Skip to main content

Does McCarren Park have more real estate impact than Barclays Center? Also, brokers say Prospect Heights booming, arena (mostly) has beneficial impact

Last week, on 6/25/13, Crain's New York Business reported McCarren Park Pool outscores Barclays Center: In terms of impact on the property market in the surrounding community, both have done well, but the pool has done better. However, Barclays has bigger impact on the retail scene in area.
The arena has been out-scored in terms of its performance as a neighborhood economic spark plug. In fact, the trophy for the Brooklyn project that has had the most transformative impact goes to the renovation of Greenpoint/Williamsburg's McCarren Park Pool, according to a new report from real estate services firm Eastern Consolidated.
Both neighborhoods have experienced explosive growth, with the price of land and buildings doubling in price over the past two years, yet the area around McCarren Park, where the pool recently underwent a $50 million transformation to return it to its Robert Moses glory days, has posted even better numbers.
In terms of land sales, there were 14 within half a mile of McCarren Park in the last two years, with an average price $10.8 million. That compares to 10 deals within half a mile of the Barclays Center, where prices only averaged $2.6 million. The volume of multi-family properties around the park also outpaced the Barclays Center's with about $95 million in sales in both 2011 and 2012 in the area around the park, compared to roughly $85 million near the arena in 2011 and $41 million in 2012. The average price for the former was a little over $490 a foot, compared to $400 a foot near Barclays. 
The metric is kind of cramped, because we don't know what the baseline is in terms of available property and available zoning.

Retail difference

The article states:
The one place where the Barclays Center outperformed McCarren Park was the one that would have been expected, in retail. In 2011 and 2012, retail properties around the arena traded for an average of about $650 a foot, with the massive deal by Forest City Ratner to sell a 49% stake in the Atlantic Center in 2011 driving the charge. The area around the pool saw much less activity (in part because the area is more residential) but there was still a notable uptick, with properties going for $600 a foot in 2012, up from about $400 a foot in 2011.
The Atlantic Center figure has little to do with the Barclays Center, but instead Forest City Ratner offloading some assets.

Other reactions

Ward Dennis on Brooklyn 11211, in McCarren Park Pool outscores Barclays Center, was quizzical:
The area around McCarren was developed into condoland years ago (a lot of projects predate the 2005 zoning). I'd bet that the prior redevelopment, not to mention the massive rezoning of the area in 2005, had a lot more to do with the price of development sites in the area than a few million gallons of water in a pool do (as fantastic as that pool might be).
I can't see the actual report from Eastern Consolidated, but the total volume comparison is BS. Look at $/sf (mentioned in the Crain's report), and the areas are a lot closer (though McCarren still "wins" by 20%, not 200%).
On Brownstoner, one reader commented:
I think it could be more coincidence. WB and GP have simply taken off again. Maybe slightly correlated, but property values on my block in Williamsburg have also tripled in 3 years and we aren't anywhere near the pool.
The Prospect Heights boom

In a 6/1/13 article headlined “Prospect”-ing for sales: prices and activity on the rise in Prospect Heights, the Real Deal found uniformly good news from, natch, four real estate professionals:
Prospect Heights is known for its brownstones, growing crop of hip restaurants and bars and proximity to the controversial Barclays Center arena, which opened in September. While there have been some complaints about rowdy Brooklyn Nets and Justin Beiber fans, the doomsday scenarios predicted by opponents of the stadium have not come to pass, at least when it comes to real estate. In fact, Prospect Heights’ popularity (and rising prices) is spilling over into nearby Crown Heights, so much so that the once-stark borders between the neighborhoods have blurred. Brokers and others now refer to the northwest corner of Crown Heights, between Washington Avenue and Nostrand Avenue, as “ProCro,” despite angry remarks about the nickname from residents and politicians, such as Congressman Hakeem Jeffries.
In this month’s Q&A, The Real Deal talked to local brokers and industry experts to find out what’s happening in Prospect Heights, Crown Heights and ProCro. The area continues to see rapid change, as manufacturing, auto repair and storage facilities are replaced by hotspots such as Bar Corvo, an Italian bistro on Washington Avenue; the Mexican eatery Chavela’s on Franklin Avenue; and Lincoln Station, which opened in January in Crown Heights. And while construction slowed during the downturn, residential projects are finally returning to the area, including a 14-unit rental building at 818 Dean Street and a 65-unit building under construction at 341 Eastern Parkway in Crown Heights.
Hal Lehrman, principal broker, Brooklyn Properties, said:
There is a shortage of listings everywhere. Right now, I am showing stuff in Prospect Heights that a year ago couldn’t be sold, and it’s going very fast in bidding wars, at asking [price] or even above. This is across the board; Crown Heights, Prospect Heights, no difference.
Jonathan Miller, CEO, Miller Samuel Real Estate Appraisers, said the "natural expansion from Prospect Heights [to Crown Heights, with the name ProCro] is creating a new submarket. Brooklyn is seeing this across many neighborhoods, as people are searching for affordability. I expect many more acronyms to be created over the next several years."

Judith Siegel Lief, senior vice president, Warren Lewis Realty, said "Prospect Heights has gotten steadily pricier; in some cases, competitive with Park Slope. As the quality of schools improves, the distinction will become even less."

Brendan Aguayo, senior vice president, Halstead Property, said, "I, for one, will never use the moniker ProCro" and "At this point, the rental market is really able to quickly absorb any quality product that becomes available."

That's good news for the Atlantic Yards developers.

"We’ve seen a bit of a demographic shift in the Prospect Heights market recently. Whereas a few years ago developers largely built for young singles, now there is an incredible demand for large apartments that can accommodate families," he added.

Arena impact

The panelists differed somewhat regarding the arena impact.

The Barclays Center is "starting to have a very positive impact" on residential sales, Lehrman said, as "the restaurants all up and down near the Barclays Center are doing incredibly well. The traffic proved not to be anywhere near as traumatic as people expected."

Not sure all the restaurants are doing well, though, yes, arena traffic was not as bad as people feared. Then again, the project isn't close to being built.

Miller said "I don’t know if the price trends are directly related" regarding the Barclays Center.

"The Barclays Center has had less of an impact on the neighborhood than some feared. But that’s not to say that there haven’t been speed bumps, or that there aren’t those who have been permanently affected in a negative way," Aguayo said. "A lot of the mom-and-pop-type retail around the arena on Flatbush and Atlantic has already experienced intense upward pressure on rents, as national brands have gained interest in the foot traffic and visibility created by the crowds. Many of them won’t be able to hang on, and for those that have already left, they probably won’t be coming back to the area."

"With regards to residential real estate, the completion of the project helped to quell any fears of potential purchasers that previously expressed concerns over the unknown," he added.

He said there was less concern from prospective buyers at a condo project "on Dean Street adjacent to the arena." However, he didn't say what potential buyers' reaction would be to the 27-story residential tower planned east of Sixth Avenue between Dean and Pacific streets, presumably much, much closer to that condo project.


Popular posts from this blog

Forest City acknowledges unspecified delays in Pacific Park, cites $300 million "impairment" in project value; what about affordable housing pledge?

Updated Monday Nov. 7 am: Note follow-up coverage of stock price drop and investor conference call and pending questions.

Pacific Park Brooklyn is seriously delayed, Forest City Realty Trust said yesterday in a news release, which further acknowledged that the project has caused a $300 million impairment, or write-down of the asset, as the expected revenues no longer exceed the carrying cost.

The Cleveland-based developer, parent of Brooklyn-based Forest City Ratner, which is a 30% investor in Pacific Park along with 70% partner/overseer Greenland USA, blamed the "significant impairment" on an oversupply of market-rate apartments, the uncertain fate of the 421-a tax break, and a continued increase in construction costs.

While the delay essentially confirms the obvious, given that two major buildings have not launched despite plans to do so, it raises significant questions about the future of the project, including:
if market-rate construction is delayed, will the affordable h…

Revising official figures, new report reveals Nets averaged just 11,622 home fans last season, Islanders drew 11,200 (and have option to leave in 2018)

The Brooklyn Nets drew an average of only 11,622 fans per home game in their most recent (and lousy) season, more than 23% below the announced official attendance figure, and little more than 65% of the Barclays Center's capacity.

The New York Islanders also drew some 19.4% below announced attendance, or 11,200 fans per home game.

The surprising numbers were disclosed in a consultant's report attached to the Preliminary Official Statement for the refinancing of some $462 million in tax-exempt bonds for the Barclays Center (plus another $20 million in taxable bonds). The refinancing should lower costs to Mikhail Prokhorov, owner of the arena operating company, by and average of $3.4 million a year through 2044 in paying off arena construction.

According to official figures, the Brooklyn Nets attendance averaged 17,187 in the debut season, 2012-13, 17,251 in 2013-14, 17,037 in 2014-15, and 15,125 in the most recent season, 2015-16. For hoops, the arena holds 17,732.

But official…

Is Barclays Center dumping the Islanders, or are they renegotiating? Evidence varies (bond doc, cash receipts); NHL attendance biggest variable

The Internet has been abuzz since Bloomberg's Scott Soshnick reported 1/30/17, using an overly conclusory headline, that Brooklyn’s Barclays Center Is Dumping the Islanders.

That would end an unusual arrangement in which the arena agrees to pay the team a fixed sum (minus certain expenses), in exchange for keeping tickets, suite, and sponsorship revenue.

The arena would earn more without the hockey team, according to Bloomberg, which cited “a financial projection shared with potential investors showed the Islanders won’t contribute any revenue after the 2018-19 season--a clear signal that the team won’t play there, the people said."

That "signal," however, is hardly definitive, as are the media leaks about a prospective new arena in Queens, as shown in the screenshot below from Newsday. Both sides are surely pushing for advantage, if not bluffing.

Consider: the arena and the Islanders can't even formally begin their opt-out talks until after this season. The disc…

Skanska says it "expected to assemble a properly designed modular building, not engage in an iterative R&D experiment"

On 12/10/16, I noted that FastCo.Design's Prefab's Moment of Reckoning article dialed back the gush on the 461 Dean modular tower compared to the publication's previous coverage.

Still, I noted that the article relied on developer Forest City Ratner and architect SHoP to put the best possible spin on what was clearly a failure. From the article: At the project's outset, it took the factory (managed by Skanska at the time) two to three weeks to build a module. By the end, under FCRC's management, the builders cut that down to six days. "The project took a little longer than expected and cost a little bit more than expected because we started the project with the wrong contractor," [Forest City's Adam] Greene says.Skanska jabs back
Well, Forest City's estranged partner Skanska later weighed in--not sure whether they weren't asked or just missed a deadline--and their article was updated 12/13/16. Here's Skanska's statement, which shows th…

Not just logistics: bypassing Brooklyn for DNC 2016 also saved on optics (role of Russian oligarch, Shanghai government)

Surely the logistical challenges of holding a national presidential nominating convention in Brooklyn were the main (and stated) reasons for the Democratic National Committee's choice of Philadelphia.

And, as I wrote in NY Slant, the huge security cordon in Philadelphia would have been impossible in Brooklyn.

But consider also the optics. As I wrote in my 1/21/15 op-ed in the Times arguing that the choice of Brooklyn was a bad idea:
The arena also raises ethically sticky questions for the Democrats. While the Barclays Center is owned primarily by Forest City Ratner, 45 percent of it is owned by the Russian billionaire Mikhail D. Prokhorov (who also owns 80 percent of the Brooklyn Nets). Mr. Prokhorov has a necessarily cordial relationship with Russia’s president, Vladimir V. Putin — though he has been critical of Mr. Putin in the past, last year, at the Russian president’s request, he tried to transfer ownership of the Nets to one of his Moscow-based companies. An oligarch-owned a…

Former ESDC CEO Lago returns to NYC to head City Planning Commission

Carl Weisbrod, Mayor Bill de Blasio's City Planning Commission Chairman and Director of the Department of City Planning, is resigning,

And he's being replaced by Marisa Lago, currently a federal official, but who Atlantic Yards-ologists remember as the short-term Empire State Development Corporation CEO who, in an impolitic but candid 2009 statement, acknowledged that the project would take "decades."

Still, Lago not long after that played the good soldier at a May 2009 Senate oversight hearing, justifying changes in the project but claiming the public benefits remained the same.

By returning to City Planning, Lago will join former ESDC General Counsel Anita Laremont, who after retiring from the state (and taking a pension) got the job with the city.

Back at planning

Lago, a lawyer, in 1983 began work as an aide to City Planning Chairman Herb Sturz, and later served as the General Counsel to the president of the NYC Economic Development Corporation, Weisbrod himself.