David Von Spreckelsen
Senior Vice President
Toll Brothers City Living
The Gowanus Canal is as far as you can get from a greenfield in this country, and the last place you’d expect to find a development by Toll Brothers, the suburban luxury home-builder better known for sprawling tracts of neo-Georgians built on fast-receding farmland.
But that’s where David Von Spreckelsen, senior vice president for the company’s City Living division, unflinchingly mapped out a 450-unit development—the first contract he signed in New York four years ago—that points to Toll Brothers’ future even as it has caused consternation back at the home office in Horsham, Pennsylvania. Company chairman Robert Toll vetoed the plan for the as-yet untitled project at 363-365 Bond Street when it was first pitched, said Von Spreckelsen, but he added, “Now it’s one of Bob’s favorite projects, because there’s so much potential.”
With nearly $1 billion in development and 1,200 units in New York, Toll Brothers is making the city a major part of its push into urban areas. Amid a longer-term trend to conquer new markets—and cushion the broader housing bust—Toll has diversified geographically (it’s in 21 states) and demographically with the launch of Toll Brothers City Living, the division that’s taken the company well beyond the ‘burbs.
“City Living really came out of Toll Brothers looking at who their customer was and where their customer was going,” said Von Spreckelsen, sitting in his notably unstuffy office near Brooklyn’s Borough Hall. “And they were seeing a trend toward people moving to more urban areas.” Young buyers and empty-nesters brought the company to Philadelphia, and from there the division hit Jersey City and Hoboken, where developments include Hudson Tea, a 1,200-unit condominium project. Success on Jersey’s waterfront whetted Toll’s appetite for the far shore of the Hudson.
Enter Von Spreckelsen, 45, a former director of real estate development for Silvercup Studios (he worked on the Queens rezoning that led to Silvercup’s Richard Rogers–designed expansion plans) who previously served at the New York City Economic Development Corporation. When he launched Toll’s local office in 2004, he figured cracking the Manhattan market would take a while. But through a broker he knew, Von Spreckelsen acquired a site near 14th Street, and soon built a 21-story glass tower designed by GreenbergFarrow. The project swiftly sold out, and this year the firm broke ground on a second tower by Perkins Eastman at 303 East 33rd Street.
But Brooklyn is where Toll has found the biggest upsides. Beyond Gowanus, the company led the wave of development along the rezoned Williamsburg waterfront with Northside Piers, a three- tower, FXFowle-designed project that is a joint venture with L&M Equity and RD Management. A few blocks away is a more modest Toll outpost, North8. (Another local project is 5th Street Lofts in Long Island City.)
New York hasn’t been without its challenges. While the hugely capitalized company rarely needs project-specific loans, cash flow can still be tight, since Toll builds suburban homes only after pocketing a down payment. “For single-family, you literally sell a house, and then you build it,” Von Spreckelsen said. “In New York City, you’re buying a piece of land, and then you’re putting up a multi-family building. It’s really building on spec.” And projects can get bogged down by the land-use process, as at Gowanus, where the team expects to finally be certified for public review in August. “When you’re still trying to get certified, there are basically no milestones at all,” said Von Spreckelsen. “That’s been a real challenge to convey back to the home office.”
Still, the company is adapting to the urban arena. In the suburbs, Toll has stakes in nearly the entire supply chain, with its own architecture, engineering, and marketing divisions. By contrast, New York’s 15-person staff outsources most services, but that will be changing. Halstead Property is the broker for projects currently in sales, for instance, but the second tower at Northside Piers will be sold in-house.
While grizzled urbanites might cringe at the thought of Toll tackling New York, the company’s reputation has already helped it grow. The brand resonates with buyers, said Von Spreckelsen: The company calls them Toll Groupies—a clan with friends or relatives who are Toll owners and eager to buy into new projects. Whether or not such loyalists will be enticed to Brooklyn’s Lavender Lake, of course, is a question taking Toll Brothers into uncharted territory.