Sunday, May 11, 2014

Brooklyn real estate update: “It feels like 2005 a little bit”; new hotels coming on Schermerhorn & near BAM; "Brooklyn" surges as baby name

“It feels like 2005 a little bit,” one developer said 5/6/14 at TerraCRG’s The Brooklyn Real Estate Summit 2014, as reported by the Commercial Observer. “My question is: will it be a hard or soft landing.” That means a hot market with a potential plateau:
The residential developers offered their views and advice on the future of Brooklyn’s commercial real estate landscape at theBrooklyn Academy of Music in Brooklyn, stressing the importance of a careful plan and high-end amenity package in commanding higher pricing and rents.
“The competition is very tough out there,” said Douglas Patrick, a principal atHeatherwood, who sat on the “Brooklyn Unveiled” panel with a number of developers with up-and-coming residential projects across the borough. “Invest the extra money and you will get the return on your investment.”
Heatherwood developed 568 Union in Williamsburg, which features a concierge, fitness center, roof terrace, parking and outdoor pool, much like the other projects discussed.
Panelists noted that Brooklyn is no longer just a value play for those moving into the neighborhood. The borough has some of the best schools in the city and more people working in Manhattan are living in Brooklyn, meaning that neighborhoods with the best access to transportation (and waterfront access) have been among the quickest to evolve.
What does that mean for Atlantic Yards? Unclear: executives at parent Forest City Enterprises still think the location, and the provision of affordable housing, make the towers uniquely situated for both strong prices and public subsidies.

According to Real Estate Weekly, one developer, Mitchell Hochberg of the Lightstone Group (big Gowanus project), said “The numbers are way too high... There will have to be some equilibrium of prices coming down on the land side.”

Rendering by Lesser Architecture
However much Forest City Ratner wanted to share the carrying costs of the complicated Atlantic Yards project, finding a new joint venture partner/overseer in the Chinese government-owned Greenland Group, surely the costs of acquisition were well below current prices.

Hotels coming around Downtown Brooklyn


Work begins on glam hotel near Barclays Center, reported the Brooklyn Eagle, regarding a site at 95 Rockwell Place near the Brooklyn Academy of Music and adjacent to the Theatre for a New Audience, which opened in November.

“They're calling this the Lincoln Center of Brooklyn,” Steve Pfister of Second Development Services said of the BAM Cultural District, according to the Eagle. “It's exciting to be a part of it.”

More from Curbed on the history of the site.

The Commercial Observer reported, in Ace Hotel Likely Coming to Downtown Brooklyn
GFI Capital Resources is close to sealing a deal with theAce Hotel to open a new lodge under its brand a few blocks away from the Barclays Center in Downtown Brooklyn, Commercial Observer has learned.
Allen Gross, president and CEO of GFI Capital Resources, has nabbed a number of parcels on Bond Street, at the corner of Schermerhorn Street, in an off-market deal, and hopes to bring a trendy Ace Hotel to the site, sources with knowledge of the deal told CO. His equity partner in the deal was Spruce Capital, which now owns a majority stake in the development site.
A couple of other hotels in the works on Schermerhorn Street include a 13-story EVEN Hotel at the intersection of Nevins Street and Holiday Inn Brooklyn Nevins Station, at 300 Schermerhorn Street, as CO previously reported.
Here's a map of the four hotel sites:

More changes in Downtown Brooklyn

In Hare Krishna HQ for sale on development-busy Schermerhorn Street block, the Eagle reportedn another building for sale, between Bond and Nevins, closer to the latter:
The International Society for Krishna Consciousness has put its headquarters at 295-309 Schermerhorn St. up for sale as a development site – on a block that's already up to its neck in major construction projects.
Eastern Consolidated, the brokerage with the exclusive sale listing, recently announced that up to 187,000 square feet of new development can be built there with inclusionary housing bonuses.
The property could fetch $60 million or more, the equivalent of $300 per buildable square foot, The Real Deal reported. [see link]
The Hare Krishna movement, founded in the 1960s, has made the Downtown Brooklyn location its home for three decades. Now it plans to move to Queens, according to The Real Deal.
Note that $300 per buildable square foot is well more that Forest City Ratner paid for many Atlantic Yards properties, though the latter number is complicated by obligations to build a new railyard and to build affordable housing.

The Eagle suggested more changes are coming, given the potential for Brooklyn Community Services, another nonprofit, at 285 Schermerhorn, may be selling its building.

DNAinfo, in Downtown Brooklyn is turning into a shopping mall, reports:
National retailers and chain restaurants including Sephora, T.J. Maxx and Hill Country Barbecue have moved, or are planning moves, into the neighborhood and parts of nearby Cobble Hill.
In the past year, Brooklyn experienced the largest percentage increase in chain stores across all five boroughs, according to a report by Center for an Urban Future.
Between 2012 and 2013 the number increased 3 percent, from1,470 to 1,511. Manhattan, on the other hand, saw a near 1 percent drop.
Not sure that Brooklyn's increase in chains necessarily translates into Downtown Brooklyn, but yes, some changes are notable.

The Brooklyn name spreads

In Slate, Ben Blatt created some entertaining maps that show us how the Brooklyn meme has penetrated national consciousness.


Why is Brooklyn unpopular in.... New York? Blatt answers:
As it turns out, the simple explanation is the correct one: New Yorkers don’t like to name their babies Brooklyn. Within Brooklyn, the numbers are more pronounced. In 2012, roughly 5 out of every 10,000 baby girls from Brooklyn, New York, were named Brooklyn, while roughly 131 out of every 10,000 baby girls born in West Virginia were named Brooklyn.
You can see examples of this same trend elsewhere. In 2012, four of the most popular 100 girls’ names were also cities with a metro area of greater than 250,000 people. One of those names is Madison, the capital of Wisconsin. Only one other state (California) names its children Madison less often than parents from the Badger State.


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