Matthias Kindler
Lorenz Nagel, Managing Director, PRIMUS Developments
PRIMUS Developments is a Hamburg-based project developer founded in 1999, with offices in Düsseldorf and Berlin, specialising in timber and timber-hybrid construction. The company committed to building exclusively in timber following the development of its WOODIE modular housing project in Hamburg Wilhelmsburg, and has since delivered timber projects across residential, commercial and public sector clients including the German Bundestag.
Lorenz Nagel, Geschäftsführer alongside his father and company founder Achim Nagel, trained as an architect at RWTH Aachen before joining the family firm in 2020. He sat down recently with REFIRE to help us learn more about the notion of the ‘operational developer’, about which he has become increasingly outspoken. He describes development as "the responsibility to shape the building process so that complex requirements lead to viable and lasting solutions" — a conviction that runs through the interview that follows.
REFIRE: Many developers spent years acting mainly as coordinators between investors, planners, consultants and contractors. Do you think that model is beginning to reach its limits?
Lorenz Nagel: The process became increasingly fragmented over time. Everyone optimised their own discipline, but responsibility for the overall project became less clear. For a long period, the market could absorb many inefficiencies because financing conditions were extremely favourable. That changed.
If financing costs remain high for several years, delays or overly complicated planning structures become much more critical. You cannot compensate for everything through rising values anymore. Developers therefore need a much deeper understanding of how buildings are actually planned, delivered and operated. Otherwise you end up managing enormous complexity while large parts of the real process remain outside your control.
You’ve often spoken about development almost as an operational discipline rather than purely a financial one.
Lorenz Nagel: Development ultimately still means delivering something physical in the real world. Somebody has to plan and build the thing, operate it and deal with all the imperfections that appear once projects leave the Excel sheet and enter reality.
Over the last decade, parts of the industry moved very far toward financial engineering. That was understandable in the market environment we had. But today, projects increasingly depend on whether important decisions are integrated early enough into the process. Questions around construction methods, energy supply or simply how adaptable a building remains after completion sit much closer to the economic core of the project than they used to.
Is it one of the reasons, perhaps, that speed itself is becoming part of the economic equation?
Lorenz Nagel: Everyone talks about permitting taking too long or leasing taking too long. But shortening the actual construction phase can create a very similar effect. If you reduce financing periods by years, that directly affects viability. That is also one of the reasons why we became heavily involved in modular timber construction. Our starting point was never branding or image. We were looking at ways to simplify construction processes, shorten delivery times and create more reliable and efficient project structures. Modular timber construction forces difficult decisions much earlier in the process. Coordination happens earlier, conflicts become visible earlier and you notice relatively quickly whether a project is actually thought through or whether complexity has simply been postponed into later phases.
One project where many of these questions seem to come together is your project Rockywood in Offenbach. Originally, this was still conceived as a fairly classic developer project. Then the market environment changed completely during realization.
Lorenz Nagel: We are traditionally not long-term holders. We usually develop projects, stabilize them and then sell them. Rockywood was initially planned in exactly that way. But while we were developing the project, the entire office market entered a very uncertain phase. We started during Covid, financing conditions shifted dramatically and transaction markets became increasingly difficult. There were moments where people internally also asked whether office still made sense at all in that environment. At the same time, the building itself worked extremely well.
Which is interesting, because the broader narrative around office real estate became almost entirely negative during that period.
Lorenz Nagel: Leasing worked surprisingly well, even during a difficult market phase. We realized that companies were still willing to move into office buildings if the buildings offered something beyond standard office space. Rockywood is a timber-hybrid office building with open access galleries, visible timber structures and low-tech energy systems. Operating costs are comparatively efficient and the atmosphere inside the building feels very different from a conventional office property. What surprised us most was how strongly tenants identified with the building itself.
Almost as if the building became part of how those companies wanted to present themselves.
Lorenz Nagel: Many tenants actively use the building in their recruiting and communication. The architecture and the atmosphere reflect something about how they see themselves as companies.
That was an important realization for us because it showed that certain qualitative aspects create measurable economic value. Discussions around office real estate often become very abstract. People focus on vacancy rates, pricing corrections or remote work. But users still respond very directly to quality, atmosphere and functionality.
And at some point that also changed the internal discussion around the future of the project itself.
Lorenz Nagel: We had strong interest from investors, including international groups. But pricing in the market at that moment did not reflect the quality of the building at all. Office assets were being discounted very aggressively across the board. Holding the project was not the original idea, and keeping an office asset in that market environment was certainly not the most comfortable decision we could have made. But we eventually started asking ourselves a relatively simple question: if the building itself is functioning well, if tenants are happy and if demand remains stable, why force a transaction purely because that was the original business plan? That was really the moment where we shifted from thinking purely as trader developers toward acting more like operators.
Energy infrastructure, operational flexibility and long-term viability seem to move much earlier into the development process today than they did a few years ago.
Lorenz Nagel: Particularly in Europe, and especially in Germany, buildings are becoming much more dependent on the systems surrounding them. Energy infrastructure is probably the clearest example.
Today, we spend a lot of time looking at the environment around the project. What kind of energy supply exists locally? How resilient is it? How future-proof is it? What happens to the building if regulatory frameworks tighten further in ten or fifteen years? Those questions directly influence whether we invest or not.
The discussion around stranded assets therefore becomes much more immediate on the development side as well.
Lorenz Nagel: We recently looked at a larger residential development near Berlin where the local energy infrastructure would have forced us into a relatively poor primary energy factor. Technically, connecting to the existing system would probably have been the easiest and cheapest solution in the short term. But then the discussion immediately shifts further ahead. An at that point, the conversation is no longer only about construction costs or short-term efficiency. It becomes a strategic question about whether the asset will still function competitively ten or fifteen years from now.
Public-sector projects and questions around critical infrastructure also seem to play a much larger role in development today than they might have a decade ago.
Lorenz Nagel: These questions no longer sit outside the real estate industry. For a long time, developers mainly thought about locations, financing, leasing risk or construction costs. Now entirely different layers suddenly move into the discussion. How resilient is a location? How quickly can infrastructure be delivered? What happens if institutions need to remain functional under very different conditions than originally anticipated? Those are not abstract discussions anymore.
We experienced that ourselves through projects for federal institutions. Originally, that was not part of some large strategic plan. It developed relatively organically through modular construction and through the ability to deliver projects under demanding timeframes. Once you enter that world, infrastructure starts being evaluated very differently. Reliability suddenly matters much more than presentation. Operational functionality matters more than iconic gestures.
And those requirements seem to extend far beyond what most people would traditionally describe as infrastructure.
Lorenz Nagel: Once you start looking at projects through the lens of long-term functionality, the distinction between infrastructure and other building types becomes less clear. Reliability, adaptability and operational continuity suddenly matter across a much broader range of assets.
Would you include educational buildings in that category?
Lorenz Nagel: Many people, of course, immediately think about government facilities or critical infrastructure. But universities, schools and research facilities face many of the same challenges. They have long life cycles, complex user requirements and a strong public mission. The discussion is about how it can support the institution reliably over time.
A few years ago, many of these discussions would have sounded completely outside the scope of development. Today, they are increasingly moving toward its centre.