The stars are aligned for great success and new development in downtown Brooklyn, the city's third largest commercial district, which is finally transforming into a true 24/7 community.
"New projects and developments appear daily. It's mind-boggling. Who would have thought this would be happening in downtown Brooklyn?" the president of Muss Development, Joshua Muss, said. "With the huge number of luxury apartments, including waterfront and 40-story buildings with worldclass views of Manhattan and the harbor coming on line, as well as the ongoing commercial development and redevelopment on virtually every block, downtown Brooklyn is arguably a combination TriBeCa, SoHo, and DUMBO. It's a hot, hot area."
Downtown Brooklyn is already the borough's leading retail destination, and more than 100,000 shoppers pass through Fulton Street Mall every day, according to the Downtown Brooklyn Partnership. More than $4 billion worth of development is coming to downtown Brooklyn, which includes nearly 2 million square feet of office and retail space. Several streetscape and transportation infrastructure improvements are also planned, along with the creation of four public open spaces, as almost 17,000 people are expected to move to the area over the next five years.
"It's the Manhattanization of downtown Brooklyn, but with a twist," a former City Council member and a land use partner at the law firm of Wolf Block, Kenneth Fisher said. "Brooklyn has achieved the density and the diversity to be its own destination. It's not just people priced out of Manhattan. The trick is going to be capture new jobs from amongst the new residents."
In the last two to three years, the area has seen major multifaceted development, especially residential. In other city neighborhoods that have recently blossomed, such as TriBeCa or DUMBO, retail establishments — especially restaurants and amenities — usually follow quickly on the heels of significant residential development and a rising population density.
"A walk through the new downtown area, one instantly notices the beehive of construction. What just a few short years ago was a downtown of several commercial spines, now and in the very near future will lay witness to more than a dozen new developments for an area that has morphed to embrace many worlds," the president of Troutbrook Companies, Marc Freud, said. "From the chic shops of Smith Street to the wonderful new restaurants and bars opening to cater to the office workers of downtown, and residences springing up all over the area, Brooklyn is fast becoming urban in its sophistication, yet provincial in its sub-neighborhoods."
As I reported last week, a joint venture of Acadia Realty Trust, P/A Associates, Paul Travis of Washington Square Partners, and MacFarlane Partners will be developing a 1.6 million square foot mixed-use complex, called the Center at Albee Square Mall.
The complex will include 535,000 square feet of retail space, 125,000 square feet of class A office space, and 900,000 square feet of residential space, which may include a hotel component.
A number of other developments are in various stages of planning. As reported last month in the press, the city plans to invest $15 million to modernize Fulton Street Mall.
The New York City Economic Development Corporation and the Department of Correction has issued a request for expressions of interest for the redevelopment of the Brooklyn House of Detention at 275 Atlantic Ave. It seeks a developer or development team to construct a mix of commercial and residential space on Boerum Place and Smith Street, on the 1.4-acre site along either side of the existing detention center. The site is a full block bounded by Atlantic Avenue and Boerum Place and State and Smith streets. The project would include construction of two new towers containing up to 238,500 square feet of hotel, office, and/or residential space and up to 27,000 square feet of ground floor retail on Atlantic Avenue, Boerum Place, and Smith Street.
Steps away from the Brooklyn House of Detention is developer Shaya Boymelgreen's 75 Smith St. The mixed-use tower, when completed later next year, will have 50 residential condominium units and the 93-room Smith Hotel.
"Muss Development will soon officially dedicate a spectacular new Plaza created alongside the newly expanded New York Marriott at the Brooklyn Bridge and will shortly announce a new retail development of approximately 50,000 square feet at the most important retail location at the crossroads of downtown Brooklyn," Mr. Muss said.
"Downtown is fast becoming a locale that affords the tourist, resident, and office worker the culture, restaurants, services, and shopping that five years ago were only available if one ventured into another neighborhood," Mr. Freud said. "With the 22-acre Atlantic Yards development about to begin, expect to have downtown in years to come be more defined. The development in downtown Brooklyn is just in its infancy."
The senior partner at Massey Knakal Realty Services, Tim King, said, "Downtown Brooklyn is a catchall phrase for a neighborhood that has always been at the forefront of Brooklyn real estate activity. Downtown Brooklyn has seven colleges with over 35,000 students, MetroTech Center, the Brooklyn Academy of Music, and the BAM cultural district. Acting as the retail anchor for all these distinct centers of activity are the Fulton Street Mall, the ‘Grande Dame' of Brooklyn retail."
A number of small developments are in various stages of construction. A 24,000-square-foot residential and retail building is just being finished by restaurateur Danny Chow on the corner of Court and State streets.
The Brody Group is putting the finishing touches on its 50,000-square-foot building at 456 Atlantic Ave., which has 7,000 square feet of ground floor retail. Marathon Bank just leased a 2,200-square-foot location at 399 Atlantic Ave.
Last year, the City Investment Fund and Atlantic Assets, whose principals include Gentry Hoit, Barbara Koz-Paley, and Judy Kessler, acquired eight three-story buildings on Atlantic Avenue. Each of the buildings contains ground floor retail with two stories of residential units above. The partnership intends to redevelop both the retail and residential portions of the project.
The biggest surprise for key executives in the business community who have been part of the geography of Brooklyn is the enormous residential demand. It is a complete surprise that condominiums in new towers on Flatbush Avenue Extension and Myrtle Avenue are selling at prices in excess of $750 a square foot.
"We are very happy with the initial sales at our luxury residential development, the Oro," the president of Palin Enterprises, Dean Palin, the co-developer of the first luxury residential condominium near Myrtle Avenue in downtown Brooklyn, said. "We named the property Oro since the property is located on Gold Street and we consider our property like a precious jewel. The 40-story condominium has a total of 303 residential units, as well as retail on the ground floor."
Last month, Gregg Wolpert purchased three one-story retail sites on Lawrence Street between Fulton and Willoughby streets, near the Fulton Street Mall, for $10.75 million. Industry leaders expect the developer to demolish the site and build an 80,000-square-foot building with retail on the ground floor and residential above. One block from the Fulton Street Mall and MetroTech, United American Land is planning to build a 594,000-square-foot mixed-use development with ground floor retail and residential. The site is located on Willoughby Street, between Bridge and Duffield streets.
As I reported earlier this year, AvalonBay Communities paid $70 million for a site bounded by Myrtle Avenue, Gold, and Prince streets. The REIT plans to begin construction this summer on a 42-story, residential market-rate tower with approximately 600 units. The property will have ground floor retail, which could house the borough's first Trader Joe's market.
Next year, AvalonBay Communities plans to begin construction of a second residential tower on Myrtle Avenue. This new tower would receive tax breaks to provide "affordable" housing to 20% of its tenants.
A third major residential development is also planned on Myrtle Avenue, on land owned by the chairman of Red Apple Companies, and Gristede's Supermarkets, John Catsimatidis. Mr. Catsimatidis plans to construct a residential condominium with approximately 500 units.
A few weeks ago, Frank and Kevin Lalezarian purchased a development site on Gold Street where they plan to build a 600,000-square-foot mixed-use tower that will house 511 rental apartments and 100,000-square-feet of retail and parking.
As I reported earlier this year, more than 1,200 hotel rooms are planned for downtown Brooklyn. This fall, the Lam Group is expected to complete a 300-room Sheraton and a 200-room Starwood Aloft Hotel, a spinoff of its W Hotel. These properties would be adjoining lots at 216–228 Duffield St., near Willoughby Street. A mixed-use W Hotel and condominium tower is planned on Flatbush Avenue near BAM and Atlantic Avenue. In the fall, construction is scheduled to begin for the Cambria Suites Brooklyn Bridge, a 16-story, 300-room all-suite hotel. The hotel will be situated on 75 Schermerhorn St. on a block near Livingston Street on the former site of Central Parking garage. As noted above, another hotel might be built by the selected developer at the Brooklyn House of Detention.
Mr. Stoler, a contributing editor to The New York Sun, is a television broadcaster and senior principal at a real estate investment fund. He can be reached at [email protected].