The Rise of Integrated Luxury: Where Hospitality, Retail & Residential Converge

In this episode of the Construction Insiders podcast, host Jessica Bush speaks with Jeff Yachmetz of Dilmon, LLC and Seb Betton of Cumming Group about how luxury residential, hospitality, and retail sectors are converging into unified, high-end living environments. They examine the operational and design challenges of converting commercial buildings, such as the landmark One Wall Street, into residential spaces. Topics include zoning, structural limitations, and complex space planning requirements. The discussion also addresses how post-pandemic lifestyle changes have created an “amenities arms race,” where hospitality-branded services, coworking areas, and on-site dining are no longer considered extras, but expected features. Drawing on recent project experience, the guests emphasize the importance of starting with intentional design and how a fully integrated delivery model is helping redefine urban luxury living.

[00:00:00] Jessica Busch: This is the Construction Insiders Podcast. I’m Jessica Bush bringing you the newest trends in strategies and construction essential to anyone in the industry. 

[00:00:14] Jessica Busch: Welcome to today’s episode of the Construction Insiders Podcast. We’re gonna sit down with Seb Betten and Jeff Yachmetz, and we are gonna discuss the combining of the luxury, residential, hospitality, and retail sectors becoming a powerful one-stop shop sector. So gentlemen, welcome. Thank you for joining me today.  

[00:00:36] Jeff Yachmetz: Thank you for having us.  

[00:00:38] Jessica Busch: Um, before we jump in, for those listeners that might not be as familiar with your backgrounds and, and kind of. Why you would be here for this conversation. 

[00:00:46] Jessica Busch: Would you mind giving us a brief introduction?  

[00:00:49] Jeff Yachmetz: Sure. So, uh, I’m Jeff Yachmetz. I’m the Executive Vice President for Dillman, LLC. We’re a family office investor platform and we invest in a variety of different, uh, uh, asset types. Uh, real estate in hospitality, luxury residential, luxury retail. Uh, highest and best use. 

[00:01:11] Jessica Busch: Well, thank you for joining us.  

[00:01:13] Jeff Yachmetz: Thank you. 

[00:01:14] Seb Betton: -Uh, and I’m, uh, Seb Betton, director of Project Management at Cumming Group. Um, I’ve worked for Cumming Group for nearly nine years now. Initially, uh, in the United Kingdom in London, um, and moved over to New York around two and a half years ago. At that point I got to work with, with Jeff initially, um, working on, uh, one Wall Street and this sort of closeout and handover occupancy. 

[00:01:38] Seb Betton: And then we moved on to, uh, Printemps, which we’ll be talking about later today. Um, I, I love, uh, retail luxury hospitality, residential projects and it’s a, a real passion of mine, so I’m excited to be here.  

[00:01:52] Jessica Busch: Wonderful. Um, so as we get into this conversation, we’ve noticed, um, this huge push of commercial to residential conversions. 

[00:02:04] Jessica Busch: What makes that leap so difficult for this type of, of movement and what’s specific building characteristics, I guess, would you need in a commercial property to make it suitable for residential?  

[00:02:19] Jeff Yachmetz: Yeah, so. The residential to, uh, conversion of an office building is, um, it. Goes through sort of a, a life cycle of considerations. 

[00:02:32] Jeff Yachmetz: We have to find the right building location. Obviously we have to find the right, uh, building that has the correct, uh, layout for a residential building. Um, ceiling heights of residential buildings are always a factor, so we’re looking at, you know, uh, how high they are in a commercial building. If you really look at how commercial buildings are designed, they’re designed. 

[00:02:53] Jeff Yachmetz: Inherently different than a residential building. So making that conversion from commercial to residential, uh, you’re weighing in a variety of factors.  

[00:03:02] Jessica Busch: Okay. So not only, I, I’m assuming you’re looking at those, the characteristics of, of the bones and kinda what can be done with that commercial building, but also we’re dealing with. 

[00:03:14] Jessica Busch: Building Codes, regulations, specifically New York. I know there’s, there’s probably quite a few hurdles to jump. Um, are these helping hindering. Conversions? 

[00:03:25] Jeff Yachmetz: uh, so as of recently, the, um, city of New York has helped the conversion, uh, world actually progress. Uh, up to this point there was a very select few. 

[00:03:38] Jeff Yachmetz: Buildings that met the criteria in terms of zoning, in terms of, uh, zoning and the location that they were, um, recently, uh, the city passed new, uh, zoning code that actually expanded those criteria and opened up, uh, a whole new world of opportunity for the conversion developer.  

[00:03:57] Jessica Busch: Wow. Okay. And so. It’s not typical, I guess, to have a city really helping. 

[00:04:04] Jessica Busch: You know, I just was doing a different hospitality podcast. We were talking about, um, LA zoning, you know, pre-fire and how this. Environment here in New York sounds like it’s really helping those conversions.  

[00:04:17] Jeff Yachmetz: Uh, you know, it was really, uh, a sort of a byproduct of, uh, a few factors. One, uh, the pandemic Okay. 

[00:04:24] Jeff Yachmetz: Um, was a, a, a factor. Uh, there was a, a real push for, um, opening up more housing in the city of New York, um, as the commercial world expanded and. Class B buildings became obsolete as more Class A office buildings came on. Mm-hmm. Uh, the city was left with a gut, a glut of actual underutilized commercial buildings. 

[00:04:47] Jeff Yachmetz: The city recognized that and saw the need for housing and actually, uh, pushed legislation forward that actually helped, uh, create more housing.  

[00:04:57] Jessica Busch: So it all sounds positive, but I’m assuming there are some just kind of structural challenges if, even if the codes and regulations or permits are helping us push, what are some of those structural challenges that you’ve encountered, um, and maybe even you two Seb about what you’ve had to kind of deal with on the job? 

[00:05:13] Jeff Yachmetz: Sure. Um. Finding the right conversion is almost like finding the needle in the haystack. Okay. Uh, again, because, you know, when you design a commercial building, you basically design a commercial building from the outside in. Whereas a residential building, you start with the core from the inside out and lay out your units. 

[00:05:31] Jeff Yachmetz: So you’re dealing with, uh, a column grid that’s designed for an office makeup. You’re also dealing with a core and elevator and stair egress stair makeup that’s designed for a commercial office space. Um, so. Working those factors into making the most efficient, uh, best laid out units is one of the, uh, is one of the con factors that you work into your, your performing, your design decisions. 

[00:05:56] Jessica Busch: Okay.  

[00:05:56] Seb Betton: Yeah, and I think, I think following on from that, you’ll see with, with One Wall Street in particular, it’s the, it’s the layouts. It’s the apartments that you get from that and you gain. Um, it’s also. You know, you can look into meps within that space and, and obviously at, at one Wall Street it was, they were moved around. 

[00:06:13] Seb Betton: There was lots of new, uh, MEP systems that were put in. Mm-hmm. Um, but that’s something that obviously is a, is a challenge, uh, when you’re converting those existing office buildings to to, to residential.  

[00:06:23] Jessica Busch: And so how would you, how do you approach, I guess, that. Differently just from a space planning perspective when you’re converting versus building new. 

[00:06:33] Jeff Yachmetz: Well, at one Wall Street, we actually have 145 different layouts.  

[00:06:37] Jessica Busch: Okay.  

[00:06:37] Jeff Yachmetz: Which is not the most efficient way to lay out a building.  

[00:06:40] Jessica Busch: Holy cow.  

[00:06:41] Jeff Yachmetz: However, we recognized that when, when we started One Wall Street, we decided that we were going to gut the entire building down to structure and facade. 

[00:06:50] Jessica Busch: Okay. 

[00:06:50] Jeff Yachmetz: Everything else was brand new. So working with the existing structure, we recognized that. Not everything was gonna stack like a new ground up development.  

[00:07:00] Jessica Busch: It’s not gonna be easy.  

[00:07:01] Jeff Yachmetz: It’s not gonna be easy or cost effective.  

[00:07:03] Jessica Busch: Or cost effective. 

[00:07:04] Jeff Yachmetz: But what it did do was give us the most incredible, most, uh, efficient residential layouts possible working within the confines of that space. 

[00:07:16] Jessica Busch: Okay. It’s a little creativity thrown in there.  

[00:07:18] Jeff Yachmetz: A little creativity.  

[00:07:19] Jessica Busch: I like it. Um, so let’s talk about expectations. Today’s expectations, this integration of hospitality, retail, residential, um, it seems to be, from what I’ve been reading, really just a requirement to have a successful building. So what, how would you define today’s amenities? 

[00:07:42] Jessica Busch: Um. And kind of the, for just the luxury sector, what are those requirements, if we were to call ’em that?  

[00:07:48] Jeff Yachmetz: Sure. I mean, the, the best way that I could describe it is it’s an amenities arms race. I mean, it used to be that, um, you had the must have was a screening room, a golf simulator, maybe a little pool. 

[00:08:02] Jeff Yachmetz: Mm-hmm. Um, a gym. Today that has been elevated to another level. Um, we’re talking about hospitality branded residences, where you can have 24 hour room service. You could have maid service, you could have linen service, um, you could have access to all different types of, um, specialty, uh. Uh, programs that a hospitality brand would have that a residential building might not have. 

[00:08:29] Jeff Yachmetz: Mm-hmm. Um, we’ve elevated our amenities as well to incorporate what’s going on in the world today with the advent of the work from home. Yes, we. Leaned into a coworking space within the building, which has two board rooms, podcasting rooms where you can actually do your podcast from home. 

[00:08:49] Jessica Busch: We could’ve gone downtown. 

[00:08:50] Jeff Yachmetz: We could, we could’ve did it from Wall, wall Street coming at you live. Um, but those were, those were, um, some, the feedback that we got from the market at the time, which was we are going, we’re taking amenities to another level.  

[00:09:03] Jessica Busch: And of those amenities, what have you seen? Whether it’s at one wall or somewhere else to be the most successful new additions, um, when integrated into that setting, that residential setting? 

[00:09:16] Jeff Yachmetz: Well, definitely the hospitality branding. Okay. And hospitality services in a residential building. Um, I think that is the new bar, uh, that is everybody is striving to achieve. Uh, at one Wall Street, we have a full service restaurant. Um, social club and bar for our residents. Um, having the ability to have a sit down dinner or have a drink or have, uh, a glass of wine at happy hour in your building. 

[00:09:45] Jessica Busch: Your home. 

[00:09:46] Jeff Yachmetz: Your home. Yeah.  

[00:09:46] Jeff Yachmetz: Without having to go outside your front door. It’s something that I think a lot of people are striving for and we’re getting excellent feedback from it. That’s wonderful.  

[00:09:53] Seb Betton: I, I think, and I think that comes back to convenience and, and post pandemic, and it’s that people want a sort of one stop shop hybrid environment that they’re right. 

[00:10:03] Seb Betton: When, when they’re at home, they can, as Jeff said, they can, they can go to a fine dining restaurant, but also at one Wall Street, they can go to Whole Foods, they can go to the gym. They can go and have their hair done in the salon at, at uh, Printemps, you know, there’s, there’s, they have everything at their doorstep and it’s convenience. 

[00:10:20] Seb Betton: And I think that’s very much what, what the market’s looking at.  

[00:10:23] Jessica Busch: You combine that with residential, how do you balance those operational needs and the privacy of your residents in a situation like this?  

[00:10:33] Jeff Yachmetz: Sure. I mean, the way that we approached it was we did not look at the building as, um, two separate entities, a retail component and a residential component. 

[00:10:45] Jeff Yachmetz: We looked at as a totally integrated. Experiential living lifestyle from day one. Okay. From day one. Okay. So when we looked at the retail component, we knew that that was gonna be a very important part of the building itself and, uh, the city, within the city, if you would. Okay. Um, so we looked at how would they actually operate? 

[00:11:06] Jeff Yachmetz: How would they load, how would they, uh, unload? How would they go about their business without. Having any negative impacts on our residents. So we looked at, uh, segregated loading areas. Uh, we looked at hours of operation separation between the residential and the retail itself for noise.  

[00:11:26] Jessica Busch: So it wasn’t an afterthought?  

[00:11:28] Jeff Yachmetz: It was not an afterthought. 

[00:11:29] Jessica Busch: These were 

[00:11:29] Jeff Yachmetz: at all. It was, it was from day one integrated into the overall plan for the building, which is a total luxury lifestyle, not just luxury real estate. 

[00:11:39] Jessica Busch: There happens to be a whole Foods down the street and there happens. 

[00:11:41] Jeff Yachmetz: Exactly. Mm-hmm. 

[00:11:42] Jessica Busch: Okay. So what do you think is driving, we were talking about, you know, post pandemic. What is, what is driving this convergence? Um, and kind of this mandated now if you wanna be successful, combination of hospitality, retail, residential, from a market perspective. What, what’s. Why is this? Is it here to stay and why, what’s driving it?  

[00:12:02] Jeff Yachmetz: Sure. I mean, there’s no secret that the market is, um, has some headwinds and it has since the pandemic, it is, uh, gotten incredibly, uh, better than where it was. 

[00:12:13] Jeff Yachmetz: However we came out into this brand new world of how everyone approaches living. Mm-hmm. How are they gonna approach their home and, um. It used to be where, uh, it was a very nice finished building. It had a very nice amenity. Well, we had to take it to another level because people expected another level. 

[00:12:34] Jeff Yachmetz: And I think we saw that across the marketplace. Um, and 

[00:12:37] Jessica Busch: The competition of others. 

[00:12:38] Jeff Yachmetz: The competition correct. Was, uh, was actually responding and. And we responded in kind. And I think it’s, it’s actually ultimately benefited the end user, which you have this now luxury lifestyle mm-hmm. Where everything, and anything that you could almost imagine is at your disposal. 

[00:12:57] Jessica Busch: How do you determine what’s at your disposal? How do you determine that that right mix, um, for the location, the demographic? How are you determining. What they really want.  

[00:13:08] Jeff Yachmetz: Well, I feel like we’re at a little bit of an advantage because our investment platform, um, we have a very strong position in, uh, very high end luxury hospitality. 

[00:13:20] Jeff Yachmetz: We have a very strong position in luxury retail, so we almost kind of took all of the feedback from all of our different business units and combined it into sort of one sort of. Investment strategy at this property, taking lessons learned from all the many years that we have in each of those businesses and leveraging it, um, at this one and the market actually responded to it. 

[00:13:45] Jessica Busch: So if you don’t mind, I might pause you guys right here. Um, let’s take a brief moment. Let’s come back in a few and talk specifically about Printemps, the project expectations, and the future of luxury experiences.  

[00:14:02] Seb Betton: Sounds great.  

[00:14:03] Jessica Busch: Alright, we’ll talk soon.  

[00:14:06] Brad Ducey: Check back in the coming weeks to continue the conversation about luxury, hospitality and retail with Jessica Bush, Jeff Yachmetz and, Seb Betton and don’t forget to subscribe to get notifications when new episodes of the Construction Insiders Podcast go live.