Interviews Steven Dubb, Principal Beechwood Organization.

0:00 Speaker 1 Good morning. This is Michael Stoler for the Stolar Real Estate Report on the Cats round Table this morning. I have the opportunity to have one of the most busiest and active developers in New York. Coupled with he’s probably the busiest and active developer definitely in the Low Island.

0:15 I have Stephen Dubb who is a principal at the Beachwood Organization. Thanks for being here, Thanks for having me, Michael, So tell me what the Beachwood Organization is doing, especially in this time of definitely a recession coupled with high interest rates. It’s a difficult It’s a good time for being a developer and a bad time. Yeah.

0:34 Speaker 2 I don’t remember interest rates ever being this higher, at least this high, at least not in my career. But at the same time, we are selling a lot of houses. I would not have guessed this a year ago when rates started rising. But there’s not a lot of supply on the market, especially on Long Island, and people, you know,

0:53 continue to need to move for all the reasons that people want and need to move, and so I’ve been surprised. But it’s been a good year of selling houses so far.

1:03 Speaker 1 Now, what are the price ranges of these houses that you’re selling, they.

1:07 Speaker 2 Range from the five hundred thousands up to three and a half million dollars depending on the community that we’re building.

1:14 Speaker 1 Okay, with regard to that, you really do mostly single family homes as opposed to multi family housing.

1:22 Speaker 2 Correct, Well, we build, we build a lot of different product types. We’re building single family homes in West Hampton, in yeap Penk and plain View. We’re building town homes. We’re building what we call flats or villas, so it’s a single level townhouse on the bottom floor and then on the second floor is a separate unit. And then

1:39 we build what we call condominium suites and those are fifteen unit buildings central elevator, five units per floor. So we really run the gamut. And by the way, we just finished a seven story building apartment building last year, so you know we’re kind of agnostic.

1:54 Speaker 1 Is that the luxury of photo, luxury of housing that you built, that’s the LB. Yes, So tell me a little bit about the Selby.

2:01 Speaker 2 So it’s two hundred and thirty seven apartments in hotel units, so it’s mixed use. There’ll be a restaurant that’s open to the public and they’re really the size and the finishes in the units are what i’d say is nicer than most of the condominium the luxury condominiums being marketed on Long Island right now. So it’s unique. There’s nothing

2:20 else like it. And we’re catering to wealthy empty esters in nasaan Sefa County.

2:26 Speaker 1 But it’s not an age restricted community.

2:28 Speaker 2 Correct, that’s totally correct. It’s not age restricted. And by the way, we get a ton of families, young families moving out of New York City who are trying to figure out where they’re going to buy a house, so they land with us for a year or two, and they tend to not have kids who are old enough

2:42 to go to school, so they’re early in the process. And we get a ton of doctors and people who work in the medical community. But our biggest demographic, i’d say is empty nesters retirees. But it’s not age restricted.

2:53 Speaker 1 Now, do you have any age restricted program projects that you’re in working with now?

2:58 Speaker 2 Yeah, country point of plane View is age restricted. Country Point at Yeappank is age restricted. Plane Views six hundred and sixty homes. Yeappank is four hundred homes. Both of them are really highly amenditized communities. So our buyers move there for a house that’s more manageable, a condo, less maintenance.

3:16 They don’t deal with landscaping, snow removal, garbage, et cetera.

3:19 Speaker 1 How expensive is the hoa the community charges for this luxury amenities package.

3:24 Speaker 2 It varies between i’d say two hundred and fifty dollars a month up to six hundred dollars a month, depending on the community and depending on the house. But what they really move for is the lifestyle. And that’s just that’s not just the no maintenance. That’s the clubhouse, the swimming pools, the card rooms. They’re basically both of those

3:42 communities have country clubs built into them, and our buyers love it.

3:46 Speaker 1 No golf clubs, no golf clubs.

3:48 Speaker 2 You know. We found we built a community on a golf course a couple of years ago, and we thought we’d have tremendous demand from golfers, and we found we really didn’t. The people moved to that community for the same lifestyle reasons I just have described, but not necessarily for the golf. They liked the view, but they didn’t

4:05 want to play golf.

4:06 Speaker 1 So what about the act of adult communities.

4:09 Speaker 2 The topic of that, well, I think the Long Island NASA on Suffolk has a massive demographic of empty nesters, and they tend to be pretty wealthy, and a lot of them have been at homes for ten, twenty, thirty, forty fifty years. I’m talking single family homes, and it’s get older and your kids leave. You don’t want to

4:31 deal with climbing up the stairs, you don’t want to deal with the maintenance of the house. And you know, like I said, snow removal, garbage, all that stuff, the pain, and so the appeal of our active adult communities is not having to deal with that. The condominium association or the homeowners association takes care of all that, so you

4:49 just get to focus on, you know, having fun.

4:52 Speaker 1 Now, you have one development, I’m not sure if it was to Selby or something else, which is really like a hotel opportunities for people.

4:59 Speaker 2 Yes, so we have two buildings that are part apartment, part hotel, and both have restaurants that are open to the public. Both have exceptional restaurants. That’s the Selby and the Vanderbilt. Both of those buildings are located in Westbury and it’s new product for Long Island. Nobody had done something like that before. And while we talked about the

5:19 Selby a little bit, and that caters mostly to empty nesters, it also caters to snowbirds. So we have a lot of we have a lot of guests who will live in Florida eight months of the year and then come stay at those buildings four months of the year in the hotel rooms, or we have we’ve got renters who

5:37 rent there and their kids come home from college periodically and they stay in the hotel rooms. And so it’s a great option for people.

5:44 Speaker 1 Well, let’s talk about the projects and plain View.

5:47 Speaker 2 Yeah, so plain Views six hundred and sixty homes. We’re coming to the end of it. We’ve got less than thirty homes left to sell. We started selling in twenty seventeen at the base of the community on Old Country Roads.

5:58 This community’s just off Exit forty eight on the le behind Old Country Road. Up on Old Country Road is one hundred and fifteen thousand square feet of retail space that we built and least our anchor there is a shop right that’s in about eighty thousand square feet and they’ve been a fixture in the Plane View community for decades.

6:16 It’s a great store for them. And we’ve also got we have restaurants, we have fitness uses, and what we really looked to do with the leasing of that real retail center was build another amenity for our homeowners, something that would say perspective buyer, that prospective buyers would look at and say, that’s great. I want to live next

6:37 to that Starbucks. I want to live next to that Organic Crush, healthy food restaurant. Man.

6:42 Speaker 2 I want to be able to walk down to the shed and have lunched. The Sheds a very famous restaurant Long Island. I want to have lunch or dinner at the Shed. And so that’s been really successful for us because that retail has helped to spur sales. And the other thing about Long Island is there’s not a lot

6:58 of land left. So there’s no clear when we’re done selling Plaine View. Nobody’s building a plane View in nasa ar stuffa county right now. It’s not clear where the next one’s going to be. And so when projects like this do come along, they tend to sell pretty quickly.

7:14 Speaker 1 Okay you have certain affordable units.

7:16 Speaker 2 Or yeah, So on top of the six hundred and sixty homes will be ninety senior affordable units, So those will be affordable.

7:22 Speaker 1 Homes that age sixty sixty two in OVUM sixty two and over.

7:26 Speaker 2 Yeah, that’s correct, and I think that those will sell somewhere in the high three hundreds or low four hundreds. And we’re working with the Town of Oyster Bay right now to get that portion of the project.

7:35 Speaker 1 On my percentage of the AMI.

7:38 Speaker 2 Believe it’s one hundred and twenty percent of AMI.

7:41 Speaker 1 Let’s talk about what you’re doing in which you did started many years ago Auvern by the c Yeah, yeah, in the Rockaways.

7:48 Speaker 2 So it’s a project that’s near and dear to my heart, my father’s heart, and our partners, Benjamin Companies. It’s one hundred and twenty acres. It was barren wasteland in the Rockaways that had been demned by New York City in the sixties under Mayor Lindsay and the city had planned to redevelop that land and they could not get it

8:07 done for decades. We were selected by Mayor Giuliani. Actually it’s a couple of rooms over right now, right after September eleventh, to be the master developer to redevelop one hundred and twenty acres and the city at the time wanted a project that would help to revitalize the Rockaway Peninsula and that would bring the middle class back to

8:27 the Rockaways and by doing that, hopefully stem is sort of the downward spiral of crime, drug use, poverty that Rockaway had fallen into. And twenty years later, that project has been really successful in achieving those goals. So the scope of the project is of orven by the cities, twenty three hundred homes, a charter school, a YMCA, about

8:50 one hundred thousand square feet of retail space, and to date we’ve built and open the YMCA. We’ve built one hundred thousand square feet of retail space, including a stopping shop supermarket, which was the first new grocery store to open in the Rockaways in over thirty years. It’s kind of a food desert, and we built about seventeen hundred

9:09 homes so far, and we really have helped to lift up not just the two census tracks that that project straddles, but the Rockaway Peninsula as a whole. It’s really under.

9:19 Speaker 1 With the higher interest rates for both of you as being a developer and for people buying what effect is that having London market today.

9:28 Speaker 2 Well, I think it constrains affordability for people. I think it thins out the market of buyers. But at the same time, available supply of homes is historically low, and so it has not slowed down the rate at which we sell homes. We may sell a home for seven hundred thousand dollars to a buyer who a year ago

9:50 would have paid nine hundred thousand dollars for a house, and now they have to sort of lower their budget into.

9:56 Speaker 1 Ven the rates with three percent now they’re close to seven percent, right, But that the same thing is happening when you are going to a bank to finance your project.

10:05 Speaker 2 Yeah, I think what we’re seeing go on, especially since First Republic and SVB is lenders are really pulling out of the market. And I’ve never seen anything like this, including during the Great Recession, where we’ll call up lenders for deals and they’ll say, we’ll do it, but we’d rather do it with somebody else.

10:23 Speaker 1 Okay, I’m so happy that Stephen Dubb has been with me today on the Stow of Real Estate Report on the Cats round Table. Thanks again, thanks for having me