That’s because a difficult entitlement process and high land costs makes it hard for developers to find greenfield sites in the close-in Philadelphia suburbs. But that’s not the type of ground that O’Neill wants anyway. Instead, he pursues blighted land, persuading development-wary neighborhoods that a multifamily project is far better than an abandoned factory site. “We develop a vision, go into the municipality, have some neighborhood meetings, try to get them to understand our vision, then we start writing the zoning ordinances from scratch,” says Michael T. Trio, senior vice president and director of land planning for O’Neill Properties Group. “We cover the bases and the NIMBY issue is mitigated.”
Down By the River Riverview Landing is O’Neill’s first shot at the multifamily market. Sixty-eight of the 310 units in the first phase are now open. The pools, Jacuzzi, gym, and clubhouse (complete with a fireplace) all look out over the river. The amenities are designed with two demographics in mind: young professionals and empty-nesters. “We’re taking this brownfield site and establishing it as a place where the BMW chicks and active adults want to live,” O’Neill says.
The units at Riverview Landing have nice carpet, washers and dryers, and high ceilings but aren’t necessrily spectacular inside. “We don’t need to do granite countertops to compete,” the developer says. “Our sites are so compelling.”
In 2005, O’Neill expects to open 1,399 units. As his quantity of apartments improves, he wants the target market to go up as well. He’s already started to dabble in high-end condos in the Philadelphia suburbs, and he’s recruited some famous firms to help out. In the Carnegie Abbey and Corinthian, Joseph Newkirk, a Ralph Lauren design consultant, is designing the sales models and the lobbies. O’Neill says he wants his condos to be known for “first-class everything.”
The price tag for his condos, which is almost $2 million for a penthouse in the Corinthian, also is first class, especially considering they aren’t even in Philadelphia’s popular Center City. “He has picked great areas to build,” says Loraine Rahm, senior advisor for Sperry Van Ness, who has been involved in the Philadelphia multifamily market for more than 20 years. “But they’re not bringing the same for-sale prices or rental rates as Center City.”
It will be a challenge for O’Neill, who must persuade people, especially active adults, to pay downtown prices for suburban luxury. “There has been significant movement from the suburbs into the Center City area,” Kline says. “There’s no question that people in their 40s, 50s, and 60s are coming back into the city in droves.”
But O’Neill is betting that quality product can keep these buyers and renters in the suburbs. Ridge MacLaren, senior investment director for multifamily in the Philadelphia office of Marcus & Millichap, thinks this bet will pay off. “The empty-nesters are moving back into the city because new product isn’t being developed in the suburbs,” he says. “Maybe some people will now see that they don’t have to go to Center City to get those kinds of amenities.”
While building and managing a new product is risky, those who’ve been watching O’Neill in business for almost the past 25 years wouldn’t bet against him.
“He approaches everything with zeal,” says Jonathan Spergel, an attorney at the environmental law firm of Manko, Gold, Katcher & Fox who has worked with O’Neill on brownfield cleanups. “If he’s not the best at it when he starts, by golly, he will be the best at when he’s done. I have no doubt he’s going to succeed in redevelopment for residential use.”
O’Neill Properties Group at a Glance
- What: A developer of brownfields and infill sites in the Northeast that is focused on luxury condos, apartments, luxury resort sporting clubs, Class A office space, and lifestyle retail centers
- Founded: 1984
- Headquarters: King of Prussia, Pa
- Geographic Coverage: Northeast, including Boston and Philadelphia suburbs, New Jersey, and Newport, R.I.
- Revenue: Initiated more than $500 million in new projects and added $2 billion of backlogs in 2004
- Units: 793 projected to be completed in 2005; more than 10,000 in the pipeline
- Value of Land in Development Pipeline: More than $4 billion
- Employees: 100
Management Initiation Conventional wisdom would say that if you’re getting into the apartment business (after years in office ownership and management) and your core business is remediating brown-fields and developing those sites, you may want to look outside for a third-party manager in the customer service-intensive apartment market. But Brian O’Neill, founder and chairman of O’Neill Properties in King of Prussia, Pa., doesn’t subscribe to this theory.
