How David Marasow Turns Vacant Properties Into Profitable Communities

David Marasow (00:00)
We just finished a full office build at about 12,000 square feet

in 60 days. So from start to finish with permits, inspections, brand new offices. I mean, 60 days is a quick feat. It wasn’t easy. There’s a lot of things that have to be lined up. But like I said, we try not to get stuck on the little details, try to get responses right away. One of the things we this tenant actually was moving from one space to another. They were in the same building. There was an issue with the carpets. They picked out a certain carpet, they didn’t have it in stock, they didn’t have enough quantity.

call the guy, run upstairs, take the carpet, go run upstairs, get an answer within today, know, tomorrow I need an answer. You know, a lot of times they’ll see like, okay, we sent an email to the client, we’re waiting for a response, like two weeks go by.

Kristen Knapp (00:38)
Oops.

David Marasow (00:39)
So that, I feel like if we move quickly on getting answers, getting solutions, things move very

Kristen Knapp (02:17)
co-founder of Upscale Construction, a Connecticut-based firm specializing in large-scale commercial adaptive reuse and multifamily development. Thank you so much for being here, David.

David Marasow (02:27)
Thank you for having me.

Kristen Knapp (02:28)
Awesome. Well, let’s just start beginning. What drew you into real estate in the beginning?

David Marasow (02:31)
This is it. I knew this was my first job. I got right out of school. I went right into property management and it was in New York many years ago. And this is what I enjoyed. This is how we, one thing led to another and here we are.

Kristen Knapp (02:42)
So you just fell into it right away.

David Marasow (02:44)
I don’t think most humans would pick this job out of the… Nobody goes into this on purpose.

Kristen Knapp (02:50)
Just a happy accident.

David Marasow (02:51)
I mean, like I think it’s 13 or 14 years now. So mean, I’m glad we did it, but I would never imagine choosing this, but here we are.

Kristen Knapp (02:59)
Yeah. So tell us about, so you already built and developed another company as well. Tell us about that.

David Marasow (03:06)
So I mean, I started in property management. I think we had four properties, so started managing in New York. This is many years ago, and it was a whole different ballgame back then. I think one thing led to another. I found that I enjoyed the construction part of it. We specialized in basically taking underperforming assets, finding government funds, because a lot of these properties were in lower income places.

We take government funds and help figure out how to turn these assets around physically and do it effectively. So I think we started at four properties. think when the time we left New York, I think we had like 1200 apartments, give or take. As time went on, we noticed that New York started really cracking down on business owners. It became more about fighting the city versus improving the tenants’ lives.

⁓ We left New York and never looked back. Like I said, one thing led to another. think at the time we left New York was about 1,200 apartments. We did a test run in Connecticut and New Jersey. Connecticut turned out to more landlord friendly, business friendly. Moved to Connecticut. I managed about 4,500 apartments in Connecticut. And then again, I enjoyed the construction part. I liked the technicals. I liked those types of challenges versus…

educating people how to actually, what to put down the toilet, what not to flush down the toilet. And in 2018, we launched Upscale Construction. It’s a full third party development company. do construction, development, adaptive reuse. And here we are today.

Kristen Knapp (04:31)
That’s amazing. I mean, managing 4,500 complexes, how do you juggle all of that?

David Marasow (04:37)
4,500 apartments, I think it was about 50 complexes. So we had a lot of, we had over 200 staff, 200 people. It definitely was a struggle. I felt that it wasn’t as enjoyable because you’re more babysitting than actually, you don’t get, when you’re on that level, you don’t get to see the finished product. You don’t get to feel what the, you don’t feel that you’re improving people’s lives. Yes, you feel like you’re moving a big boat.

And you don’t get that intimate feeling of like, Joey, we helped him and we helped her. have the individuals. On the construction side, I feel like it’s a lot more personal.

Every project is an undertaking. Every project is a lot more rewarding in my eyes, at least. I enjoy this part of the business a lot more. And this is where we ended up. It definitely was a lot of work. It wasn’t an easy task.

those many, sleepless nights. know, boiler goes out in the middle of the winter and then you have 200 apartments without heat. It’s a fun, it happens.

Kristen Knapp (06:21)
Yeah. And making that jump to construction, like just tell me about that. What did that look like and what kind of education did you dive into?

David Marasow (06:30)
So I always did the construction part of it. I always enjoyed the construction part of it. I think that it’s more of a responsibility and a liability is more of a challenge, right? Like we, what I specialize in was, you know, we had a group, the group bought, you know, they purchased a property, they gave us the keys. said, okay guys, you know, we have one group that, you know, one division that will essentially turn over the asset physically and one that will take care of the tenants and manage it and then really handle that part. I always gravitated towards the construction and I spent a lot of time doing it. So.

A lot of trial and error. learned a lot along the roads.

I didn’t go to special schooling for it. I did do a lot of classes, like every time there’s any classes that are easy to access online or even in person. very technical. like going to a lot of, I went to a lot of boiler trainings, different manufacturers had different courses where they offered like, for example, we had many, many properties. So you’d call a technician or company and say, let’s upgrade this boiler plant. You call five different companies, each one proposes a different brand.

early on I learned was you sort of have to have some type of brand, you know, preference. have to say, this is what I want. This is the type of system I want. This is the controls I want. So very early on, I was always asking those questions, taking those classes from different manufacturers. So then we’d call in, you know, a company, could you upgrade our boiler plant? It was more like it wasn’t just the uneducated consumers were like, okay, I want this company, this brand, this controller now give me a proposal. Now you could bid that out apples to apples because we knew we had, you know,

fifty two hundred you know boilers are and you get here’s my history this is the ones that last these are the ones that don’t want to be different headaches and and issues that pop up from it uh… this is something that we’ve uh… you know i’ve developed over time and learned uh… the hard way so

Kristen Knapp (08:13)
That’s amazing. Yeah. And it sounds like you’ve built a great team around you as well.

David Marasow (08:16)
Yeah, thank God we have a great team. Our core management, the people here are here with us at least for five years. So I mean, we’re not constantly switching people up. The people that work here, they like it here. They don’t want to leave. So I think we’re doing something right.

Kristen Knapp (08:29)
Yeah, how do you create that company culture?

David Marasow (08:31)
I think that we give a lot of people the responsibility but also the authority to make the changes on their own. So we’re not micromanaging all our staff. We’re telling them this is what we expect. Now, if you have any issues, come back to us. Yes, we’re on top of them, know, double checking and doing weekly meetings. But a lot of, almost everybody that works here has the authority to make, you know, decisions. And they feel like they may make mistakes. We’ll back them.

We all do, we’re all human, we all make mistakes. I think that’s the feeling that we give them. And one of the methods that we give them, that feeling, is by asking them what do they think? Someone brings up an issue, whether it’s a job site or whatever it is, we always ask them, okay, what do you think the solution should be? And it sort of gives somebody that may not have the correct experience, like we trust you, we may guide you a little bit better, but like,

It doesn’t have to be my way. You’re entitled to your own way. And if it works, I’m happy that it goes that way. Like, I don’t know everything. And we try to hire people that know better or more than us. But I think that creates a culture where like, you know, it’s not like I said so and therefore, you know, you have to perform. It’s more like the end game is that we build something that’s, you know, quality and the clients happy. So I’m happy to give you the authority to make the decision. I mean, we may suffer from it and we may pay a price.

And that’s why sometimes we’ll double, triple ask, you are you 100 % sure? Like, did you think about this? Did you think about that? And if it makes sense, knock yourself out.

Kristen Knapp (10:29)
Yeah, and I would imagine that not only attributes to the company culture, but that also attributes to your efficiency and the way you can move through things quickly.

David Marasow (10:38)
I think so. I tell people we all live on WhatsApp. It’s an instant messaging app that a lot of people are not familiar with, but everything goes on WhatsApp. So you’re not sending a message, an email to somebody, hey, I need an answer, and you’ll get a response in three weeks. Everything in our company is instantly. So someone’s on a job site and they have a question, they’ll send a quick video, a voice memo, and within five minutes, you’ll have an answer or a direction to go, and we move fairly quickly.

Our architects our engineers we bring everybody on whatsapp and you know obviously everything that needs to be documented gets followed up with an email like hey You know, thank you. We’re just confirming x y & z But for efficiency we find that very very quick you could get answers and if somebody doesn’t operate on that level It just they won’t and they won’t fit in our company if our architect engineers if they don’t If they’re not in that mind space like we need to move quickly. It doesn’t

We just finished a full office build at about 12,000 square feet

in 60 days. So from start to finish with permits, inspections, brand new offices. I mean, 60 days is a quick feat. It wasn’t easy. There’s a lot of things that have to be lined up. But like I said, we try not to get stuck on the little details, try to get responses right away. One of the things we this tenant actually was moving from one space to another. They were in the same building. There was an issue with the carpets. They picked out a certain carpet, they didn’t have it in stock, they didn’t have enough quantity.

call the guy, run upstairs, take the carpet, go run upstairs, get an answer within today, know, tomorrow I need an answer. You know, a lot of times they’ll see like, okay, we sent an email to the client, we’re waiting for a response, like two weeks go by.

Kristen Knapp (12:08)
Oops.

David Marasow (12:08)
So that, I feel like if we move quickly on getting answers, getting solutions, things move very

quickly.

Kristen Knapp (12:15)
Yeah, because mean, time is money in your business.

Yeah, so that’s amazing.

David Marasow (12:18)
Yes.

Kristen Knapp (12:20)
Yeah, so you say you focus on high impact projects. How would you define high impact?

David Marasow (12:25)
I think something that gives back to the community, something that makes a difference to the space. Obviously, as a contractor, we’d like to take any work that people send us, you know, and a lot of our work is relationship based. So like, yes, we have parameters that we don’t we take these jobs versus those jobs. But we do go out of our parameters sometimes to build a relationship or to enhance the relationship, you know, just to keep things flowing. So we focus on things that will make a difference to the space and to the area. So, you know,

A lot of people call us with things that are underperforming, things that other people have tried and they failed at or they didn’t perform at. So we’ll come into areas and markets where people haven’t done

yet. We have a big development site now in Middletown, Connecticut, and a building that’s been sitting for bacon 12 years. It’s vacant for 12 years. A lot of people have looked at it and tried. Those are the things that we enjoy. We really like the challenge of like.

Nobody’s been able to do this. There’s gotta be a reason or a way that we could do this more than other people. It doesn’t mean we’re the best, we’re not the fastest, we’re not, you know, but we enjoyed those projects of like, okay, how come nobody was able to do this? And was it because they didn’t ask the right questions? They didn’t know the right people? Like, what are we, what could we do that can actually make a difference in this, you know, site, this property, this city? Those are the things that we enjoy. So we try to gravitate towards those types of projects.

Kristen Knapp (13:40)
That’s amazing. Do you have an example of something that’s been really great for the community?

David Marasow (14:26)
So for example, we just finished an adaptive reuse. It was a nursing home that’s been sitting vacant for many years in South Windsor, Connecticut. We just had a ribbon cutting ceremony, I think about a month ago now. There’s I think 45 apartments. It was sitting vacant for many years. It was a beautiful city and this is a nursing home that went bust. I’m not even sure why. And essentially we came in and really changed the way that the property was used.

For example, the property was a big square and they had long hallways down the middle. And it’s a single story. So what we did was we created roadways around the entire property and then had direct access to the apartments. Instead of accessing the property just from the front, then you have to walk down these long, narrow hallways and then you end up with much smaller apartments. So we did was we created a road around the entire property and had, no common areas now.

where everybody accesses their apartment directly from outside. It’s very hard to show on a conversation. we essentially changed the method that this property is used. Yes, it took a little bit of out of the box thinking, but I think it came out a very nice product. mean, it’s 55 and older community, and I think there’s a lot of residents there. They like it. Very easy to access your apartment. You park right in front of your apartment, and you go directly inside. I think it’s a shift to the way the property was used until now.

You know, it took a little bit of out of the box thinking.

Kristen Knapp (15:41)
Yeah, I mean, I’m so fascinated with the adaptive reuse part of your business. Can you explain just kind of a breakdown of what that is for people who might not know?

David Marasow (15:48)
Okay, so that debris was essentially you have a property sitting, you know, that let’s say it used to be a, in this case was a nursing home for many, you know, many, many years. And you come in and you change the type of property that, know, the type of property that it’s going to be. So in this case, we made it apartments, but we’re doing now an office, hotel conversions. we’re doing all these different types of properties where essentially it’s been used for many, many years as one type of use, whether it’s a department store, a retail space.

or an office or an industrial building and then essentially take the property and you adapt it to something else, something that has a better use, a better product, a better financial product. think that’s essentially what it is in a nutshell.

Kristen Knapp (16:25)
Yeah, yeah. And I mean, talk about some more creative reuses you’ve done.

David Marasow (16:30)
We haven’t done that many. think we’re at the fourth or fifth one now. We’re doing right now and we have an industrial complex. It’s 35,000 square feet, single story. Essentially this was designed as like contractor base. You see they’re very cool. Everybody’s building them. In 2020 we were approached and we came up with this concept where a lot of people had to make hard decisions. Do I give up my business or do I give up my home? So we came to this complex and we said, hey, we’ll make this a live work facility.

because they’re already built out as contractor base. Essentially, you already have your main door, you have your own utilities. We essentially came up with this idea, we’ll just add another story on top of each space and upstairs will be living and downstairs will continue to be business. It like a little kitchen and a commercial, an ADA bathroom. And you could have a yoga studio downstairs, it could be good for an architect, it could be for anybody that has a small business and essentially even if they have employees,

You can’t really run a real business out of a residential neighborhood. can’t have tractor trailers pulling up here because it’s ⁓ an industrial zone. You could run a real business out of it and live upstairs. know after the 1940s when people were coming back from the war, a lot of people had this idea where they lived and worked in the same place. You had a bodega, they lived upstairs. But that concept has really gone away. And now that people are struggling for better for worse and people are seeing that.

we could condense our live and our work type of environment. A lot of people are choosing this lifestyle now. it’s something we’re in the middle of right now. We should be finished actually our first batch of four units. The next batch is 10. And like I said, it’s 35,000 square feet. So we definitely have more to go. But there are a lot of challenges along the roads. A lot of towns are not familiar or they don’t like these ideas or they’re worried that whatever you’re proposing, they affect them negatively in other ways.

you know, other developers coming with crazy ideas. So there’s definitely a lot of bumps in the road. not an easy feat, but it worked.

Kristen Knapp (18:23)
That’s amazing. love that. then so talk about like, as you’re zoning, do you have to like, is the zoning involved in that? Is that difficult and challenging?

David Marasow (18:31)
100%. People call us all the time, I want to build in this city. I would say, this city is good for zoning, that city is good for building. So you have a lot of that. Some cities, the zoning is very easy. They want development, but the building department is very tough. They really nickel and dime on every little tiny thing. Some cities, it’s vice versa. So you’re never going to have it smooth sailing. No project is 100 % bump free. The zoning definitely plays a big play in the game.

especially when you’re proposing something that may have not been done in this town before. like a lot of people are nervous that, know, rightfully so, they’re very worried about it. It definitely plays a long time in this project of the live work units that took us about a year and I want to say maybe a year and three months to get approvals just to come up with this concept and build it. So definitely there’s a lot of back and forth. Like I said, a lot of towns are nervous. You’re proposing something that…

they don’t know or they haven’t seen. So we have to bring studies and data showing other cities what they’ve done. It’s definitely a struggle. It’s not easy. But any construction project has to go through zoning approvals and every city’s got some grouchy guy sitting on the board that he just doesn’t want any development or he feels that every developer is out to get him or ruin his city. So you have that. We see that a lot.

Kristen Knapp (19:46)
Yeah, and as you guys build, you guys are both contractors and landlords. So have a pretty good, well-rounded view of everything, correct?

Yeah, talk about that. Talk about what makes your firm different.

David Marasow (19:57)
So we, like I said, I used to manage about 4,500 apartments here in the state of Connecticut. So we have a very good data on what sells, what rents, what doesn’t. And I’m still tapped into different groups and friends of mine that have a lot of apartments or a lot of real estate. So we’re constantly analyzing the numbers. Like, okay, does this make sense? What are the numbers today? Yesterday on a group, one of my groups, like…

Somebody was basically saying like they got $2,000 for a studio in this and this market. I was like, okay, great. means that it passed a different threshold. Like now we could start developing this product because I know ownership or assets in that town, but they were just informing me like, hey, check this out. We got this and this, like I said, this and this rental type. So we see that a lot. We have a lot of data and we know what sells and what doesn’t sell.

For a long time, people were building apartments without laundry in the units. So we know because we have many apartments, we know the number one thing that sells an apartment today, and it’s been like this for five years at least, is to have laundry inside the unit. And we see developers putting up buildings all over with a central laundry mat. like, that’s crazy. Nobody wants to be hauling a laundry basket down the hallway. Those days are over. So that’s just one concept where we see that our advantage, we bring a lot to the table that

a developer, he’s not a lot of developers, they build a building, they hand it off to a management company, they have no clue what the tenants are happy with, what the tenants want, like, you know, they may hire some firm to do some type of market research, but they don’t, they don’t intimately know what sells what doesn’t sell. We’re boots on the ground, we have a lot of friends in the industry here. So people call us, could you build this building here? Like, that’s the wrong market, or that’s this and this challenge. And people appreciate that, like, we know they appreciate that we’ll tell them,

don’t build or build with this, don’t put ceiling fans in all your apartments. Like we had a, we’re middle of a development now that, you know, the landlord approach as he says, okay, he has this crazy dream. He’s building these huge units. I mean like 1200 square feet apartments. I said, look great. You know, you’re to have all these challenges with cost. And I look at the floor layouts and like you have fans in every bedroom. said, okay, you’re going to build, let’s say it’s 250 apartments. I said, that’s 300, 400 ceiling fans. You know how many calls you’re to get back that a ceiling fan is shaking?

I mean, is that something you want to deal with? It’s like, it’s an amenity. I’m like, it’s amenity that’s going to cost you so much in the long run. What we do often is we put the boxes for the ceiling fan. That means that the special boxes that have an extra support. And then if the tenant wants to put a ceiling fan, it’s on them. So we do that often. It’s only another dollar, know, a dollar 50 for a box, but you’re not responsible for the ceiling fans.

Kristen Knapp (22:31)
That’s really interesting. Yeah, you guys have a really good view of everything and that kind of plays into your efficiency as well.

David Marasow (22:36)
I think that’s why a lot of people like us and they keep calling us because they know that we’ll tell them don’t do this, don’t do that. know, and some people, it’s like a lot of developers, it’s like a dream of theirs. Like they build this building so they can walk around and tell all their friends, you know, I built this beautiful building. And some of them do a really good job. Some of them don’t really know what they’re doing. So we’re there to hold their hand, to show them, know, Hey, great. We love the concept. We love the idea. Just make these five changes and you’ll really take it over to it.

Kristen Knapp (23:01)
Yeah. Amazing. So what’s next with your business?

David Marasow (23:04)
I think just growing, seeing where this takes us, think the tariffs are going to play a lot into this industry and people are sitting on the sidelines. Like I said, it takes a lot of time to develop a set of plans to really develop development. So people are moving that forward. A lot of people are sitting on the sidelines or developing plans, but they’re not necessarily actually building anything or getting ready to build. People are just waiting to see how this plays out. I think that we’ll see a lot of new constructions that are coming to market once

the playing field plays out a little bit. Once we see, is this type of thing here to stay? it really, is it leaving? I think once that really levels itself out, I think that we’re gonna be swamped. They won’t be able to keep up. I know there’s a lot of people that they have plans, they have ideas, they have pieces of land, or they have properties. They’re just waiting right now. So that’s definitely gonna be a challenge in the future, like building everything that everybody wants to build.

Kristen Knapp (23:55)
Right? And where can people find you?

David Marasow (23:58)
Upscalect.com, Upscalect.com, we’re on all the social media platforms, wherever you are.

Kristen Knapp (24:04)
Awesome. Well, thank you so much for being here today, David. I think people learned a lot about your business and also adaptive reuses and all that.

David Marasow (24:11)
All right, thank you so much for having me.

Kristen Knapp (24:12)
Awesome. Everybody, thank you so much for listening and we’ll see you back next time. Bye.