Rick Gropper of Camber Property Group: 5 Questions

New York-based Camber Property Group is celebrating a decade in business this year, and Rick Gropper, principal and co-founder of the firm, said it’s the company’s busiest year yet. 

Founded in 2016 by Gropper and Andrew Moelis, the real estate development and management firm specializes in building and preserving affordable, mixed-use and transitional multifamily housing. 

Camber’s name was at the forefront of two major housing announcements this summer. One of them was the start of construction for the $167 million redevelopment of Chelsea Beacon, where 131 affordable units, supportive housing, and community spaces will replace the former Bayview Correctional Facility at 550 West 20th Street. Plus, Camber was one of the developers selected for the $62 million modernization of NYCHA’s Unity Towers in Coney Island. 

The firm is also growing its national portfolio, bringing its experience in turning around distressed assets and building new housing to Pennsylvania, Connecticut, New Jersey and Ohio.

Commercial Observer sat down with Gropper in July to discuss the two headline-making projects, what it took for Camber to get there, and the challenges ahead.

The following conversation has been edited for length and clarity.

Commercial Observer: Tell us about your background. What brought you into the affordable housing space, and how’d that lead to Camber?

Rick Gropper: I’ve been in the affordable housing industry for about 20 years. I started right out of graduate school from Columbia University’s real estate development program as an intern at L&M Development Partners. The market was terrible, because it was 2008. I interned for a year before they finally hired me. I worked my way up from an assistant project manager to a project manager, and I was able to learn all aspects of the development process. I’m very operationally focused, and I like solving problems and trying to be creative to accomplish deals that are challenging but really necessary. 

So at L&M, I learned how to put all the pieces together — from the acquisition of land or buildings, to the financing, construction and design of a building, and getting through the complicated web of governmental approvals that are required for a closing. I really fell in love with the industry. I kind of grew up in the affordable space in New York City, and I think that everyone’s really collegial, friendly and willing to jump in and help solve problems. A lot of my best friends are in the industry as well.

I started Camber in 2016, after about 10 years at L&M Development Partners. This is our 10th year of being in existence, which is a big milestone. We’re really proud of the company that we’ve built. My co-founder Andrew and I started in the closet in someone else’s office, basically, and now we’ve put together a team of over 100 people that I think is one of the best in the business at being tenacious, creative and dedicated problem-solvers who are willing to do what’s right, whatever it takes.

Camber Property Group has been front and center of two major projects announced this summer, Chelsea Beacon and Unity Towers. Is it something in the air?

This is definitely our busiest year so far, and I think a lot of things have come together both for us as a firm and in the city. There’s such a focus on affordable housing, both preserving and creating units. I think that the Mamdani administration has put a lot of really strong housing leaders in place who have decades of collective experience. They just released the Block-by-Block housing plan, and have some really ambitious goals to create 200,000 units of new housing and to preserve another 200,000 units of existing housing. 

For us at Camber, we’ve spent 10 years building the company, its infrastructure and team, and a lot has come together. We now have a portfolio of 13,000 units, and we’re vertically integrated so that we can control all parts of the development process, from site or building acquisition to the financing, construction and property management. That’s really important for us, not only having a really strong team, but also being able to run and control all parts of the process, so that we can take out as much of the uncertainty as possible, because real estate is inherently risky. The more that we can control and do ourselves in-house, the more effective we’re going to be as a firm. 

I think that the projects we’ve done have spoken for themselves, and that’s one of the reasons that people turn to our firm to take on some of the most complicated and challenging projects out there. I think Chelsea Beacon and the Unity Preservation Trust are two examples of projects that we were awarded that definitely have their challenges, but we’ve been able to execute on similar projects previously.

Chelsea Beacon is a huge undertaking. What are some of the unique challenges of that project?

Chelsea Beacon is the restoration of an existing, historic building. It was built as a YMCA in the early 1900s, and then in about 1970 it was converted to a women’s correctional facility. That facility was ultimately abandoned right after Hurricane Sandy in 2012. It has sat empty since then. 

ESD did a request for proposals to find a developer to convert it into affordable housing, and we responded with the Osborne Association. They manage affordable housing, as well as focus on re-entry from the criminal justice system. It seemed like a great match for this site. We also brought in CookFox as the architect. 

It’s a really beautiful building. We’re adding about 10 floors on top of it, with 131 units of supportive housing and 20,000 square feet of community facilities. 

It’s a challenging construction project because we’re restoring and building upon an existing building, but we’re also confident in our team. First, there’s the design of the restoration and the overbuild. It involves abating hazardous material inside the building, converting the existing building, and getting it ready to accommodate the additional floors we’re putting on top of it. There’s also a brownfields component. This is a brownfield project, because it was a natural gas generating site, so we have to clean it up.

The second part of it is just the complicated layers of financing to put together the $131 million that we needed to complete the project. We did that alongside our partners at the state, New York City Homes and Community Renewal and the New York State Office of Mental Health and Hygiene. They’re providing capital so that the nonprofit can actually own the short-term transitional residence. Our partners at Wells Fargo are providing debt and equity.

It’s a tough time to build a multifamily from the ground up. How do you balance new construction alongside preservation projects?

I think that projects in New York City have gotten more and more complicated, as we look to add in sustainability and green features. The projects have also gotten a lot bigger, in both units and dollars and building size. There’s such a need for affordable housing that we’ve added units and density wherever possible. 

There are other components now, too, like in the case of Chelsea Beacon, where we have about 20,000 square feet of community facility space. We’re always looking to find new ways to create a better product, and keep sustainability front of mind.

Our new construction and preservation pipeline is split about 50-50, so we have about 1,500 new construction units in our pipeline. One of the most exciting projects that we’re working on is called Stevenson Square. It’s 1,000 units of new housing that we’re building on a site that includes an existing 1,000 units of housing that we preserved. We just finished the first two phases of the project. And we’re about to start construction on the third phase.

So we’ve got about 1,500 units of new construction and another 1,000 units of preservation projects in our pipeline. We’re always trying to split the product types, and to do as much as we can. 

Chelsea Beacon and Unity were both announced within a month of each other this summer, but such complex plans and capital stacks must take a long time to get to closing. What’s the typical timeline you’re looking at on these projects? 

It can take affordable housing in New York City years to get to the point where you’re ready to close on construction. We’ve had projects that have taken as long as five years in planning and pre-development in order to get to a project closing, especially when you have a Uniform Land Use Review Procedure. 

For Unity Towers in Coney Island, we spent about a year working with NYCHA to get to the point where they designated us as the design-build contractor. 

Unity was the second project that we’re working with with the New York City Public Housing Trust as the design-build contractor. We execute the renovation of the property, and NYCHA continues to own and manage. When we’re done, NYCHA will have recapitalized a fully restored and preserved building that will be affordable and accessible to residents for decades to come. 

The Chelsea Beacon project is one that we spent about three years designing and planning in order to get to a closing, and then it’ll be about a three-year construction period until we’re ready to welcome our first residents into the building.

Emily Davis can be reached at edavis@commercialobserver.com.