Two decades after completing a small condominium project in Brooklyn, the Fallon Company has not taken on any new developments in New York City. The Boston-based developer, led by CEO Michael Fallon, has completed over $5 billion in projects but continues to focus its efforts outside of New York.
Fallon emphasized that his decision is not due to any aversion to New York. “New York is such a fabulous place,” he said, calling it the social, cultural and business mecca of the United States. “It’s such a deep pool of opportunity.”
Despite these sentiments, the company sees more potential in markets like Nashville and Charlotte, as well as Boston. “Why are we focused on the markets we’re focused on? Scale and access to capital,” Fallon explained during an interview with The Real Deal.
He cited several reasons for preferring cities like Nashville and Charlotte: reliable infrastructure, sound financial standing, cooperative stakeholders, favorable political climates for business and pleasant weather. Both cities also have National Football League teams.
Most of the company’s $6 billion development pipeline is concentrated in the Southeast. According to Fallon, this region presents fewer concerns about local policies aimed at limiting profit-driven housing development—a topic that arose as he prepared for his interview by researching Zohran Mamdani’s positions.
In one campaign video from Mamdani, the politician states: “If we want to end the housing crisis, the solution has to be moving toward the full de-commodification of housing.”
Fallon disagrees with this approach. He believes that allowing large-scale for-profit development is necessary to address or prevent housing shortages.
The company typically builds affordable units using Low Income Housing Tax Credits and partnerships with insurers such as Mass Mutual and Prudential. It also works with lenders including Fortress Investment Group; Santander, Bank OZK, Wells Fargo and Key Bank.
The next phase of Fallon’s Nashville project will consist entirely of affordable units—over 300 apartments—as well as retail space and a child care center. Future stages will add another 400 income-restricted residences. This $3 billion master-planned effort is scheduled to begin construction next year.
In Charlotte, Fallon is collaborating with the local housing authority on a mixed-use project expected to include up to 975 homes (20 percent affordable), office space totaling 405,000 square feet, 36,000 square feet for retail use and amenities plus a hotel with 180 rooms.
The company’s absence from New York predates recent political changes there; it prefers working where it understands regulatory frameworks and maintains established relationships. “It’s about de-risking that whole spectrum of development as much as you can,” Fallon said. “In New York, it’s very complex and challenging to build.”
Fallon Company has maintained a presence in Charlotte since 2016, Raleigh since 2018 and Nashville since 2019.
“Nashville in particular is very focused on ‘how do we make this a compelling investment opportunity for a company relocation?’” said Fallon. “You need the city to remove friction points, and that is what the city and state are really good at.”
He noted Tennessee’s efforts toward smart growth policies designed to attract more investment compared with other Southeastern cities.
Although New York City’s vacancy rate fell below 1.4 percent in 2023—the lowest on record—the city still poses significant challenges for developers: high wage requirements tied to affordability mandates for multifamily buildings; strong hotel worker unions blocking nonunion hotels; unpredictable rezoning processes; historic preservation rules; and organized community opposition remain obstacles (source).
Taking on major projects would mean competing against established players like Related Companies’ Hudson Yards or Tishman Speyer’s Spiral—developments which Fallon cited among his favorites—and securing investors willing to back those ventures under uncertain conditions.
“We need to focus on markets where we have a competitive edge in product, in relationships, in policy,” he said. “That works for partners with very long-term capital.”
