Announcer: 00:02
Hey BK, with Ofer Cohen .
Ofer Cohen: 00:07
So David, how'd you get here this morning? Because, you know, it was kind of interesting. I invited David at 9:30 AM, and at 9:27, I got an email that, you know, one of David's biggest weakness, is that he's always late and so I figured, let's get it out of the way and kind of clear the air on that one and this so we can Kinda...
David Kramer: 00:30
Let's just deal with my weaknesses just for first off, let's just deal with all my stuff and then we can only go up from here. Exactly, you know, I, I tend to be a little distracted, and I tend to run a little late and I scream at my kids time management and it's become enough of a thing that they have now shortened it to TM.
Ofer Cohen: 00:30
TM.
David Kramer: 00:52
But it could easily be out right back at me. I'm certainly when there's a commute in the morning, I need a 10 minute, I did it need a 10 minute grace period.
Ofer Cohen: 01:01
That makes sense. So I think we're going to start the shows and I'm going to say, Hey David,
David Kramer: 01:06
And we say, “hey Ofer?”
Ofer Cohen: 01:09
Yes, and I'm going to say, welcome to Hey BK. Welcome to Hey BK, the show that lets you get to know the people behind the Brooklyn transformation. So for our first episode, I talked to David Kramer, David is the president of Hudson companies, which he joined in 1995. Hudson, in my opinion, is one of the most community-minded developers in New York City they've developed over 10,000 apartments in New York. In my conversation with David, we explored what made David Wright for Hudson, what made Hudson right for David and throughout you'll hear his love for the city. I'm so happy to be hosting this show and bringing voices like David's to you. Each episode, Hopefully, we'll teach you a little bit about how this great city functions and how the type of personalities behind these projects is really what makes a difference. And with everyone I talked to, it starts for love for what they do. Even though what a developer does isn't always easy to explain.
David Kramer: 02:09
You know, I have different levels of what I do. So the first is, I build apartment buildings in New York City that's sort of like the one-liner. And then if you want to peel back the onion a little bit, I'll say that we build five different types of housing in New York City, primarily ground up, primarily the four boroughs. And within those constraints we build affordable housing, that's one, workforce housing that's two, housing for institutions is three, market-rate rentals and market-rate condos.
Ofer Cohen: 02:42
Right, but that's sort of like a very dry sort of very basic technical answer.
David Kramer: 02:48
Wait, but then what I was going to say is that, so then people want to know what is a developer do, right? There's nobody knows what a developer does. And I say it's kind of like the film producer and then people don't know what a film producer does either. And what I like to say is that we buy a parking lot and then four years later, this is an apartment building standing there. And in that four-year journey, maybe a thousand decisions were made. And somebody guided the journey from deciding everything from whether the brick is yellow or red to how wide the hallways are, to basic decisions about is it a rental or a condo? Is it studios or three bedroom apartments.
Ofer Cohen: 03:25
So what do you like about that work?
David Kramer: 03:28
I think I liked the variety. Every day is different and every hour is different because at any one time, let's say we have seven or eight projects going on at different phases. So we are strategizing and negotiating how to find the site. And then 20 minutes later we're talking about a subcontractor that filed for bankruptcy. And then 45 minutes later we're dealing with a closing with HPD on an affordable job and two hours later we're looking at funds to pick for the new marketing campaign of a project.
Ofer Cohen: 04:03
Sounds very horrible to me. Why wouldn't you like that variety? I mean there's a lot of other variety that can have in your life.
David Kramer: 04:10
Can you? I mean to deal with architects and contractors and lenders and lawyers.
Ofer Cohen: 04:15
Yeah. But, so what is the work really that you like out of the entire Enchilada here?
David Kramer: 04:21
What's the melted cheese in development?
Ofer Cohen: 04:23
Yes.
David Kramer: 04:24
You know, we have a bell at Hudson, and we ring it on occasion when there's a victory and I encourage as much bell ringing as possible because the development process over a four year period is at the most exciting, a very tiny victory, you know, in one day, like you finally gotten the Department of Buildings to issue a C of O, a certificate of occupancy. You finally have a closing with your construction lender. You finally leased up the last apartment. And so there are benchmark moments that are very exciting and it is a thousand steps to that moment where it's very exciting when you've leased up your last apartment, but it was a seven-month journey to lease up every apartment.
Ofer Cohen: 05:09
So is it like celebrating small victories? The real satisfaction is at the end or throughout the process or?
David Kramer: 05:17
I think you have to really enjoy the journey. Because, it's a little bit of an anticlimax when the job is finally done, that's not when it was exciting. It was exciting when you finally signed the deal and got control of the site, it's exciting when you see the building coming out of the ground. It's exciting when you see the brick and the window is that you've picked or the limestone from Portugal on the facade of the building
Ofer Cohen: 05:42
And David's enjoyment of the small victories. It's within the whole company and they and he love what they do and to do what he does and be so great at it. You need it. So I have this theory that no kid growing up thinking I want to be a real estate developer. Uh, you know, you know, when I grow up.
David Kramer: 06:01
I think that's pretty accurate of everybody at the Hudson companies. I once sorta gave a little pep talk where I said none of us came from affluent families. None of us came from real estate families, but we are hardworking and scrappy and, I don't think anybody says, certainly from my generation, the seventies, "I want to grow up to be in real estates." And most of the people at Hudson started from the civic side of real estate working for nonprofits in affordable housing, working for city governments. Me, personally, I wasn't thinking real estate. I was thinking homelessness. I got into housing in the eighties as a save the world, Do Gooder.
Ofer Cohen: 06:43
I'm sure there's a whole generation of you guys, but don't you think you stand out this way in our industry?
David Kramer: 06:50
No, I don't. Every industry has a wide variety of people coming to what I think real estate is really the big tent and that you have parts of the real estate industry that never meet each other. An office broker who is the king of midtown office leasing may never in 50 years bump into the king of affordable housing who is hanging at 100 gold street at HPD. And so there are a lot of different nooks and crannies and real estate. And I think there is always going to be the group that's interested in the life of the city who maybe wasn't an urban studies major. In the eighties, people were much more focused on homeless issues. And then 20 years later people were much more focused on sustainable issues, and so now you have a whole generation of people in this business who care a lot about sustainability, energy efficiency that didn't exist 20 years ago.
Ofer Cohen: 07:45
Right and it's also affordability, right? I mean in every step in every sort of a segment of our industry, there's the idea of affordability, especially in our city. So how do you, you know, how do you come from, you know, being an affordable mission-driven developer which you still do affordable housing into developing probably one of the most luxurious buildings in Brooklyn Heights or in Brooklyn.
David Kramer: 08:10
Or New York City
Ofer Cohen: 08:10
Or New York City
David Kramer: 08:11
or the United States, you know, it's nice to have a mix. I mean, a lot of it is the same skill set working with architects and lenders and understanding a site and figuring it out and putting the pieces of the puzzle together. You know, one of the things the people at Hudson like is the fact that we do both types of projects and they're both exciting in their own way. I mean, we're closing on a huge affordable job in the Bronx in the next two weeks called "La central", which is going to be seeing a 700 affordable housing units and a new space for Bronx Net TV and a lot of other nonprofit uses. And that's a fun thing to work on as well.
Ofer Cohen: 08:52
And this mix of interest makes Hudson, such a unique place and that means team that reflect their values.
David Kramer: 08:59
What makes the right culture, what makes a fun work environment? I've sort of been running the show at Hudson now, let's say the last probably six or seven years after what had been very much been a partnership and been at a minimum three people running the company. And then it somehow became just me. And so it occurred to me that like, oh, I can suggest all sorts of things. And so we have a bring your dog to work day and we have a Sushi and massage day. And it's nice to be able to say like, Hey, let's try and experiment. And you know, I try and emphasize that I really don't care when people come in or when they leave, it's sort of results-oriented and that we can have fun at the same time that we are developing the projects and we have high standards for ourselves. But that doesn't mean we can have fun with bring our dogs to work.
Ofer Cohen: 09:51
The Flexibility David brings into being a boss. It was with him through his career, a willingness to embrace new kinds of challenges and curiosity worth beyond know. He began his career in LA, wanting to fight the homelessness and then he moved back to New York and was ready for a new challenge.
David Kramer: 10:10
And then I wanted to tweak it a little bit. I wanted to make more money. I moved back to New York and I enjoyed being a housing developer, but I didn't feel like I had to devote myself exclusively to affordable housing. And it's interesting at the same time I interviewed at the Hudson companies in 1995. So did Shaun Donovan who eventually came on to be, went on to be HPD commissioner and Hud Secretary. And as I understand it, Sean wasn't interested in considering a job at Hudson because they were hiring a project manager to work on an 80/20 in the east village.
Ofer Cohen: 10:45
Pardon my interruption. 80/20 is a government incentive to make 20 percent of the units affordable.
David Kramer: 10:51
And I understand Sean's feedback was that he just wanted to focus on exclusively on affordability. So I think my one sort of pivot moment was realizing I didn't want to just do affordable housing. I enjoyed housing development, but I also wanted to make money and I had seen the world of the nonprofit salaries in LA. So when I moved back to New York, I had made certain promises to my wife, that I would make money because we had been in la where she was more the breadwinner working in the film industry. And then coming back to New York, I said I would step up.
Ofer Cohen: 11:24
It's unusual because usually, a real estate developer would be the breadwinner. And the film producer would be the one supported by the real estate developer.
David Kramer: 11:33
Well, for our courtship, she made, I think at least double what I do,
Ofer Cohen: 11:36
And of course along the way there were challenges, what we call the "holy shit moment".
David Kramer: 11:42
My Holy Shit moment? I think it was pretty scary when I moved back to New York and I was concerned about whether I was hireable and marketable because I had a non-profit background and I took some part time work, but there was a lot of stress about whether this was going to make any sense. So I would say that was one good moment. You know, I think the hardest part of Hudson was that the partnership that had primarily been around since 1986 when Hudson started, began to fray right around the time that the great recession was hitting. And that ended with sort of my, sort of taking over Hudson. So that was..
Ofer Cohen: 12:28
That was a trial.
David Kramer: 12:30
I was going to say it was a dicey moment in time in terms of, you know, real estate, condo projects that didn't do particularly well
Ofer Cohen: 12:36
During this period, did you have the ability to see, to feel like this is temporary, I'm going to get through it or with some moments like where are we going with this?
David Kramer: 12:47
No, I think that is a big challenge. I think in life, in real estate, I once a reality TV show about poker and poker player was saying that the problem and poker is that when you. win you just think that you're always going to win and you get overconfident. When you lose, you get down on yourself and you make reckless decisions because you were afraid you're always going to lose. And hearing that, I thought that had a lot to do with real estate that when times are good, you just sort of expect that rents are always going to go up three, four percent. That it's always going to be good. And then on the flip side, when times are bad, you can't really see a light at the end of the tunnel.
Ofer Cohen: 13:22
Now seasoned and knowing that time changed, this made David and Hudson know that they really care about the property to win out and want it bad enough to take the risk, for instance, the way they won the public library in Brooklyn Heights process. So the Brooklyn Public Library in Brooklyn Heights was one of those. They decided that this one is monumental iconic worth the brain damage and potential risk.
David Kramer: 13:49
Yeah. You know, I mean if I knew then what I know now, not sure I would've been so bullish because it's been a fun, exciting, complicated journey. At the time I thought, yeah if you're going to be aggressive on any site, it might as well be the best site in Brooklyn. And I was, you know, I asked for feedback because you always want to sort of filter as many opinions as possible. I asked the guy who runs the corporate office in Brooklyn, what do you think of this site at the end of Clinton next to one Pierpont Plaza. And he said, without hesitation, best site in Brooklyn,
Ofer Cohen: 14:20
That's great. And so when did you decide that you're going to run five marathons?
David Kramer: 14:26
Well, that's a whole story. So I ran a marathon in 1996 because that's, you know, if you're in New York, have to have you run a marathon?
Ofer Cohen: 14:34
I'm dying to but my ankle is screwed up.
David Kramer: 14:36
But yeah, I mean it's not healthy to run a marathon, but it's a, especially as an urbanist to spend the day in all five boroughs seeing all the different neighborhoods. It really is dramatic going from neighborhood to neighborhood. So I did that and I walked about a 15-minute pace and I finished about six and a half hours. And my last marathon I decided I wanted to be one of those people who had a gimmick because you see people who are walking in the marathon in a clown outfit or they're juggling and the crowd goes crazy. So I like, I want to do that. I want to gimmick. So I decided that one of the great joys in life is the pure joy of throwing and catching and Nerf football. So I encouraged my brother and we did the marathon together. And over six and a half hours we threw a Nerf football back and forth to each other while we walk the marathon.
Ofer Cohen: 15:23
Wow. So I sent you the list of questions last night. And so you know, what's coming. Tell me something that nobody knows about you.
David Kramer: 15:36
I did see that. My father's background is, is pretty interesting. I don't know if you even know this, but my father would get from a seriously orthodox Jewish family in Bensonhurst. In fact, his family was the one most responsible for setting the Lubavitch up on Eastern Parkway. I'm his father and uncles bought, oh, seven, seven Eastern Parkway and, but he was a bit of a rebel and did not want to continue going onto yeshiva and continuing to Orthodox Judaism. And so we went to Brooklyn College knowing he'd be drafted and he went off to World War II was an 18 year old. And got seriously injured and lost his arms in world war two. So the father I grew up with is somebody who was a bilateral arm amputee, which was completely normal for me because that's the father I knew and I'm actually putting together a bunch of archival work about him now, so he's on my mind more now.
Ofer Cohen: 16:32
Thank you so much, David.
David Kramer: 16:35
Hey BK, good to be here.
Ofer Cohen: 16:38
Thanks for listening. For more information, visit heybk.nyc or you can email me at ocohen@terracrg.com.