How to Think Like a Developer

Red Awards’ Developer of the Year on approaching development like an art form—along with the importance of trusting your taste and gut instinct.

Sam Charney isn’t interested in overcomplicating things. “Real estate development is not rocket science,” he tells us—but don’t mistake that simplicity for a lack of vision. For Charney, development is equal parts responsibility and art form: a way to address the housing crisis head-on while leaving a lasting, livable imprint on the city he grew up in.

In this candid interview, the Red Awards’ Developer of the Year opens up about the market risk that keeps him up at night, how he defines long-term value, and why trusting your taste—and your gut—is non-negotiable.

What does being a developer mean to you?
To me, it means being a steward of housing. There’s a global housing crisis, and we need to build our way out of it—especially in New York. I want to create buildings that people love, that feel like home, and that will stand the test of time.

Being a developer is a lot like being a film producer. You find the script, hire the director, cast the team, and make sure everything runs smoothly. It’s about bringing a piece of land—or an existing building—back to life in a way that respects the surrounding community.

We’re not here to displace people or raise rents just for the sake of it. That’s why we support local nonprofits and build mixed-income housing, like we’re doing in Gowanus through the 421-a program. We want buildings where low-, middle-, and market-rate tenants all live together, share amenities, and send their kids to the same schools. That’s the recipe for diversity and for creating a vibrant cultural melting pot, which is what New York is, right?

When you look at a building, what signals long-term value to you that the average buyer might miss?
Rule number one in real estate is always the same: location, location, location. Signs of an emerging neighborhood—local shops, artists, young people moving in—are usually good indicators. Those early adopters tend to be the tastemakers who decide what’s cool and where demand will grow.

That said, it’s easy to get seduced by beautiful architecture in the wrong location. I’ve seen incredible buildings across the country—a 1900s post office in Chicago, a stunning prewar office building in Newark—but the reality is, if there’s no demand, beauty alone doesn’t make it a smart investment.

Take the concept of replacement cost—what it would cost to rebuild the land and structure today. Sam Zell, a legendary real estate investor, built his philosophy around buying below replacement cost. But in some markets, even if you’re getting a building for half of that, it doesn’t matter if no one wants to use it. If the location doesn’t support demand, the math just doesn’t work. So at the end of the day, it always comes back to location.

When you buy a property that needs work, how do you balance customizing it to your taste versus creating long-term investment value—or, in other words, what does value mean to you?
I’ve been lucky to be surrounded by people with great taste—from my mom hunting for hidden paintings at flea markets, to working for the Walentas family at Two Trees, who had an almost instinctive eye for design and were huge patrons of the arts. Growing up in New York, constantly exposed to art and culture, that sensibility naturally rubbed off on me.

When we’re rehabbing a building, we work with architects and designers whose aesthetics align with ours. It’s a collaborative, iterative process. They’ll present ideas—like at 99 Claremont on the Upper West Side, which has Gothic architecture—they might suggest pulling that style into the interiors with arches and other decorative elements. That’s where their genius comes in.

Sometimes they hit the mark right away. Other times, we guide them based on the market: who’s going to live here? Families? Students? What’s the right tone and palette? It’s about marrying creativity with feasibility.

Of course, we have a fiduciary duty to deliver returns—but for me, that’s not the only bottom line. I do this because it’s meaningful and fun. I get to leave a mark on the city I love. And ideally, these buildings will still be standing long after I’m gone. That’s the aspiration: to build something that lasts for generations.}

You’ve been working in real estate for over two decades now. Looking back, is there a mistake you ever made that fundamentally changed the way you develop or build today?
I’ve made mistakes on every single project—professionally and personally—and that’s part of why I love this business. It’s not an assembly line where everything is uniform. Every building, especially in New York where you’re doing urban infill, comes with unique site conditions and a million unknowns.

Early on, I bought my first property and was totally transparent with the seller—who then used that against me to squeeze more money, even though we were already under contract. More recently, I trusted a subcontractor to handle something outside their expertise, and it backfired. These are the lessons you carry forward. As a developer, your job is to mitigate risk every step of the way—from acquisition to disposition or refinance. The goal isn’t to avoid mistakes, because that’s impossible if you want to succeed. It’s to make sure those mistakes aren’t catastrophic.

I always tell people: beware of analysis paralysis. I used to read Oh, The Places You’ll Go by Dr Seuss to my kids, and there’s that section called “The Waiting Place”—where everyone’s just waiting for something to happen. That’s what too many people do in this business. But time is money, especially in real estate. You have to make decisions quickly, with the best information you have at the moment. You won’t always get it right, but if something doesn’t work, you adjust. Fire the subcontractor. Switch vendors. Rethink the design. Progress beats perfection, the key is to keep moving.

You mentioned “analysis paralysis,” and that gets me wondering: what does thinking like a developer mean when analyzing the real estate market?
I always joke that real estate development is not the most complicated business. It’s not rocket science. I’ll tell you—I personally don’t use any math higher than algebra on a daily basis. We’ve got much smarter people here in the office who can model things out in Excel with macros and build all these formulas. But me? I can do a deal on a pad of paper with a pen.

We don’t build anywhere outside New York City. So living here, growing up here, breathing this city—it’s not so different moving from Long Island City to Greenpoint, or from Bushwick to the border of Williamsburg. Of course, prices change, but construction costs are similar. You’re using the same subcontractors, the same vendors. We’ll do our market research on rental prices, on sales prices, on what you can get per square foot—and we do our diligence there. We rely on very smart people here, like Andrew and his team, to dissect that data and bring it to us.

For me, it’s not about over-analyzing the market. It’s about having a gut feeling that a place is where we want to build, that the general metrics in New York are going to work. Then, I manage the teams that collect that data and help validate that instinct.

When you think about risk in today’s market, what’s the variable that keeps you up at night?
The biggest risk in multifamily development right now is interest rates—and the uncertainty around them. We underwrite very conservatively. We don’t assume rent growth; whatever rents are today, that’s what we project three or four years out. Even though rents usually rise a few percent annually, we don’t bake that in, and our lenders appreciate that approach.

With interest rates, that’s a different story. I’m not a macroeconomist—I’m not studying the yield curve every day. There are people way smarter than me doing that work. And still, no one really knows where rates will be in three or four years. You can estimate your construction loan and permanent financing, but so much of it is out of your control. And that’s tough—especially for developers, who tend to be Type A and want to control everything. At Charney, we self-perform almost everything: property management, brokerage, general contracting. We’re fully integrated because we want to own every detail—for quality, for cost control.

But interest rates? You just can’t control them. That’s the variable that keeps me up at night.

Perhaps the most relevant question to our readers: If a friend asked whether to buy, rent, or sit tight in NYC right now, how would you advise them?
I get asked this all the time. And I’ll tell you—my answer is never based on market conditions. It’s always based on where you are in your life.

Personally, I didn’t buy my first piece of real estate to live in until I was in my 40s. And that was intentional. My family was growing, and I had no idea what it was going to look like. I always rented. Then my wife got pregnant, and we had to move into a bigger place for our daughter. Then we had our son, and had to move again.

Eventually, we said, “Okay, we’re happy now with two children—a boy and a girl. We don’t need more.” Only then did we start to figure out where we wanted to live—where we wanted to send them to school, what the right community would be to raise them.

So I always tell people: rent until you have a definitive idea of what your final station in life is going to look like—especially from a family perspective. Because the transaction costs of going in and out of real estate are so expensive. You’ve got mortgage recording tax, transfer tax, legal fees, broker fees—all of what we call “friction costs” in a deal. You need to make a lot on the sale to cover those.

And it’s not a liquid asset. If you suddenly need to move, you might have to fire-sale your apartment or home, depending on market conditions. Maybe your job moves you. Maybe something happens in your family. There are a lot of things that can change.

I always advise people to keep the flexibility of renting—until you are 100% sure that this is where you’re going to be, and that your family size isn’t changing.