Episode Overview

Podcast: Real Talk: Real Estate Discussions with Andrew Kirsh
Episode: Building Mass Timber Projects with Tim Gokhman of New Land Enterprises
Air Date: October 25, 2023
Guest: Tim Gokhman, Managing Director, New Land Enterprises

This episode centers on the innovative use of mass timber in high-rise construction, featuring Tim Gokhman’s experience pioneering the tallest mass timber building in the world, Ascent, in Milwaukee. Andrew and Tim discuss the advantages, challenges, and future of mass timber, covering everything from insurance and capital markets to design, construction, and sustainability.

Key Discussion Points & Insights

1. Introduction to Mass Timber & New Land Enterprises

• New Land Enterprises is a vertically integrated development firm focused on ground-up, market-rate multifamily projects and innovating with new construction technologies.
• In 2018, New Land began exploring tall mass timber projects, leading to the development of Ascent.
• Mass timber is explained as engineered, laminated wood used for structural elements, allowing for tall buildings previously reserved for concrete and steel.

“Mass timber is the evolution of heavy timber buildings... you glue and press it together and you create these structural members that can achieve fire ratings and equivalent to concrete and steel. And that's really what mass timber is.” – Tim Gokhman [04:05]

2. Technical Foundation & Industry Context

• Origins: Glulam (glued laminated timber) has decades of history; CLT (cross-laminated timber), enabling taller construction, was popularized ~25-30 years ago in Austria.
• The U.S. is still catching up to European mass timber innovation.
• Mass timber is most competitive for buildings in the 12–25+ story range, offering comparability or advantages over concrete in speed, aesthetics, and sustainability.

“Where we see the sweet spot for mass timber... is north of [12-18 stories] and up to Ascent is 25 stories.” – Tim Gokhman [06:28]

3. Benefits vs. Challenges

• Advantages:
  • Faster construction (3-4 months faster than concrete for Ascent)
  • Aesthetic appeal (exposed wood; biophilic design)
  • Sustainability (embodied carbon reduction)
  • Labor efficiency
• Main Challenges:
  • Higher insurance premiums due to limited actuarial data
  • Newness complicates lender and insurer perceptions
  • Supply chain risks (e.g., reliance on Austrian timber suppliers)

“Insurance is probably one of the biggest problems in mass timber... Insurance companies want to see failures. We would like to very much not be a part of their data set.” – Tim Gokhman [08:01]

4. Market Appetite & Capitalization

• New Land has mainly used syndication for deals, but is seeing increased institutional and ESG fund interest as decarbonization becomes a priority.
• Mass timber appeals to capital markets as a differentiated, sustainable product.

“Mass timber is a very potent solution [for carbon reduction]... We’ll continue to see more and more interest from institutional equity as this becomes more mainstream.” – Tim Gokhman [10:00]

5. Project Spotlight: Ascent (Milwaukee)

Project Details:

• 25 stories, 284 feet
• 19 stories of exposed mass timber above 6-story concrete podium
• Completed 3-4 months ahead of equivalent concrete timeline

Development Process:

• Required extensive predevelopment and custom approvals due to lack of precedent/code pathways
• Utilized alternative means testing for fire safety; completed extensive scientific testing with the U.S. Forest Service

Financials:

• Roughly 6% cost premium over concrete (location dependent)
• High tenant engagement and perceived superior tenant experience due to biophilic design

“The reactions are visceral in a very positive way… The cool thing about mass timber is that it literally makes people feel a certain way. And this isn’t us marketing—it’s science. It’s called biophilia.” – Tim Gokhman [16:02]

Leasing & Value:

• Ascent is considered a “watermark” asset—premium rents, high retention, faster lease-up
• “Premiums” are realized not just in rent, but in retention, marketing, and cap rate compression

6. Mass Timber Industry Trends & New Land’s Future

• Rapid increase in mass timber adoption (especially in office sector via Hines’ T3 model and major tenants like Google, Microsoft, Adidas, Walmart)
• New Land aims to replicate Ascent’s model in other cities, leveraging lessons learned and digital design advantages

“The demand—it’s a hockey stick. It literally is exponential growth. And it’s not just what you’d expect—Adidas, Estee Lauder, Walmart, everyone’s building with mass timber.” – Tim Gokhman [18:44]

• Success requires beginning from first principles, not simply substituting timber into steel/concrete designs
• Local partnerships are crucial in scaling to new markets (Denver is a priority, plus Seattle, Atlanta, Charlotte, Raleigh, Salt Lake City)

“Great local partners make a huge difference... We do not want to suffer from the hubris of saying, ‘Oh, we're going to go to a new market and figure it out.’” – Tim Gokhman [27:27]

7. Broader Applicability

• Mass timber is easily adaptable to offices and hospitality; multifamily is hardest due to irregular demising walls
• Once proven in multifamily (the most challenging segment), hospitality and office sectors are seen as low-hanging fruit

“If you can make it work in multifamily in Milwaukee, you can make it work in most any other city.” – Tim Gokhman [29:11]
“Frank Sinatra was wrong... If you can make it in Milwaukee, you can make it anywhere.” – Andrew Kirsh, jokingly [30:13]

Notable Quotes & Memorable Moments

“The construction industry hasn’t innovated in decades.” – Tim Gokhman [04:05]

“Insurance companies aren’t looking for more buildings being built; they want to see failures. We would very much not like to be part of that data set.” – Tim Gokhman [08:08]

“The reactions [from tenants] are visceral. If you’ve seen the pictures, they just don’t do it justice.” – Tim Gokhman [16:02]

“The most important thing is the team... the engineering is not good enough and the team is not good enough.” – Tim Gokhman [26:45]

“You have to have a team that really knows everything inside and out about every aspect of it to be able to handle that.” – Tim Gokhman [26:09]

Important Timestamps

• Vertically Integrated Development & Mass Timber Origins: [03:17–05:56]
• Comparative Advantages & Challenges (Economics/Insurance): [06:28–09:21]
• Capitalization Strategies & ESG Trends: [09:51–11:05]
• Ascent Project Approval & Construction Process: [12:04–14:54]
• Tenant Experience and Rent Premiums: [16:02–18:13]
• Market Trends & Replicating Ascent: [18:44–21:02]
• Scaling, Local Partnerships, and Asset Classes: [27:27–29:11]
• The “Milwaukee Not New York” Moment: [30:13]
• Closing Remarks: [31:09–31:21]

Final Thoughts

Andrew and Tim’s conversation shines a spotlight on the disruptive potential of mass timber as a construction material. The Ascent project serves as a playbook for future high-rise development, demonstrating that when innovative design, sustainability, and market differentiation come together—with the right team—the result can be both profitable and transformative for the industry. With the global building sector increasingly focused on carbon reduction and tenant experience, mass timber looks poised for sharp growth, especially as regulatory, insurance, and supply chain challenges continue to be addressed.