Commercial Real Estate

Why I Decided to Develop a 13-Story, 84-Unit, 95,522-Square Foot High Rise

Expertise: Personal Development, Real Estate News & Commentary, Real Estate Investing Basics
38 Articles Written

This may be unorthodox, but this is just something that works for me.

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About one-third of my work goes towards networking, simply having a three-to-five coffees or lunches with someone high up on the ladder than myself.

So in one of these outings, I was sitting in an office of a big developer (he’s currently doing a massive skyscraper), discussing deals and things of that nature.

We were looking across the Hudson River from the 47th floor of a big building around corner from Broadway. Over in Jersey City, they’re currently building crazy amounts of high rises and skyscrapers.

Altogether, more than 37,000 units new units have been approved.

“Do you do Jersey?”

“No, but I’d love to.”

“I’m telling you, it’s nice over there,” I said.

We were in his office in Lower Manhattan. From the room, we could see these little ferries ride across between New York City’s Financial District and Jersey City’s Waterfront.

Related: 12 Creative Ways to Add Major Value to Apartment Buildings

“They’re running every 10 minutes,” he said.

“Yeah, most of my stuff is over there,” I said. “I don’t even touch Brooklyn.”

What Piqued My Interest in High Rise Developments

We then started talking deals, the economy of high rise developments, and what it takes to structure these deals—the promotes, the margins, what numbers to hit, what a profitable deal looks like.

The main takeaway was that when you’re doing these deals, the economy of scale applies. “It’s really all the same,” another high rise developer told me.

On a personal note, I strongly believe in patience. In accumulating small wins, constantly growing bit by bit with each endeavor and deal. You can’t build a skyscraper without a solid foundation.

The reason why I approach it this way is because as an entrepreneur, your mind is always racing with what you think are great ideas, angles, strategies. One of biggest challenges is to dim these and stay focused.

I’m doing a deal, the first full smart home development in that neighborhood (across from a 16-story high rise under construction), which I thought was big for our firm.

At first it was just a basic renovation, conversion to four 1-bedroom apartments—$1.5M ARV.

Due to unforeseen serendipitous circumstances (read: approvals), that changed to a brand new construction, with $4.5M in estimated asset value, once complete.

Nevertheless, after hearing about the formula for bigger deals, I left the meeting thinking about if I should.

“What if… Should I?”

“Dude, leave that alone…”

“No, why can’t you?”

“Focus.”

At this point, I’m having a full-blown conversation with myself.

“Let’s just plant a seed in universe,” I remember thinking, “and we’ll leave it. Whatever happens happens.”

So just to plant a seed, I shot a text to a broker. This is verbatim, for the record. (Forgive errors and typos.)

“Yo!” I wrote. “Can you find find me JC corner lot I can build 100k sf on?”

I also have a very eager wholesaler friend who desperately wants to syndicate high rises in NYC—always texting me wild deals that never come close to coming through. (I keep telling her she’s crazy.)

So I said the same thing.

“If you see any lots in JC, I’m down to build. 100k sf.”

13 Stories, 84 Units, 95,522 Square Feet

So I recently came across a deal. Corner lot, full block, but oddly shaped. A bit overpriced, but definitely doable.

I immediately shot it over to my architect. “Dude, what can you do with this?”

“What do you have in mind?”

Related: How to Take the BRRRR Strategy to the Next Level with a 198-Unit Apartment Building

“No idea. I don’t know,” I said. “Just go crazy with it. I like this building, but that’s about it.  Oh, and I want to do the first minority-owned high rise over there.”

I didn’t tell him the 100k square foot size, anything like that.

About a week later, he sent me this: Thirteen stories, 84 units, 95,522 square feet.

In part II of this piece, I break down how I took over the land (no cash down), structured the deal, our plans for building—and why I want to give tenants free Uber rides.

Think I’m crazy for tackling something of this magnitude?

Weigh in below!

A native of Denmark, Philip came to New York in 2014 with $79 in his PayPal account. In 2015, he joined Bisnow Media (the largest commercial real estate news source in North America) and helped lead them to a $50M sale as National Editor and Director of Content Strategy. Founder of NYEG, a real estate & VC company with $80M in the development pipeline, Philip and his team are currently developing a series of historic projects, including the first black-owned high rise in Jersey City, the first smart home development in Jersey City's McGinley Square, and the first voice-controlled student housing building in Philadelphia. Philip is the best-selling author of Real Estate Wealth Hacking: How To 10x Your Net Worth In 18 Months and an expert columnist for Forbes, Black Enterprise, Entrepreneur and others.

    George Krischke Real Estate Broker from Honolulu, HI
    Replied about 1 year ago
    Aloha Philip, I like your style. You piqued my interest. Clever cliffhanger. Don’t let us down. Can’t wait to read the rest of the story. ~ Mahalo
    Jonathan X Sanchez Rental Property Investor from Beaverton, OR
    Replied about 1 year ago
    Excellent read! I’ve always wanted to develop skyscrapers and buildings, let us know how this goes!
    Frank Karlya from Flushing, New York
    Replied about 1 year ago
    Awesome article, cannot wait to see what happens next!
    Kyle Jones Flipper/Rehabber from Douglasville, GA
    Replied about 1 year ago
    I got excited reading this article. I’m rooting for you brother.
    Flor Branham
    Replied about 1 year ago
    Yes! Awesome job… looking forward to part 2
    Jason Carter Rental Property Investor from Culver City, CA
    Replied about 1 year ago
    That’s how it’s done! Congrats Philip. Inspiring. I can’t wait for part II.
    Ronak Shah from Paramus, New Jersey
    Replied about 1 year ago
    Waiting for Part II soon! Would love to network in JC.
    Josiah E Arias
    Replied about 1 year ago
    As a newcomer to this game, it is nice to see what the goal is. Good read and can’t wait for part II!
    Cristian Aviles-Morales from Orlando, FL
    Replied about 1 year ago
    Holy Holy Holy! You are a great writer, first off. Second off, you are UP THERE. I know you say there are people even higher than you. But from my POV you are UP THERE. I can not wait to hear more.
    Carmen CR from Nutley , NJ
    Replied about 1 year ago
    This was an encouraging post for newbies!!