Amy Rose Speaks on “Outlook for Construction & Development” Panel at New York University's First Symposium of Women in Real Estate 
 

Posted On October 20, 2017

Competitive Tension Arises Between Union,
Non Union Construction Labor in New York City

Construction and Development Leaders See Merits to Both Labor Sources When Weighing Time, Cost Decisions
By DIANA BELL

 

NYU Women in Construction Panel. Pictured, left to right: Joanne Minieri, RXR Realty; Linda Chiarelli, NYU; Mariana Circiumaru, GreenOak Real Estate Advisors; Michelle Felman, JAM Holdings; Sabrina Kanner, Brookfield Property Partners; and Amy Rose, Rose Associates. Credit: NYU Photo Bureau, Elena Olivo

 

Ground-up building of a commercial asset is a complex task, with enough moving parts to make one's head spin. Communication between construction and development is crucial, but navigating that relationship can be tricky, as design and budget are certain to run up against true cost at one point or another, according to speakers on the Outlook for Construction & Development Panel at New York University's First Symposium of Women in Real Estate held on October 19. 

Depending on the project, panelists say, non-union labor is being considered as one way to manage cost expectations. 

"There are days where I feel I am the referee sitting between the development and construction arms. As the owner whose dollars are funding entire project, you have to take a hard view. The best and easiest no-brainer residential building we have ever built would still take five years," explains Amy Rose, co-president of Rose Associates. "Things happen outside all of our controls, whether it be the markets or the need for greater concessions… But there are some [elements] you must protect the integrity of, because if you don't, you will impact financial components of deal." 
 

Safety First


Developers are attracted to the low cost of non-union labor, according to Marianna Circiumaru, head of U.S. construction at GreenOak Real Estate Advisors. But it must be the right match of size and scope between contractor and project in order to ensure there are no issues with safety or scheduling, she says, adding that, "If it's not the right match, it could be a disaster." 

However, a lengthier cycle has resulted in an all-around wiser construction labor force, according to panelists. 

"Because we are 10 years into a seven-year cycle, there is some self-correction going on," says Sabrina Kanner, executive vice president of design and construction at Brookfield Property Partners on the construction labor sector. "The non-union contractors are learning about safety, and they may be getting more expensive, but they are taking the middle ground." 

That middle-ground, as an example, means they are usually qualified to handle a multifamily apartment in a smaller market within the boroughs. But, panelists say, that for instance they would not utilize non-union labor to build a supertall in Hudson Yards, citing the more-advanced safety knowledge characteristic of union labor. 

"With the growth of non-unions coming along in a real way, the unions are recognizing their deficiencies," says Rose, adding that Rose Associates utilizes both forms of labor, but that decision is based on the type of work called for on the specific project. 

Unions are reaching out to ask how they can be more competitive, notes Kanner, calling the situation a really healthy tension. 
 

Time: The One Constant


Although the effects of a maturing construction labor force will continue to wind their way into build decisions, the one thread tying together all elements of development and construction remains time. 

Time has become everyone's most precious commodity, affecting choices from where to live and how to work, says Michelle Felman, founder of JAM Holdings and member of Cumming Construction Management's board of directors. 

"Ten to 20 years ago, people wanted space and didn't value time as much. Now, we are seeing people will take a lot less to have convenience of being close by the things they want to do," said Felman, who points to RXR Realty, which is looking to build mixed-use communities around transportation systems within the suburbs, as a prime example. 

As a result of the new workforce demanding more work-life balance, developers are seeing opportunity for mixed-use communities outside of the city, in suburban areas where that type of product didn't exist, according to Joanne Minieri, executive vice president of RXR Realty. 

"There's high demand for that type of product and we're excited to be working on that," says Minieri. 

With transportation a foremost focus, residents are willing to live in smaller spaces, but in turn have demanded more thoughtful amenities and fancier finishes. Lifestyle is now a significant piece of new multifamily development planning. 

New rental developments have finishes almost near condo finishes, and throughout all new multifamily housing, the level of finish has increased, according to Rose. 

"They are all beautiful inside and out. Residents are paying a tremendous amount of rent, so they expect service and for us to curate a life for them," she adds. "We spend a lot of time thinking about curating amenity spaces."

To further differentiate itself from competition, the landlord has released the RoseLife app, through which tenants can make requests and reserve services - such as renting barbeque equipment or scheduling a dog walk - in addition to paying rent. 


 

About Rose Associates, Inc.

Based in New York, Rose Associates is a developer, owner and operator of premium residential properties. From planning a new development to managing day-to-day property operations, the Rose 360 Platform offers a full range of services designed to maximize the value of real estate. The firm oversees more than 26,000 units across New York, with approximately $2 billion in projects under development. Rose recently opened the historic skyscraper 70 Pine Street, which the firm is transforming into a luxury rental property with 644 residential units, 132 extend-stay apartments and a destination restaurant/lounge occupying the top four floors.

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