Looking Forward to Monday Morning
A series of essays on business, architecture, and the business of architecture.
Creating our Own Bear Market
by Daniel Frisch
Posted February 25th, 2019

2018 was an odd year, something of a black swan for our small (mid-size) firm. We were busy all year, and our team worked well, exceptionally so in many regards. But when all of the numbers were in, it was the first year in many that the firm revenue did not grow. For me, as the firm’s lone principal, the year-end analysis of the numbers warranted examination and explanation.

We know why expenses increase – rents go up, payroll and insurance do as well. More significantly, why does revenue drop? In our case, we can attribute top-line decreases to four specific projects and the challenges they presented.

The first project was an ongoing penthouse loft renovation in TriBeCa. The building’s management and building’s architect inexplicably and inappropriately disapproved the first full set of submitted plans – after three or four reviews asking for additional details and information. This nearly unprecedented rejection required DFA to discard nine months of work product and start anew. The revised plans were eventually approved – after multiple re-submissions – and the apartment that is soon to finish will be a stunner. Even when overcome, doing work twice or three times over is an undesirable and expensive endeavor.

The second Project was a high-end pre-war apartment renovation on the Upper East Side – pretty much our bread and butter. The clients fit well within our ‘friends and family’ class, and the building management and reviewing architect posed no unusual difficulty. For the first time in many years, we had a ‘bad’ contractor. Typically, our construction partners make everyone look good, but not so in this case. Poor construction management brought schedule delays, eventually leading to deficient work. The six-month project took a year, and corrective work has continued for an additional year. The time and emotional resources DFA committed to the project were unprecedented, and the impact on the firm was felt by all.

Project three was another ‘friends and family’ project. The project scope was the combination of units and wholesale renovation a triplex penthouse apartment on the edge of SoHo. The six-story landmarked building became a co-op in the eighties, and in 2007, one of the original families who occupied the top floor and penthouse had become tired of small building life – everything from building politics and management to a self-run freight elevator that was too often broken – and decided to move to a full-service co-op in the West Village. DFA designed their new apartment and over the course of the project became friends with the family. Ten years later, the prodigal son was living in the old loft, had recently married and the couple were expecting their first child. The apartment below them became available and they jumped at the chance to expand, purchasing the apartment and hiring DFA to design their new home. Since the plan was a wholesale (gut) combination and renovation of the apartments, the decision was made by the small building’s board to simultaneously undertake facade and roof repairs. As might have been expected, the conditions of the landmark facade as well as the roof were worse than anticipated. In deference to the possibility of leaks caused by the exterior work, the six-month interior renovation project was significantly delayed and became a fifteen-month affair, taxing the patience and resources of our client, as well as those of the firm.

The fourth project is an ongoing townhouse reconstruction in Brooklyn. The project started as renovation of an 1860’s brownstone damaged by fire. The long-time owner had not anticipated undertaking a wholesale renovation, but was left little choice given the extent of the damage. The initial proposition, once determined, was straightforward. Excavate the cellar, reconstruct the parlor and second floor with period detailing, and create a rental unit of modest sensibility at the third floor, while installing all new plumbing, electric and mechanical systems. While the program was simple, the execution has been anything but. The project suffered setbacks from day one, including a septuagenarian DOB examiner, LPC intervention, the uncovering of structural repairs beyond what had been damaged by fire. Complicating matters further, the owner of the house has both an extraordinary attachment to the home’s historical significance, as well as a desire to create anew, and the project has evolved into a design-build effort – with all decisions open for exploration and revision.

Taken together, these four overlapping projects should have had more of a consequential impact on our small (mid-size) firm than they did. The ability of our team to dig in and to navigate these choppy waters with enthusiasm and compassion for our clients’ projects and lives makes me tremendously proud; more so I believe than the victory laps we so regularly enjoy. Looking back, I am certain 2018 will be remembered as a year of perseverance and growth. Yes, …And, I sure am looking forward to 2019.