Brooklyn Grows Up

The (Scaled Back) Facelift of NYC’s “Other Skyline

By Diane Greer

Residential Projects

Large condominium projects completed in Downtown Brooklyn last year include the 40-story, 303-unit Oro Condominium at 306 Gold St.; the Clarett Group’s Forte Condominium, a 30-story, 108-unit, triangular tower at 230 Ashland Place; and Be@Schermerhorn, a 25-story, 246-unit condominium at 189 Schermerhorn Place.

The Clarett Group is developing what will be Brooklyn's tallest building at 111 Lawrence Street. The 51-story, 500,000-sq.-ft. tower will contain 500 rental units and ground level retail.

One block south of the Oro, Alexandria, Va.-based AvalonBay Communities’ 42-story Avalon Fort Greene tower is rising at Flatbush and Myrtle avenues. The $320 million project will feature 631 rental units, an 18,000-sq-ft plaza and 2,000 sq ft of retail Completion is slated for the second half of 2010.

Across Myrtle Avenue is the 38-story Toren, clad in an innovative and visually stunning silver-blue aluminum and glass curtain wall BFC Partners enlisted Skidmore Owings & Merrill Architects to design the 240-unit condominium, which includes 13,000 sq ft of retail space and 5,000 sq ft of offices. The project is seeking LEED gold certification and boasts its own cogeneration plant. Residents should start moving in this summer.

Another innovative facade is rising at 80 DeKalb Ave. Designed by Costas Kondylis, Forest City Ratner Cos.’ 34-story rental tower features a sawtoothed facade clad in aluminum and glass. The $200 million project features 365 rental units, including 73 affordable units. Staged completion will occur between summer and January.

Brooklyn’s tallest building is under construction at 111 Lawrence Str., in the heart of Downtown. The 51-story, 500,000-sq-ft tower, developed by the Clarett Group, will contain 500 rental units and ground-level retail.

At 230 Livingston St., work is under way on a two-tower, 271-unit rental complex with a 26-story building fronting Livingston and a 10-story structure on Schermerhorn. The project, developed by Shlomo Karpen, includes 15,000 sq ft of retail.

Commercial Development

Economics and easy access to Manhattan is fueling new hotel construction. At 216-222 Duffield St., the Lam Group of New York is building a 30-story, 300-room Sheraton Hotel and a 180-room Aloft Hotel. The Sheraton expects to open late summer and the Aloft in early 2011 Meanwhile at 300 Schermerhorn St., Tyler Hospitality is constructing a 247-room Holiday Inn

Larger hotels expecting to break ground in 2009 include the 164-room Hotel Indigo at 237 Duffield St. and Cambria Suites at 75 Schermerhorn St.

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Construction of major new office developments has yet to take off Downtown. “Historically Downtown Brooklyn has been home to a lot of banks, financial institutions and insurance companies,” Chan says. “Many of these companies are shedding space.&rdquo New office development will occur once the existing lease and sublease space is absorbed and major anchor tenants commit to new space, he adds.

Last year saw significant commercial leasing activity and a changing tenant profile, Cushman & Wakefield’s Markman says. Advertising, legal, publishing, consulting and nonprofit organizations replaced financial tenants. “Brooklyn is a good value play,” Markman adds “Rents are less than half what you would pay in Manhattan and incentives can lower costs further.”

Markman says he expects this year to be a little more challenging due to the economy and as lease rates drop in Manhattan, “but I really expect Brooklyn to continue doing well.”

One Class A office project expected to start this year is City Point. The first phase of the development is a 17-story structure designed by Cook+Fox featuring 350,000 sq-ft of office space, retail and a mix of affordable and market-rate rental units. Located on the site of the recently demolished Albee Square garage on Willoughby Street and across the street from the soon-to-be-constructed Square Park, the project will be Brooklyn’s first LEED gold certified office tower

Markman says the planned City Point office space will be easily absorbed by the market. “To have 300,000-400,000 sq ft of office space is not a lot of product to come online over the next two the three years,” he adds.

The second phase of the project will be a residential building, originally planned as a 65-story tower. The developers are still working through a number of options for the site.

Downsizing & Delays

Economic uncertainty and the credit freeze are impacting developers and potential buyers “There is little if any financing,” Miller Samuel Real Estate Appraisers’ Miller says “All new development activity is under pressure simply due to the lack of sales.

A development map of Downtown Brooklyn. Over 60 projects are planned, under construction or already completed.

“I characterize the market as experiencing a large pause. Everyone is waiting until credit improves and things start to move.”

Brooklyn-based North Development Group is changing its plans for the triangular lot at the 85 Flatbush Ave. Ismael Leyva had designed a 21-story futuristic version of the Flatiron Building containing 108 condominiums for the site.

“We are downsizing the building and it will lose its Flatiron appearance,” says Martin Ehrenfeld, NDG’s director of sales and marketing “The market is changing and we need to change with the market.” Ehrenfeld says his firm hopes to start construction on a 13-story structure with 160 rental units and some commercial space in the spring.

Developers of the Oro envisioned the adjacent Oro II as a 38-story mixed-use tower with two hotels and residential units. Current plans call for a 16-story building housing a 135-room Homewood Suites and the 240-room Hilton Garden Inn. Construction is expected to start in late 2009.

New York-based Red Apple Real Estate wants to develop a massive mixed-use project on Myrtle Avenue consisting of three low-rise buildings and high-rise tower. Work is under way on a nine-story, 85,000-sq-ft building with 100 rental units.

“We are capable of building another 1,400,000-sq-ft,” says John Catsimatidis, Red Apple CEO “But we are waiting to see which way the market is going.”

At the corner of Flatbush and Atlantic avenues, Forest City Ratner is creating an 8-million-sq-ft mixed-used development designed by Frank Gehry. The $4.2 billion Atlantic Yards project features an 850,000-sq-ft sports arena and 16 mixed-use high-rises.

The project, long-delayed by lawsuits, now may face further challenges due to economic conditions. In a third-quarter earnings conference call in December, chief executive Charles Ratner said the company remained committed to the project and expected to get through the remaining litigation in 2009 But he said the project could be further delayed if the economy continues to struggle.

“We are in a transition period,” Miller says “We have a tremendous amount of stimulus being pumped into the economy but it is going to take awhile to work through the system and the hope that is that you start to see a thaw in credit.”

Miller does not think we will see much new residential development over the next several years “There is still a lot of supply that needs to be absorbed and it will be absorbed at a slower pace.”

Chan remains resolute “We are enthusiastic about the momentum and the magnitude of economic growth Downtown and we are sobered by the economic realities that we are now facing, but we not discouraged in the least.”