On Thursday, September 26, 2019, the Cornell Baker Program in Real Estate had the privilege of welcoming Cornell Alumnus Scott Walsh (AAP ’99) back to campus as a speaker in the third Distinguished Speaker Series event of the Fall 2019 semester. Mr. Walsh is the Vice President of Residential Development for global real estate firm Lendlease and the Project Director for Lendlease’s landmark U.S. residential development at 277 5th Avenue, New York. He is also a member of the Real Estate Board of New York and serves on the Rent Guidelines Board.
Headquartered in Sydney, Australia, Lendlease has a global presence with projects and offices in Europe, the Americas, Australia and Asia. Since its inception in 1958, the firm has worked on several iconic projects such as the restoration of the Statue of Liberty, construction of the Sydney Opera House, creation of the National September 11 Memorial and Museum in New York, and restoration of London’s historic Tate Britain. In Mr. Walsh’s words, “Lendlease is an international company operating locally.”
Mr. Walsh began his career as an architect but his passion for real estate led him to pursue a Master of Science in Real Estate Finance and Development from New York University. After a brief but important stint with Arthur Anderson in its real estate consulting division, Mr. Walsh spent 7 years with Rockrose Development Corp., one of New York’s premier luxury real estate owners – managers – developers, and 12 years with TF Cornerstone, a New York real estate developer best known for its luxury rentals, before moving to development firm Forest City Ratner. Forest City Ratner is the development firm behind iconic buildings such as 8 Spruce Street (New York by Gehry) and the New York Times building in New York. Since joining Lendlease in 2016, Mr. Walsh has pursued developments with an eye on the “triple bottom line”. As Mr. Walsh explained, the triple bottom line approach at Lendlease combines economic, social, and environmental sustainability into its measure of performance. Over his 20 year career, Mr. Walsh has successfully led the sellout of $500 million in luxury condominiums and the leasing of over 5,000 residential units.
Giving an overview of Lendlease’s portfolio, Mr. Walsh spoke about the access and privilege that come with working for a major company. Access to capital is not restricted to local geographies. The current $19.4 billion pipeline for the U.S. market includes development projects in New York, Chicago, Boston and San Francisco. The kickoff project for this portfolio is 277 5th Avenue, New York, a development which Mr. Walsh regards as his favorite building that he has worked on thus far. Known for its construction business in the U.S. market, Lendlease sought a project that would announce its arrival on the development front. Addressing the buyer profile for the project, Mr. Walsh stated that while the project has seen international buyers, the majority of the buyers are local. He explained that even international buyers want to live like locals in New York City and hence the 277 5th Avenue will barely see vacant units.
Delving into years of experience, Mr. Walsh explained that a higher yield from a particular unit type does not mean that the entire development should only have such units. It is the responsibility of the developer to create the right mix of unit types that not only maximizes yield but also caters to different customer profiles. The developer should align the units in such a manner that is based on the demand and preferences of the customer. Designing units that can be combined/ transitioned into larger spaces can provide a particular advantage. Speaking about sales strategies, Mr. Walsh said that it is important to educate the buyer pool about what options are available in the market and what distinguishes the development that a developer is offering for sale. He said that he personally prefers a pre-sell program. Considering proptech, Mr. Walsh said that the real estate industry is ripe for disruption and innovation. Lendlease is committed to becoming future ready and is focusing its research efforts on Artificial Intelligence in construction and development planning as well as health and safety for its workers.
Another New York City based project that his team is working on is a $125 million, 42-story mixed tower to be constructed on the campus of the Union Theological Seminary near Columbia University. This development includes “air rights” – the transferable development rights a landowner holds with respect to the space above its building. These rights can be sold or transferred to another developer, as often occurs in New York City. Mr. Walsh also briefly mentioned how Lendlease is working with Google on the $15 billion development of housing, office, and retail space in the San Francisco Bay Area.
As the event approached its conclusion, Mr. Walsh imparted some career advise to the students. He said that learning how to work with different people is extremely important to a fruitful career. Managing people’s work habits and personalities is an art in and of itself and something that early career professionals should invest in learning. “People are complicated, business is not,” Mr. Walsh explained. When asked about his favorite building, Mr. Walsh said that he loved the buildings in New York City and just enjoyed the juxtaposition of the old and modern architecture. “I could walk from Tribeca to Midtown every day for the rest of my life!”
The Baker Program thanks Mr. Walsh for his time and for an engaging evening filled with candor and knowledge-sharing. We look forward to his next visit and wish him continued success.
