Blue Onyx CEO Levi Kelman on Opportunity Zones, New Jersey and More

Blue Onyx breaks ground.

To further’s mission of democratizing knowledge about commercial real estate, we started an interview series with all kinds of CREF pros: everyone from multifamily and medical to cannabis and construction. This time we connected with Levi Kelman, the CEO of Blue Onyx Companies, a business that provides a range of commercial real estate investing, development and management services.

Here’s how the conversation went:

What are the challenges and rewards of developing in opportunity zones?

Pursuing development in opportunity zones can be notably rewarding because it offers us, as the developer, a chance to really have a positive impact on the quality of life not only for residents of our properties, but for the community-at-large. We’re a mission-driven company and believe that the leaders within the sector have a responsibility to the communities they serve. There’s no better way to act on this commitment than to focus our efforts on underserved regions where our developments stand as resources driving economic revitalization and supporting local businesses.

One of the biggest challenges attached to this kind of project is that it can often be difficult for community members to envision the positive impacts a development may have on their neighborhood, both directly and residually. For this reason, developers have a responsibility to be transparent — informing residents about their plans as part of an open and ongoing dialogue with all community stakeholders. Only then can they establish the trust and community support needed to ensure the ultimate success of a project. It’s this engagement at the community level that is the most important and satisfying part of the work we do here at Blue Onyx.

How has the pandemic impacted your development and leasing practices?

From a development perspective, COVID simply accelerated the efforts we were already making to be more innovative and adaptive in the projects we’re creating. It appears to be validating many of the decisions we’ve made previously, such as better support for distributed and at-home work. For us, adapting to the challenges posed by the pandemic was a matter of perspective, and we chose to see and emphasize the potential for net positive change versus. simply seeing it as a limiter or barrier. It also sharpened our focus on areas of the business most impacted and most crucial to future success, such as logistics and sourcing considerations, alternate and sustainable financing, and how technology can begin to deepen the relationship between developer and tenants/residents.

In regard to leasing, it has mostly impacted — and will continue to impact — our design process. While the acquisition, entitlements and construction processes all remained relatively the same, our approach to design now incorporates amenities such as coworking, differentiated unit layouts to accommodate a home office, and a focus on offering more outdoor/green spaces. We’ve also looked at technology to help bridge the property management/resident relationship, with “virtual” amenities such as fitness and cooking classes augmenting more traditional amenities impacted by safety considerations.

What are the benefits of Blue Onyx having realty, management, and development under one umbrella?

As a fully-integrated CRE development, leasing and management company, we have the benefit of end-to-end visibility on projects, which allows us to consider issues specific to operations in design and vise-versa, ultimately making us a better operator and developer, while ensuring we’re delivering the best experience for our tenants. This vertical integration is especially crucial as we pursue mission-driven developments aimed at having a significant impact on the surrounding communities — seeing a project through from the early design stages through completion necessitates the kind of open, ongoing communication that is at the heart of success for these developments.

Further, we are avid believers that tech-enablement is a key component for the future of residential real estate. With this in mind, our integrated approach has helped us form a more holistic perspective, revealing stronger opportunities for the most effective implementations of tech throughout the development, leasing and particularly the management processes. Ultimately this strategy supports the delivery of a consistently top-tier experience centered around our buildings’ residents while integrating our properties into the surrounding neighborhoods.

Are there any overlooked insights aspiring CRE investors should know about the New Jersey market?

The economic health of New York City has long supported its standing as a prime region for new construction, so we believe that there will continue to be a consistent demand for development in the New Jersey market given its proximity to the thriving metropolitan area. The difficulty here is the limited amount of green space available in New Jersey to develop from the ground up — as such, a strategic methodology for site selection is important for any developer in the region. At Blue Onyx, we focus our efforts to uniquely identify what we believe are underutilized land and undervalued properties. My advice for aspiring CRE investors would be to view development through the lens of repositioning, exploring areas that have not seen as much investment activity as the standard “Class A” communities. It is in these spaces that you can get creative and develop projects that will create enduring value for your partners, investors, employees, tenants/residents, and the surrounding community.

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