Skip to main content

2009 report: one year to fill market-rate buildings; some affordable units faster than others

New apartment buildings don't just fill up lickety-split. Buildings get TCOs (temporary certificates of occupancy) that approve certain floors for residence, while work continues elsewhere.

The interest in market-rate units fluctuates with price and competition. So luxury units at the slowly-opening 461 Dean, for example, have been said to come with "incentives" (aka discounts), as do others in the for-now glutted market in and around Downtown Brooklyn.

Even low-income affordable units don't fill instantly, despite huge demand, because of the challenges in processing applications. Moderate- and middle-income affordable units also face challenges, apparently.

One huge lesson of Atlantic Yards/Pacific Park is that predictions are fuzzy.
How fast are they filling up?

We don't know exactly how fast the rentals are filling up at 461 Dean, which is said to be partly occupied, and which includes 181 below-market units and 181 market-rate ones. (Maybe we'll learn at the recently rescheduled Quality of Life Community Meeting, set for Jan. 24.)

My October 2016 annotation of August 2014 tentative timetable
It has a TCO dated 11/1/16, which expires at the end of January; more than half the building is ready for occupancy. However, as I wrote yesterday, the lights are on, but few, if any people seem to be home.

By contrast, neither of the two other nearly finished buildings are ready for occupancy, though contracts have been signed at the condo building and, presumably, tenants are being selected for the rental one.

There's no TCO yet for 535 Carlton, the "100% affordable" rental building, which developer Forest City Realty Trust--parent of Forest City Ratner, part of Greenland Forest City Partners, said 11/3/16 "is expected to begin phased opening in the fourth quarter of 2016."

Nor is there a TCO yet for the 550 Vanderbilt condo building, which Forest City said is "expected to begin phased opening in the first quarter of 2017." The fourth tower, the "100% affordable" 38 Sixth Avenue, "is expected to begin phased opening in the second quarter of 2017."

As Forest City suggested in a document filed with the Securities and Exchange Commission, each of the three upcoming buildings--and, I'd guess, 461 Dean--might take up to a year to fill up.

It's not clear if that relates to the slow absorption of apartments and/or a fuzzy start for leasing.

How fast do buildings fill?

But it's worth looking back to a 2009 report on Atlantic Yards by the consultant KPMG. The report was conducted for the Empire State Development Corporation, the state authority overseeing/shepherding Atlantic Yards, and it rather unwisely supported the purported ten-year project buildout.

The report is not necessarily current, since it addresses a configuration of buildings that has since changed, but it does suggest that market-rate buildings could take a year until 100% occupancy was reached, with a few rental buildings coming faster (but the largest building quite slow), and the condo buildings taking a year.

From 2009 KPMG report
The report stated:
Given the lack of affordable housing in New York City, and its waiting list, it is reasonable to assume that low income units at each building will be absorbed as soon as they are brought to the market. Displayed on the following page are the market and middle income absorption estimates for the Subject Property.
Yes, the low-income units will be absorbed quickly, so any delay has to do with the processing of applications. But it's interesting to see that, at least in 2009, KPMG estimated that below-market middle-income rentals would take seven months to fill up.

It's not clear why, but presumably that was based on the history of other projects. I'd guess that, as long as enough people participated in the lottery, they'd be easy to fill up. Maybe it has something to do with the possibility that the more expensive below-market units will be on higher floors that get the TCO later in the construction process.

From 2009 KPMG report

Comments

Popular posts from this blog

Barclays Center/Levy Restaurants hit with suit charging discrimination on disability, race; supervisors said to use vicious slurs, pursue retaliation

The Daily News has an article today, Barclays Center hit with $5M suit claiming discrimination against disabled, while the New York Post headlined its article Barclays Center sued over taunting disabled employees.

While that's part of the lawsuit, more prominent are claims of racial discrimination and retaliation, with black employees claiming repeated abuse by white supervisors, preferential treatment toward Hispanic colleagues, and retaliation in response to complaints.

Two individual supervisors, for example, are charged with  referring to black employees as “black motherfucker,” “dumb black bitch,” “black monkey,” “piece of shit” and “nigger.”

Two have referred to an employee blind in one eye as “cyclops,” and “the one-eyed guy,” and an employee with a nose disorder as “the nose guy.”

There's been no official response yet though arena spokesman Barry Baum told the Daily News they, but take “allegations of this kind very seriously” and have "a zero tolerance policy for…

Behind the "empty railyards": 40 years of ATURA, Baruch's plan, and the city's diffidence

To supporters of Forest City Ratner's Atlantic Yards project, it's a long-awaited plan for long-overlooked land. "The Atlantic Yards area has been available for any developer in America for over 100 years,” declared Borough President Marty Markowitz at a 5/26/05 City Council hearing.

Charles Gargano, chairman of the Empire State Development Corporation, mused on 11/15/05 to WNYC's Brian Lehrer, “Isn’t it interesting that these railyards have sat for decades and decades and decades, and no one has done a thing about them.” Forest City Ratner spokesman Joe DePlasco, in a 12/19/04 New York Times article ("In a War of Words, One Has the Power to Wound") described the railyards as "an empty scar dividing the community."

But why exactly has the Metropolitan Transportation Authority’s Vanderbilt Yard never been developed? Do public officials have some responsibility?

At a hearing yesterday of the Brooklyn Borough Board Atlantic Yards Committee, Kate Suisma…

No, security guards can't ban photos. Questions remain about visibility of ID/sticker system.

The bi-monthly Atlantic Yards/Pacific Park Community Update meeting June 14, held at 55 Hanson Place, addressed multiple issues, including delays in the project, a new detente with project neighbors,concerns about traffic congestion, upcoming sewer work and demolitions, and an explanation of how high winds caused debris to fly off the under-construction 38 Sixth Avenue building. I'll have more coverage.
Security issues came up several times at the meeting.
Wayne Bailey, a resident who regularly takes photos and videos (that I often use) of construction/operations issues that impact residents, asked representatives of Tishman Construction if the security guard at the sites they're building works for them.
After Tishman Senior VP Eric Reid said yes, Bailey asked why a guard told him not to shoot video of the site, even though he was on a public street.

"I will address it with principals for that security firm," Reid said.
Forest City Ratner executive Ashley Cotton, the …

Barclays Center event June 11 to protest plans to expand Israeli draft; questions about logistics

At right is a photo of a poster spotted in Hasidic Williamsburg right. Clearly there's an event scheduled at the Barclays Center aimed at the Haredi Jewish community (strict Orthodox Jews who reject secular culture), but the lack of English text makes it cryptic.

The website Matzav.com explains, Protest Against Israeli Draft of Bnei Yeshiva Rescheduled for Barclays Center:
A large asifa to protest the drafting of bnei yeshiva in Eretz Yisroel into the Israeli army that had been set to take place this month will instead be held on Sunday, 17 Sivan/June 11, at the Barclays Center in Downtown Brooklyn, NY. So attendees at a big gathering will protest an apparent change of policy that will make it much more difficult for traditional Orthodox Jewish students--both Hasidic (who follow a rebbe) and non-Hasidic (who don't)--to get deferments from the draft. Comments on the Yeshiva World website explain some of the debate.

The logistical questions

What's unclear is how large the ev…

Atlantic Yards/Pacific Park graphic: what's built/what might be coming (post-dated pinned post)

Click on graphic to enlarge. This is post-dated to stay at the top of the blog. It will be updated as announced configurations change and buildings launch. The August 2014 tentative configurations proposed by developer Greenland Forest City Partners will change, and the project is already well behind that tentative timetable.


Not quite the pattern: Greenland selling development sites, not completed condos

Real Estate Weekly, reporting on trends in Chinese investment in New York City, on 11/18/15 quoted Jim Costello, a senior vice president at research firm Real Capital Analytics:
“They’re typically building high-end condos, build it and sell it. Capital return is in a few years. That’s something that is ingrained in the companies that have been coming here because that’s how they’ve grown in the last 35 years. It’s always been a development game for them. So they’re just repeating their business model here,” he said. When I read that last November, I didn't think it necessarily applied to Atlantic Yards/Pacific Park, now 70% owned (outside of the Barclays Center and B2 modular apartment tower), by the Greenland Group, owned significantly by the Shanghai government.
A majority of the buildings will be rentals, some 100% market, some 100% affordable, and several--the last several built--are supposed to be 50% market/50% subsidized. (See tentative timetable below.)

Selling development …

Atlanta's Atlantic Yards moves ahead

First mentioned in April, the Atlantic Yards project in Atlanta is moving ahead--and has the potential to nudge Atlantic Yards in Brooklyn further down in Google searches.

According to a 5/30/17 press release, Hines and Invesco Real Estate Announce T3 West Midtown and Atlantic Yards:
Hines, the international real estate firm, and Invesco Real Estate, a global real estate investment manager, today announced a joint venture on behalf of one of Invesco Real Estate’s institutional clients to develop two progressive office projects in Atlanta totalling 700,000 square feet. T3 West Midtown will be a 200,000-square-foot heavy timber office development and Atlantic Yards will consist of 500,000 square feet of progressive office space in two buildings. Both projects are located on sites within Atlantic Station in the flourishing Midtown submarket.
Hines will work with Hartshorne Plunkard Architecture (HPA) as the design architect for both T3 West Midtown and Atlantic Yards. DLR Group will be t…