A conversation with Dimitry McDuffie
From professional athlete to real estate developer at Ten Brinke
A unique transition into the real estate industry
Dimitry McDuffie, project developer at Ten Brinke, had a somewhat unusual start in the real estate world. Initially, McDuffie was an up-and-coming basketball star with promising career prospects. But then the dream was shattered by a stroke of fate: a complicated knee injury forced the then 21-year-old McDuffie to pursue a new path. As a personal trainer, he then met a real estate investor who encouraged him to get involved in real estate.
“At the time [...] this topic was completely new territory for me, and it just came about from conversations [...] with this person, and then in 2016 [...] I finally got to the point where I just jumped into the shark tank, into the real estate industry […] and that was ultimately the start with an apartment building - more or less all by chance - and then I just tasted blood,” says McDuffie in an interview with the Urbyo Professional podcast.
From inspection to implementation
Before a project can even get underway, the property must first be thoroughly examined and put through its paces. According to McDuffie, location factors such as emissions and connections are of course the first thing to consider. Only then can you see whether the location is suitable at all.
Then you look at the development possibilities in terms of building law and clarify whether or not there are already development plans that need to be followed. It is also necessary to clarify exactly which asset class and which mix of uses you want to map. From this, the sales prices and rents that can be expected on the market can then be derived.
Once all the factors have been calculated and the economic viability checked, the purchase review and planning process can begin.
Nuremberg as a strong location
Although Nuremberg is not one of the top seven locations in Germany, Ten Brinke sees potential in the metropolitan region. With top brands such as Adidas, Puma and others, Nuremberg is one of the strongest economic regions in Germany.
According to McDuffie, this leads to a high demand for residential space, including upmarket new builds, as well as commercial space for companies from small to large that are growing up in the region or want to set up there.
Nevertheless, ticket size is an issue. Projects that are too large, for example a 150 million project, are seen as too high a risk in the region, as well as difficulties with asset allocation. Nuremberg is still an attractive location.
Room for improvement in cooperation with municipalities
When asked about cooperation with local authorities, McDuffie replies that the entire approval process is one of the biggest challenges and affects planning security. On the one hand, this is due to the excessive demands placed on local authorities by the large number of regulations, and on the other hand because many processes are simply very slow. It can often take several years for everything to be settled with the city council and to collect all the expert opinions, etc., during which a lot can change in terms of financing options. Investors can therefore risk of ending up with a stranded asset.
“Every investor approach is a new game”
To stay motivated, the former professional athlete sees every investor approach as a new game - you have to learn from rejections and try to develop a new game plan.
You also have to stay on the ball and show agility in order to best serve the needs of an investor through planning.
As Ten Brinke is financed almost exclusively from its own funds, the pressure on the company is fortunately not so high.
Lots of optimism despite high demands
Another topic of discussion was sustainability. Ten Brinke naturally ensures that it always complies with the various requirements and also keeps an eye on the certifications that exist in Germany with regard to sustainability in construction. McDuffie added that he also considers these measures and requirements to be sensible, as he is of the opinion that it will be possible to construct predominantly self-sufficient buildings in the future. Even if he would generally like to see more security in the industry, for example with regard to subsidies, McDuffie is optimistic that the industry will return to an upswing.
