Tired of finding himself at the mercy of his developer clients, architect Jared Della Valle did something about it. He started buying up the occasional small property, leading him in 2006 to launch Alloy, a firm that designs, develops, constructs and even markets its own buildings.
Today, Alloy boasts a growing portfolio of mostly residential projects. As of early November, they include Dumbo’s first townhouses — five sleekly modern, 3,000-square-foot-plus abodes each selling for $4 million and up.
“As an architect, you sit around and wait for clients, while on the development side, you go ahead and buy property,” said Mr. Della Valle. “It’s not easy, but you don’t have to wait for the phone to ring.”
There are a handful of architects in the New York area going much the same route and setting up what some now refer to as design-focused integrated practices. Better control of their own destiny is only one of the reasons. So, too, are the far richer financial rewards that come with development and marketing work.
Some observers say integrated firms also enjoy an edge when it comes to securing funding. “They have a unique vantage point, from [the initial] vision through the delivery of units to the end user,” said Mark Melchione, group manager for commercial real estate at M&T Bank, a leading construction lender that has helped finance buildings by DDG and FLAnk, both integrated firms. “It certainly can be an advantage.”
Combining skills ranging from design and finance to marketing, however, is a daunting task —especially given that the rising integrated firms are often small, with a dozen employees or fewer. “Each field is complex in its own right,” said Vishaan Chakrabarti, director of the real estate program at Columbia University’s Graduate School of Architecture, Planning and Preservation.
He ought to know. In his life outside Columbia, Mr. Chakrabarti is a partner at architecture firm SHoP, which occasionally does double duty as a developer on the projects it designs.
Among other things, there can be an inherent conflict between those who want to design the most attractive and best-functioning building and those who want it to pay off the most.
“We’re at our best when we stick to architecture,” he said of SHoP, noting nonetheless that among his students at Columbia there is a growing interest in trying to wear multiple hats.
Based: 60 Hudson St., Manhattan
Service: Development, architecture, construction, investment, property management
Space Built/In Process (SQ. FT.): 1.4M/600K
Notable Projects: 41 Bond St., a 10-story, seven-unit condo building; 345meatpacking, an 11-story, 37-unit condo building at 345 W. 14th St.
As integrated firms go, DDG entered the world four years ago with a key advantage: the diversity of skills its four founders — an architect, a developer, a lawyer and a private-equity investor —brought to the enterprise. Since then, the firm has grown to 75 employees and added an office two years ago in San Francisco, and today has 10 projects worth an estimated $800 million in the works. As Chief Executive Officer Joe McMillan sees it, his firm’s competitive edge comes from its ability to design, develop, construct and even manage buildings.
“It affords us the ability to really control our projects,” he said. A case in point was DDG’s breakout project at 41 Bond St. in NoHo, a 10-story condo clad in handsome bluestone. Completed in 2012, its seven units sold for between $5.1 million and $8.2 million, while the property’s striking design garnered considerable publicity.
Unlike many development companies, DDG finds that distinctive architecture is essential to its brand. The firm is willing to spend a little more on flourishes because its partners are convinced that it will pay off in the end. “We have infighting, of course, but it’s always in service of the belief that great architecture has economic return,” said Peter Guthrie, the founding principal who oversees design and construction.
A 12-story, 13-unit condo in Tribeca and the conversion of a former SoHo chocolate factory into 24 luxury condos will come next.
Among DDG’s fans is Lori Price, a research director at a New York hedge fund, who purchased one of the condos at 345meatpacking.
“They’ve essentially created an art installation, and each apartment is a jewel box,” she said. What’s more, since DDG manages the building, any issue she has gets resolved quickly. “It makes the process for me as an owner seamless.”
Based: 520 W. 27th St., Manhattan
Service: Architecture, development, brokerage
Space Built/In Process (SQ. FT.): 350,000/440,000
Notable Projects: 385 W. 12th St., a seven-story, 12-unit condo building; the Abingdon, a seven-story, nine-unit condo building at 607 Hudson St.
Most architecture students avoid learning the business side of their craft, but not Jon Kully and Mick Walsdorf. Even as grad students at Columbia University, both knew they wanted to work as developers and designers, which is why they launched integrated firm FLAnk in 2002. At the time, “there was no precedent we could find,” said Mr. Kully.
More than a decade later, their firm has completed seven projects and has three underway. Its latest offering, 224 Mulberry St. in Nolita, features seven condos that range from $6 million to an eye-popping $30 million.
“What’s great about these guys is that they design things that work,” said Stephen Prince, a managing director at a Manhattan-based hedge fund, who recently bought a 4,200-square-foot condo at 385 W. 12th St., a seven-story, copper-clad building designed and developed by FLAnk.
FLAnk’s projects range from developing a 60,000-square-foot office building on West 27th Street to the conversion of a historic Greenwich Village church into swanky lofts.
Today, the firm employs 10 people, six of whom are trained as architects. Throughout the design process, the team is mindful of the bottom line. “We understand objectives from the beginning,” said Mr. Kully. “We don’t finish DDs or CDs [design documents or construction documents], go out to market, and suddenly start scratching our heads.”
That’s not to stay FLAnk produces uninspired architecture. Mr. Kully said it caters to an “elite consumer class” that appreciates high design. He added, “A coveted location and delivering something unique and fantastic — that’s what we are always pursuing.”
Based: 20 Jay St., Brooklyn
Services: Development, architecture, construction, brokerage
Space Built/In Process (SQ. FT.): 250,000/500,000
Notable Projects: Five townhouses on Water Street in Dumbo; conversion of former Brillo warehouse to 10 loft apartments
When you work as both an architect and developer, you grow accustomed to having to explain yourself. Jared Della Valle, president of Alloy, sums up his integrated firm like this: “We design beautiful things. We also happen to build and sell them.”
Alloy’s portfolio of mostly residential work includes two upscale Dumbo projects totaling 51,450 square feet and a prominent mixed-use building in Brooklyn Bridge Park. Recently, the firm also put a parcel it owns in Manhattan’s Hudson Yards — where it could build as much as 413,000 square feet of space — on the market with an asking price of $75 million.
“You have to invest your time into understanding neighborhoods, so when you do see opportunity, you’re ready for it,” said Mr. Della Valle.
He acquired a taste for the hunt while running New York-based architecture firm Della Valle Bernheimer Design, which he co-founded in 1997. He started buying real estate as a way to generate work for the firm and established Alloy as a side company in 2006. The architecture firm was dissolved in 2010, enabling Mr. Della Valle to focus his full attention on Alloy.
He emphasized that Alloy is careful about not taking on too much at once. It spends up to five years working on a project and fusses over every detail. That’s a major selling point for buyers.
“What sets them apart is they are architects first and developers second,” said Miles McEnery, an art-gallery owner who purchased a loft at 185 Plymouth St. in Dumbo. “You get such a thoughtful, intelligently designed property. Not a lightbulb is out of place.”