Kaufman Development
How do commercial real-estate developers create community? I sat down with Brian Suiter, Director of Real Estate Development for Kaufman Development to talk about the future of development in Columbus, Kaufman’s development goals and philosophy, the many moving parts involved in large-scale real estate, and The Gravity Project, an impressive new mixed-use building (and community concept) currently under construction in Franklinton.
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Ladies and gentlemen, welcome to the Confluence Cast presented by Columbus Underground. We are a weekly Columbus-centric podcast focusing on the civics, lifestyle, entertainment, and people of our city. I'm your host, Tim Fulton. This week, I sat down with Brian Suter, director of real estate development for Kaufman Development, to talk about the future of development in Columbus, Kaufman's development goals and philosophy, the many moving parts involved in large scale real estate here in the capital city, and The Gravity Project, an impressive new mixed use building and community concept currently under construction in Franklinton. You can get more information on what we discussed today in the show notes for this episode at theconfluencecast.com. Also, The Confluence Cast is on Patreon. Find out how to support this podcast on our website, theconfluencecast.com, or at patreon.com/confluence. The Confluence Cast this week is sponsored by Little Rock Bar. Little Rock Bar is located at 944 North Fourth Street in Italian Village. With 30 beers on tap, Little Rock Bar has happy hour from 4:00 to 8:00 every day. Every Tuesday, get $3 draft beers all night while you enjoy Rock Your Cock Off Karaoke. Wednesdays is Everybody's a Comedian hosted by Travis Haywisher. It's like trivia, but you prove your snark instead of smarts. Info, hours, and upcoming events at littlerockbar.net. Everyone's night should have a little rock. Enjoy the interview. Sitting down here with Brian Suter, the director of real estate development for Kaufman Development, here in his lovely office on Warren Street in the Short North. Brian, how are you? Good. Great to have you here. Good to be here. Thank you. First of all, tell us about what Kaufman Development is. What do they do? Sure. We're a, a full service real estate development firm, so we do everything from design, acquisition, consulting work for other third parties if, if that's a possibility.
Okay. Everything sort of from start to finish. Finding new sites to developing, and really a little bit more philosophically, we are striving to build communities is really what our tagline is. So it's not just the physical part of building buildings, but trying to really build communities and build neighborhoods. And primarily what you guys build out are apartment complexes and mixed use buildings, correct? Yeah, that's right. So our focus, the, the horse that really draws the cart, is mostly residential. So whether that's condos or for rent apartments, the biggest parts of the project are always gonna be some kind of residential component. Could be mixed use, could have office, could have retail space in addition to it, but that's really the focus of our firm.
And you do control then, you know, the rental agreements, the leases, all that stuff- Yeah ... afterwards as well. Yep. So we build and operate. Yeah.
Okay. So it's a little unique. There's some firms that just build, some firms that just operate, but our intention is to sort of have a horizontal strategy from acquisition through development through construction, and then actually operating the properties thereafter. And talk about how that process works. How, first of all, how you guys identify the need for a project. Sure. You know, so part of it is based on market. I mean, purely where there's growth. Obviously, we're mostly based here in Columbus just-
Mm-hmm ... because we know that, know the market well and know that there's gonna be population growth. In addition to that, we know that there's gonna be people that are moving from the suburbs downtown- Mm-hmm ... into urban cores. So we focus a lot of our work in urban areas. So with that, we sort of know the good parts of, of town. All of us have lived here for a long time and know where the good neighborhoods are or where up and coming neighborhoods are going to be, and so we focus basically on trying to find sites or trying to find opportunities in those places. Beyond that, we are looking at sites in other cities, in other states.
Okay. And so that similarly is, to some extent, data-driven. It's where we think the population growth is gonna be, but it's also places that we think we wanna spend time because obviously we're gonna be spending a lot of time there, both- Right ... myself and all of our executives and all of our folks on our leadership team in our corporate offices, but also we have ongoing operation folks that are there. So we wanna find places that we like to be, we think are cool, we think are good places to hang out and, and find opportunities to build there.
Well, and I imagine there's some aspect of looking at data, right? Whether that be census data or private reports that are coming out, but also places where I imagine the population's a little bit younger, where there is an amount of disposable income where they're willing to spend a certain amount of their income on rentals. For sure. 'Cause that's, that's sort of what you guys do. For sure.
Talk about Columbus as a market and what, how it's different. Yeah, so, uh, I mean, I think I'd say that we do look towards markets that people have disposable income and that there's a need for a, you know, nice apartments and, and- Okay ... built communities. It's not necessarily the first and foremost, though, because I think there's always gonna be an opportunity for us to find markets that maybe there's not that niche being filled, where there's not a community or sort of a philosophical piece of real estate being filled where people wanna be in a place that has lots of programming and, you know, yoga classes or fitness classes or coffee tastings. And those kinds of things will draw people from other communities to ours because we have that little unique aspect. Columbus is unique in the fact that, one, obviously we're growing. We're 14th largest city in the country.
Mm-hmm. Now with, uh, population leaving Cincinnati, leaving Cleveland, leaving Toledo, a lot of those folks are coming here. So we think that there's a huge amount of upside for Columbus in itself. And obviously, in the course of the last, you know, six to 10 years, there's been that population migration from suburbs down to urban cores. Mm-hmm. And those urban cores are being built out, and that's not just young people or millennials, young professionals. It's also empty nesters. Kids are out of the house, don't wanna maintain a house out, you know, in Powell, decide to come downtown, walkable communities.
Mm-hmm. It's both ends of the spectrum. Can you talk about sort of what, how you guys, how Kaufman tries to distinguish yourselves from other communities in, you know, lifestyle communities comes to mind. Like, what's the- What's the difference in sort of the end product that people are getting? Sure. So we base our philosophy or base on our real estate on four pillars. Wellness, philanthropy, innovation, and sustainability.
Okay. And so all four of those things drive our decision-making process throughout. And with that, we differentiate ourselves having a high design. All of our projects are really focused on the design aspect. It's not as if we come in and stamp out the same project that we did, you know, the time before. Right. Not a single one of our projects is anything like the project that we've done in, in past. So we differentiate ourselves sort of in, in the uniqueness of the, the product and the design.
Okay. But along with that, it's the whole idea of really programming all of our projects as much as we possibly can. So we have folks that are on site that are creating, you know, wellness classes, or creating opportunities for residents to easily get into f- philanthropic opportunities or volunteering opportunities. Okay. We have a partnership with BESA here in town.
Mm-hmm. That it's quick, easy, one click. You sign up for the website, you know, you sign in, you get your name and all your, your profile, and basically they just have a huge list of volunteer opportunities that with a click of a button, you know where you need to go, what you need to wear, what, you know, what time you need to be there. Mm-hmm. And so it's making sort of those easy, accessible means to have volunteer opportunities. But on the same side, there's coffee tastings, and there's fitness classes, and there's opportunities to hang out with the community next to the pool. So some of that is a little bit unique in terms of the market here.
Right. All of that stuff is basically done for free. It's part of your rent. Right. It's not something that's tacked on, on, in addition to it. But it is, um, sort of a unique scenario for us. I think also in addition to that, sort of on the design side, our design style or our aesthetic is a little bit more contemporary than a lot of other spaces.
Mm-hmm. So there's, there's certain people that go towards that aesthetic versus others. So again, a little bit of a differentiating factor for us, at least in the Columbus market. At those communities, is there like a title for the person who's doing like the prog- Do you have, are they like the director of fun or- Yeah. I-
I'm just curious. There's two folks on, at each site. Obviously, we have our maintenance staff and management folks. Mm-hmm. What are traditionally known as leasing folks-
Mm-hmm ... or leasing staff, uh, are either community ambassadors or community curators. Okay. The title means that they're actually helping to curate the, the communities-
Yeah ... and actually helping to really create those kinds of spaces for opportunities for residents to collide. So it's not, we don't think of them just purely as leasing, but really those people that are trying to bring the communities together. Right. And I don't believe this is at all a conflict of interest, but I have hosted trivia nights at- Yeah.
... uh, a couple of the communities, so. You gotta tell me the next time. I like trivia. Yeah. Can you talk, are you familiar with or aware of sort of where you guys are at in terms of market share for Columbus if you're just talking about, you know, these community style- Sure
... buildings, or like how many units do you guys have in comparison? Yeah. I mean, I, I don't know whether I, I can give you number of units, probably only because I don't know the other competitors in the market. Mm-hmm. We have five communities now that are open-
Okay ... and operating, and we've got another three that are coming online here shortly through construction. And so we're, we're probably on the smaller end. We're not nearly as, as big as LC- Mm-hmm ... or, you know, Wood Companies or Edwards, and that's partly by design. We really aren't interested in just sort of pumping out as quickly as we can new product. And we're also young. We're only six or seven years old at this point, so-
Right ... a lot of those other groups have had a little bit more runway to be able to build more product. So we're probably s- the smaller of the groups, but at the end of the day, we're probably more impactful than some of those groups are, just because we have built so much in the course of the last couple years. Mm-hmm. We're sitting down here. The impetus is you guys have broken ground and have steel up in the air for the Gravity Project on West Broad Street. Can you talk about that project, the vision for it, the purpose for it? Sure. So Gravity is, uh, yeah, on Broad Street heading west after you pass the new Veterans Memorial-
Mm-hmm ... or the being built Veterans Memorial in COSI. It's on the north side of the street as you're going west. So the Gravity Project is sort of two different things. One is Gravity the building, so it's actually the structure and the community, and then there's a separate piece that's Gravity the philosophy or Gravity the concept. Okay. And so my role is obviously Gravity the building. I build the building, sort of sticks and mortar. And the building, as you said, started end of last year, around December, started, broke ground. All the steel is up at this point.
Mm-hmm. It's gonna be 234 units, 50,000 square feet of office space, 30,000 square foot of retail, restaurant, art space. And I am terrible at square footage. Yeah.
Can you give me sort of a comparison of what that- Sure ... like- Yes
... is that a mall? So, um, let me think. The best way to say it is, like, if you go into, like, a Staples or an Office Depot, it's probably around 20,000 square feet. Okay. That's helpful. So that's... It, it gives you sort of the idea of a big box. Ours is much more sort of linear.
Mm-hmm. So with that, we think we're probably gonna have a gym space that's gonna be open to the public and as well as open to our residents that's probably half of that space. Okay. So a relatively big gym. And then a couple restaurants that are possibilities as well as, you know, some potential art space, co-working space, that type of thing.
Okay. That's all on the first floor of, of the buildings. There's 50,000 square feet of office space above some of that retail, and that's in four stories of office space, 12,000 square foot floor plates. So- Okay ... four floors of 12,000 square feet, give or take. And then b- beyond that, we have 234 units, ranges everything from studios to two bedrooms, and then a huge parking garage of, you know, 500, 500-space parking garage.
Wow. So really big project that we're coming out of the ground with now. Anticipate having residential units will be available sort of this time, give or take, next year. Okay. Office space is gonna be available come the beginning of next year. So we've got a lot of work to still do to, to get there, but we're making-
That seems fast, though. Yeah. Just next year? I mean, we're- Yeah. Um-
... end of September we're recording this. S- yeah, steel buildings go up quick. Okay. Um, so it's, you know, once you sort of get the steel up, the steel's topped out at this point, meaning all the steel's up.
Mm-hmm. So we're starting to put skin on the building and starting to s- you know, make it airtight. Okay. And so once that's done, it's pretty quick to actually get- ... tenants into the office building. The residential spaces are, are wood construction versus steel.
Okay. So you'll start to see some wood frame construction go up. That just takes longer, and it also takes a little bit more time and energy to put into each of the individual units to get nice- More labor, right ... right. Nice fixtures, finishes, all that kind of stuff, so.
So talk about, I, we will get into sort of the philosophy behind- Yeah ... Gravity Project, but talk about your role in that. Sure.
You're not an architect. I'm not. You didn't design the building. Somebody at some point hands you, hands it off to you, right? Right. Right.
And so you are tasked with what? Is it sourcing everything? Yeah. Is it hiring the subcontractors? So again, I mean, the company does everything from soup to nuts.
Okay. So it's everything from finding the dirt, to acquiring it, to going through the process, to getting permits, to construction, to operating it. So- And so do you find the... Let's, let's go through that. Yeah.
Do you find the site? Yeah, so in this case, I came on to Kaufman after the site was already acquired. Okay. So we had the site under a contract, and were already going into the design phase, meaning we knew what the site was, and we're starting to think about what the building wanted to look like, what the programming or what the uses were gonna be on the site.
Okay. Um, so that's when I joined Kaufman. And, and so my role is basically to take it from finding a site all the way up through when we have a permit from the city or, you know, to actually start construction. Okay. In which case, another one of our guys takes over and actually does the actual construction piece.
Oh, okay. So my role is basically everything from, you know, finding the site up to that construction piece. So it's understanding all of the design aspects, all the legal aspects. Understanding whether, like, an area commission has influence over it. Exactly, yep.
Okay. Going through all the commissions, going through all sort of the entitlement or the approval processes with the city, and sort of quarterbacking all of those different aspects up until we start construction. Our CFO handles most of the financing. Okay. So finding the, the debt side, you know, working with banks to be able to get essentially a mortgage for the property.
Mm-hmm. And then we also have other folks in the team that work on finding the equity piece. Similar to, you know, your house that you buy, you need to have a down payment, you need to have debt. So we've got folks that are specifically geared toward finding that, you know, quote-unquote, down payment piece or the equity. Mm-hmm. And then we have folks that are finding that debt side from, from banks.
So you guys have outside investors that are contributing to the projects? For sure, yep. Okay. Yeah, absolutely. Real estate is a really capital-heavy business.
Mm-hmm. It's really expensive to- I mean, it is capital. It is. It is.
Right. It's all about money, unfortunately. So it's just expensive. I mean, it's, you know, not like just developing an app that all you need is a computer and, you know, some coffee. It takes a huge amount of money to be able to pay all the consultants and all your architects- Mm-hmm ... and all your, you know, contractors and all that. So we do look for outside investment from the community, from folks that we know, as well as, you know, internal. We, we can, uh, also, you know, get money from... Our CEO puts his money in, as well as some of us put our own money in as well.
Okay. Um, so it's a bit- little bits and pieces, but obviously the, the lion's share is coming from outside investors. Well, and even before you guys break ground and start designing, you have... I imagine you're, you're lining up, like, here's how much it's gonna cost, here, here's how much we have to service the debt- Sure
... every month, quarter- Yep ... fiscal year. For sure.
And here's the anticipated revenue. Yeah. And here's like, here's sort of the, the break-even point. Yep.
And it's, you know, a certain amount of occupancy of that office, that retail, those apartments. Yep, absolutely. It's, it's an iterative process. So as we go through the design process, you know, Brett, our CEO, pushes design, and he pushes the idea of really trying to make the most unique, most sort of impactful building. Right. But on the flip side of that, we need to make sure that it's, one, financially feasible for our company so that we can keep our lights on and be here next year.
Right. But also that there's a return to our investors. As I said, we don't invest all of our own money into it. Mm-hmm. There's outside investors, and they have choices to make for investment like anybody else. They can take their money and put it in the stock market, they can take their money and put it in another competitor, or they can come with us, and so they're gonna anticipate some kind of return on their money. And so all of those things-
Well, and a better than, better than passive return, right? Exactly, right. They need to have... They need to see... You know, real estate's risky at the end of the day. It's not as easy as just putting your money into a bond. Mm-hmm. So they need to be compensated for that risk. And so there's that balance between creating a building that has impact, it's beautiful, it's high design, but also that we can afford and that can, you know, pay those investors back some of their return, their return plus extra.
Mm-hmm. And so it's sort of an iterative process. Design comes, figure out is, can we afford it? Right. Are the investors willing to put money towards it? Sort of back and forth till, till we get to a project that we can, we, we like, we en- you know, enjoy the, the design of, but also that we can get outside money from too.
And I don't know how much you'll be able to answer this question, but I'm curious. It seems to me as though there's a whole lot of apartments, rentals coming on- Sure ... coming on the market. At what point do we, does Columbus hit sort of a saturation point? Is this growth sustainable? Sure. So, you know, it'd be great to have a crystal ball- ... um, and understand sort of when that's coming.
Right. We would all make a, a whole lot more money and have way more projects if we knew that. Right. You know, I, I love sky cranes. Looking around the city, there's a lot of sky cranes right now, which is fantastic. It shows that there's growth and progress in the city.
Mm-hmm. The downside of that is that we're building a lot of, a lot of units right now. And a lot of expensive units, it seems. Yes, a lot of expensive-
Yeah ... units. Yeah. You know, I've, I've heard that we have less urban units than Cincinnati or Cleveland do based on population. Okay. So my belief personally is that there's still runway for more to get built, but to your point, there's a certain no return that, that you're gonna get to where there's just too many units and there's just not enough population. Um-
So we're almost catching up- We are ... is what you're saying. Yeah, we're almost catching up. I think both cities have less sky cranes than we do right now.
Mm-hmm. And a lot of the stuff that you're seeing is apartments. The reason for that is, again, growth coming back downtown to urban core and, you know, apartments have sort of been the way the real estate market has gone for the last six or seven years. Well, and part of it's our population too, right? And the philosophy of, you know, the people that are slightly younger than you and I that aren't interested in owning- For sure
... and, and want to continue to rent for longer. Yeah. There was a, a, sort of a, a connection or a collision of a variety of different elements that came together to create a boom in the, the housing market. Mm-hmm. Part of it was obviously recession. People realized they maybe didn't wanna buy a house, so they're g- willing to rent. That's folks younger than us, that's, you know, people that no longer have kids.
Right. That's folks m- my age that have just made a decision not to rent. There's also the fact that most... a lot of the population is having kids or getting married later in life. Mm-hmm. So there's a longer runway there for people to live in apartments before they move to the suburbs to have better school systems. In addition to that, there was financing. You know, there were banks that were willing to lend for apartments because of all those, those factors.
Mm-hmm. And so a variety of different components came together to create a housing boom, and whether or not we're at the plateau of that or whether we still got a little runway, I think across the nation we're probably at a plateau. I think we built a lot of units in the course of the last six or eight years. Mm-hmm. Columbus, we still have a little bit more runway, but it surely, we're getting to that plateau pretty quickly, I think. And it'll be interesting to see how many of the sky cranes here, how those units come on, when they come on, and how well they're occupied in the course of the next, you know, six to 12 months.
Yeah. I'd be surprised if you see much more development after sort of this wave. Okay. Just because lending has gotten a little bit more difficult, construction costs have gotten a little harder. As you said, there's a lot of units on the, on the market right now, and so it's hard to be able to find those tenants to be able to fill your space.
Are the construction costs a labor issue or...? You know, it's, it's funny, the last couple weeks have sort of been one of those conversations that's happened with all of, you know, my development peers. Okay. It's like the first thing out of your mou- out of our, out of our mouths over beers is like, "What, h- how you doing with construction?" So there's issues that, one, you know, there's a ton of sky cranes and a ton of people working on stuff right now.
Right. So labor is really high. Aside from that, commodity prices have gone up dramatically. Even before the last couple hurricanes, things like, you know, PVC piping and- Huh ... you know, brick and wood and drywall were all expensive, more expensive than they had been historically.
Right. And then in addition to that, the couple hurricanes that have happened, anybody that can swing a hammer is gonna take their truck and go down to, you know, either Texas or Florida because it's- 'Cause insurance money is good money. It is. And there's, you know, 80,000 houses that need to be rebuilt.
Mm-hmm. And so all of... You know, if you got a truck full of lumber, you're gonna drive it past Ohio and- Mm ... drive it to Texas 'cause you're gonna get better prices there. So it looks like for the foreseeable future, those prices, commodity prices are gonna continue to rise and labor prices are gonna continue to rise, which is gonna make it a little bit more difficult for us to build here in Columbus.
And are you guys... Do you work at a scale... So what's interesting to me here is comparing this to, we had a conversation with a, a brewer who has to buy futures- Right ... in, in hops and whatever. Listen to that episode. Right.
Um, are you guys at a point in economies of scale where you are buying... You're not buying futures in wood and stuff like that, right? You're just liter- You have to deal with the market price just like anybody who's- Right ... going to, it's less, but anybody that's going to the hardware store. Yeah. And yes-
Okay ... for sure. We're, we're essentially going to the hardware store. Our hardware store is a little bit bigger and a little bit more complex, but it's a hardware- Right ... store nonetheless. You know, we hire, uh, general contractors, so we don't have a construction firm within our company.
Okay. Unlike some other groups in town that do. We hire out all that. We are a very small shop, so our construction director deals with all those, those things. Those contractors may very well be hedging their bets on costs for labor and commodity prices- Mm-hmm ... but that's not something we do. We simply have to pay them for their services-
Gotcha ... and they, they handle their business, you know, separately from that. Gotcha. Let's iron in back on The Gravity Project. Yeah.
What's the philosophy behind that, and what's, again, the impetus for it? Yeah. So again, sort of two different pieces. There's The Gravity Project, which is the real estate, the building. Mm-hmm. And then there's sort of the Gravity concept, and the concept is really sort of the next iteration or the next component of really that programming piece that comes along with all of our other sites.
Okay. Really being very, very focused and very understanding what the needs are of populations and communities. And so the idea really came from Brett, who's the visionary of the company, to come up with a place that is the center of gravity where, you know, like-minded, driven people can come together to have those bonding and those collision points. And so with that, we're gonna do programming that's on site, whether it's TEDx kind of- Okay ... kind of topics, whether there's, you know, communal dinners, whether there's opportunities for people to meditate, have meditation classes or yoga classes, whether there's, you know, opportunities for things like happen at Independence Day happen year-round on site at Gravity.
Okay. And then, you know, that really brings in both the community, the, the community that lives at Gravity, the building, but also the greater community of Franklinton and, and of the city. Okay. So it's coming up with sort of that means to have the hub for like-minded people to come together and really be driven and sort of make yourselves better people, and we're hoping to help sort of curate that through our project.
And what does that... What's the virtue there for you? That simply people wanna be close to that, and so they want to have an apartment there, they wanna have their office there? Yeah. Okay. So it's-
Just like it is at your other communities. Yeah. The thought is that instead of... You know, historically, people created buildings that you lived in and then filled them with programming, filled them with amenities so that people leased space. Okay. All of those amenities were driven by the need to fill space and lease apartments. The philosophy of Gravity is flipped, where we say, "We wanna create that amenity and create that programming so that that is what people wanna be a part of." Obviously, it'll help lease space, but it's the idea that those programs and those amenities and that like-mindedness and those collision points are what the project is about. It happens that there's also retail, residential, and office space there-
I see ... you can lease. So it's taking sort of the traditional idea of residential real estate or commercial real estate and flipping it and saying, "We're really gonna push for the programming piece first and foremost, and then build the building around that component." Okay. And there will be some renderings on the website that you can take a look at. Sure.
Talk about sort of the other projects that you have that you're working on, and do they relate to Gravity or, you know- Is this a new philosophy for you guys? Yeah. So we've got a couple other projects that are coming up, uh, in town. Obviously, The Gravity Project. We've got 80 On The Commons, which is a sister building to the 250 High Street, which is a building that's right off of, uh, Columbus Commons. We're building a sister building to that directly adjacent to it. That's the south end of The Commons, right? Yeah.
Okay. Southeast end of The Commons. Got it. We took down a, uh, a kickball field. There's people that are pissed off about that right now.
Okay. Sorry about that, guys. Sorry. Yep, sorry. Uh, and created some more traffic, but it'll, it'll be good in about 12 months. So yeah, that building's coming out of the ground, and we've got another project that's coming out of the ground up in New Albany as well. And so those are the three construction projects. To your question, i- are those gonna have, you know, be extensions of Gravity? We're considering that right now. We-
Okay ... we think there's definitely gonna be a need for that kind of concept, uh, in all of our communities. Mm-hmm. And we're trying to sort of understand how the Gravity concept can be transplanted elsewhere. There might be components of that Gravity concept in all of our projects, or alternatively, there may be an opportunity for if you live in any of our projects to have access to Gravity. And, you know-
That's interesting. Okay ... so that you can come from New Albany and be a part of, you know, whatever the, the, the dinner that's going on at Gravity in Franklinton. Beyond that, we're really looking at the ways to be able to create the concept and the building of Gravity in other cities. We think that there's a need for this. There's sort of a niche, um, and there's, uh, people that really draw, are drawn towards this kind of concept. Mm-hmm. So we're looking at other places we can take it and, you know, put it in, in other cities as well.
And I've seen sort of the common area space that you have in your other communities. Yeah. Is the Gravity common space, like, huge? Yeah. So a- again, we, you know, d-
Or is that mixed in with, like, the coworking space- Yeah ... and, like, it's just- Yep
... there's an open floor plan at some point. Exactly. Okay. It's, it's less, again, less about the individual residence amenity spaces. There's not gonna be a gym just for the residents.
Okay. There's not gonna be, you know, a living room or, you know, a, a common space just for the residents. All of that stuff is on our first floor. There will be some spaces that are restricted to residents. There's a big green open lawn space that will be restrict- you can't walk in off the public in there. Okay. But if you are a member of the coworking space or you are an office tenant, you can still get access to that.
Okay. So we've really taken sort of the concept of amenity spaces that are specifically for our residents and blown it up to say there's common spaces for the, for the community, the Gravity community, the Franklinton community, the greater Columbus community- Okay ... within that, so that it's not just like we have a closed door that you can't get by if you're not a resident. So all of that stuff, that 30,000 square feet of retail space, is really being curated specifically for needs for our tenants, but also needs for the community. So again, coworking space or coffee shops or restaurants or fitness areas, all that our residents can use, but hopefully we have others using those as well.
As somebody working in development, you said earlier that you believe that this sort of building boom that we're going through in the urban core right now is, is gonna slow down. Sure. As a Short North resident, good. Thank you. Fewer, uh, orange cones. Yeah.
Yeah. That will, that will be great. After that, you know, if you had a crystal ball, what do you think you would see coming along then? It's a great question. I think i- in urban cores, there's continu- going to be continued development. I mean, you know, along the Short North, along High Street, I think it may slow down, but it's never gonna stop. I mean, it- Mm-hmm
... there's always gonna be orange barrels on High Street just because it is the main artery for Columbus. Right. It's connecting, you know, two huge pieces of, of the city together. So there's always gonna be some kind of development going on there. I think further out in the suburbs, you're gonna see more housing stock being built, more single-family homes. Okay.
Just 'cause a lot of that has slowed down as more construction has happened in the urban core. Mm-hmm. So I think it might turn out a little bit, more homes be produced elsewhere. Residential will potentially, the apartments may slow down for a while, but is there an opportunity for condos in some of these locations as well? Mm-hmm.
Are all these sky cranes that are building apartments, are people now gonna be interested in actually buying downtown? And, and that flip of people not being interested in buying homes, is that gonna go back to more of a traditional standard that has been for the last 50 years and people looking to own? Mm-hmm. So there's po- potential for that as well. I think in addition to that, there's also something to be said about space making and some of the stuff that you see along Gay Street or see in Franklinton or see down by the, at Columbus Commons. People are really being diligent about creating spaces that people can come together. Mm-hmm.
As we get more and more technologically, you know, o- obsessed, it's easy for us just to look at our phones on our couch, but I think people are slowly getting the understanding that there's still that social aspect that- Right ... we need as humans. So there's more opportunities for that to be built and finding those opportunities to build environments where those collisions happen. There's a reason that people go to coffee shops to work. It's not just coffee. It's like you actually get to interact with people, and you get to be sort of, have the buzz and the vibe. Well, and it's why those coworking spaces work too, right?
Exactly. Exactly right. We're all social people at the end of the day, and, you know, handheld devices are keeping us more and more away from each other. I think there's opportunities to really find ways to build specifically for people to come back together again in some of those more urban spaces. So we'll see as time goes on. I don't know whether I could say that one component of the real estate business, you know, whether it's retail or whether it's office or whether it's residential or whether it's industrial or whatever. Mm-hmm. I don't know... You know, there's gonna be shifts and changes in terms of what's sort of the hot commodity at the time. Mm-hmm.
But I'm not sure whether or not... You know, in urban cores, I think it's gonna continue to be the residential and sort of those place-making spaces that are gonna c- continue to drive real estate. Great. Yeah. Brayden, thank you so much for your time.
Yeah. Thanks for having me. I appreciate it. Thank you for listening to the Confluence Cast presented by Columbus Underground. Again, you can get more information on what we discussed today in the show notes for this episode at theconfluencecast.com. Please rate, subscribe, share this episode of the Confluence Cast with your friends, family, contacts, enemies, your favorite developer. If you're interested in sponsoring the Confluence Cast, get in touch with us. We can be reached by email at info@theconfluencecast.com. Our theme music was composed by Benji Robinson. Our post-production engineer is Philip Cogley. I'm your host, Tim Fulton. Have a great week.
Transcript6,639 words
Tim Fulton Ladies and gentlemen, welcome to the Confluence Cast presented by Columbus Underground. We are a weekly Columbus-centric podcast focusing on the civics, lifestyle, entertainment, and people of our city. I'm your host, Tim Fulton. This week, I sat down with Brian Suter, director of real estate development for Kaufman Development, to talk about the future of development in Columbus, Kaufman's development goals and philosophy, the many moving parts involved in large scale real estate here in the capital city, and The Gravity Project, an impressive new mixed use building and community concept currently under construction in Franklinton. You can get more information on what we discussed today in the show notes for this episode at theconfluencecast.com. Also, The Confluence Cast is on Patreon. Find out how to support this podcast on our website, theconfluencecast.com, or at patreon.com/confluence. The Confluence Cast this week is sponsored by Little Rock Bar. Little Rock Bar is located at 944 North Fourth Street in Italian Village. With 30 beers on tap, Little Rock Bar has happy hour from 4:00 to 8:00 every day. Every Tuesday, get $3 draft beers all night while you enjoy Rock Your Cock Off Karaoke. Wednesdays is Everybody's a Comedian hosted by Travis Haywisher. It's like trivia, but you prove your snark instead of smarts. Info, hours, and upcoming events at littlerockbar.net. Everyone's night should have a little rock. Enjoy the interview. Sitting down here with Brian Suter, the director of real estate development for Kaufman Development, here in his lovely office on Warren Street in the Short North. Brian, how are you?
Brian Suter Good. Great to have you here.
Tim Fulton Good to be here. Thank you. First of all, tell us about what Kaufman Development is. What do they do?
Brian Suter Sure. We're a, a full service real estate development firm, so we do everything from design, acquisition, consulting work for other third parties if, if that's a possibility.
Tim Fulton Okay.
Brian Suter Everything sort of from start to finish. Finding new sites to developing, and really a little bit more philosophically, we are striving to build communities is really what our tagline is. So it's not just the physical part of building buildings, but trying to really build communities and build neighborhoods.
Tim Fulton And primarily what you guys build out are apartment complexes and mixed use buildings, correct?
Brian Suter Yeah, that's right. So our focus, the, the horse that really draws the cart, is mostly residential. So whether that's condos or for rent apartments, the biggest parts of the project are always gonna be some kind of residential component. Could be mixed use, could have office, could have retail space in addition to it, but that's really the focus of our firm.
Tim Fulton And you do control then, you know, the rental agreements, the leases, all that stuff-
Brian Suter Yeah
Tim Fulton ... afterwards as well.
Brian Suter Yep. So we build and operate. Yeah.
Tim Fulton Okay.
Brian Suter So it's a little unique. There's some firms that just build, some firms that just operate, but our intention is to sort of have a horizontal strategy from acquisition through development through construction, and then actually operating the properties thereafter.
Tim Fulton And talk about how that process works. How, first of all, how you guys identify the need for a project.
Brian Suter Sure. You know, so part of it is based on market. I mean, purely where there's growth. Obviously, we're mostly based here in Columbus just-
Tim Fulton Mm-hmm
Brian Suter ... because we know that, know the market well and know that there's gonna be population growth. In addition to that, we know that there's gonna be people that are moving from the suburbs downtown-
Tim Fulton Mm-hmm
Brian Suter ... into urban cores. So we focus a lot of our work in urban areas. So with that, we sort of know the good parts of, of town. All of us have lived here for a long time and know where the good neighborhoods are or where up and coming neighborhoods are going to be, and so we focus basically on trying to find sites or trying to find opportunities in those places. Beyond that, we are looking at sites in other cities, in other states.
Tim Fulton Okay.
Brian Suter And so that similarly is, to some extent, data-driven. It's where we think the population growth is gonna be, but it's also places that we think we wanna spend time because obviously we're gonna be spending a lot of time there, both-
Tim Fulton Right
Brian Suter ... myself and all of our executives and all of our folks on our leadership team in our corporate offices, but also we have ongoing operation folks that are there. So we wanna find places that we like to be, we think are cool, we think are good places to hang out and, and find opportunities to build there.
Tim Fulton Well, and I imagine there's some aspect of looking at data, right? Whether that be census data or private reports that are coming out, but also places where I imagine the population's a little bit younger, where there is an amount of disposable income where they're willing to spend a certain amount of their income on rentals.
Brian Suter For sure.
Tim Fulton 'Cause that's, that's sort of what you guys do.
Brian Suter For sure.
Tim Fulton Talk about Columbus as a market and what, how it's different.
Brian Suter Yeah, so, uh, I mean, I think I'd say that we do look towards markets that people have disposable income and that there's a need for a, you know, nice apartments and, and-
Tim Fulton Okay
Brian Suter ... built communities. It's not necessarily the first and foremost, though, because I think there's always gonna be an opportunity for us to find markets that maybe there's not that niche being filled, where there's not a community or sort of a philosophical piece of real estate being filled where people wanna be in a place that has lots of programming and, you know, yoga classes or fitness classes or coffee tastings. And those kinds of things will draw people from other communities to ours because we have that little unique aspect. Columbus is unique in the fact that, one, obviously we're growing. We're 14th largest city in the country.
Tim Fulton Mm-hmm.
Brian Suter Now with, uh, population leaving Cincinnati, leaving Cleveland, leaving Toledo, a lot of those folks are coming here. So we think that there's a huge amount of upside for Columbus in itself. And obviously, in the course of the last, you know, six to 10 years, there's been that population migration from suburbs down to urban cores.
Tim Fulton Mm-hmm.
Brian Suter And those urban cores are being built out, and that's not just young people or millennials, young professionals. It's also empty nesters. Kids are out of the house, don't wanna maintain a house out, you know, in Powell, decide to come downtown, walkable communities.
Tim Fulton Mm-hmm.
Brian Suter It's both ends of the spectrum.
Tim Fulton Can you talk about sort of what, how you guys, how Kaufman tries to distinguish yourselves from other communities in, you know, lifestyle communities comes to mind. Like, what's the- What's the difference in sort of the end product that people are getting?
Brian Suter Sure. So we base our philosophy or base on our real estate on four pillars. Wellness, philanthropy, innovation, and sustainability.
Tim Fulton Okay.
Brian Suter And so all four of those things drive our decision-making process throughout. And with that, we differentiate ourselves having a high design. All of our projects are really focused on the design aspect. It's not as if we come in and stamp out the same project that we did, you know, the time before.
Tim Fulton Right.
Brian Suter Not a single one of our projects is anything like the project that we've done in, in past. So we differentiate ourselves sort of in, in the uniqueness of the, the product and the design.
Tim Fulton Okay.
Brian Suter But along with that, it's the whole idea of really programming all of our projects as much as we possibly can. So we have folks that are on site that are creating, you know, wellness classes, or creating opportunities for residents to easily get into f- philanthropic opportunities or volunteering opportunities.
Tim Fulton Okay.
Brian Suter We have a partnership with BESA here in town.
Tim Fulton Mm-hmm.
Brian Suter That it's quick, easy, one click. You sign up for the website, you know, you sign in, you get your name and all your, your profile, and basically they just have a huge list of volunteer opportunities that with a click of a button, you know where you need to go, what you need to wear, what, you know, what time you need to be there.
Tim Fulton Mm-hmm.
Brian Suter And so it's making sort of those easy, accessible means to have volunteer opportunities. But on the same side, there's coffee tastings, and there's fitness classes, and there's opportunities to hang out with the community next to the pool. So some of that is a little bit unique in terms of the market here.
Tim Fulton Right.
Brian Suter All of that stuff is basically done for free. It's part of your rent.
Tim Fulton Right.
Brian Suter It's not something that's tacked on, on, in addition to it. But it is, um, sort of a unique scenario for us. I think also in addition to that, sort of on the design side, our design style or our aesthetic is a little bit more contemporary than a lot of other spaces.
Tim Fulton Mm-hmm.
Brian Suter So there's, there's certain people that go towards that aesthetic versus others. So again, a little bit of a differentiating factor for us, at least in the Columbus market.
Tim Fulton At those communities, is there like a title for the person who's doing like the prog- Do you have, are they like the director of fun or-
Brian Suter Yeah. I-
Tim Fulton I'm just curious.
Brian Suter There's two folks on, at each site. Obviously, we have our maintenance staff and management folks.
Tim Fulton Mm-hmm.
Brian Suter What are traditionally known as leasing folks-
Tim Fulton Mm-hmm
Brian Suter ... or leasing staff, uh, are either community ambassadors or community curators.
Tim Fulton Okay.
Brian Suter The title means that they're actually helping to curate the, the communities-
Tim Fulton Yeah
Brian Suter ... and actually helping to really create those kinds of spaces for opportunities for residents to collide. So it's not, we don't think of them just purely as leasing, but really those people that are trying to bring the communities together.
Tim Fulton Right. And I don't believe this is at all a conflict of interest, but I have hosted trivia nights at-
Brian Suter Yeah.
Tim Fulton ... uh, a couple of the communities, so.
Brian Suter You gotta tell me the next time. I like trivia.
Tim Fulton Yeah. Can you talk, are you familiar with or aware of sort of where you guys are at in terms of market share for Columbus if you're just talking about, you know, these community style-
Brian Suter Sure
Tim Fulton ... buildings, or like how many units do you guys have in comparison?
Brian Suter Yeah. I mean, I, I don't know whether I, I can give you number of units, probably only because I don't know the other competitors in the market.
Tim Fulton Mm-hmm.
Brian Suter We have five communities now that are open-
Tim Fulton Okay
Brian Suter ... and operating, and we've got another three that are coming online here shortly through construction. And so we're, we're probably on the smaller end. We're not nearly as, as big as LC-
Tim Fulton Mm-hmm
Brian Suter ... or, you know, Wood Companies or Edwards, and that's partly by design. We really aren't interested in just sort of pumping out as quickly as we can new product. And we're also young. We're only six or seven years old at this point, so-
Tim Fulton Right
Brian Suter ... a lot of those other groups have had a little bit more runway to be able to build more product. So we're probably s- the smaller of the groups, but at the end of the day, we're probably more impactful than some of those groups are, just because we have built so much in the course of the last couple years.
Tim Fulton Mm-hmm. We're sitting down here. The impetus is you guys have broken ground and have steel up in the air for the Gravity Project on West Broad Street. Can you talk about that project, the vision for it, the purpose for it?
Brian Suter Sure. So Gravity is, uh, yeah, on Broad Street heading west after you pass the new Veterans Memorial-
Tim Fulton Mm-hmm
Brian Suter ... or the being built Veterans Memorial in COSI. It's on the north side of the street as you're going west. So the Gravity Project is sort of two different things. One is Gravity the building, so it's actually the structure and the community, and then there's a separate piece that's Gravity the philosophy or Gravity the concept.
Tim Fulton Okay.
Brian Suter And so my role is obviously Gravity the building. I build the building, sort of sticks and mortar. And the building, as you said, started end of last year, around December, started, broke ground. All the steel is up at this point.
Tim Fulton Mm-hmm.
Brian Suter It's gonna be 234 units, 50,000 square feet of office space, 30,000 square foot of retail, restaurant, art space.
Tim Fulton And I am terrible at square footage.
Brian Suter Yeah.
Tim Fulton Can you give me sort of a comparison of what that-
Brian Suter Sure
Tim Fulton ... like-
Brian Suter Yes
Tim Fulton ... is that a mall?
Brian Suter So, um, let me think. The best way to say it is, like, if you go into, like, a Staples or an Office Depot, it's probably around 20,000 square feet.
Tim Fulton Okay. That's helpful.
Brian Suter So that's... It, it gives you sort of the idea of a big box. Ours is much more sort of linear.
Tim Fulton Mm-hmm.
Brian Suter So with that, we think we're probably gonna have a gym space that's gonna be open to the public and as well as open to our residents that's probably half of that space.
Tim Fulton Okay.
Brian Suter So a relatively big gym. And then a couple restaurants that are possibilities as well as, you know, some potential art space, co-working space, that type of thing.
Tim Fulton Okay.
Brian Suter That's all on the first floor of, of the buildings. There's 50,000 square feet of office space above some of that retail, and that's in four stories of office space, 12,000 square foot floor plates. So-
Tim Fulton Okay
Brian Suter ... four floors of 12,000 square feet, give or take. And then b- beyond that, we have 234 units, ranges everything from studios to two bedrooms, and then a huge parking garage of, you know, 500, 500-space parking garage.
Tim Fulton Wow.
Brian Suter So really big project that we're coming out of the ground with now. Anticipate having residential units will be available sort of this time, give or take, next year.
Tim Fulton Okay.
Brian Suter Office space is gonna be available come the beginning of next year. So we've got a lot of work to still do to, to get there, but we're making-
Tim Fulton That seems fast, though.
Brian Suter Yeah.
Tim Fulton Just next year? I mean, we're-
Brian Suter Yeah. Um-
Tim Fulton ... end of September we're recording this.
Brian Suter S- yeah, steel buildings go up quick.
Tim Fulton Okay.
Brian Suter Um, so it's, you know, once you sort of get the steel up, the steel's topped out at this point, meaning all the steel's up.
Tim Fulton Mm-hmm.
Brian Suter So we're starting to put skin on the building and starting to s- you know, make it airtight.
Tim Fulton Okay.
Brian Suter And so once that's done, it's pretty quick to actually get- ... tenants into the office building. The residential spaces are, are wood construction versus steel.
Tim Fulton Okay.
Brian Suter So you'll start to see some wood frame construction go up. That just takes longer, and it also takes a little bit more time and energy to put into each of the individual units to get nice-
Tim Fulton More labor, right
Brian Suter ... right. Nice fixtures, finishes, all that kind of stuff, so.
Tim Fulton So talk about, I, we will get into sort of the philosophy behind-
Brian Suter Yeah
Tim Fulton ... Gravity Project, but talk about your role in that.
Brian Suter Sure.
Tim Fulton You're not an architect.
Brian Suter I'm not.
Tim Fulton You didn't design the building. Somebody at some point hands you, hands it off to you, right?
Brian Suter Right. Right.
Tim Fulton And so you are tasked with what? Is it sourcing everything?
Brian Suter Yeah.
Tim Fulton Is it hiring the subcontractors?
Brian Suter So again, I mean, the company does everything from soup to nuts.
Tim Fulton Okay.
Brian Suter So it's everything from finding the dirt, to acquiring it, to going through the process, to getting permits, to construction, to operating it. So-
Tim Fulton And so do you find the... Let's, let's go through that.
Brian Suter Yeah.
Tim Fulton Do you find the site?
Brian Suter Yeah, so in this case, I came on to Kaufman after the site was already acquired.
Tim Fulton Okay.
Brian Suter So we had the site under a contract, and were already going into the design phase, meaning we knew what the site was, and we're starting to think about what the building wanted to look like, what the programming or what the uses were gonna be on the site.
Tim Fulton Okay.
Brian Suter Um, so that's when I joined Kaufman. And, and so my role is basically to take it from finding a site all the way up through when we have a permit from the city or, you know, to actually start construction.
Tim Fulton Okay.
Brian Suter In which case, another one of our guys takes over and actually does the actual construction piece.
Tim Fulton Oh, okay.
Brian Suter So my role is basically everything from, you know, finding the site up to that construction piece. So it's understanding all of the design aspects, all the legal aspects.
Tim Fulton Understanding whether, like, an area commission has influence over it.
Brian Suter Exactly, yep.
Tim Fulton Okay.
Brian Suter Going through all the commissions, going through all sort of the entitlement or the approval processes with the city, and sort of quarterbacking all of those different aspects up until we start construction. Our CFO handles most of the financing.
Tim Fulton Okay.
Brian Suter So finding the, the debt side, you know, working with banks to be able to get essentially a mortgage for the property.
Tim Fulton Mm-hmm.
Brian Suter And then we also have other folks in the team that work on finding the equity piece. Similar to, you know, your house that you buy, you need to have a down payment, you need to have debt. So we've got folks that are specifically geared toward finding that, you know, quote-unquote, down payment piece or the equity.
Tim Fulton Mm-hmm.
Brian Suter And then we have folks that are finding that debt side from, from banks.
Tim Fulton So you guys have outside investors that are contributing to the projects?
Brian Suter For sure, yep.
Tim Fulton Okay.
Brian Suter Yeah, absolutely. Real estate is a really capital-heavy business.
Tim Fulton Mm-hmm.
Brian Suter It's really expensive to-
Tim Fulton I mean, it is capital.
Brian Suter It is. It is.
Tim Fulton Right.
Brian Suter It's all about money, unfortunately. So it's just expensive. I mean, it's, you know, not like just developing an app that all you need is a computer and, you know, some coffee. It takes a huge amount of money to be able to pay all the consultants and all your architects-
Tim Fulton Mm-hmm
Brian Suter ... and all your, you know, contractors and all that. So we do look for outside investment from the community, from folks that we know, as well as, you know, internal. We, we can, uh, also, you know, get money from... Our CEO puts his money in, as well as some of us put our own money in as well.
Tim Fulton Okay.
Brian Suter Um, so it's a bit- little bits and pieces, but obviously the, the lion's share is coming from outside investors.
Tim Fulton Well, and even before you guys break ground and start designing, you have... I imagine you're, you're lining up, like, here's how much it's gonna cost, here, here's how much we have to service the debt-
Brian Suter Sure
Tim Fulton ... every month, quarter-
Brian Suter Yep
Tim Fulton ... fiscal year.
Brian Suter For sure.
Tim Fulton And here's the anticipated revenue.
Brian Suter Yeah.
Tim Fulton And here's like, here's sort of the, the break-even point.
Brian Suter Yep.
Tim Fulton And it's, you know, a certain amount of occupancy of that office, that retail, those apartments.
Brian Suter Yep, absolutely. It's, it's an iterative process. So as we go through the design process, you know, Brett, our CEO, pushes design, and he pushes the idea of really trying to make the most unique, most sort of impactful building.
Tim Fulton Right.
Brian Suter But on the flip side of that, we need to make sure that it's, one, financially feasible for our company so that we can keep our lights on and be here next year.
Tim Fulton Right.
Brian Suter But also that there's a return to our investors. As I said, we don't invest all of our own money into it.
Tim Fulton Mm-hmm.
Brian Suter There's outside investors, and they have choices to make for investment like anybody else. They can take their money and put it in the stock market, they can take their money and put it in another competitor, or they can come with us, and so they're gonna anticipate some kind of return on their money. And so all of those things-
Tim Fulton Well, and a better than, better than passive return, right?
Brian Suter Exactly, right. They need to have... They need to see... You know, real estate's risky at the end of the day. It's not as easy as just putting your money into a bond.
Tim Fulton Mm-hmm.
Brian Suter So they need to be compensated for that risk. And so there's that balance between creating a building that has impact, it's beautiful, it's high design, but also that we can afford and that can, you know, pay those investors back some of their return, their return plus extra.
Tim Fulton Mm-hmm.
Brian Suter And so it's sort of an iterative process. Design comes, figure out is, can we afford it?
Tim Fulton Right.
Brian Suter Are the investors willing to put money towards it? Sort of back and forth till, till we get to a project that we can, we, we like, we en- you know, enjoy the, the design of, but also that we can get outside money from too.
Tim Fulton And I don't know how much you'll be able to answer this question, but I'm curious. It seems to me as though there's a whole lot of apartments, rentals coming on-
Brian Suter Sure
Tim Fulton ... coming on the market. At what point do we, does Columbus hit sort of a saturation point? Is this growth sustainable?
Brian Suter Sure. So, you know, it'd be great to have a crystal ball- ... um, and understand sort of when that's coming.
Tim Fulton Right.
Brian Suter We would all make a, a whole lot more money and have way more projects if we knew that.
Tim Fulton Right.
Brian Suter You know, I, I love sky cranes. Looking around the city, there's a lot of sky cranes right now, which is fantastic. It shows that there's growth and progress in the city.
Tim Fulton Mm-hmm.
Brian Suter The downside of that is that we're building a lot of, a lot of units right now.
Tim Fulton And a lot of expensive units, it seems.
Brian Suter Yes, a lot of expensive-
Tim Fulton Yeah
Brian Suter ... units. Yeah. You know, I've, I've heard that we have less urban units than Cincinnati or Cleveland do based on population.
Tim Fulton Okay.
Brian Suter So my belief personally is that there's still runway for more to get built, but to your point, there's a certain no return that, that you're gonna get to where there's just too many units and there's just not enough population. Um-
Tim Fulton So we're almost catching up-
Brian Suter We are
Tim Fulton ... is what you're saying.
Brian Suter Yeah, we're almost catching up. I think both cities have less sky cranes than we do right now.
Tim Fulton Mm-hmm.
Brian Suter And a lot of the stuff that you're seeing is apartments. The reason for that is, again, growth coming back downtown to urban core and, you know, apartments have sort of been the way the real estate market has gone for the last six or seven years.
Tim Fulton Well, and part of it's our population too, right? And the philosophy of, you know, the people that are slightly younger than you and I that aren't interested in owning-
Brian Suter For sure
Tim Fulton ... and, and want to continue to rent for longer.
Brian Suter Yeah. There was a, a, sort of a, a connection or a collision of a variety of different elements that came together to create a boom in the, the housing market.
Tim Fulton Mm-hmm.
Brian Suter Part of it was obviously recession. People realized they maybe didn't wanna buy a house, so they're g- willing to rent. That's folks younger than us, that's, you know, people that no longer have kids.
Tim Fulton Right.
Brian Suter That's folks m- my age that have just made a decision not to rent. There's also the fact that most... a lot of the population is having kids or getting married later in life.
Tim Fulton Mm-hmm.
Brian Suter So there's a longer runway there for people to live in apartments before they move to the suburbs to have better school systems. In addition to that, there was financing. You know, there were banks that were willing to lend for apartments because of all those, those factors.
Tim Fulton Mm-hmm.
Brian Suter And so a variety of different components came together to create a housing boom, and whether or not we're at the plateau of that or whether we still got a little runway, I think across the nation we're probably at a plateau. I think we built a lot of units in the course of the last six or eight years.
Tim Fulton Mm-hmm.
Brian Suter Columbus, we still have a little bit more runway, but it surely, we're getting to that plateau pretty quickly, I think. And it'll be interesting to see how many of the sky cranes here, how those units come on, when they come on, and how well they're occupied in the course of the next, you know, six to 12 months.
Tim Fulton Yeah.
Brian Suter I'd be surprised if you see much more development after sort of this wave.
Tim Fulton Okay.
Brian Suter Just because lending has gotten a little bit more difficult, construction costs have gotten a little harder. As you said, there's a lot of units on the, on the market right now, and so it's hard to be able to find those tenants to be able to fill your space.
Tim Fulton Are the construction costs a labor issue or...?
Brian Suter You know, it's, it's funny, the last couple weeks have sort of been one of those conversations that's happened with all of, you know, my development peers.
Tim Fulton Okay.
Brian Suter It's like the first thing out of your mou- out of our, out of our mouths over beers is like, "What, h- how you doing with construction?" So there's issues that, one, you know, there's a ton of sky cranes and a ton of people working on stuff right now.
Tim Fulton Right.
Brian Suter So labor is really high. Aside from that, commodity prices have gone up dramatically. Even before the last couple hurricanes, things like, you know, PVC piping and-
Tim Fulton Huh
Brian Suter ... you know, brick and wood and drywall were all expensive, more expensive than they had been historically.
Tim Fulton Right.
Brian Suter And then in addition to that, the couple hurricanes that have happened, anybody that can swing a hammer is gonna take their truck and go down to, you know, either Texas or Florida because it's-
Tim Fulton 'Cause insurance money is good money.
Brian Suter It is. And there's, you know, 80,000 houses that need to be rebuilt.
Tim Fulton Mm-hmm.
Brian Suter And so all of... You know, if you got a truck full of lumber, you're gonna drive it past Ohio and-
Tim Fulton Mm
Brian Suter ... drive it to Texas 'cause you're gonna get better prices there. So it looks like for the foreseeable future, those prices, commodity prices are gonna continue to rise and labor prices are gonna continue to rise, which is gonna make it a little bit more difficult for us to build here in Columbus.
Tim Fulton And are you guys... Do you work at a scale... So what's interesting to me here is comparing this to, we had a conversation with a, a brewer who has to buy futures-
Brian Suter Right
Tim Fulton ... in, in hops and whatever. Listen to that episode.
Brian Suter Right.
Tim Fulton Um, are you guys at a point in economies of scale where you are buying... You're not buying futures in wood and stuff like that, right? You're just liter- You have to deal with the market price just like anybody who's-
Brian Suter Right
Tim Fulton ... going to, it's less, but anybody that's going to the hardware store.
Brian Suter Yeah. And yes-
Tim Fulton Okay
Brian Suter ... for sure. We're, we're essentially going to the hardware store. Our hardware store is a little bit bigger and a little bit more complex, but it's a hardware-
Tim Fulton Right
Brian Suter ... store nonetheless. You know, we hire, uh, general contractors, so we don't have a construction firm within our company.
Tim Fulton Okay.
Brian Suter Unlike some other groups in town that do. We hire out all that. We are a very small shop, so our construction director deals with all those, those things. Those contractors may very well be hedging their bets on costs for labor and commodity prices-
Tim Fulton Mm-hmm
Brian Suter ... but that's not something we do. We simply have to pay them for their services-
Tim Fulton Gotcha
Brian Suter ... and they, they handle their business, you know, separately from that.
Tim Fulton Gotcha. Let's iron in back on The Gravity Project.
Brian Suter Yeah.
Tim Fulton What's the philosophy behind that, and what's, again, the impetus for it?
Brian Suter Yeah. So again, sort of two different pieces. There's The Gravity Project, which is the real estate, the building.
Tim Fulton Mm-hmm.
Brian Suter And then there's sort of the Gravity concept, and the concept is really sort of the next iteration or the next component of really that programming piece that comes along with all of our other sites.
Tim Fulton Okay.
Brian Suter Really being very, very focused and very understanding what the needs are of populations and communities. And so the idea really came from Brett, who's the visionary of the company, to come up with a place that is the center of gravity where, you know, like-minded, driven people can come together to have those bonding and those collision points. And so with that, we're gonna do programming that's on site, whether it's TEDx kind of-
Tim Fulton Okay
Brian Suter ... kind of topics, whether there's, you know, communal dinners, whether there's opportunities for people to meditate, have meditation classes or yoga classes, whether there's, you know, opportunities for things like happen at Independence Day happen year-round on site at Gravity.
Tim Fulton Okay.
Brian Suter And then, you know, that really brings in both the community, the, the community that lives at Gravity, the building, but also the greater community of Franklinton and, and of the city.
Tim Fulton Okay.
Brian Suter So it's coming up with sort of that means to have the hub for like-minded people to come together and really be driven and sort of make yourselves better people, and we're hoping to help sort of curate that through our project.
Tim Fulton And what does that... What's the virtue there for you? That simply people wanna be close to that, and so they want to have an apartment there, they wanna have their office there?
Brian Suter Yeah.
Tim Fulton Okay.
Brian Suter So it's-
Tim Fulton Just like it is at your other communities.
Brian Suter Yeah. The thought is that instead of... You know, historically, people created buildings that you lived in and then filled them with programming, filled them with amenities so that people leased space.
Tim Fulton Okay.
Brian Suter All of those amenities were driven by the need to fill space and lease apartments. The philosophy of Gravity is flipped, where we say, "We wanna create that amenity and create that programming so that that is what people wanna be a part of." Obviously, it'll help lease space, but it's the idea that those programs and those amenities and that like-mindedness and those collision points are what the project is about. It happens that there's also retail, residential, and office space there-
Tim Fulton I see
Brian Suter ... you can lease. So it's taking sort of the traditional idea of residential real estate or commercial real estate and flipping it and saying, "We're really gonna push for the programming piece first and foremost, and then build the building around that component."
Tim Fulton Okay. And there will be some renderings on the website that you can take a look at.
Brian Suter Sure.
Tim Fulton Talk about sort of the other projects that you have that you're working on, and do they relate to Gravity or, you know- Is this a new philosophy for you guys?
Brian Suter Yeah. So we've got a couple other projects that are coming up, uh, in town. Obviously, The Gravity Project. We've got 80 On The Commons, which is a sister building to the 250 High Street, which is a building that's right off of, uh, Columbus Commons. We're building a sister building to that directly adjacent to it.
Tim Fulton That's the south end of The Commons, right?
Brian Suter Yeah.
Tim Fulton Okay.
Brian Suter Southeast end of The Commons.
Tim Fulton Got it.
Brian Suter We took down a, uh, a kickball field. There's people that are pissed off about that right now.
Tim Fulton Okay.
Brian Suter Sorry about that, guys.
Tim Fulton Sorry.
Brian Suter Yep, sorry. Uh, and created some more traffic, but it'll, it'll be good in about 12 months. So yeah, that building's coming out of the ground, and we've got another project that's coming out of the ground up in New Albany as well. And so those are the three construction projects. To your question, i- are those gonna have, you know, be extensions of Gravity? We're considering that right now. We-
Tim Fulton Okay
Brian Suter ... we think there's definitely gonna be a need for that kind of concept, uh, in all of our communities.
Tim Fulton Mm-hmm.
Brian Suter And we're trying to sort of understand how the Gravity concept can be transplanted elsewhere. There might be components of that Gravity concept in all of our projects, or alternatively, there may be an opportunity for if you live in any of our projects to have access to Gravity. And, you know-
Tim Fulton That's interesting. Okay
Brian Suter ... so that you can come from New Albany and be a part of, you know, whatever the, the, the dinner that's going on at Gravity in Franklinton. Beyond that, we're really looking at the ways to be able to create the concept and the building of Gravity in other cities. We think that there's a need for this. There's sort of a niche, um, and there's, uh, people that really draw, are drawn towards this kind of concept.
Tim Fulton Mm-hmm.
Brian Suter So we're looking at other places we can take it and, you know, put it in, in other cities as well.
Tim Fulton And I've seen sort of the common area space that you have in your other communities.
Brian Suter Yeah.
Tim Fulton Is the Gravity common space, like, huge?
Brian Suter Yeah. So a- again, we, you know, d-
Tim Fulton Or is that mixed in with, like, the coworking space-
Brian Suter Yeah
Tim Fulton ... and, like, it's just-
Brian Suter Yep
Tim Fulton ... there's an open floor plan at some point.
Brian Suter Exactly.
Tim Fulton Okay.
Brian Suter It's, it's less, again, less about the individual residence amenity spaces. There's not gonna be a gym just for the residents.
Tim Fulton Okay.
Brian Suter There's not gonna be, you know, a living room or, you know, a, a common space just for the residents. All of that stuff is on our first floor. There will be some spaces that are restricted to residents. There's a big green open lawn space that will be restrict- you can't walk in off the public in there.
Tim Fulton Okay.
Brian Suter But if you are a member of the coworking space or you are an office tenant, you can still get access to that.
Tim Fulton Okay.
Brian Suter So we've really taken sort of the concept of amenity spaces that are specifically for our residents and blown it up to say there's common spaces for the, for the community, the Gravity community, the Franklinton community, the greater Columbus community-
Tim Fulton Okay
Brian Suter ... within that, so that it's not just like we have a closed door that you can't get by if you're not a resident. So all of that stuff, that 30,000 square feet of retail space, is really being curated specifically for needs for our tenants, but also needs for the community. So again, coworking space or coffee shops or restaurants or fitness areas, all that our residents can use, but hopefully we have others using those as well.
Tim Fulton As somebody working in development, you said earlier that you believe that this sort of building boom that we're going through in the urban core right now is, is gonna slow down.
Brian Suter Sure.
Tim Fulton As a Short North resident, good. Thank you.
Brian Suter Fewer, uh, orange cones. Yeah.
Tim Fulton Yeah.
Brian Suter Yeah.
Tim Fulton That will, that will be great. After that, you know, if you had a crystal ball, what do you think you would see coming along then?
Brian Suter It's a great question. I think i- in urban cores, there's continu- going to be continued development. I mean, you know, along the Short North, along High Street, I think it may slow down, but it's never gonna stop. I mean, it-
Tim Fulton Mm-hmm
Brian Suter ... there's always gonna be orange barrels on High Street just because it is the main artery for Columbus.
Tim Fulton Right.
Brian Suter It's connecting, you know, two huge pieces of, of the city together. So there's always gonna be some kind of development going on there. I think further out in the suburbs, you're gonna see more housing stock being built, more single-family homes.
Tim Fulton Okay.
Brian Suter Just 'cause a lot of that has slowed down as more construction has happened in the urban core.
Tim Fulton Mm-hmm.
Brian Suter So I think it might turn out a little bit, more homes be produced elsewhere. Residential will potentially, the apartments may slow down for a while, but is there an opportunity for condos in some of these locations as well?
Tim Fulton Mm-hmm.
Brian Suter Are all these sky cranes that are building apartments, are people now gonna be interested in actually buying downtown? And, and that flip of people not being interested in buying homes, is that gonna go back to more of a traditional standard that has been for the last 50 years and people looking to own?
Tim Fulton Mm-hmm.
Brian Suter So there's po- potential for that as well. I think in addition to that, there's also something to be said about space making and some of the stuff that you see along Gay Street or see in Franklinton or see down by the, at Columbus Commons. People are really being diligent about creating spaces that people can come together.
Tim Fulton Mm-hmm.
Brian Suter As we get more and more technologically, you know, o- obsessed, it's easy for us just to look at our phones on our couch, but I think people are slowly getting the understanding that there's still that social aspect that-
Tim Fulton Right
Brian Suter ... we need as humans. So there's more opportunities for that to be built and finding those opportunities to build environments where those collisions happen. There's a reason that people go to coffee shops to work. It's not just coffee. It's like you actually get to interact with people, and you get to be sort of, have the buzz and the vibe.
Tim Fulton Well, and it's why those coworking spaces work too, right?
Brian Suter Exactly. Exactly right. We're all social people at the end of the day, and, you know, handheld devices are keeping us more and more away from each other. I think there's opportunities to really find ways to build specifically for people to come back together again in some of those more urban spaces. So we'll see as time goes on. I don't know whether I could say that one component of the real estate business, you know, whether it's retail or whether it's office or whether it's residential or whether it's industrial or whatever.
Tim Fulton Mm-hmm.
Brian Suter I don't know... You know, there's gonna be shifts and changes in terms of what's sort of the hot commodity at the time.
Tim Fulton Mm-hmm.
Brian Suter But I'm not sure whether or not... You know, in urban cores, I think it's gonna continue to be the residential and sort of those place-making spaces that are gonna c- continue to drive real estate.
Tim Fulton Great.
Brian Suter Yeah.
Tim Fulton Brayden, thank you so much for your time.
Brian Suter Yeah. Thanks for having me. I appreciate it.
Tim Fulton Thank you for listening to the Confluence Cast presented by Columbus Underground. Again, you can get more information on what we discussed today in the show notes for this episode at theconfluencecast.com. Please rate, subscribe, share this episode of the Confluence Cast with your friends, family, contacts, enemies, your favorite developer. If you're interested in sponsoring the Confluence Cast, get in touch with us. We can be reached by email at info@theconfluencecast.com. Our theme music was composed by Benji Robinson. Our post-production engineer is Philip Cogley. I'm your host, Tim Fulton. Have a great week.