As the experts onstage for “Boroughs on Fire” at Connect New York on April 17 will attest, a great deal of the development action these days can be found outside the Manhattan core. Yet HAP Investments’ Eran Polack, who will be among those experts, has long sought after emerging neighborhoods that would reward a long-term strategy. Here, he shares insights into that strategy.
Q: A common thread for HAP Investments over the past 20 years has been one of focus on undervalued or emerging neighborhoods. What investment principles that were developed in markets such as Budapest and Tel Aviv have carried over to New York?
A: When we established our U.S. office, we knew we had to find our niche—something that well-established developers were not doing. HAP Investments has had a successful history of identifying and investing in neighborhoods in the preliminary stages of urban revitalization, and we carried these same principles to New York.
We identified emerging neighborhoods with long-term potential that we could invest and develop in for the next 20 to 30 years. Our goal was to build multiple projects in these neighborhoods, and strategically position ourselves to build a business around it.
Q: In New York, HAP was among the early investors in markets such as East Harlem and Washington Heights. More recently, the company has pursued opportunities in markets that are more established, such as Chelsea and Tribeca. Is this a shift in strategy, or does it build on HAP’s longstanding strategy?
A: HAP’s longstanding strategy has always focused on developing projects in both emerging and prime neighborhoods throughout the New York metropolitan area. We are still pursuing smart investment opportunities in emerging neighborhoods. We currently have a 42-story luxury rental project at 500 Summit Ave., located in the rapidly growing Journal Square neighborhood of Jersey City.
Today, we are investing in more prime New York City markets, such as Chelsea, with our project at 215 & 225 W. 28th St. and in Tribeca at 65 Franklin St. with plans to build full-service luxury rental and condominium developments boasting a full suite of amenities. We are confident about developing in these prime downtown neighborhoods because they are highly desirable and stable. We believe there is still a lot of growth potential and an opportunity to build more projects in the future.
Q: Affordable housing continues to be a focus for HAP, and we’ve heard a great deal about the continuing need for affordability in the city. Do you anticipate pursuing affordable opportunities in the outer boroughs?
A: We are actively looking to develop more rental projects offering affordable housing in New York. We continue to look at additional opportunities in East Harlem and Washington Heights, and we are also interested in the Bronx and Brooklyn.
Q: Why do you think more established neighborhoods are good investment opportunities today?
A: Our experienced team and strategic partners are continually assessing market trends and best positioning our developments for success. We believe that high quality projects situated in desirable and stable neighborhoods will continue to be smart investments, even in various market conditions.