Russell Galbut, Managing Principal & Co-Founder, Crescent Heights

Invest: spoke with Russell Galbut, managing principal and co-founder of Crescent Heights, about Crescent Heights’ approach to urban development, mixed-use communities, and South Florida’s growth. “We want to be the best in class, and that’s what we’ve stood for for the last 50 years,” Galbut said.

How would you describe Crescent Heights’ approach to development across major U.S. markets?

Crescent Heights is a premier urban real estate firm recognized for developing high-rise, mixed-use luxury residential projects in major gateway cities in America. We like to build best-in-class, iconic buildings that are usually tall, with lots of open space around them. That is essentially what we do. We enhance the skyline in important cities around America, and we have done that for 50 years. I built our first condominium 50 years ago, and the business has grown exponentially since then.

How has the evolution of the urban landscape impacted the way you make decisions around design and development?

The urban landscape around gateway communities, whether it is South Florida, San Francisco, or Chicago, has been evolving to accommodate increasing housing demand to serve the generations to come. We look for locations that include important elements, surrounding community cultural centers of excellence, walkable, natural areas that promote well-being within our communities.

In South Florida, we have helped to create an urban walkable community around Brickell City Centre as well as Worldcenter. Worldcenter has become the center of Miami. It is in the heart of the Arts and Entertainment District with acres of parks amidst the new Signature Bridge. It is where our local cultural museums of excellence are, like The Arsht Center, the Frost Museum of Science, and the Pérez Art Museum. It is also where Biscayne Park, the Kaseya Arena, Bayside Marketplace, our train station, and PortMiami are all accessed from.

PortMiami is one of our greatest assets. Nine million people will sail out of PortMiami next year, making it one of the largest economic engines in Florida and one of the largest drivers of room nights demand in our city as well as our country.

From a historical perspective, Miami has only now built its own train station, which just happens to be in Worldcenter. Miami is only 125 years old. Cities like New York that are 300 years old show us what happens when mass transit is provided to one area. The area explodes with lots of development, which is what happened to Miami World Center. This is one of the reasons we are so excited about Miami’s future.

How do you balance residential, retail, and lifestyle elements with economic profitability outside the development itself?

Many people ask how we build a building like Forma and afford it. We spend a little bit more money on architecture and interior design, with more and better amenities than anyone. We have our own art curator on staff who is always updating the art.

More importantly, our residents count on our Crescent phone App. The app is important because it builds community. If you look at what we put into the marketplace last year with Forma, it is outperforming its comp set by 20% because people feel it is a community. They feel it is a place where they can work, play, and live an extraordinary life.

Most of our projects have a full-time chef, as well as all different types of amenities. Physical health is so important, so you will find massive gyms and healthcare and wellness services in all of our projects. That is what Forma is, and that is why it out-competes its comp set. It is the same whether you go across the nation to our Ten Thousand project in Los Angeles or to our NEMA projects in San Francisco and Chicago. We spend more and deliver more to the consumer. They live, work, and play in a place that is magical.

How important is design as a differentiator in today’s competitive real estate landscape?

Today, people are demanding more. People want more out of life, and they are entitled to more out of life. They want wellness, happiness, and comfort. When we build a community, we want to build it with a food grocer in the heart of it. We want to build it with a gym and accessible healthcare and wellness services. We want to provide all the essentials to live, work, and play in the same location. That is our objective, and we have been successful at doing that. It is because we are willing to spend more than the competition. We want to be the best in class, and that’s what we’ve stood for for the last 50 years.

What innovations are you currently exploring that could redefine city living?

When you live in a Crescent property, your phone app connects you to news, activities, and services. We have shared workspaces, but if you need a conference room for 50 people, you can reserve it in your building from your app. If you need a dinner and a boardroom for 20 people, you can reserve it on your app. We have a commercial kitchen and a chef available to cater residents’ meetings.

Furthermore, we have partnered with Bilt to give our residents the opportunity to live in any one of our buildings in other cities. If you rent an apartment in Miami and you are going to Los Angeles for a weekend, you can book a guest room in our Los Angeles building through the app if available. This is something new that has not been done before, and it has been received with great success. Our residents love our initiatives, which are all part of our never-ending search for excellence in all that we do as a company. 

How has Crescent Heights pushed the envelope in residential and mixed-use development over the years?

We have pushed the envelope over the years. The first instance was the creation of The Alexander in 1988: the hotel condominium. Everybody thinks the hotel condominium concept goes back 100 years, but it does not. We were the ones to help formulate it and make it more popular. Today, it exists in so many different versions and so many different locations. The basic concept was always smart, but it needed more developers in that space.

Some years later, we built one of the largest condominium hotels in the history of the world: Ala Moana in Hawaii. Ala Moana was about the opportunity to own a place in Hawaii and rent it out when you were not there as a hotel unit. That was before Airbnb, but the concept is the same. It gave people the opportunity to feel like they owned something, had a place to go when they visited there, and had an amenity in the world-famous Ala Moana Shopping Center that shared the same development site. That is why it sold out in five months.

We are now developing the Galleria Mall in Fort Lauderdale. We are putting up nine residential towers around the mall, reconfiguring the mall, and spending over $100 million just in the mall. It is true urbanism, and the mall will be the best amenity and development project anyone can ever have.

Wellness is baked into our projects. At Galleria, we will include paddle courts, racquetball courts, tennis courts, and all those things. But when you have a million-square-foot mall in the heart of all these buildings, it feeds on itself. People will never need to get into their cars again.

The Galleria Mall is two blocks from the ocean. It will be the heart of the community, just like Worldcenter and Brickell are in Miami. Fort Lauderdale has more parkland, more beach, and more water than either Palm Beach or Miami. The future of South Florida is going to be in and around Fort Lauderdale, and that is why we selected the Galleria Mall.

How important is collaboration between the public and private sectors in making projects like that possible?

A project of that size is constantly a work-in-progress. But the first phase should be completed in approximately 2 years. A lot depends on governance. If governance is smart, it will work to approve permits quickly. We are in the permits phase now and waiting for approvals.

The communities that get ahead are those that partner with government on permitting and processes, and with developers on building. The aim should be for quality development, not for more government processes. A city administration cannot build things on its own. Only when it works together with the private sector is it possible to create the greatest cities on Earth.

In the city of Miami, we have a new mayor, Mayor Eileen Higgins. She is incredible when it comes to permits. She is breaking down walls and insisting that the permit division use artificial intelligence to help pass and approve projects in months, not years. Her leadership in the city of Miami can work in other cities, and other cities are starting to wake up wanting to emulate Miami’s trailblazing model and new mayor.

What role does Live Local play in addressing housing, affordability, and permitting challenges?

Thank God we live in Florida because Florida created the greatest legislation of any state, and it is called Live Local. Live Local focuses on three things. The first is affordability, because so many communities have zero affordable inventory. The second is traffic, because we have so much traffic, it impacts quality of life and we need to control it. The third is speed to permit, because that is what kills a project more than anything: it is delay after delay, process after process.

Part of Live Local says that 40% of the units have to be dedicated to workforce housing. That is the best thing about Live Local. I embrace it, and I tell everyone I speak to that this is a law that makes sense. This is a law that will save Florida by providing affordability, deal with traffic in a serious way, and speed the process to permit that will not take years.

Miami Beach is the clearest example of the problem. It has fought development for years because of a few local voices that are the loudest. Our family is a sixth-generation local family, where we had more people living on Miami Beach 20 years ago than we have today, because of affordability. Affordability was the cause of this. 

Miami Beach is an island community off of Miami. If we could provide affordable housing for police officers, teachers, nurses, and doctors, we would have them on the beach, and they would not have to come into the city every morning. You cannot reach the beach between 7 or 8 in the morning, and you cannot get off the beach between 5 or 6 in the afternoon, primarily for one reason: No one who works on Miami Beach can afford to live on Miami Beach. That is one of the biggest issues Miami Beach faces today.

How do you see transportation changing the future of urban living in South Florida?

We must get cars off the road. With Waymo, Tesla, and others, this is going to happen. These driverless cars drive beautifully, and they are safer than human drivers. People won’t need a car. And we will get even more cars off the road by having affordable housing and the workforce living within our communities. Traffic will move more smoothly, and people will eat in local restaurants, shop in local stores, and will do so all by walking. This is what Live Local can help create.