Editor's Note: The following is a web-exclusive interview with Gotham Organization president David Picket, part of MULTIFAMILY EXECUTIVE's broader coverage of best-in-class regional firms. For more profiles, see the January 2008 issue of MFE arriving in mailboxes this week, or visit the stories online here.
Q: What guides your strategy to remain a regional player?
A: It is tough to master a market like Manhattan. That has been hard enough. In a sense, you could say that we are always sticking to our knitting. We understand Manhattan from both a capital side and an operations side. We understand the costs of construction, and we know how to stress rent and operating expenses.
If you can do it here, you can do it anywhere, right? And I guess that is true. We are expanding geographically and are working on a 50,000-square-feet retail project in Washington, D.C.'s Columbia Heights neighborhood that includes a Marshall's, Best Buy, and Target.
Q: What challenges are unique to working in New York?
A: We do all of our own contracting. That is a major platform for us and a way we get a lot of our deals. Trying to understand another construction market is very difficult. But development has been difficult the past few years because the market has been overheated. We have always been value guys, and we are looking forward to a little disruption, as it has been tough for us to buy things that we perceive to be top of the market.
Q: Who do you consider your toughest competitors?
A: The best company in our space is [New York City-based] The Related Group. I have a lot of respect for them. They are very good competition, they do a very good job, and they have some very smart people working there. If I had to compare, it would be them. They are much larger, and that is who we look up to-or I guess look aside to-because I think we are as good as anybody.
Q: How does New York's economy affect your business?
A: The capital markets are causing some changes-most notably that condo development is not a favored lending platform at this point. I think condo development is still happening, but it is much more difficult, and the pool of lenders is much smaller. In New York, there are plenty of people who want to hold land. If you are buying land where prices are, you cannot do a rental. The folks who have bought land over the last year or so are going to be faced with a difficult situation.