PROFILEnyc had the exclusive opportunity to sit down with Scott Shnay, a principle at SK Development, to discuss multi-generational development in New York City, his partnership at CBSK Ironstate and developing The Lindely in Murray Hill. Get an inside look at what it takes to deliver affordable luxury in one of Manhattan’s hottest neighborhoods and what is still to come from SK Development:
DD: How did you get involved in development in New York?
SS: I’m a third generation developer. My grandfather was a home builder in Queens back in the 60s. My father got started in the late 60s and early 70s, and then I went to go work for my father in 2006. I’m fortunate to have it in my blood.
DD: Very cool. Have you guys developed in other cities?
SS: Just New York, in all five boroughs.
DD: What’s your view on developing in New York? How is it different than developing anywhere else as the city has such iconic skylines and different neighborhoods with their history?
SS: I think the great thing about developing in New York is all the different neighborhoods, everything from buildings from the 1800s to the modern towers. Another plus is that as a developer the city is pretty straightforward about development. You know exactly what you’re going to get. It makes underwriting deals a lot easier than it is in other cities where what you can build is less open to interpretation. You know exactly what you can build. On the other hand, you may be boxed in, which can put some restrictions on creativity. The city is changing things so that things are a little more flexible in terms of development.
DD: Do you feel that the city has been more open and will help developers with commercial projects or do you feel that depends on site and location?
SS: I think it depends on location. This current cycle is leaning toward condominium and office development. I think the condominium market is pretty well served right now and I think people are looking for other potential projects to do. We’ve looked at everything from industrial to storage to office to rental. Each site is zoned for certain types of projects. You really have to make things work depending on who, where, what, why. It definitely is fluid.
DD: What led you guys to Murray Hill and what is the story behind The Lindley and that property there?
SS: In terms of The Lindley, this is the third project that we have completed on that block. We started at 200 East 39th Street with The Frontier, which is the land lease deal that we negotiated. We recently finished a 91 unit rental building there, along with retail. We then were fortunate enough to do a joint venture with the family who owned neighboring properties and do another “phase 2” of the Frontier development, which is another 55 unit rental project. Then while we were developing that project, the three buildings south of us along Third Avenue came up for sale and we purchased those, always with the thought that we would build a condominium. The reasons were, one, because the way the site is laid out, and also the underlying economics of the site were much for favorable for a condominium project. We also were able to start early enough that we were able to secure a 421-A tax abatement so it worked well as a condominium project.
DD: Rawlings Architecture did both the interiors and exteriors for Lindley? How did that partnership come about?
SS: It’s great. We’ve done a number of projects with Rawlings going back to the late 90s, we’ve done nearly a half dozen projects together. We have a very good working relationship. We also have a good working relationship with the general contractor on that project, so it was a good fit to use them on all three buildings to create continuity between the projects.
DD: Sales have been pretty strong there. Who are your buyers and how are you reaching them?
SS: Buyers have been from across the board, from investors to young professionals, to some empty nesters. I think because it's such a central location and close to Grand Central that anybody can live there. We even have families buying with students that go to NYU because it is easy to get down to Union Square. In terms of our marketing plan, we started with very early pre-sales. When we opened the sales office in the retail construction site, we then received more tremendous feedback. Buyers like to be able to see the building, see the construction and get a feel for what they are buying. We've done that now on three or four projects. Our sales office opened at The Lindley about a year ago and we're already more than 70 percent sold with closings just beginning.
DD: What separates the Lindley from some of the other similar products on the market? Once a buyer closes and moves in, what are they really going to appreciate about buying and living there?
SS: I think two of the things that has separated us is the location. The Lindley is centrally located and so close to transportation. People really have trended towards that. Also the fact that we are able to start early enough that we secured the 421-a tax abatement, buyers obviously appreciate that. Additionally the fact that we keep residents' carrying costs down. The Lindley is a very approachable building from the design, to the unit layout, to the amenities and common spaces which have been furnished by Design with Reach. It is very approachable, easy to understand, and efficient. I think the price is right. We work consciously on how we divide and price the building to be able to give buyers affordable luxury; but, the two main things that buyers focus on in my opinion is the location and the tax abatement.
DD: When will The Lindley be delivered?
SS: This month. Closings have just begun and residents are able to move in.
DD: What future projects do you guys have in the pipeline?
SS: We are in construction now on an 85 unit, 130,000 square foot condo building with about 200,000 square feet of retail. We started the pre-sales there and got a good response. We also recently closed on a 250,000 square foot site in Hell’s Kitchen that will become 222 condos and about 40,000 square feet that we have sold back to a car dealership. That project will be done in about 30 months.
About Scott Shnay:
Scott Shnay is a principle at SK Development and has over a decade of experience acquiring sites and developing projects throughout the New York metropolitan area. Scott has been responsible for over 1 million SF of development valued at over $1 Billion. He graduated with a B.A. in Public Policy (Urban Planning/History of Architecture) from Trinity College in 2001.
About SK Development:
SK Development is led by the father and son team of Abe and Scott Shnay. The firm is currently developing over $500 million of projects including The Lindley (591 Third Avenue), Pod Brooklyn (626 Driggs), 363 Lafayette Street, and 21-30 44th Drive (Long Island City). SK recently completed 301 East 50th Street, 10 Bond Street, The Frontier (200-210 East 39th Street), and Chelsea 29 (221 West 29th Street). Additional projects in Manhattan and Hudson Valley are in pre-development.
