This month, ULI Philadelphia sat down Carl Dranoff, president and co-founder of Dranoff Properties. For over three decades, Carl has been a trailblazer in region’s real estate by spearheading residential and mixed use projects which have revitalized and enhanced the city’s landscape. Carl is a Gold sponsor of ULI’s annual Spring Meeting and will be hosting a product council as well as leading a mobile tour. As if that weren’t enough, Carl and his daughter Julia Gutstadt, Chief Investment Officer at Dranoff, will be speaking at March 14th’s WLI luncheon about the importance of trust and teamwork in real estate.
How did you get your start in real estate?
I’ve always had a passion for building, starting from childhood when my favorite toys were Lincoln Logs and erector sets. When I started Dranoff I saw a huge opportunity; there was no place to live in a place where so many people worked. We have continued to identify opportunities wherever we go – in that sense we are pioneers. As an example, we went to Camden when no one else would touch it, and converted the RCA Victor building into market-rate apartments. Fast forward to today, and you have the 76ers moving their practice facility and offices there, along with increased office and residential development. I predict Camden will be next Hoboken.
How would you describe your approach to development?
Contrarian. I had no money when I started out; my father was a dry cleaner and my mother was a homemaker. To carve out my destiny, I needed to zig when others were zagging. That’s why I got into the rehab industry early on in my career – people really weren’t doing that type of work back when I started. Philadelphia was dying and people were flocking to the suburbs. By going against the grain, I was really able to make my mark. That’s who I am: someone who is always trying to stay ahead of the curve and be a first mover.
Dranoff’s first project is an excellent example of that mentality. In 1997 I took a building – what is now Locust on the Park – and made an empty industrial facility at the edge of Center City into vibrant lofts. Interestingly, the space was a former bible sales company; I like to say we started Dranoff in a very holy place!
Where is the next big area of opportunity?
Avenue of the Arts. The city spent all this money on theatres and entertainment, but there was nowhere to live nearby. I see this as the next “Michigan Avenue,” which is where I got the idea for a mixed-use Symphony House which would include theatre, high end restaurants, and residential.
You been a tremendous booster for the Avenue of the Arts. Why is this location so important? It’s the only place in Philly where every tourist will come to because you can go to shows, have great entertainment, and dine at top restaurants. Plus people want to live there. It’s like the Philly’s version of Broadway, Park Avenue, and Lincoln Center. When it reaches its full potential it will elevate the entire city to a whole new level.
Tell us a little about one of your latest projects, the SLS LUX Philadelphia Hotel and Residences.
This project, which will have an iconic presence in Philadelphia’s skyline, will be a 45 story, 152 room luxury hotel with condos. We anticipate breaking ground this summer, with a timeline of about 30 months for its completion. The site is the former home of Gamble and Huff’s Philadelphia’s International Records, so we’ve made it our goal to incorporate its rich history into the lobby. Our city is proud of its musical heritage and we want to showcase this by making it part of the project. The hotel’s ballroom will be the new social center of the city by featuring outdoor terraces, amazing food and drink and breathtaking views of the Kimmel Center and downtown Philadelphia.
To bring the glam and the bling we’ve brought on SBE as a partner, whose newest property is South Beach’s hottest hotel, SLS South Beach. We’re also working with superb luxury designer Phillippe Stark, and internationally renowned architecture firm, Kohn Pedersen Fox Associated (KPF) on this project.
Speaking of music, what do you listen to get inspired?
My favorite song is Love Train by Gamble and Huff. I could listen to it 20-25 times in a row. It was meant to be!
This year marks the first time in 20 years the spring meeting will be in Philadelphia. How has the city evolved since then?
Anyone in attendance 20 years ago will have their head spinning. We’ve had a tremendous amount of residential growth which, in turn, has led to a huge increase in pedestrian activity on the street. The skyline and scenery is completely different: new convention center, upgraded Reading Terminal, terrific shopping, revitalized parks, including the current Schuylkill River development. Not to mention University City’s rapid developments, which is why it’s now a connector to Center City, not a divider. If you look at what we’ve done over the past 20 years we’re practically a different city.
You work with your daughter, Julia Gutstadt, at Dranoff. What is it like working so closely with family?
Like me, Julia has a civil engineering degree and MBA. Whether we’re speaking together or identifying the next property, she provides leadership, intelligence, and energy. She is Gen Y – she sees things differently than I do which keeps our products fresh and allows us to continue to see new opportunities.
Overall, the best part of working with family is complete trust. No one has to walk on eggshells – you get the unvarnished truth on everything. I would say that our entire company is family, since we are tight knit and privately held which allows us to make team investments. We are our own critics and are risking our own money.
At the end of the day, we are all about our reputation. Since 1997, our team has worked together as a family, which is reflected in our brand’s success. When you work with Dranoff you know that you’re getting not only incredible service and management, but trust, transparency, and accountability.