Season 2:

Episode 16

August 31, 2021

75 Park Lane with Phillip Gesue

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This week we’ll be talking to Phillip Gesue, the Chief Development Officer at Strategic Capital, a Jersey City-based development company that is a subsidiary of China Construction America. In this week’s episode, we will discuss how a 37 story high-rise, located just steps from the Hudson River, is set to become the city’s landmark condominium residence.

We will be speaking with him about how he has been involved with the architectural design and development of 75 Park Lane, his career at Strategic Capital, as well as how his team has implemented a number of technologies to increase energy efficiency and reduce the building’s waste. We will also discuss the buyer segment of Chinese nationals and Chinese Americans and how that has become intertwined with the macro-level topic of immigration in the greater New York City area.


About Phillip Gesue

Phillip Gesue is the Chief Development Officer at Strategic Capital (the New Jersey-based investment arm of China Construction America (CCA), a subsidiary of state-controlled Chinese builder CSCEC), where he had previously served as head of real estate. As a Columbia University graduate of the School of Architecture, Planning and Preservation with an MS in Real Estate Development and Bachelor’s of Science in Business and Economics from University of Pittsburgh, Phillip is an expert in the field. He is also a board member of New York’s Art Omi International Arts Center.

00:00:00] Intro: What goes into making an iconic building in America? What are the stories and who are the people behind the next generation of architecture? If your work touches the real estate industry in any way, or you’re just curious about what goes into one-of-a-kind cities and towns all across our country. Join us on The American Building podcast.

In season two, we learn about everything from skyscrapers to single-family homes, from the famous and soon-to-be famous designers and developers responsible for them. This season focuses particularly on the pandemic and how our buildings will change in response. Our sponsor is the iconic design firm Michael Graves Architecture & Design.

And now your host, award-winning architect turned entrepreneur, Atif Qadir, AIA.

[00:01:06] Atif Qadir: This is American Building, and I’m your host, Atif Qadir. We are recording from the historic home of world-renowned architect Michael Graves in Princeton, New Jersey. Check out this amazing space for yourself at the Michael Graves Architecture & Design YouTube channel. Now, let’s build something.

Today, our guest is Phillip Gesue. Phillip is the Chief Development Officer at Strategic Capital, a Jersey City-based development company that is a subsidiary of China Construction America. Previously, he held senior development roles at the Witkoff Group and Time Equities. He is a graduate of Columbia University like me.

We will be talking about 75 Park Lane. It is a recently completed condominium tower that is part of the Park and Shore development that also includes its sister building, 2 Shore Lane. The project was developed by Strategic Capital and designed by Woods Bagot. More broadly, we will discuss how immigration to the United States and the real estate market are intertwined in the greater New York City area.

Thank you so much for being here with us, Phillip.

[00:02:19] Phillip Gesue: Thank you.

[00:02:21] Atif Qadir: So you are from Erie, Pennsylvania, and for political nerds like me, we know this as the quintessential bellwether county. Northwest Pennsylvania, coal country, unions, historic cities and towns built around railroads and then the history after that related to economic collapse.

So the story of Erie is to some extent a larger American story. Could you tell us what it was like growing up in this part of the country?

[00:02:46] Phillip Gesue: Sure. Well, I didn’t spend that much time in Erie, but I grew up in Pittsburgh more so than Erie. And, you know, the two of them are very similar in that they’re both, you know, industrial towns.

And when I grew up there, which was in the seventies, they were industrial towns that were on the wane. They had been really the towns that built up and created a lot of the economic wealth in the United States. And so people like the Melons and Carnegie and JP Morgan was actively involved in the area, the Rockefeller’s standard oil, all those things were created in Western Pennsylvania.

And of course the coal industry was created in Western PA and West Virginia. So they were incredible places in the late 1800s up until about 1950s, and then they started a very precipitous decline due to international competition and trade. And so at that time it was Japan that started producing steel post-World War II, and then Taiwan started producing other types of industrial items.

And by the time I was a kid in the seventies, most of the factories were declining and going out of business. When I was a kid and I would go to school in Pittsburgh, the whole city smelled like coke, which is something that’s used to produce coal. And you know, it’s industrial opponent that you use to burn it still with.

And, you know, it was really a very industrial place and that all changed, you know, pretty quickly between 1975 and 1985. I mean, almost all of the steel industry closed down during that time or a big part of it, and the same thing goes for a lot of other types of industry in that area. So it was interesting growing up in that, you know, the whole nature of the place changed and it become very economically depressed.

And I have family who were factory workers, and so we knew firsthand, you know, what that meant to families. So it was interesting. It’s particularly interesting looking back.

[00:04:42] Atif Qadir: So your path from Pittsburgh to New York City, what were the steps along the way there?

[00:04:48] Phillip Gesue: There were a lot of steps cause I moved away from Pittsburgh when I was young. I wound up going to school for business and economics, and eventually I moved back to New York to go to grad school at Columbia. And I got interested and involved in architecture and then in development. So I was interested in business and I sort of came to New York to learn about architecture and then learn about the real estate business.

So going to Columbia was really incredible and living in New York City was incredible because if you’re from Western PA, you know, there not a lot of economic opportunities there. And they particularly weren’t when I was, you know, a kid up through the nineties, when I graduated from college. It’s different now the areas, you know, sort of on a big rebound, but being in New York was fantastic.

[00:05:38] Atif Qadir: And you went to college in Pennsylvania?

[00:05:39] Phillip Gesue: I did. I went to university.

[00:05:41] Atif Qadir: Okay, cool. Um, they have, or had a really good basketball team and now I think that might be

on the rise.

[00:05:47] Phillip Gesue: Exactly. I’m a fan. When I was a kid there, they had a fantastic football team.

So really, really good players.

[00:05:55] Atif Qadir: I think that’s the story of conference realignment and what the good and the bad of that ends up being. So when you were in New York, you worked for a number of well-known real estate developers. So Steve Witkoff, Francis Greenburger, what were the different things that you learned from each of those experiences?

[00:06:12] Phillip Gesue: So, you know, firms like that, you learn a lot from the principals. I had the fortune of working very closely with, uh, both Francis Greenburger and Steve Witkoff and both incredibly successful, brilliant people. And, you know, you learn different things from them. And I think, you know, having exposure to very successful people and very smart people in a work setting. You know, you learn a lot of lessons and they’re different lessons.

And I think you learn different things about different elements of business from different people. And so, you know, certain people know a lot about politics and you know how to treat a community group and how to, you know, work with council members and other people are really good at looking at small deals and taking a chance on something.

If your downside is protected and you know, you, these kinds of philosophies from these kinds of guys and, you know, I’ve learned a tremendous amount from both of them and from other mentors during my career. So it was critically important having access to those types of people.

[00:07:11] Atif Qadir: And you’ve worked at Strategic Capital since 2016.

So for about five years. And as you’ve started and grown at the development business at the firm, what a particular ways have you been organized? Planning for perhaps some things that you’ve learned from your other work experiences.

[00:07:29] Phillip Gesue: Sure. So, you know, working in Strategic Capital is even different because we’re a public company and, you know, there is a gigantic difference between a public real estate development company and a private one, or the business just by its nature works better for private individuals and entrepreneurs who are quick decision makers, they have a gut, they have a leadership instinct. They have, you know, an idea and a vision. And they sort of see that through, you know, based on their own, you know, life philosophy and things that they like. And, you know, they have visions and visions are generally good if they’re carried out by a visionary, not by a team of people who are trying to create a vision because it’s necessary.

So that’s one of the problems you get with public companies during development. On the other hand, public companies teach you a lot about discipline. And liability and sort of being beholden to your shareholders and, you know, communicating risk to people. And those are things that you don’t get in a private setting and with an entrepreneur, because those people are learning those things on the fly as they go, and they do it themselves.

They don’t expect you to translate the risk they’re doing it themselves. And when you work for a public company, there is no entrepreneur looking over your shoulder. You have to tell the shareholders, you know, this is the exposure, this is the benefit. And it’s a very different exercise.

[00:08:55] Atif Qadir: So Strategic Capital, the project that we’re going to focus on today is 75 Park Lane.

And could you tell us about the specifics of its location and the Newport neighborhood in Jersey city?

[00:09:07] Phillip Gesue: So Jersey city, generally over the last 20 years, it’s really become huge, but it’s really become a major city over the last five years. It’s become much more diverse and international than it was before.

As New York has exploded and become, you know, this incredible place in terms of, you know, the whole nature of Manhattan being uplifted to the lofty levels that it’s at. And that brought up Jersey city with it because a lot of people were displaced by that increase in housing costs in Manhattan and moved to Jersey city, and that has been great for Jersey city.

So, you know, it now has a great diversity of restaurants, very, very diverse population in terms of ethnicity, and also a much more diverse population in terms of where people work. So you’re just as likely to meet somebody here who works in Princeton or New Work or Jersey city as in New York City. And that’s very good for cities to have diverse populations and, you know, or diversity of things that the people do. So that obviously if something ever happened in Manhattan or the finance industry, we and I went down or the subway system was screwed up, you know, Jersey city wouldn’t sees to be. So what’s happened also at the same time is Newport, which was kind of like the suburban Jersey sister to Battery Park, you know, has come into its own in the same way that Battery Park did 10 or 15 years ago.

Battery Park really got great when it got totally built out and landscaping grew in and, you know, population kind of became more entrenched there. And you know, now you go through Battery Park in the evening and you have groups of 10 and 12 year olds, you know, running around through the streets, just like kids do in the suburbs.

You know, when I was a kid in the seventies and eighties, and it’s something that you don’t see in the city at all. So it’s a very wonderful thing, especially if you have a family and that same dynamic now kind of exists in Newport, even though Newport is not built out to the same degree that Battery Park city was sort of the bottom two thirds of it is, it’s heavily populated now has better, or the retailers don’t have fabulous but, and it was better retail than it used to have a long time ago. And the same sort of dynamic with families, making a decision to stay there and, you know, kids running around the street and, uh, you know, it’s really, really nice for urban growth.

[00:11:34] Atif Qadir: Do you see comparisons between Jersey city or that Newport neighborhood specifically and say like Astoria or downtown Brooklyn?

[00:11:42] Phillip Gesue: No. I mean, Astoria and downtown Brooklyn are about as urban and dense as you could possibly get. And from an ethnicity standpoint, you know, for sure you do, because those are incredibly diverse places and Jersey city is incredibly diverse and I don’t know what the latest statistics are, but it is as Asian as it is American.

And that I think is a very interesting dynamic. And that’s something that you see in places like going to Astoria or like a certain areas of Brooklyn. So I think those things are similar, but from a built environment, Astoria is a gritty place where you have to walk a long way to the subway. And, you know, I think that those are much grittier urban environments than this.

This is new, nice and clean and nicely landscaped. It’s more like Dallas than Brooklyn.

[00:12:34] Atif Qadir: And by Asian, you mean non-US nationals versus like Americans that are of any ethnicity or did you mean something else?

[00:12:42] Phillip Gesue: When, I mean Asian, I mean a people of Asian descent, people of American descent, there is a large population of recent Asian immigrants here.

Who many are not American citizens and who are foreign nationals who are either working here temporarily, have family here. It’s both South Asian and East Asian, you know, lots of other ethnicities. So it’s a interesting community.

[00:13:12] Atif Qadir: And the scope of the project of 75 Park Lane, kind of give us the numbers of what that project is.

[00:13:19] Phillip Gesue: Sure. So 75 Park Lane is it’s two buildings that are combined. It is 430 condominiums, which is a very large condo. As for-sale housing goes, it’s a 358 unit building and the 72 unit building that are both next to one another, they share amenities. They have slightly different style. They have two different homeowners associations.

And really the concept was to create a smaller boutique building for people who liked that concept, a larger, full service building for people who liked that concept.

[00:13:55] Atif Qadir: And I want our listeners to be able to imagine themselves being at 75 Park Lane. So what is the experience as you enter the building and you walk up to you?

[00:14:07] Phillip Gesue: The building is, you know, I would say the best the thing that Woods Bagot did was they had a phenomenal interior designer. So this project was both designed on the interiors and the exterior by Woods Bagot and the designer who worked on this also did the Bacharach Hotel in Midtown and has done some other really incredible hotel and residential properties around the world.

He’s an Australian and was just a very talented individual. So, you know, it’s very modern, it’s very spa-like, all natural stones. One of the great things about having a connection to China and Asia is that we were able to do procurement of really incredible natural materials for this about five years ago.

So there’s just beautiful stone throughout the project and, you know, wood finishes and it really feels like a spa, you know, when you’re in the common areas and the amenities. And it’s very spacious and, um, it just has a very modern feel to it, which is not what you see in Jersey so much. I would say stylistically, it’s more like something you would find in downtown Manhattan.

[00:15:12] Atif Qadir: And in terms of the relationship that you mentioned it’s because Strategic Capital is subsidiary of China Construction America, right? That’s correct. Perfect. Okay. And then in the design and the construction of the building, you were able to implement a number of technologies to enable the energy efficiency and reduce waste.

Could you talk about some of those technologies?

[00:15:34] Phillip Gesue: Sure. So that project is about five years old. So a lot of the things that we did there are very commonplace now, but at the time, you know, we used a very sophisticated HVAC and thermostat systems. So, you know, regulating HVAC is probably the biggest energy saver globally.

So the largest polluter are buildings in terms of, you know, CO2 production and its buildings, you know, heating and cooling systems and particularly cooling. So we used a very efficient cooling system and we use very efficient thermostat systems. And those are some of the biggest, you know, savings that you can have in a building.

And those are also savings that translate to people’s sort of second biggest purchase outside of their homeowners association dues, which is their monthly electrical and gas charges.

[00:16:21] Atif Qadir: And we talked in the past about what you learned on this project, what worked on the design and what would you have done differently or what have you done differently in subsequent projects?

[00:16:32] Phillip Gesue: So, you know, this project, I mean, one of the things about working with Woods Bagot and a really great designer is that they push you to over-design things. I think that this project probably is a lot fancier than it might’ve needed to be from an economic standpoint. I think in terms of things that I don’t care for in the design.

I think that the interior design is very handsome and it, and it really turned out very nicely. So there aren’t a lot of planning related things that I think I would have done differently here. But I think that, uh, we made this, you know, we made sort of a Mercedes when we might’ve just needed a BMW or something, it was, we kind of overshot our mark and really, really put a lot of fancy finishes, spend a lot more money than we might’ve needed to.

But you know, that also has resulted in our ability to have decent absorption and, you know, great sort of buyer and, you know, a brand awareness, which is something that’s good to do on your first deal.

[00:17:28] Atif Qadir: So our listeners get a gauge that some of those finishes, could you kind of describe the, like what types of wood flooring, what types of stone, some other of the materials that were used?

[00:17:37] Phillip Gesue: Sure. I mean, we use something that’s called, so throughout the common areas there’s something called blue to ciseaux, which is a common French limestone, so we use that product throughout. We actually used a product that is from China, it’s actually mined in China, that is virtually identical. It’s an identical looking thing.

And you know, it’s an organic material. So there are lots of places that have the same organic materials. And that’s just a really beautiful, like very soft gray stone. And that goes through all of the common areas in the building and the pool. There is a 75 foot lap pool all done in that marble. And, you know, again, those are the sorts of things that, you know, in Jersey city, you can’t really find Olympic sized, slap holes.

And those are things that have attracted people to the building, especially when they’re done, you know, really richly like that, like a five star hotel. And then, you know, all of the units have Oak flooring, which is not that uncommon these days for apartments, they have, you know, really beautiful Walnut kitchens, which is something that’s a little bit unusual and, you know, really nice quality.

Like real quartz countertops, not courtside or artificial, but like real true quartz, which is something that has the look of court stone. If you know what that is, and they’re incredible sheets of, of courts that basically get cut. And that has an incredible look, difficult to work with and, to be honest with you, if I was going to change one thing might’ve done something different. Counters. Yeah, because it’s a little crumbly. And so it was a lot of, you know, we had a lot of waste, but it looks incredible and has been embraced by the buyers.

[00:19:12] Atif Qadir: Awesome. I’m going to take a break here to let our listeners know that we’ll be having the incredible Paul Lewis on the show later this season. Paul is a founder and partner at LTL architects and has been a professor at Princeton University for over 20 years.

So I’m going to go a little bit bigger picture then the project itself. So 75 Park Lane was built for an audience of buyers that was largely Chinese nationals and Chinese-Americans, what would you say differentiates these types of buyers from others that you attract in your projects?

[00:19:46] Phillip Gesue: So I would say that the project wasn’t specifically built for an Asian audience.

I think that the project was built for an American audience. I think that it appealed to an Asian audience because it was built in Jersey city. And I think we knew that that buyer segment was a large part of our audience. You know, an interesting thing that I’ve discovered because I’ve been in the condo business for a long time, is that Asians and Chinese in particular know a lot about condominiums.

It is like the way it’s a national pastime for us New Yorkers to talk about real estate and the price of real estate, you know, what have you got? Where’d you buy? And how much per square foot? They’re like that times 10, like they know everything about condos. They’re great at layouts, even the average buyer will come in and just know everything about the finishes.

And they’ve really, really sophisticated. And they also know a lot about pre-sales and the whole selling condos, because, you know, that’s the way people buy real estate in China, they buy it pre-construction from plans. In general, the demand and supply much further out of balance than it is here. So in China, you may want to buy an apartment and there may be a thousand buyers like yourself in line for 300 units.

So it’s done by assigning people numbers, and you know, some guy may want to buy your number and the line behind you. And, you know, it’s just a real, it’s a racket. But it is also, you know, has a really sophisticated buyer. And that is something that I didn’t know. And that is something, you know, wound up being very good for us during pre-sales because the Chinese buying audience understood presales.

And I would say, you know, Jersey is probably not a huge pre-sale market, just because people who are from suburban Jersey, they’re not accustomed to that. So it helped us to sell a lot of units very early. And I think to this day, now that the project is, you know, is a hundred percent finished and complete now little over a year. You know, those buyers now feel really comfortable with quality of the product and, um, you know, sales are going very briskly. So I think it’s been positive to be involved with that buyer audience. But I wouldn’t say that there were any sort of specific design moves that we made.

[00:22:03] Atif Qadir: So Newport in Jersey city and Flushing in Queens and Vancouver are all markets that have attracted Chinese buyers for a long time.

What would you say is it that is drawing this particular set of buyers to those places. And are there certain things that you see other real estate developers trying to do to attract those buyers?

[00:22:22] Phillip Gesue: Well, you know, I mean, I’m, I’m not an expert in that sort of Asian immigration trends, but you know, I’ve done business in all those places.

So, you know, in Vancouver, it’s community. I mean, Vancouver has a huge existing Chinese community. At the time, I used to do business in Vancouver in the late nineties. And I think at the time it was 50% Chinese or Hong Kong originated families. So I think that, you know, there just as a very big base there, I think it’s a natural stopping off point for people from China.

Anywhere you have a big community and you have people who love their families, you know, they grow because people want to be around their family and friends. And I suspect that, you know, the same thing occurs here in Jersey city. People have friends, they move here because their friends are here and they move here because their kids are going to NYU.

And a lot of the immigration that you see in those places, you know, it’s not because of access to capital markets or, you know, something that’s only business oriented. It probably starts to social and business is good too, so it’s a good decision.

[00:23:28] Atif Qadir: And then, in total, the number of US nationals of Chinese descent in the US has grown from about 3 million to over five and a half million over the past 20 years.

And a portion of that is due to the EB-5 program for our listeners that may not be aware. Could you describe what the EB-5 program is.

[00:23:48] Phillip Gesue: Sure. So the EB-5 program, it’s basically a financing program to generate equity investments for United States businesses and real estate projects, or I think it’s actually just real estate projects that are, uh, sort of underprivileged areas in terms of economic activity in that area.

So for example, if you are in a particular census tract in a city that has certain criteria that you know, where it’s not like a first tier type of a market, you are allowed to raise money to finance projects using capital from foreign investors. And those foreign investors are able to purchase a green card, or it used to be $500,000.

Now it’s a million dollars and essentially they put the money in the money is an at-risk investment. And after five years, they assuming that the investment goes well, the investment gets paid back and they get a green card. And so the green card is effectively like an incentive for foreign nationals to invest in US projects.

So that program was always kind of on the fringes of it’s been an existence a very long time. When I say a long time, 20 years, maybe that number may be wrong but you know, not, not much longer than that, but longer than 10 years, which is when it’s been really active. But what happened is 10 years ago, you know, people discovered China for EB-5 and the whole game changed.

Once people went to China and they found that they were able to raise huge amounts of EB-5 very quickly and EB-5 became a really feasible, um, financing source for really huge projects, because you could go to China and go on tour. And then, you know, 3, 4, 5, 6 months you could raise a hundred million dollars and that money was being brought back and put into, you know, one or several massive projects here in the states.

And that all of that activity really happened, you know, after Lehman brothers crash, it became a, you know, a viable source and China sort of became big at that time. So we’ve used it on our project. I’ve worked on other places where we’ve used it in projects I’ve been to China on EB-5 raises before, and, uh, it’s been a great source of capital for projects.

I think it’s been great for foreign nationals who were interested in, in, you know, obtaining a green card and I’m very bullish on it. I think it’s good on a variety of levels.

[00:26:16] Atif Qadir: Talk to us about what, like a road show in China for an EB-5 program, like, looks like, like where do you go? How does this happen?

What are you saying? What does that even mean?

[00:26:27] Phillip Gesue: You know, I suppose it could be as simple as like a Tupperware party or something, which you really do, you know, you advertise it wisely. You generally go to a hotel and rent a giant hotel ballroom and you present the project the same way you would pitch a real estate development to an investor or group of people looking at it.

And, yeah. You know, you do a big presentation and then essentially people sign up and you get fairly big crowds. And, uh, you know, you go around and answer questions and there’s a forum where people sign up and then people are given the paperwork and the ensuing days, and that road trip happens. You know, you might, might do that for a week in Beijing and a week in Shanghai and a weekend in Shianne and a weekend in Shenzen and, you know, Hong Kong. All over the place.

It’s a tough business. It’s a sales business, really. And you have firms that specialize in selling this and who have the lists and know where to go and have the energy and, you know, requires a lot of stamina, um, weeks and weeks and weeks of talking and moving and moving the production and late nights.

And you know, it’s tough

[00:27:37] Atif Qadir: And I’m guessing because of the fact that China construction its parent company there gives you perhaps a leg up over American companies that are just going there on their first trip. Would that be the case?

[00:27:48] Phillip Gesue: No, no not at all. Again, the Chinese buyers are very sophisticated and if there’s a deal, that’s interesting looking at a good location.

I mean, they’re more about the deal than they are about the sponsor and, you know, in many cases, rightly so. And so, you know, I think that, uh, timing really helped the most with EB-5. When we raised money for this it was four years ago and that was the sort of beginning of the end of EB-5 because what happens is the green card market gets saturated to an extent where the, the, the backlog is so big that instead of getting it in five years, it’s like seven or eight or ten years.

And once that happens, investors, it’s too, too far of a horizon for people to look out. So that’s what happened in China about four years ago. So now there’s a huge backlog and actually India has become a huge place where people are going now and, uh, lots of people are trying through India, but India has not had the kind of subscribership that China had.

[00:28:45] Atif Qadir: So last month I spoke to one of the EB-5 councils at, uh, one of the larger developer companies in New York. And they said that they had seen the writing on the wall already and started shifting their efforts towards countries, uh, beyond China, about a year or so ago. Uh, she had mentioned that the timeframe now is about 10 to 12 years before a Chinese national.

That that’s a lot.

[00:29:07] Phillip Gesue: That’s a lot of times, it’s pretty difficult. So it’s, it hasn’t, it hasn’t been as good, but people still do it. And, um, Chinese are like very, you know, protective of their kids. And so you have a lot of families who, the kids born and they apply. You know, by the time he’s 10, he’ll get it.

And then he can go to college three years later, you know? So I, I, there is still some business, but it’s slower than it was. Let’s say, you know, in 2014, 15 years.

[00:29:33] Atif Qadir: So we just talked about, uh, American developers going to China, and now let’s talk about the opposite. So Xinquan Real Estate Company was the first Chinese investor to be the GP of their own deal in New York City.

And that was for a project in Williamsburg and now smaller Chinese investors are placing capital in the United States as well. How do you see the profile of Chinese investors and developers in America having changed over time?

[00:29:58] Phillip Gesue: I think that a lot of the overseas investors who came and failed, to be honest with you, I do believe that real estate is still a local business and no matter what we do or what, what you see other people doing, it’s harder for us than it is for somebody who’s been here for a very long time and they’re doing it all their lives.

So I think that the experience of Chinese investors here has been terrible because the Chinese investors came here when the market was going up, up, up. And I think that, you know, in Beijing, when things go up, up, up, they just keep going. But you know, in the US real estate markets, it’s not like that things go up, up, up, and then they sit there for 10 years or five years or some period of time.

And they don’t necessarily, you know, have such a steep arc all the time. So I think if you’re coming here with a bunch of money, that’s highly leveraged and, you know, putting together a capital stack with lots of expensive financing, you can’t just sort of sit and wait the market out. You’ve got to like execute and get out.

And, uh, I think that a lot of Chinese investors who are hurt by that dynamic. I think that Xinyuan you know, maybe they had good timing with which was their first project, but you know, you also don’t know how well the projects worked out until you see people doing a lot more of them and you look and look at what their P&L was. You know, on these projects we, we fortunately did very well because, uh, our firm has been here for a very long time. So, you know, the guy who runs China Construction and Strategic Capital has been here for 30 years. And, you know, he was knowledgeable about the market and, you know, has been in Jersey city long time. And so I think we had pretty good luck with the projects that we worked on, but, you know, developing a luxury condo today is not the greatest thing in the world because, you know, New York is oversaturated and slowed down and, you know, there’s lots of competition.

So even though the project is doing very well, it’s not hitting the skin off the ball like you might have 10 years ago.

[00:32:08] Atif Qadir: And, more broadly, in terms of policy. So a Chinese national recently bought around 140,000 acres of land in Texas to build a wind farm. And in response, the government in Texas assigned an act to prevent foreign nationals, particularly Chinese, from buying large amounts of land and owning infrastructure in this state.

Do you think legislation like that is going to change the calculus of how Chinese investors invest in the United States?

[00:32:37] Phillip Gesue: You know, I don’t know. I mean, the politics is really not my purview and, and, you know, I’m trying to understand the political environment in the world probably as much as everybody else is right now.

So I really don’t know, but it’s the type of question where the answer would have to be, ‘yes’. Right? I mean, if somebody is breathing down your neck and you don’t feel welcome, you certainly wouldn’t want to invest money there. So, you know, I don’t think it’s a very difficult question to extrapolate.

[00:33:04] Atif Qadir: I just gave you a softball for your last one.

So, so the truth, the true softball though, is what advice do you have for someone that is interested in a career in development?

[00:33:16] Phillip Gesue: Well, I would say right now, my biggest advice is go green. I would say, learn about sustainable design, learn about carbon neutral technologies. And I think that there is going to be a time in the very near future when the brakes get put on development, because it is very environmentally unfriendly, many, many ways.

And I think that there will be. You know, the same way that all of a sudden, like in six months, electric cars took over the world right now, we ever really thought about an electric car until Tesla started growing precipitously in the middle of the pandemic when, you know, nobody had anything to do, but sort of think about it.

And then all of a sudden everybody’s doing an electric car. Six months later, it was incredibly fast and automobiles don’t really matter that much in terms of the world’s carbon output. It’s buildings that do. Things that really matter. So I think that, you know, if people really care about reducing the carbon footprint in the world, which they should, seem like they do more.

So they’re going to have to very quickly get buildings in their eyesights and that’s going to cause a big change in the way development occurs. So I think that, that’s, that’s the first thing. And I think the second thing is if you are interested in the business, I think it’s always good. If you’re young to try to do something entrepreneurial and, you know, do your own deal. Even if it’s small, you know, you learn a lot by buying an old house and fixing it up and selling it. There’s something about risking your own money and having to go through the steps yourself and signing a loan agreement and looking at a closing statement, you learn what they mean much more quickly when it’s all for you.

And you know, you’re doing it with your own money. So that’s another thing.

[00:35:08] Atif Qadir: And you’re going to make mistakes on much smaller projects than you would just try to go and do something big first.

[00:35:13] Phillip Gesue: Yeah.

[00:35:15] Atif Qadir: Thanks so much for joining us today on the American Building podcast. If you want to hear the behind the scenes stories of how iconic buildings in our country were designed and built subscribe to this podcast on Spotify, iTunes, Google, or wherever you like to listen. We all know real estate is a tough industry to make it. So how can professionals stand out and make a name for themselves in today’s world? Hear from me, the team at Michael Graves, and many of our spectacular guests, like Phillip, on what we did to make it where we are. Grab our exclusive guide Seven Tips on How to Stand Out in Your Field at

My name is Atif Qadir and this has been American Building by Michael Graves.

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