Colleen Wenke of Taconic Partners: 5 Questions

If you thought Times Square was only a destination for international tourists, suburban out-of-towners and rowdy event-goers, think again.

Taconic Partners is giving the busy New York City neighborhood a residential makeover with continued success at the Ellery, a 32-story, 330-unit luxury apartment tower at 312 West 43rd Street that opened two years ago and is now fully leased.

The secret to attracting residents to Times Square? Creating a “calm oasis” within the chaos, according to Colleen Wenke, president and chief operating officer at Taconic.

The Ellery’s 10,000-square-foot indoor garden and 40-foot-long pool overlooking the city — along with its close proximity to mass transit — make it an alluring attraction for New York City residents who want to live closer to work, Wenke said.

Thinking outside the box and building residential properties in previously untouched neighborhoods like Times Square might also help create some much-needed housing in the city, she said.

Commercial Observer sat down with Wenke earlier this month to discuss New York City’s emerging residential areas, as well as Taconic’s current projects and whether the company is pursuing more housing under current tax incentive programs.

This interview has been edited for length and clarity.

Commercial Observer: The Ellery, Taconic’s 32-story luxury apartment tower in Times Square, is fully leased. Why do you think Times Square is becoming more of a residential neighborhood?

Colleen Wenke: That’s been in occupancy for about 18 months, so we’re in our first year of renewals there. I’m very proud and excited to say that our retention is quite strong, and I think that’s a testament to the product that was delivered.

Our thought process about all of our multifamily and all of our product types across all asset types is really focused on the quality in what we’re delivering, whether it’s our office space, homes, lab and life science spaces. We think about who’s going to be using the space and what they’re using it for.

Our thought process about the Ellery was really about a case of calm and a respite at an oasis given its location. The neighborhood can be quite hectic, so, once you come inside, it really draws you into a calm oasis, a garden within the center and the heart of the city. I think that’s really resonated well with the user group and the tenants who have come into the building.

I think residential development is going to continue, given some of the attributes of the neighborhood — certainly access to transportation, restaurants, theater and then all of the employment in the area. 

We have found an ongoing trend that people want to live close to where they work, and so we’re providing a comfortable home environment where you can walk to where you work and also have all of the amenities in the neighborhood that satisfy a comfortable lifestyle, including a grocery store, which we are welcoming in Aldi on June 19. It’s definitely a testament to them having conviction about the New York market, and I think it’s a great complement to the residential in the neighborhood.

Do you think there’s a growing trend toward access and convenience over neighborhood and community?

I always think that there’s demand around transit-oriented development because there is a convenience factor that happens, especially with career-oriented working professionals.

In the Financial District, conversions are happening. And that’s not only happening within the Financial District, that’s also happening in Midtown, and I think that’s going to continue happening as we have a supply of Class B and Class B-plus product in the office sector, and there’s a question mark around what will happen to it. They’re functionally obsolete buildings, they require a huge capital injection to kind of bring them up to a better office-type product, and it makes better sense as a residential use, especially in a market that is undersupplied.

New York’s subway system is the bloodline of New York. You can get around so much quicker using it. It helps to drive demand, and then when you sprinkle in a retail offering that complements a day-to-day lifestyle, it helps to balance out the comfort level. Whether it’s a nice brunch spot or a grocery store or a fitness studio, all of those sorts of things, you start to have a really balanced lifestyle.

Taconic also completed the Miramar, a mixed-income residential development in northern Manhattan’s Inwood. What was the appeal to build in Inwood, and how is that building doing?

The Miramar is also doing very well. We have been involved up in Inwood for over a decade, and our thesis there was also transit-oriented development. We saw that as a very interesting neighborhood. You have access to the waterfront and you have access to transportation, and again, it’s that value proposition relative to an otherwise very expensive Manhattan proper market. You’re still on the island of Manhattan, you have Metro-North, and you have access to subway lines there, and you have proximity to both medical and academic institutions.

As we looked at market analysis, we thought that Inwood was a really important place to keep an eye on, and we got involved there over a decade ago. We developed the Miramar, and we’re about 60 percent leased. It’s performing quite well.

Residents are really happy because it’s a new product tied to that market. Former Brooklynites and Manhattanites who just want a little bit more space are moving up to Inwood, and they’re responding quite well.

Is Taconic pushing forward with any other new housing developments in the city? Especially under the 485-x tax incentive program?

We are pursuing a handful of requests for proposals (RFPs). Nothing has connected right now. We would love to.

We believe in New York. We believe in the need for, and we see the need for, housing. The challenge right now is that Manhattan itself is an island, and there’s a limited number of sites in supply, but we’re actively pursuing conversions. We are pursuing new RFPs. If we could find sites or conversions or partnerships, we would absolutely do so.

Multifamily building filings are growing rapidly in New York City. What’s driving the growth considering the challenges?

I don’t think it’s brand new. It’s continuing a trend with the affordability crisis and people who could have otherwise purchased choosing to rent, and interest rates remaining high, and demand remaining strong, and a limited supply.

I don’t think it’s a single-pronged issue, I think it’s multiple variables that are leading to continuing strong demand. And because New York is amazing, there is a continued need for housing and a continued drive to build, and so it’s happening.

I think one of the other things that isn’t getting as much attention is that there is existing housing stock that could otherwise be occupied.

We have a portfolio of workforce housing that we have at the ready to be occupied, and we’re working with the city to help facilitate how to truncate an extended approval process to get folks who qualify into housing quicker. I think the administration is focused on that, and I think that that is also part of the story.

As we talk about housing, we should also talk about the existing housing stock and how we get people into the existing housing stock, not just new housing. New housing takes a very long time to actually design, file, build and get people in, and that can be all types of different housing, not just affordable, but market-rate as well. But there is an existing built environment, and I think we should also focus very much on getting that available quicker to get people into that built environment.

Isabelle Durso can be reached at idurso@commercialobserver.com.