Interview: Eran Polack of HAP Investments on ‘Healthy Competition’ & Emerging Markets for New Developments

Eran Polack is the CEO and Co-founder of HAP Investments, a residential and commercial real estate development firm that is building all over New York City (and the world). With projects in Harlem, Jersey City, Tribeca, and Chelsea, Polack explains the benefits of each neighborhood, which market he thinks has the most growth potential, which neighborhood is the best investment, and what his plans are for the future.

What are the challenges and benefits of the diverse markets you are building in: East Harlem, Jersey City, Tribeca, and Chelsea?

EP: We identified East Harlem as an emerging market with a lot of opportunities and started investing about seven years ago. East Harlem was attractive to us for multifamily development for several reasons – we could build quality projects with great amenities for less, we could offer more affordable rents, and the projects were situated near public transportation providing residents with an easy commute to and from the center of Manhattan. We think there are still strategic opportunities to develop in this neighborhood, but it’s becoming more challenging to make the numbers work with rising land prices and construction costs.

We identified Jersey City as another emerging market we wanted to invest in because it offers quality living, more affordable prices compared to Manhattan, and great transportation access to and from New York City. We were one of the first developers to invest in the Journal Square neighborhood of Jersey City with our property at 500 Summit Avenue, a planned 42-story luxury rental tower with sweeping views of the New York City skyline and convenient access to the PATH train into downtown Manhattan. While there is more development activity happening there today, our product will be very distinct and will contribute to the excitement of the area.

Most recently, we have invested in select Downtown Manhattan neighborhoods including Tribeca with our planned 19-story luxury residential building at 65 Franklin Street. We believe in Tribeca because it is a very established neighborhood that is highly desirable and stable. There is more product coming into the neighborhood today, but we view it as healthy competition. This challenges us to design, develop and deliver a building that will stand out from the crowd.

We also believe in the strength of the Chelsea neighborhood. It’s a healthy and stable market which led to our investment at 215 & 225 West 28th Street for a planned 20-story luxury rental and condominium development. Acquiring the land for this project was the real challenge as we had to assemble eight lots on West 28th Street but we are excited about our plans to build a full-service luxury residential development boasting a full suite of amenities.

Which market has the most growth potential?

EP: We think there are still good investment opportunities in Jersey City as the area continues to grow. There has been tremendous development activity, an influx of businesses moving to the area, and the region has attracted a lot more people looking for quality living options at more affordable prices compared to Manhattan.

Which neighborhood is the best investment?

EP: We believe there are some great investment opportunities in Downtown Manhattan and are bullish on the market for the next several years. We see potential in the Lower East Side, NoHo, Nolita and the Financial District.

What are HAP’s plans for the future?

EP: Our focus is to continue to grow the company and identify and invest in additional residential developments strategically situated in both emerging and prime markets in the New York metropolitan area. We want to successfully design and develop the projects in our pipeline and continue looking for new opportunities.