The first time I came across Youngwoo & Associates, it was trying to win the RFP to redevelop the Kingsbridge Armory in the Bronx as a market.
(Mayor Michael Bloomberg instead tapped the Related Companies to make it a mall, which never happened.)
These days Youngwoo is only doing data centers, which is about the furthest thing from a food market I can imagine. Why the change? Because, thanks to the AI boom, that’s where the money is.
There’s also a lot of drama in data centers, which is what Youngwoo CEO Margarette Lee likes about her job. “It’s a rush,” she said Thursday at a panel discussion hosted by NYU Schack.
Data centers are controversial because they are voracious users of power and have been blamed for driving up ordinary people’s electricity bills. Opponents also accuse them of consuming a huge amount of water, although another panelist, Britt Winterer, chief development officer at Link Logistics, said that’s no longer true.
“Water’s not an issue. It’s a closed-loop system, so that’s not anything for anyone to be worried about,” he said.
Data centers are also blamed for gobbling up farmland (which uses even more water), but new technology allows for them to get by with a lot less acreage than they used to. A year ago, 500-megawatt data center projects needed 600 acres, but now can fit in 200, Lee said.
Still, New York legislators just passed a one-year moratorium on data centers.
“People are freaked out,” Winterer said. “There’s massive opposition throughout the country, and a lot of misinformation.”
While moratoriums have passed or are in the works in every state, a few towns are trying to attract data centers because they pay so much property taxes.
“Denying AI is a little like a Spurs fan thinking the Knicks are going to give up when they’re 29 down,” Winterer said. “AI is here.”
Youngwoo snagged some land for data centers at bargain prices in Alabama, but other buyers have flooded that market, and sellers have caught on.
“Now the owners of these lands are realizing that they can get a lot more money, so the price of that land is increasing,” Lee said.
What we’re thinking about: Whether or not a data center moratorium is good policy, I suspect Hochul will sign the bill because she’s running for re-election this year on an affordability agenda. So Youngwoo won’t be doing any deals in New York until further notice. However, the ban will make its data center in New Jersey more valuable by limiting local competition. Send your thoughts to eengquist@therealdeal.com.
A thing we’ve learned: L&M Development Partners chair Ron Moelis and others are pursuing a philanthropic venture to create a “housing lab,” with the goal of accelerating residential development. Governments could use some help, including from the tech sector, he noted.
“The biggest problem that I’ve seen is that the regulatory process has gotten insane,” Moelis said at the Schack event Thursday. “The bureaucracy is overcoming the industry. It’s really difficult to get things done.”
Elsewhere…
Oh, the Urbanity posted a compelling video on YouTube on “left-wing NIMBYism.”
“Right-wing NIMBYism is bad, but it’s legible,” the narrator says. “You don’t want poor people, immigrants or renters living near you? Gotcha. It’s awful that you think it’s the government’s job to segregate society through housing, but at least I know what you’re up to.”
He continues, “Left-wing NIMBYism is weirder because it claims to support affordable, inclusive cities. But by blocking market-rate housing for being ‘too expensive,’ it makes housing more expensive. You can’t say the market will only serve the rich when you create the conditions for that to be true.”
It also took a shot at the left’s pursuit of rent control, summarizing its approach to rising rents this way:
“If we can just take a hammer and smash those prices down, we’ve fixed the problem.”
Closing time
Residential: The most expensive residential sale recorded Thursday was $21 million for a 3,478-square-foot condominium unit at 15 Central Park West in Lincoln Square. Noel Berk, Elizabeth Mercedes Berk and Fran Shapiro of Engel & Volkers had the listing. The unit last sold in January 2018 for $21.5 million.
Commercial: The most expensive commercial transaction was for the retail and residential portions of 185 Broadway. The 183,214-square-foot rental portion traded for $190 million and the retail for $30 million. SL Green sold the properties to Maxim Capital Group.
New to the Market: The highest price for a residential property hitting the market was $45 million for penthouse 2003 and 2009 at 1 Central Park South. The combined unit is 10,290 square feet. It is listed by Kane Manera and Douglas J Albert at Corcoran.
Breaking Ground: The largest new building permit filed was for a proposed 65,479-square-foot, 71-unit project at 62-63 60th Place in Ridgewood. KAO-HWA LEE Architects filed the permit on behalf of developer Ami Weinstock.
— Matthew Elo
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