It all started with a cold call.
The daughter of two real estate brokers, Melissa Burch was surrounded by industry chatter in her early years and captivated by the “why” behind the fast-paced development of her hometown, Columbus, Ohio. With an interest in public-private partnerships, she took a chance and cold called Bruce Ratner in 2002 — a call that would lead to 13 years at Forest City and her overseeing the firm’s 22-acre Atlantic Yards project in Brooklyn (now called Pacific Park).
In 2015, she moved to Lendlease to lead its New York development business. With Burch at the helm, Lendlease has more than $1.6 billion currently under development — and the pandemic hasn’t stymied its ongoing activity.
In the past five months alone, Burch sealed the $350 million debt and equity financing for — and started construction on — 100 Claremont Avenue, Lendlease’s 354,000-square-foot, mixed-use development in Morningside Heights that sits atop the Union Theological Seminary; and closed the $111 million acquisition of One Java Street on the Brooklyn waterfront.
Burch describes development as a sprint as well as a marathon, and she’s in this race to win.
Commercial Observer: Where did you grow up?
Melissa Burch: I’m a Columbus, Ohio, girl from the Buckeye State. We have deep Ohio roots on my father’s side, but my mother actually grew up in the Dominican Republic. Her family immigrated here, and, eventually, found their way to Columbus. My mother and father were high school classmates, but not high school sweethearts. That didn’t happen until college [laughs].
How did you get your real estate start?
My parents are residential brokers, but they also run a small business together that is focused on audio and video duplication and production. So, very different types of businesses.
But I grew up around the transacting of real estate, and that was complemented nicely by another major influence, which was the rapid development of Columbus as I was growing up. It was — and is — a city undergoing incredible growth. It’s the capital of Ohio and home to Ohio State University, which is a huge economic engine for the city and has attracted a lot of other businesses.
I was always very interested in not only what was happening in Columbus, but why; why was it developing and what were the factors behind it? A lot of times it had to do with politics and civic objectives, and I’ve always been very interested in politics and government. It’s what I went on to study when I went to college, although I was ultimately drawn to real estate.
What was the pull for you?
I felt like real estate was right at the intersection of city building and civic development. That’s what got me turned on to real estate development, which I came to undertake as an intern between my first and second years at Harvard Business School.
I secured an internship with Bruce Ratner in 2002; this was way back before the Atlantic Yards project, so Bruce had a bit of a lower profile. I was specifically interested in public-private partnerships, and his real estate business was focused on those. Now, you see quite a number of developers that have been able to undertake projects of scale in the public-private arena, but, at the time, Bruce was one of the first.
Isn’t Bruce Ratner also an Ohioan?
He is. All of the Ratners are from Cleveland and I’m from Columbus. And he went to Harvard College, which is where I went to college. When I was trying to break my way into real estate, I didn’t know anyone in New York City real estate, and there was a part of me that thought, “Huh, I wonder if it’s enough that I grew up in Ohio, he grew up in Ohio. He went to Harvard; I went to Harvard. Would that be enough to get me noticed?” And, through a cold call, I was able to secure an internship. I spent the next 13 years of my career there.
Moving to New York City coupled with the Forest City internship must have been a really interesting time in your life.
I had always wanted to live and work in New York City. When I was a little girl growing up in Ohio, people would ask me, “What do you want to be when you grow up?” and I would say, “a New Yorker.”
I had always been drawn to New York, despite having never stepped foot in the city until I was 16 years old. I attended the Democratic National Convention, which was being held in New York City in 1992 at Madison Square Garden. I knew instantaneously that all of my dreams would need to come true, because I was completely dead set on moving to New York and putting down roots here.
Have you read “Here is New York” by E.B. White? He writes about the passion of settlers who come to New York in search of something.
I have! Whenever I’m having a down moment about the city, I read it. I do feel like the city is almost like a person. It’s something that is unto itself. One of the reasons I love New York is that there’s not any one person that New York is for; it’s all of these different people that give it a texture and a complexity. That’s why it’s such a resilient city.
How was your experience of working through this pandemic?
We’ve had a number of key project milestones during this time, including our 100 Claremont project. One of the things I love about development is that it’s this confluence of a role; you have to act with such purpose and intensity every day, but projects take five years to happen. So, it’s a simultaneous sprint and a marathon. And to have this project come to a head, at a time of such dramatic and unprecedented change, was an incredible challenge and circumstance to work through.
To be specific about that challenge, the project is a mixed-use development in Morningside Heights, Manhattan. It’s a fascinating project that has a 50,000-square-foot academic podium at the base of the building, which consists of faculty housing, new academic spaces and office spaces for the Union Theological Seminary. And, then, the top 30 floors on top of that are residential condominiums.
So, you have this incredible, vertical, mixed-use building that has been 30 years in the making, with all of the work of design and pre-development and bidding and buying, getting the project to a point where it can start construction and launch into the next phase of reality.
On June 22, we simultaneously closed on the purchase of the air rights from Union Theological Seminary, $250 million of construction debt, $100 million of equity financing, and we commenced construction on a 350,000-square-foot project.
There were definitely several dark months in the depths of the New York lockdown, when COVID was on the verge of overwhelming the city. Waiting out those key months, and methodically addressing the various concerns and new risk factors that had emerged due to COVID, and addressing those one-by-one, really allowed us to emerge from the closing in a position of strength, which is where we find ourselves today.
How did the project come about?
The Union Theological Seminary sits on a beautiful swath of land up in Morningside Heights, just across from Riverside Church. The campus — which was built over 100 years ago and is beautiful, gothic, collegiate-style architecture — has now come to the point where the campus needed to be renewed. Its infrastructure was failing, it was not ADA-accessible, it needed key upgrades around wireless and connectivity, and its campus needed to be reinvested in to pave the way for the next hundred years of growth for the university.
They had undertaken a whole review of their real estate options, and there had been many iterations of this. In the most recent iteration, the new president of the university, a woman named Serene Jones, helped drive a great outcome where they were able to partner with L&M Development Partners. L&M came to Lendlease in 2016, and we started to talk about forming a development joint venture with them. And that’s what’s been happening over the last four years on this site: taking an idea for a development partnership and consummating that, and then allowing the project the opportunity to develop its vision and translate into a physical reality that’s starting to emerge.
You also acquired One Java Street in Brooklyn last month with plans for an 800-unit rental property. You’ve been busy!
Well, I’d been working on this site for around 10 months, so it had been brewing. We’ve been looking at a series of waterfront sites in Brooklyn and Queens since I launched the business for Lendlease five years ago. We’ve actually redeveloped quite a number of waterfront sites globally, in Sydney, Australia, and then domestically, in East Boston, as well as in Chicago. So, the waterfront was always something that I thought would be a great fit from an aspirational standpoint.
After developing in Brooklyn with Forest City, I always thought that a portion of this business would be Brooklyn-based, but the land values have really run up over the last five years, and there just really wasn’t the right entry point from a land perspective.
And this site is not just any site. Why I had my eyes on it is that it’s connected to the water ferry and to the India Street pier, so it’s connected to mass transit in a way that no other site in Greenpoint is. In thinking about the ways in which the city is investing in mass transit networks, the water ferry is a huge part of that story in really activating the waterfront of the East River, both on the Manhattan and the Brooklyn and Queens sides.
Any complexities in the deal closing?
This one moved pretty quickly. It’s a site that was previously being developed by another development group [JZ Capital Partners and RedSky Capital], which had to sell for reasons that have been reported — part of the partnership needed to liquidate. When we first started talking about the opportunity to come into the site back in January, it was around a different value and deal structure than where we ended up, because, between now and then, a pandemic has shaped the way we’re thinking about risk and opportunity.
So, the deal was repriced and structured, so Lendlease and our partner, Aware Super, have an 80 percent interest in the development, and then, a small portion of the previous owner group is retaining 20 percent. Through all of that, what was really clear is that there are very few firms that have existing capital partnerships in place that can transact in all-cash. And so, that really worked to our strengths and highlighted our ability to unlock a site like this, when there are uncertainties in the world and when capital is not willing to take a risk.
Melissa Burch. Credit: Sasha Maslov/ For Commercial Observer
What is the one thing that you personally miss the most about normal life pre-COVID?
I miss work events. I can’t believe I’m saying that but it’s true. The real estate community of New York loves coming together to hash out ideas, debate or discuss things, and to celebrate things. I really look forward to the opportunity to do that again.
I do think there’s an interesting opportunity for New York, here, in how it emerges from this crisis, and I think the private sector and public sector need to come into partnership. New York is resilient, but it also cannot be complacent; I do not think we can be a creative place that is complacent about its recovery.
I’ve been very interested in proposals that have challenged preconceived notions in the city around cars, and how cars are overwhelming the street life and crowding out other uses. There was a proposal over the summer by Vishaan Chakrabarti, who is a former Bloomberg planning official, and he now runs an architecture practice. It calls into question the idea of thinking about our city streets not as the domain of cars, but as the domain of pedestrians, and how New York could emerge as a better version of itself and improve the quality of life, which I think is essential for competitiveness.
A bigger spotlight has been placed on the lack of diversity and inclusion in commercial real estate this year. In your eyes, where do we stand today, in terms of, implementing real change in the industry?
We’re at the front-end of a growing movement, but we need to see more women and people of color in this industry. I do not believe that we are “mission accomplished” by any stretch of the imagination. I think it’s fantastic that there are finally women in leadership, authority and prominence at the helm of many development companies — but having just one [woman] was never the point.
I’ve been really excited about the conversation that has been unfolding within Lendlease and with other organizations that I’m a part of, like [the Real Estate Board of New York] and [Urban Land Institute]. Thinking about systemic change means that you need a strategy at every single part of the funnel, so there is more of the continuous nature of thinking about ongoing types of mentoring and engagement across the lifecycle.
I’m a huge fan and believer in internships. As I said, I got my first internship at Forest City through a cold call, so there are examples of people without connections to the industry being able to forge a path, but it definitely requires tenacity, persistence, curiosity and fortitude. We need to make it easier for people to get their first steps in, in particular, for women and people of color.
But why am I not in total distress about this? I guess it’s because I feel like there are leading firms that want to be at the forefront of this conversation, and there’s a little bit of me that feels like the ones that are resisting this change and supporting this type of inclusiveness are going to fall by the wayside.
We’re seeing an unprecedented disruption within our markets, and the one thing that is absolutely clear to me is, when you’re trying to deal with an unprecedented situation, doing it with conventional thinking is not going to be the way to get there. So, we need new voices in this conversation.
And I get excited about moments like this, because I think there are entry points for women, people of color, and diverse viewpoints. There is no way anyone is going to navigate out of this crisis by only thinking about tradition and what has been done in the past.
What’s a good place for someone to start today, absent ties to the industry?
A great way of getting connected is to be a part of a community or an organization. So, I would take advantage of organizations like you ULI or the mentoring programs at WX [New York Women Executives in Real Estate] and get embedded in a community that is going to help support, educate and inspire.
This is a long game; your simplest development deal from start to finish is five years, and those are easy ones. And, who got into this business to do the easy ones, right? We all want to have impact.
So, this is about nurturing, fostering, and creating your community. When I was just starting out, I was very focused on, “How do I meet the head of this company?” But there was a real inflection point for me in my early 30s, where I started to really realize that the key is in investing in your peers. Your peers, the people that you have grown up with in this business, are now the people that are at the helm of projects and that are at the helm of major decisions impacting real estate. So, you need to invest early in your peer group.
I actually think about mentoring, not so much vertically as horizontally. And that’s because the best advice will come from your peer group that’s going through this journey, and all of their experiences will be different. Thinking about yourself as a part of a cohort is important to keeping a really intact community around you and supporting each other over the lifetime of a career.
Who are your mentors?
Over the course of my life, I’ve been blessed with many mentors and role models. My first major role model that shaped the entire early years of my life was the head of the all-girls school that I attended for 13 years in Columbus, Ohio. To this day, I am in touch with her ,and she has been the leading voice and inspiration for me around issues of leadership and growth.
Early mentors within real estate were, absolutely, found in my time at Forest City. There’s no doubt that Bruce Ratner and MaryAnne Gilmartin loomed large in inspiring me.
One of the amazing things about Forest City is that there is a very robust alumni club, and you realize there are Forest City people all over New York City real estate. There’s something about the experience that we had at Forest City that has kept us very close and connected. We do deals together, we support each other, we call each other, we challenge each other, and we absolutely compete against each other. It’s really a testament to what a special place Forest City was, that it turned out and inspired a whole next generation of developers across New York.