Dan Parker of Compass: 5 Questions

The job of a development executive at a major brokerage is more all-encompassing than many people realize. 

This is the main message taken from a conversation with Dan Parker, co-head of new development for Compass Development Marketing Group. While Parker is charged with selling some of the most desirable luxury residential projects in New York City, his participation on every project begins long before the start of the traditional sales cycle, and usually before the project even physically exists. 

Parker spoke with Commercial Observer recently about how he helps shape the very essence of luxury real estate in New York City, and the trends that are currently moving buyers into luxury properties.

This interview has been edited for length and clarity.

Commercial Observer: How early are you brought into a project, and what kind of input do you have on the planning stages of a new development?

Dan Parker: It’s a really good question, because I think one of the biggest misunderstandings about what we do in new development marketing is that we’re brought in to sell. The truth is, we start very, very early in the planning stages. A developer is usually calling me the moment they’re looking at land for a potential site, and we start to talk about what this could be, who is this for, and what the opportunity is here. If we get to a place where they get really comfortable around transacting, then we begin a process. 

A lot of the success we have comes from those very early decisions, particularly around unit mix: How many one-bedrooms, two-bedrooms and three-bedrooms should there be? What can we connect as far as outdoor space? How big should each unit be? What is the amenities program looking like? Where should the entrance be placed? Some of those early questions are some of the most important. At the end of the day, if we’ve really done our job, then when it comes time for sales, we won’t be hitting roadblocks.

When we’re looking at a piece of land, we’re answering these questions based on data and experience. We like to be data-driven around here. It’s really important for us to understand what the comps are. In a few rare instances, a site can perform very differently than its comps in the surrounding area, and New York can be very block by block. For instance, I was walking past Gramercy Park today. Obviously, if you’re touching the park, that’s a really big deal. If you’re a block away on Third Avenue, it’s an entirely different market. 

So we do try to be data driven. We look at the costs and the opportunities, but it takes experience too. If I just give a developer raw data without much context or an understanding of the buildings, then they can interpret it however they want without understanding that, for example, a building had 16-foot ceilings, or other drivers of value that are not super obvious if we’re just looking at pricing on a unit-by-unit basis. Being able to frame the data from our experience is really vital. 

Let’s talk a bit more about that data. Talk about the type of research you rely on in your work, and both the importance and the limits of it.

It’s pretty simple. New development is almost its own market. If we’re looking at new condo sales, it’s not that it’s not affected by new records in a co-op building or very high-priced rentals in the surrounding area, but it really does live mostly within its context of being a new building, and it’s really hard to compare a new development purchase with a building that’s maybe 10, 12, 15 or more years old across the street. We’re looking at other new development buildings for the most part, and we are looking at sales. 

What’s really interesting to me — but might be very boring to other people — is that because of the lead times we have on these buildings, we’re signing a lot of these contracts far in advance of closing. I’m really interested in the contract-signed date. That’s when a buyer has made the decision to purchase the apartment. There are two ways to get the contract date: One, believe what people tell you; or, two, verify it later with the documentation in Acris [New York City’s property database]. We spend a lot of time here trying to find out when buyers are making this decision. That’s the snapshot of the market I’m interested in. Closings might tell an entirely different story.

We’re also looking at things like: What are these buildings? Who are the architects? Who are the designers attached? What are the features of the units? What are the amenities in the building? Do they have high ceilings? Do they have onsite parking? All of these things are big drivers of value. Do they have attached outdoor space? Do they have big views? These are all things that are not necessarily incredibly obvious from a deed, but it’s important for us to understand all these layers so that we can then price buildings appropriately, and also understand what’s driving value in these different neighborhoods. 

We’re not just looking to duplicate other people’s success stories, but we are looking to see who’s transacting: Who are the buyers, what are they valuing, and what are their priorities? And, then, how do we meet and exceed those priorities and expectations and build for their priorities in our projects?

That being said, what are some of the most important things you’ve found buyers are looking for today when it comes to new luxury development?

It can depend on the neighborhood and the buyer, but generally some of the biggest drivers of value today are views, outdoor space and amenities. If we can connect as much of the building as possible to outdoor space, or set back at certain important areas in the building that allow us to attach exterior space to units, then it’s a question of, are we attaching that exterior space to the right units where it will drive the most value? 

In the past cycle, we sort of hit “peak amenity” in new development here in New York City. For me, it’s less about “Do we have the most amenities?” and more about ”Do we have the right amenities for these buyers?” 

Amenities serve two purposes for me: One, really great amenities allow us to market a building in a way that will get people really excited; and, two, beautiful amenities enrich people’s lives. There’s a way that you live in your apartment, but you can really entertain or connect with your family in this amenity space. We have a building called the Henry on the Upper West Side that has a bowling alley. It’s a way to connect with your kids. There can be community in the building that allows you to connect with other people. 

There’s always this tension in these buildings between wanting to build a place where a buyer can have solitude, privacy and their own experience, and really wanting to connect with people. It’s a tough needle to thread today. But, if we can provide both of those things to someone, then we’ve done something that people will be excited about.

How difficult is it to create a property that is truly unique in this market, and how important is that?

Right away when you said that, my first thought was, “Well, do we want to build something truly unique?” Sometimes we do. At the end of the day, I’m here to help our developers meet their goals. One developer’s goal might be to build something incredibly unique. Another might be about wanting to hit some kind of velocity goal. Another’s top priority might be getting a certain dollar per foot. 

A mix of these things can lead to real success, obviously, but, in terms of building something unique, there are some places where I wouldn’t do it. On the Upper East Side, for example, I wouldn’t build something that departs from someone’s dream of Upper East Side living. 

There was this moment maybe 15 years ago where in every developer meeting I had, someone wanted to “bring downtown uptown.” People have their ideas and fantasies of how they want to live, and we’re really working in fantasy here. If we’ve done our jobs well, then contracts are signed well in advance of these closings — so, well in advance of buyers being able to tour their units, tour the amenities, see the facade, etc. We’re selling a dream. And, if I’m selling a dream on the Upper East Side, it better be of an Upper East Side building. So place can be incredibly important. 

There’s a lot more permission to do something unique downtown, and there are some great examples of that, like 56 Leonard, or the rental building 8 Spruce, the Frank Gehry-designed building. It’s very exciting to have something unique. But, generally, I do a lot of my work on the Upper East and Upper West Sides. We want to fulfill the fantasy for someone of a really special uptown building.

You also work on projects in Brooklyn like the new luxury condos at Bergen Brooklyn. In the luxury condo market today, is there what you would consider a distinctive “Brooklyn style”? And, if so, how would you define or describe it?

I think there are Brooklyn values more than a Brooklyn style, particularly around craft and materials, maybe finding more local vendors and artisans to participate in a certain way. I think there are priorities around creativity and building community, particularly in the larger buildings. There’s a sense of community that people sell, which is different than in Manhattan. In Manhattan, that hasn’t really been a feature we promote. 

I’ve lived all over Brooklyn since 2001, and I’ve been in Williamsburg for about the last 15 years. Whenever I go anywhere in the world, to any city, there seems to be this Brooklynification of wherever I am, that I can walk into a coffee shop, and see reclaimed wood and ironwork and industrial details. 

The funny thing is, in Brooklyn, we’ve sort of outgrown all that. It’s a much more mature place, I think. But you do see these nods to a `90s or early 2000s Brooklyn all over the world now.

Larry Getlen can be reached at lgetlen@commercialobserver.com.