Atlantic Yards/Pacific Park Report

Last October, Madison International Realty's Ron Dickerman, whose firm bought the Atlantic Terminal and Atlantic Center malls from Forest City Realty Trust in 2017, sounded a little frustrated, in an interview with The Real Deal: We’ve got unbelievable frontage on Atlantic Avenue directly across from Barclays Center. And yet, because the leases are so long, it limits our flexibility in terms of leasing these assets up and making them interesting and exciting. So what we’ve been doing is trying to move the tenancy into the current century. Now he's far more enthusiastic about other product lines.  Retail going down In a 5/24/22 interview with the Commercial Observer, Madison International Realty’s Ron Dickerman On the Great Retail Pivot , Dickerman sounded more modulated about retail: I think retail is becoming an asset class that people are considering revisiting, based on how frothy other asset classes are. In the midst of COVID and what’s happening with the rising interest ...

From The Real Deal's The Closing: Ron Dickerman , a 10/5/21 interview: As the founder of Madison International Realty, which over the past two decades has pumped north of $17 billion into real estate assets, Dickerman is one of the industry’s biggest secondary investors, focused on owning minority positions in big-ticket properties... Madison owns or has owned pieces of the Seagram Building on Park Avenue, the Lloyd’s building in London and the Trianon tower in Frankfurt, Germany. Dickerman developed a niche of serving as a port of call for real estate syndicators who needed to cash out on their stakes in buildings before their partners were ready to sell. One set of questions concerns Madison International's two-stage transaction, first in 2011 purchasing a 49% stake in Forest City Ratner's/Forest City New York's local retail portfolio, then, in 2017 buying the rest, as the parent company, Forest City Retail Trust, was trying to raise cash and streamline its operatons....

Madison International via Street Art NYC Opposite the Barclays Center at Fort Greene Place and Atlantic Avenue, there's a new mural, "Hope," at  Atlantic Center mall , 20 feet wide and 24 feet tall, from artist  Jason Naylor . "To the Heroes of This World," it says, responding to the coronavirus crisis. "Thank You." The oft-derided Atlantic Center was taken over in late 2017 (along with adjacent Atlantic Terminal and more) by Madison International Realty, which bought out Forest City Ratner/Forest City New York in stages. Atlantic Center, or Atlantic Terminal? Note that Madison and others subsume Atlantic Center under Atlantic Terminal--a continuation of a strategy intermittently begun by Forest City --and the coverage, including in Street Art NYC  and BK Reader , identified the location as Atlantic Terminal, rather than its older, uglier sibling to the east. (I suspect that came from a press release.) To quote the Brooklyn ...

So, let's take a look at the page for Madison International Realty that incorporates the recently purchased (closed late 2017) Atlantic Center and Atlantic Terminal malls, developed by Forest City Ratner (later Forest City New York) and then sold by parent Forest City Realty Trust (since absorbed by Brookfield): Madison International Realty was founded in 2002 by Ronald M. Dickerman, Madison’s President, with the idea of building a world-class global investment platform focused on providing liquidity to real estate owners and investors who otherwise had few options for facilitating early exits from their illiquid real estate ownership positions or monetizing embedded equity. Today, with offices in New York City, London, and Frankfurt and more than 40 professionals dedicated to the sourcing, underwriting, acquisition, asset management, and investor relations for the firm, Madison has become a global leader in providing equity capital in a diverse range of real estate transactions...

Via NYC EDC Sure, the most notable thing in my article yesterday for The Bridge: Amazon in Brooklyn: Why the Bid Didn’t Quite Measure Up , was that dramatic (and fanciful) illustration of the Amazon sign on top of the former Watchtower building, now called Panorama. And there are other interesting comparisons between the Brooklyn bid and the Long Island City offering, with better logistics and lower costs. The Atlantic Yards angle But, yes, Atlantic Yards/Pacific Park was part of it, with two sites offered as potential office towers. One was the B4 site at the arena's northeast flank, now planned as space for  810 apartments . See DT 10 in the graphic below. It says 830,000 square feet. The other was Site 5, currently home to P.C. Richard and Modell’s parcel, slated for a larger development, assuming the state permits the  shift of bulk  of the never-built tower approved for the Barclays Center plaza across the street. See DT 13 in the graphic below, with 1.14...

Well, the new (as of last September ) owner of the dowdy Atlantic Center mall, Madison International Realty, is indeed upscaling the offerings, with more food, as promised: Smorgasburg is moving there for a weekend winter residency. From the New York Times's Food section , 10/3/18: Smorgasburg  It’s a big challenge to haul the components of the Smorgasburg market from place to place, but that’s what Eric Demby, one of the founders and a partner, is doing. Starting the first weekend in November, the market will move from other locations in Brooklyn to 25,000 square feet in the Atlantic Center shopping mall across from Barclays Center. It will offer at least 25 vendors, including a liquor bar, a coffee bar and a bocce court. Among the stands will be Bolivian Llama Party, Dough, Mao’s Baos, Fedoroff'sSteaks, Oyster Party and Red Hook Lobster Pound. Night Market in the VICE Media Villain space in South Williamsburg will start the first Friday in November and be open Fridays f...

In  Betting on Brooklyn: One Major Retail Landlord's Survival Plan , The Deal (via The Street) interviews Ronald Dickerman, founder of Madison International Realty, which bought Forest City's New York retail properties, including the Atlantic Terminal and Atlantic Center malls, in a deal that closed 12/22/17. He suggested that the foot traffic from the nearby transit hub and the 6,000-unit development means "It's pretty hard to screw this one up." He said they'll "raise rents from $30 per square foot to $60"--an indication that Forest City Realty Trust, parent of Forest City New York, just wanted to get out of the mall business. As he's said before, he wants Barclays Center visitors to eat next door: "We are going to do a facade redevelopment, some interior renovations, and definitely food and beverage concepts. There's a space on the third floor [presumably at Atlantic Center] that could be experiential retail." Well, it cou...

A press release 12/22/17, Forest City completes conversion of ownership in 10 New York City specialty retail centers , indicated that Forest City Realty Trust has formally sold its 51% share in the Atlantic Terminal and Atlantic Center malls, as expected, to its partner Madison International Realty. Note this statement: "the 42nd Street retail/entertainment complex, is expected to transact at a later date upon resolution of the ground lease dispute with the City of New York." That's a reference to a lawsuit  (case file ) over the terms of a 20-year lease that renews next year. Forest City paid a base rent of $1.17 million a year for the first 20 years of the lease, gaining that very nice deal in tougher times, and the two parties are in dispute about the way to calculate the value of the lease renewal.  According to remarks at a November hearing by Supreme Court Justice Charles Ramos, he is inclined to grant Forest City's request for arbitration to resolve th...

From The Real Deal, 12/1/17,  Is retail turning a corner? : Cushman [& Wakefield], for one, was tapped by Ronald Dickerman of Madison International Realty this year to handle leasing at the 2.1 million-square-foot, 12-property retail portfolio the company will own outright by the end of this year. That’s when it’s slated to close a deal to buy partner Forest City New York out of its 51 percent stake. This includes the Atlantic Terminal and Atlantic Center malls. From the article: Dickerman said that unlike with many prime Manhattan locations, there’s still plenty of financial upside at the Brooklyn mall[sic]. “This is not $2,000-per-square-foot rents going to $5,000 per square foot. This is $30-$50 going to $100 per square foot. The narrative is very different here,” he said. “There’s a lot of opportunity to twist this project into the current century.” That suggests that some of the downmarket leaseholders might be replaced by retailers with somewhat higher price points a...

Well, in January, the Real Deal reported that Madison International, already a 49% owner of Forest City Realty Trust's New York City retail portfolio, was aiming to buy the remainder of the property, and now it's official. The agreement announced today (press releases at bottom) values Forest City's interest at about $1 billion; we'll see if that's deemed a good price or a sale from weakness. Not only is Madison buying Atlantic Terminal and Atlantic Center malls, across from the Barclays Center, it is "considering the potential redevelopment" of both. Crain's adds detail : [Madison's Ronald] Dickerman said his firm plans to invest "ten of millions of dollars" repositioning the two adjacent Downtown Brooklyn properties to bring in new tenants and make the complex a hipper destination. Included in the plans are an increased number of food options and the installation of a roof deck that Dickerman said would lure larger crowds from th...

The Real Deal this morning published Madison International in talks to buy Forest City’s stake in NYC retail portfolio , based on an unnamed source. That means the fund manager, which in 2011 bought a 49% stake in the malls--like Atlantic Center and Atlantic Terminal--would own the entire portfolio outright. Last August, Forest City indicated it could put such retail buildings on sale. According to a 2011 New York Times interview with Madison International's Ronald Dickerman, "They came to us, I think, in September 2010 to fund their go-forward investments. You may know that the Atlantic Yards development is something like $4 billion." The malls were fully occupied and leased, he said. "We invest in core Class A assets where the building itself is relatively stable and the deal is not distressed. What’s distressed about the transaction is the fatigue of the underlying investor." So Forest City may be even more fatigued by now--as well as focusing its attenti...

After selling a 49% stake in its major Brooklyn malls (and other retail properties) in 2011, and after selling 49% of other malls in 2013, Forest City Realty Trust (formerly Forest City Enterprises) aims to get out of the retail business almost completely. That means a sale of the majority stake in the Atlantic Terminal and Atlantic Center malls opposite the Barclays Center, and a presence in retail limited to mixed-use, "placemaking" projects. That includes retail in places like the MetroTech office park and includes Pacific Park Brooklyn, so, despite no discussion of the paused proposal to build a glitzy mall at Site 5, currently home to Modell's and P.C. Richard, I assume that's still the plan. But Atlantic Yards/Pacific Park, it seems, remains something of an anomaly. After all, if Forest City aims "to redeploy the value from our retail portfolio into apartment and office assets that align with our focus on core markets and urban, mixed-use placema...

This is among multiple articles covering issues raised at the March 15 Atlantic Yards Community Development Corporation (AY CDC) meeting. "Activate the Atlantic Avenue corridor." That's one confounding justification by Greenland Forest City Partners for its brazen, highly questionable plan to shift 1.1 million square feet of bulk from the tower planned for the arena plaza across the street to Site 5, creating what I've dubbed the "Brooklyn Behemoth," with 1.6 million square feet--and then turn B4, the large tower planned at the northeast corner of the arena block, from residential to office uses. The jargon-y claim--as if somehow office workers from one building would cross broad Flatbush Avenue to commune with the other building--strikes me as a fig leaf to get a plan passed that exceeds previously disclosed ambitions. The rationale begins Speaking at the 3/15/16 meeting of the Atlantic Yards Community Development Corporation, Forest City spokes...

The office tower at Forest City Ratner's Atlantic Terminal mall is set to get $90.8 million in triple tax-exempt re-financing, and though the city claims there's no politics at play, this is apparently the largest allocation of tax-exempt bonding for a private company project under the city's discretionary BUILD NYC program. (See this  map  to compare.) And it's nearly the largest ever under the life of the program, which goes back to at least 2008. There was a $112 million  bond  for Mount Sinai Hospital in Queens. But the additional $14.2 million in taxable bonds for Atlantic Terminal put the total at $115 million.  The BUILD NYC program is used significantly for private schools, hospitals, and social service agencies, and less often for private companies. So, if there's a finite amount of capacity to issue such bonds--since there's no reason federal government to allow unlimited financing--Forest City's application could crowd out other potential...

National Real Estate Investor on 11/26/14 published D riving Up Value in Urban Retail Settings Still a Tough Development Proposition , quoting, among others, Forest City Ratner CEO MaryAnne Gilmartin: Gilmartin also talked of the experience of building the Atlantic Terminal mall a decade ago, at a time when doing anything in Brooklyn was considered a huge risk. For Forest City, the risk was mitigated by the fact that it had secured the land at a low cost and so had a lot of potential upside. In practice, the development has been massively successful by bringing retail to an underserved market. The Target at the property, for example, is now the best-performing location for the department store chain. At the time, however, Forest City had to convince tenants to lease space at the Atlantic Terminal mall, often on very favorable terms. As a result, today Forest City would like to redevelop the original property and bring it in line with the quality of the more recent Atlantic Yards pro...

The watchdog site New York World yesterday published  Night of the living tax break : Five years after state lawmakers killed a corporate property tax exemption that had outlived its original purpose, it’s still stalking New York City’s finances, to the tune of more than $650 million this year. ...Other windfalls went to the headquarters of News Corporation — the owner of the New York Post — whose tax bill is cut by some $2.2 million this year, and Manhattan’s East River Plaza mall, a project co-owned by real estate giant Forest City Ratner, which got two breaks totaling $8.1 million. ...These are among the more than 7,000 properties that continue to receive abatements on property taxes under the city’s Industrial and Commercial Incentive Program, or ICIP, first launched in the 1980s to encourage businesses to locate or remain in New York City. That program was open to a wide array of business that built or made improvements to their properties. It expired in 2008, amid...