REAL ESTATE NEW YORK sat down with the next generation of metro area developers for a series of discussions about market conditions and challenges, neighborhoods on the rise and the upcoming projects that are changing the face of New York.


THE DOMAIN COS.
Matthew Schwartz

Founded in 2004 by Matthew Schwartz and Chris Papamichael, the Domain Cos. draws on its founders' diverse backgrounds. At the Related Cos.' Related Capital arm, Schwartz specialized in community development. Papamichael started his career at W&M Properties, moved to condominium developer Crescent Heights and then became a principal at Aris Investments, which specializes in turning around distressed mulitfamily assets. Domain has developed more than 2,300 housing units and 70,000 sf of neighborhood retail space here and in New Orleans, where the company has been involved in post Katrina rebuilding.

PROPERTIES: Markham Gardens on Staten Island (a "privatized" public housing project), Spring Creek Gardens in East New York (600 residential units), Park Lane at Sea View on Staten Island (104 residential units for seniors), three-mixed income rental projects under development in New Orleans (483 residential units)

WHAT WAS THE IMPETUS FOR STARTING THE DOMAIN COS.?

MS: We saw an opportunity to combine forces and create a company that could cover all ends of the spectrum in multi-family and commercial development, focusing on community development where we could provide all aspects of a mixed-use plan. At the same time, since we both had a background on the financial services side, we felt we could carve out a niche in identifying opportunities where there are certain challenges in raising capital.

YOU'VE DONE A NUMBER OF AFFORDABLE-HOUSING PROJECTS, IN NEW YORK AND NEW ORLEANS. IS THAT A SECTOR WHERE RAISING CAPITAL CAN BE ESPECIALLY CHALLENGING?

MS: Absolutely. Working in the community development sector presents an entirely different set of challenges from conventional financing. Without some level of government assistance, the projects aren't feasible. Typically we look to create a cocktail of incentives and subsidy programs in order to make projects work. This sector of development was influenced in different ways by what's going on in the capital markets, but that has had a very substantial effect on our sector and slowed down development.

HOW ARE YOU ADDRESSING THOSE CHALLENGES?

MS: As a company, we were very fortunate to get substantial amount of our pipeline closed before the shift in the capital markets. One of the major impacts to the community development business is that the industry lost a lot of its largest investors, or those investors who scaled down operations considerably. What we've focused on since that shift took place is executing the pipeline that we already have, building our infrastructure as a young company and raising capital. When the market does turn for the better, we'll be prepared to jump back in.