for us. So what does it mean to be a good client, Vincent? Or
SPEAKER_04:Brian, Brian? Well, I was gonna say, you know, the thing when I have either potential clients or a new client, I always ask the question, do you have an image book? Do you have, you know, do you have images of things that resonate? And it could be anything. It could be a wall color, it could be a fabric, it could be whatever. And that really aids in the process of when the client comes in. I mean, I'm going to just address budget for a second when you were asking Matt that question, because inevitably, every time a new client comes in and you're looking at a plan, but it's a new client. You don't know them. You don't know what their taste is. You don't know what their interests are. And they want to know definitively, how much is this going to cost? I have no idea. So, you know, if my hand is going to be held to the flame, you know, based on the size of an apartment or a house, I can throw out a ballpark, but you can't hold me to that. And so, you know, clients, you know, clients really need to come prepared to share with you the information that you need in order to jump off and get started.
SPEAKER_06:But Brian, you told me it was going to cost, sorry.
SPEAKER_04:We do budgets. We're very good with our budgets.
SPEAKER_01:It is very much a two-way street, though. And you can only expect clients to react to information that we provide. At the level where collectively we work, we don't build spec homes or investment properties. We build homes for sophisticated clients who have done this before almost Every client has done this before. And we're in a position where we want to provide them the information to make the right decisions so that in the end, as Matt said, they come home to a home that they love. um very often we provide them initial budgets and the reaction is oh wait this is way more than i want to spend let's figure out how to get this down we get it down to a point where they're comfortable moving forward and then inevitably they end up making all the additions and they end up going back to the original starting point where we expected the budget to be and then beyond But it's because they're satisfied, they're seeing the project being built, they're loving it, and they're gladly making additions along the way, and they end up with a product that they end up loving.
SPEAKER_05:All right, I'm going to get even more specific on that. I have a client who, young couple, professional couple, I put them in their starter house. They decided, okay, we love, love, love our location in downtown New Canaan, but it's time to expand. And they worked with this architect. And I'm going to say they spent hundreds of, at least$100,000 in the planning process. And the renovation got into the$3 million category. after which they came to me and said, this is way past what we anticipated, and we don't think it's a good idea anymore. Can you sell us a$3.5 million house in town? And we did. So how could that possibly happen? How could you get so far along with a client in that pas de deux, that dance, where they actually walk away and say, I had no idea it was going to cost this much? Has that ever happened to you?
SPEAKER_01:I would answer that by saying that I think the architect should have been working with a builder who could have given him some guidance along the way And they could have figured out that they were going off the rails.
SPEAKER_05:I think it gets to the heart of the whole hour, having all of you together and talking about collaboration. And I think it really is the best illustration I can give on what happens when the designers are not talking to the builders.
SPEAKER_01:It seems to me that there was some either misunderstanding there or that that architect just wasn't aware of what the costs were in that market. know the project
SPEAKER_05:or the client didn't know his own mind and maybe made changes and changed the scope and said well i'd really like it to be green i'd really like it to be sustainable i'd really like it and added more and more and more to the cake recipe
SPEAKER_01:that and that often happens and then sometimes sometimes clients just uh get cold feet at the last minute and decide they'd rather not go further into the process of building their own and just make the decision quickly to buy something that's already done and just redecorate.
SPEAKER_02:One of the reasons we bring in contractors for pre-construction is exactly that. I mean, they're the ones, we understand sort of rule of thumb, like I was throwing out cost per square foot. That's basic understanding of kind of historical data. Contractors are the ones who are in it every day, looking at bids from subcontractors, understanding material prices, understanding the rise and fall of material prices. We know that there was a big COVID surge. Some material prices have dropped back down. Lumber, for example, is back down to where you'd expect it to be. Steel has not dropped. PVC, copper, those have not dropped. We don't know that. I know that anecdotally from talking to contractors, but they're hearing it every day. You want to bring somebody in, especially if you're new to an area or especially if the project is ambitious or has a lot of unknowns, where you can say, listen, let's test this periodically along the way. We can start with a rule of thumb number. Contractors are going to come in and go, oh, you're budgeting$900. I think you're closer to$1,100,$1,200, whatever it is. And then you're going to start with a set of plans. It might be a light set, but you'll test it, right? What's the square footage? What are we dealing with some of the expensive items like windows, roofing, heating and cooling, things like that? I
SPEAKER_05:expect my architects to not know it anecdotally, to know it deep. Because if your design for my roof is dependent on cedar and you don't know about what's going on with the cedar market or the slate market or the lead-coated copper market, then you're going to design something that I can't afford.
SPEAKER_02:Which is why we bring contractors in, because we don't know that. We don't know what the commodity pricing is of slate at any given time. I know that there's a pecking order between an asphalt roof, a wood roof, and a slate roof, but interestingly enough, we just did a slate roof on a big project in Connecticut, and the slate roof cost and the wood roof cost were almost identical. which shocked the hell out of us because in my mind, historically, slate has always been a lot more expensive.
SPEAKER_05:You hear that? You hear that, fans? Everybody, you heard it here first. Slate is now the same price as wood. Call Matt Berman at mattberman.com if you want a slate roof for the cost of wood.
SPEAKER_02:At that time in that market, it was, right? It may have changed, but it is so important. And listen, we're all working on the projects that are all on our websites. They are big, ambitious projects that are very complicated with a lot going on. It's not a simple box on a site, you know. And so it does require requires some thought. And you asked, I want to answer the question you asked earlier about what makes a good client. And I think, I thought about this for years and we talk about it a lot. And you said somebody who's decisive. Decisive is good. You obviously don't want somebody second guessing the decisions. You also want somebody who's open-minded, right? You want to have a conversation with them. But I think at the end of the day in our profession, I would say grace and gratitude go a long way. A client who treats you with respect, A client who's appreciative of what you do, who recognizes the effort that you put in, who recognizes how hard you're working, who recognizes that you're not just, you know, some whatever. You work hard to make this, and you're doing this for them. That ultimately, that appreciation. Do we
SPEAKER_05:have to be friends?
SPEAKER_02:We don't have to be friends, but appreciation goes a long way. Okay. Appreciation. I recognize how hard you're working. I see the passion. And I respect what you're doing. And, you know, I think we've all had clients that you do feel that appreciation from. And you have clients where every time you get the text or the email, your first response is, oh, shit. And that's not fun, right? You want the client who you get the text and email, and you're like, oh, great. I can't wait to talk to this person. I'm sure they have something. It's going to be enjoyable.
SPEAKER_05:I have a question for you, Roberto, and I think, you know, you should kind of close us out with this. Where is the market now for large renovation projects in New York? Are you finding that they're in vogue? People want to take on a project, want to hire a team and roll up their sleeves, or they want to be done? Just give me a new construction, new development, because, you know, it's too hard to do in New York right now. I mean, where's the value play? Where's the market?
SPEAKER_06:Well, ever since COVID, renovations became very, very difficult. You couldn't even get into buildings, and it was taking a long time. And the spread of buying something that needed a complete renovation versus something that was finished used to be 75% to 80% of value. Then it spread. It came down to 70% of value if you needed to do a full renovation. And it's a lot of work. It's onerous. It takes a lot of time. And that's changing a little bit. People are finding the value in that, especially in these larger apartments, Long Park and Fifth and Central Park, where people are wanting to make their own. They want to make their own private Idaho. The clients I have that I was working with Matt, I showed him and his wife so many apartments along Park and Fifth. And he... He was just like, you know, these are all old. I want new. And this is a new construction building, new construction being built by one of the best developers here. And he had Matt and his team come in and they were going to redo a lot of stuff of what was supposed to be new. So, you know, people are wanting to curate their spaces, even the new ones. And I wanted to ask you guys, that's one of the things I wanted to ask you guys was, How many of your clients are buying in these new construction buildings? Because a lot of it's, you know, they're kind of white boxy. And you have to come in and really make it a home.
SPEAKER_04:It's a mix. It's a real mix because... And just as you were saying, you have the clients that want the sort of new, modern, and then you've got those that want the more traditional. We do both, but it makes me think when you're talking about this, clients of ours that bought on Park Avenue in one of the new big buildings, and when they negotiated the sale price, They kept in the finishes thinking it's going to be good enough for us. So, you know, they paid for that. Then we got in there and knowing, you know, these are long term clients. the entire apartment was gutted, the entire thing. There wasn't anything remaining. And so again, I think this goes back to the value of having Matt, the value of having Vince, the value of having me come in and walk through and really talk about, based on their needs, what is going to need to be done to make it work with that lifestyle. So yeah, it's very interesting.
SPEAKER_02:We've done everything from, like you said, the full brand new place, full gut, to just kind of going in and re-skinning. We did a place where we went in and took all of the kitchen cabinet doors off, refaced them, clad them, clad the island, put a new countertop on. But the guts were actually all there. We didn't change the floor. And when we were all done, the client said, I should have changed the floor. So I mean, it's... It's a mixed bag. To your point though, Roberto, we are doing quite a number of kind of those refresh... new development uh projects uh hudson yards where you're kind of going in sort of what can i keep what changes how do we how do we create more of an additive layer so we'll take a hallway that is just white paneling oh sorry white drywall and put sort of a paneling up on it to sort of create more of a of an entry condition and a circulation condition and things like that so it's but we're also then redoing ceilings and putting in av and speakers and because the developers tend not to deliver things to the level that these clients are used to.
SPEAKER_06:Clients probably always have that vision that they want to do that. But when they go through that final walkthrough and you go through a final walkthrough to a new development, it is so depressing because you're like, I spent all this money and there's still like white powder dust everywhere. And it's just so plain. It's 100%.
SPEAKER_05:I got a theory, Roberto. I think that you've been talking about the market for the last 10 years in Manhattan and it being flat or even down a bit. And we're all waiting to see what it's going to take for New York to bounce back. And I actually think that what we've been talking about on this show is a big part of it. If you're moving into New York and you're considering New York, you have to know that there's a path forward to getting what you want. You have to know that you're not gonna be running into friction with the board management, the rules of New York, and every other turn. You have to know that you can get into a building like the Dakota, because we've been tossing it around, and that there's a path forward to getting something truly awesome and modern and fabulous that feeds your soul in an old building that has a lot of rules. And I think New York's ability to respond to that is gonna go a long way toward attracting wealth back into Manhattan. If they know they can hire a dream team like this and get what they want efficiently and fairly, They'll be back to New York. But right now, if they think there's too much friction, they head to Miami Beach.
SPEAKER_06:Yeah, but it's daunting. And you need these guys to put their arm around your shoulder and to say, you know what? It's okay. We've got this. We can get it done.
SPEAKER_05:All right. This has been an awesome show. Thank you all so much. This is Burbs and Burbs 190 today. Large luxury renovation projects. And I'm going to remind you that you'll find me at theangleteam.com in Connecticut. You'll find Roberto at robertocabrera.com. He's an agent at Brown Harris Stevens in Manhattan. And who is this? This is bjminc.com. Brian J. McCarthy, Inc. And that's Brian. our designer. This is the website for Workshop APD and our friend Matthew Berman. And this is the website for DeSalvo, Vincent DeSalvo Contracting. Lisa, Ben Isvey, thank you so much for putting this together. You are a rock star in the worlds of architecture and design in New York. And once again, thank you, Grace Farms. And with that, thank you all. This has been a really great show. This has been one of my favorites of the year. I mean, I think you guys are really rock stars, and I think that this is, and getting it right versus getting it wrong can be a million-dollar mistake or a million-dollar success easily, right? I mean, it really matters to get this right, and I think you guys have explained some of the reasons why. Thank you.
SPEAKER_06:Thank you. Thank you.
SPEAKER_05:And we're going to get you guys back, right, Lisa? We'll get them back maybe six months from now. Yes. And we'll do it again. And we'll find out if New York is coming out of the doldrums, if New York is back, baby.
SPEAKER_07:Good. Thank you.
SPEAKER_05:Thank you, Roberto. Bye. See you next week.
UNKNOWN:Bye-bye.
