In 2008, David Mann ditched a nine-year career in the garment business for a future in real estate, enrolling in New York University’s real estate development master’s program. Then in 2010, around the time he graduated, he moved to Westchester from Manhattan and launched his second career with vigor: Today 37-years-old and a father of two, Mann is single-handedly transforming the White Plains rental market with five high-end developments built so far and more on the way. (He has plans to break ground on a 50-unit development in Port Chester this spring.) We sat down with the Armonk resident to find out why he’s so bullish on Westchester’s rental market, and what he has in store for the county.
Your first project, completed in 2012, was 17 Dekalb Ave. [Mann sold the property to another investor shortly after completion.] What were your thoughts going in, and what surprised you?
Well, through my analysis, I was very confident the demand was there—that wasn’t my concern. The concern was, ‘Okay, I have this vision, and I believe that if I’m able to build this product, I am certain that it’ll rent out and be very profitable. But I’ve never built a building before.’ So there was the ‘how do you get from A to B’ aspect, but it wound up more like A to Z. In the beginning, it didn’t take up every single minute of the day. And I was thinking, ‘Why doesn’t everybody do this? It seems…not that hard.’ And over the course of the next year…I realized why being a real estate developer is not so easy.
What makes it so difficult?
It is so in-depth. It tests your patience every day, whether it is dealing with administrative issues between engineers and the municipality; or dealing with contractors; dealing with the bank; construction issues. Everything takes longer than I originally thought.
You use modular construction—what does that entail?
The building above the foundation is built off-site in a factory, then transported to White Plains, stored in a storage lodge, and then shuttled like an assembly line to the site, and picked up and set on the foundation. Then the units are stacked on top of one another.
What’s the advantage?
One goal of the real estate developer is to eliminate uncertainty. Everything is really your best guess—you’re a speculator. ‘If I build this, I should rent it out at these prices, it should cost this amount, it should take this long, interest rates should be here, et cetera.’ A lot of assumptions. If your costs spiral out of control, and the project takes twice as long as you thought, you expose yourself to interest rate risk, rent price risk, economic risk—the quicker you can do it, the less risky of an endeavor it is. And so modular construction eliminates the uncertainty of construction costs, because about 50 percent of construction costs are negotiated up front; and I’m able to build a 35,000- to 40,000-square-foot building in a matter of nine or 10 months in what would normally take 16 to 18 months.
Why develop in White Plains?
White Plains is the unofficial capital of Westchester. You can drive 15 minutes and be in most any town in Westchester, so White Plains lends itself to local commuters.
What types of renters are you attracting?
Depends on the building. The more expensive the rents, the older the residents are. I don’t have a lot of commuters to the City, believe it or not. It’s certainly less than 50 percent, and it could even be less than a third.
Are you targeting the high-end exclusively?
Everybody always wants to get the highest rent possible, but it’s not like you can go and build 1,000 units and have the most expensive apartments—there just may not be that many people who can afford them. It’s not like New York City where you build something new, and you have the highest rent, and it will eventually rent. In White Plains there are 60,000 residents, so it’s a matter of what will the market allow.
Will the market allow for more development?
Absolutely. There’s room for a lot—a lot—more in Westchester. Nothing has been built in White Plains, and not a lot in Westchester County, since 2008. So as long as you build something new, and the finishes are nice, people will want to live there.