Stephen Carlidge, President, Shore Point Architecture P.A.
In an interview with Invest:, Stephen Carlidge, president of Shore Point Architecture P.A., discussed the evolving challenges and opportunities in architecture, particularly in New Jersey’s coastal regions. He highlighted regulatory hurdles, shifting financing landscapes, and the impact of rising interest rates on development. Carlidge also shared insights on market trends, historic preservation expertise, and the firm’s strategies for talent retention and future growth.
What changes and milestones have most impacted Shore Point Architecture in the past year?
In the past year, our industry has faced challenges due to difficulties in obtaining local approvals for major development projects in New Jersey. This is particularly true along the Jersey shore, where we work, requiring compliance with both local and New Jersey Department of Environmental Protection regulations, which are cumbersome. New Jersey’s home rule system creates inconsistencies in regulations across towns, making negotiations challenging. Additionally, we have two projects currently on hold due to litigation from increasingly litigious development objectors. Financing for large projects has also become difficult. Previously, major banks handled real estate development financing, but now private equity firms dominate. These firms have less real estate experience, so they are more cautious and require more hand-holding, as they are less familiar with design, construction, and development procedures compared to traditional banks.
Taking a broader look at the economy, how have ongoing changes in the market also impacted your business, if at all?
Our firm focuses on high-end luxury multifamily development, which is heavily impacted by interest rates. Five years ago, rates were near zero, but now they range from 7% to 9%, significantly affecting borrowing costs and demand. Lowering interest rates would boost mortgage availability and demand for luxury housing. Additionally, we develop affordable housing, facing two major issues: construction material costs, which surged four to five years ago and remain high despite some stabilization, and reduced federal housing subsidies under the current U.S. administration, limiting grant availability. These factors make affordable housing development in New Jersey extremely challenging, as no construction is currently affordable. New Jersey is the only northeastern state with a growing population, unlike New York, which has a declining population.
Additionally, we do much work along the oceanfront. FEMA flood hazard elevations have increased dramatically in recent years, and New Jersey is about to adopt new flood hazard regulations, which will significantly affect development along the oceanfront and all water bodies. Navigating these new, more restrictive regulations is an additional challenge we are facing.
What trends are you seeing in architecture projects or career development right now?
The office building market has collapsed; we used to do significant corporate office work, but that demand is gone. The retail market is also challenging, with minimal bricks-and-mortar retail development due to online shopping, though some niche locations persist. We’ve refocused our practice on multifamily housing, including affordable housing, as well as institutional clients, primarily governmental agencies. These agencies can still bond for funds, enabling projects like a large fire station we recently completed and a new police station in another municipality. However, brick-and-mortar retail and office buildings remain difficult. We don’t specialize in healthcare, a busy design market, though we’ve done some medical office fit-outs, but nothing more complex, as it’s not our expertise.
What key partnerships— schools, government, or private firms—have helped your business grow recently?
Well, I have a background in public school design. I spent many years running one of the largest public school design practices in the country, and I still have a few educational clients that we service. We’ve been fortunate enough to maintain relationships with public school districts and school boards. Also, the central Jersey, eastern central Jersey area has seen an enormous growth in the Jewish population, and we’ve been able to crack into that niche. We’ve done two Jewish schools and two new Jewish shuls recently, which have been an interesting new market for us. That’s largely been driven by the geographic change in our area here in Monmouth County, where we have an enormous growth in the Jewish population and their need for religious buildings, specifically for their congregations. We’ve been able to tap into that, and we pride ourselves on being nimble in that we can, even though we don’t dabble in healthcare, we can dabble in almost everything else. I think that’s been helpful for us to stay active. We also do a lot of high-end single-family residential work. That market has been strong along the Jersey Shore, both with primary residences and secondary residences. There’s an enormous desire for people to have beach houses along the shore, and we do quite a bit of that type of work. We’ve been fortunate enough to be in those niches right now geographically.
Could you tell us about your firm’s expertise in historic preservation and how it influences your work?
Our office is located in Ocean Grove, a National Historic District, with two adjacent towns also designated as such. The rules and regulations for development in these towns are much more stringent than in typical towns, requiring approval from a Historic Preservation Commission for even minor alterations to a single-family residence. We have significant expertise in navigating these approval processes, making us sought-after for such work. In Ocean Grove, we handle 80% to 90% of the design work, primarily because other architects are unfamiliar with the complex approval processes, which we can effectively manage.
What do you believe is the key differentiator for Shore Point, and what makes you stand out in comparison to other firms?
Most of our work comes from repeat clients or word-of-mouth referrals. Our strength is that we do a good job and are extremely technically competent. We are often asked to take over projects started by other architects when developers and owners realize those architects are in over their heads. We are currently handling two major projects taken over from other architects due to owner dissatisfaction. We are service-oriented and top-heavy, with most staff being senior people, unlike most firms that have few senior staff and many younger employees. This structure ensures efficiency and technical competence. We pride ourselves on our technical superiority, which is recognized in the marketplace.
How is Shore Point Architecture engaging with young professionals to retain talent for the future?
We have a difficult task recruiting younger people at the Jersey Shore, as most younger, single people prefer urban environments like Jersey City, Hoboken, New York City, or Princeton due to their cachet, while we are in suburban central Jersey. Hiring young architects, fresh out of school or with a few years’ experience, is challenging. Nearly every architect in New Jersey is looking to hire, including our office. We recently hired a young person in her third week, who approached us after leaving another firm; we didn’t poach her. We rely on word of mouth, avoiding headhunters, and listen for unhappy architects willing to talk. Hiring new people is a major challenge for all New Jersey architects, despite many students in architectural schools, including Kean, established five years ago. The road to becoming a licensed architect in the U.S. is difficult, involving an internship period and an exam. Many young architects get disillusioned quickly and work for contractors or developers for less stress and more money.
How do your main goals align with where you see the architecture industry heading in the next three to five years?
Every architect is worried about AI, which many fear will eliminate much of what we do. Programs can already produce buildings by processing building codes, zoning ordinances, and design parameters. Katerra tried this but failed, possibly ahead of its time. AI is altering how we operate; I’m using it to write letters by providing key words. AI may soon design buildings, which is scary for architects. A major opportunity is rehabbing and repurposing abandoned or underutilized buildings, especially converting them to residential use due to demand. Many big-box stores are being repurposed into sports or pickleball facilities. In New Jersey, with little developable land left, most projects involve demolishing or repurposing existing buildings. Figuring out how to do this efficiently is a significant challenge.
Specifically for Shore Point Architecture, what would you say are your top three priorities for the next few years?
We want our two projects held up by litigation to be freed up to resume. Our staff is down 20%, now at nine people, and we’d like enough volume to hire a couple more for an optimal size. We enjoy interesting oceanfront projects, including a unique mixed-use project with a hotel, two condominium buildings, and 10 single-family homes on an underground parking garage roof along the boardwalk, currently stalled by litigation. We’re hopeful it will move forward. We’re also working with a client on an affordable housing project using modular, prefabricated construction to bridge the affordability gap. While prefab has worked for prisons and low-end hotels, we’re investigating panelization in a factory for assembling buildings. Wood and light-gauge panelization may offer opportunities, unlike concrete cell stacking used in prisons, which isn’t suitable for attractive or affordable housing.
