Owners, Developers & Managers Design/Build
12B March 3 - 16, 2020 6B June 16 - July 6, 2020
New York Real Estate Journal New York Real Estate Journal
LeadersPRODUCTION FACILITY FOR FILM AND TV LARGE-SCALE Steven Kratchman Architect Industry Spacesmith commissioned to design embracesOpportunities vertical expansions to reduce property taxes
During the past 20 years, Steven Kratchman Architect, PC (SKAPC), has completed over 50 vertical expansions to existing buildings. While adding upward is certainly not a new concept, its desirability has increased in tandem Herman Katz with development and redevelopment Cangemi in urban environments whereWilkes space is at a premium, as well in suburban & as Clyne, LLP neighborhoods where property values continue rise. However, the comSenior to housing, as an investment, plexity of many building expansions may now require its own form of life often make more adding challenging support. Withthem developers more than ground-up construction. than double the number of units in “Any it’s 2018 as itenlargement, did just four whether years before vertical, downward or sideways, can that, according to the National Investtrigger a complexity factor,” said ment Center for Senior Housing & Steven Kratchman, the firm’s owner Care, demand appears to be slowing and founder. “These projects can be down faster than its target residents. design intensive depending on a vaDespite the sobering market trend, riety of factors, such as the condition managers and owners of senior care of the site and existing building, the facilities may find in this challenging availability of design documentation, news an opportunity to reduce their local ordinances and codes, and the property tax burden to offset declining building construction type and use.” net income and save a significant SKAPC specializes in repurposing chunk of annual fixed operating costs. and reinvigorating existing spaces Until recently, senior housing with design concepts that are both outpaced office, retail, hotels and sophisticated and practical. “My apartments as one of the fastest-growfirst experience working on a vertical ing commercial expansion was asreal theestate designsectors, archiaccording to Green Street Advisors. tect for a three-story addition to an Real estate developers long existing five-story school have structure,” been focused on accommodating the said Kratchman. “We added a class72 million Americans born between room floor and a new gym on top 1946 and 1964,built whoout are about reach of a partially roof, to and the their mid-80s, the perfect move-in existing floors required reinforcing of demographic most facilities. the columns andforfootings. The work However, occupancy senior was completed whileamong the children NEW YORK, NY
David Wilkes
104,000 s/f Upriver Studios facility
for senior housing properties Expanding its presence in Upstate NewYork, the international and interiors firm Witharchitecture developers adding Spacesmith has been commissioned more double to designthan Upriver Studios.the The large-scale production facility number of units in 2018 for film and TV will ultimately comas it104,000 did just prise s/f offour soundyears stages and post-production support spaces before that, and according in an adapted former manufacturing to the National Investbuilding. Led by noted actress and director Mary Stuart Masterson, ment Center for Senior media strategist Beth Davenport, and Housing & Care, demand producer Diane Wheeler-Nicholson, the new facility the bucolic area appears tomakes be slowing more attractive to major film, televidown faster than its sion and media productions. Spacetarget smith hasresidents. designed the adaptive reuse for Upriver Studios with an eye toward physical activity to the elderly right the maximum functionality of a sound in their own living room? App-based stage, making it an attractive option games like Tetris andthat Mahjong for production crews tend toalso use provide seniors with mental the well-equipped studios exercise in New and Yorkstimulation. City. Coupled with the Hudson Management RiverMedication Valley’s relatively low costs of The challenges keeping labor and living, itsposed scenicby views, and track of one’s medications have the region’s recently increased motion largely been solved by astudios variety of picture tax credit, the new offer technologies to prevent life-threatenan alternative for production groups ing Medication are thaterrors. previously workedreminders only in large now available through smartphone metropolitan areas. apps like Personal Caregiver and Environmental responsibility is a RxmindMe. top priority for both Spacesmith and Healthcare Information client Stuart Masterson, who pledged Management that Upriver Studios would meet the A variety of health tracking tools film industry’s strictest standards and are now available to collect and keep help productions become eligible for SAUGERTIES, NY
housing facilities fell in the third quarter of 2019 to 88%, down from previous highs. Your mother’s iPhone may be the culprit, along with a host of other technological advances. Consider the following five ways that technology has impacted seniors’ lifestyles, arguably for the better: Social contact Video chat like Skype and social media, as well as email, WhatsApp, and so many other services, while designfor for real a townhouse notSKAPC’s a substitute human on conManhattan’s Upper East Side involved nection, are being embraced by the adding a–three-story vertical additionfor to elderly often being configured an existing three-storygrandkids. storefront with them by tech-savvy Safetyabove. apartments Most surveys show that some 90% were attending school, and the entire of seniors would prefer to stay in experience demonstrated first-hand their own home, and various Personal the range of issues vertical additions Emergency Response System (PERS) can present.” devices are now available that allow SKAPC’s design for a townhouse the wearer to simply push a button on Manhattan’s Upper East Side– for emergency attention. Beyond that, which involved adding a three-story GPS tracking devicestocananmonitor the vertical addition existing location and send alerts for a loved three-story storefront with apartments one who may suffer from Alzheimer’s above–completely transformed the disease or other dementias. property. Kratchman initially recomExercise mended a brick structure to mirror Who needs to pay substantial sums neighboring buildings. “However, for the recreational and exercise the owner is in the stone business facilities at athe senior facility and wanted structure to when have products like Nintendo’s Wii the grandeur of residences on sports upper games areAve.” availabe to provide light Madison
current information such as medical history, physician contacts, medication schedules, and health conditions. Venture capital and other firms will spend some $1 billion this year on “aging in place” technologies. The rise of technologies that help the elderly remain in their homes cuts against real estate bets that aging baby boomers will flee their isolation to enroll in senior housing developments. Moreover, with increasingly better health, the age at which people enter senior housing is rising, at around 85 years old today, compared to about 82 ten years ago. The result is a looming glut of senior facilities units. And, while the word “looming” may sound speculative, the impact on valuation–for a variety of significant purposes, including property tax assessments–is very much real time, as in right now. The tax assessor’s job is to estimate what a purchaser would pay as of a current taxable status date for the subject property, and that means they a green tax credit. Plans are in place must consider market supply and to ensure the studios use 100% clean, demand factors in the industry that renewable energy by 2030. The buildimpact perceived risk. In two words: ing features locally sourced materials, capitalization rate. Noted declines in rooftop photovoltaics, low-flow toioccupancy combined with the widelets and fixtures, and high-efficiency ly-published trend toward remaining LED lighting throughout. Situated at home for as long the as possible are on a generous site, repurposed now the subject of intense discusstructure can also be expanded to
sion among the sector’s investment community, and will result in higher perceived risk, more challenging access to capital, and notable declines in property values. The tax assessor’s most challenging assignment when it comes to valuing such properties–in NewYork anyway–is to distill the real estate component from the overall going concern value: no easy task and one that is the subject of endless debate. Senior living facilities are, first and foremost, run as businesses that happen to occupy real estate; unfortunately many tax assessors zero in on transfer prices that represent more than just the real property. Notwithstanding this common driver of senior housing over-assessments in any market cycle, with declining demand for the going concern business now comes a parallel drop in the value of the real estate that supports a senior living facility. Owners and operators should be especially keen to evaluate their property tax burden in view of meet the needs of larger productions the current market. — either through permanent additions or by parking temporary trailers in two large, adjacent parking lots. An outdoor break area also serves as a David Wilkes, Esq.,place FRICS, isfora partner at casual meeting cast and Hermanweather Katz Cangemi Wilkes & Clyne, crew, permitting. To York, comment LLP, New N.Y. on this story visit nyrej.com
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