NBBJ's Böhm on the strict rules for practicing in Russia

Design condos in the United Arab Emirates? Piece of cake. Residential towers in China? Easy. But build condos in Moscow? That's another story, as Friedrich “Friedl” Böhm knows all to well.

“The rules in Russia are very difficult for foreign firms—most of which have left—to deal with,” says Böhm, CEO of architecture giant NBBJ (#4 among design firms on BD+C's 2006 Giants 300 list). “The magic is to be sympathetic to the culture. The developers want our ideas, but they want what will work internationally. The local architects don't like foreign architects, so it's hard to find partners. Finding good clients also is difficult, as are the approval processes.”

NBBJ is working on a dozen jobs in Moscow, including the city's Central Transit Terminal, scheduled for 2008 completion, and the huge “City of Capitals” mixed-use project—two high-rise condo towers, the St. Petersburg and the Moscow, and a mid-rise office tower. The project is just coming out of the ground.

“The condo market is hot,” says Böhm. “With the rise of the Russian middle class, they realize that they can get returns of 40% on real estate development, vs. three or four percent in Europe. There's such a pent-up demand, and now the money is there, so they think real estate is a good investment.”

How good? Böhm says high-end condo projects can be built for $100/sf and sold for $500/sf. Even at the lower end, the typical sales price is $300/sf for $100/sf in construction costs.

Soon after City of Capitals opened its sales office late last year, one of the penthouse floors sold for $36 million. The developer, local firm Capital Group, is getting “top Tokyo prices,” according to Böhm, for core and shell spaces whose interiors the buyers must finish themselves.

Böhm, who works out of NBBJ's Columbus, Ohio, office, likes working in Russia so much he hopes to land more work there, starting in St. Petersburg. “As an architect, Russia is a place where you can do something very interesting,” says Böhm.

“The Russians are difficult to negotiate with, but once you have a deal, everyone lives up to it,” says Böhm, who says he's very selective about the clients he chooses—and makes sure to get an up-front payment before starting any work.