Inside Third & Bond: Week 128

Over the past 128 weeks, we’ve endured our share of good-natured ribbing from y’all about how long it’s taking us to complete this project. At 44 units, Third + Bond is a medium-sized job, and on the small side for Hudson. One might think that because it’s small and low-rise, it should take less time to complete than other, larger jobs. Would that it were so.

The work of a developer is highly scalable. The advantage of this fact is that it’s possible for a medium-sized outfit like Hudson to successfully undertake very large projects, such as the 33-story J Condo in Dumbo. The counterweight to this advantage, however, is that a small project can take just as much time, and cause just as much brain damage, as a large project. Anthony Bianco put the relatively large challenges of small projects into perspective, writing in his book about the founders of international developer Olympia & York, when he mused, “If Olympia & York could put up the tallest office tower in Canada in 18 months, why had it taken Paul and Lea Reichmann five years to remodel [their home at] 241 Strathallan Wood?”

In the comments of Week 97, bxgirl asked a very good question: Is Third + Bond really taking too long to complete? How long should it be taking, and how long do other similar projects take?

We explained in Week 76 that a new development should take two and a half to three years to complete, as a rule of thumb, from acquisition to certificate of occupancy. So the answer to your question, bxgirl, is that it’s taking a normal amount of time to build Third + Bond. But to paraphrase LeVar Burton, you don’t have to take our word for it. We did some digging in public records to see exactly how long it took for other well-known Brooklyn projects to go from acquisition to completion. Here’s what we found:

• Avalon Fort Greene was acquired by AvalonBay in January 2007, and received its TCO in November 2009. That’s about 150 weeks, which is pretty fast, especially for a high-rise. Avalon is a REIT, which means they don’t need to go out to banks for conventional construction financing – that surely saved them some time.

• Richard Meier’s On Prospect Park was acquired by the developer in April 2005, and received its TCO in November 2008, 190 weeks later.

• 14 Townhouses, the contemporary townhouse development on State Street in Boerum Hill designed by Rogers Marvel Architects, was acquired by the developer in November 2003, and received its TCOs in November 2006, after 160 weeks.

This is a small sample, but we think it’s representative. If it comes as a surprise to you that it takes three to four years to develop a building, that’s probably because the most visible phases of construction, such as the superstructure and façade, are relatively rapid compared to other construction phases and all of the pre-construction work.

At this point, we anticipate we’ll receive our first TCO in late May or June. Using acquisition as the start date, we’re on track to complete Third + Bond in about 160 weeks. True, that’s a hair outside of our three-year target, and we’d be prevaricating if we told you we hadn’t planned to be finished sooner. Stop work orders and unresponsive subcontractors have slowed down the pace at times. But overall, 160 weeks is a respectable length of time to complete a new development in Brooklyn.

What’s more, the pace of construction at Third + Bond hasn’t caused us any real pain. Our construction loan is a floating rate, and one of the happy consequences of the credit crunch has been extremely low interest rates, so our finance payments are under budget. Now that construction is nearing completion, the Brooklyn condo market is looking healthier than it has in two years. We’re much happier coming to market in the spring of 2010 than we would have been last November. Our timing may well end up working in our favor. Knock on sustainably harvested wood…

Inside Third & Bond: Weeks 1-127 [Brownstoner]

Our legal fine print: The complete offering terms are in an Offering Plan available from Sponsor. File No. CD080490. Sponsor: Hudson Third LLC, 826 Broadway, New York, NY 10003.