Despite an underwriting environment that has tightened significantly, large-scale, inventive residential projects are still rising in Brooklyn, where developers and New Yorkers have flocked in droves over the last decade.
“Really this is a market of neighborhoods,” said Seth Pinksy at the TerraCRG Only in Brooklyn conference last week, where residential developers talked about their Brooklyn projects.
Pinksy’s firm, RXR, is building one of the most interesting developments in Downtown Brooklyn.
The project, which will be developed under the new 421a framework, is 400 apartment units that will be built on stilts above a building on the campus of Long Island University (LIU) on Flatbush Avenue. The move is another city-private developer partnership for RXR. The company has done similar work with the City of Yonkers and New Rochelle, which is currently underway.
When Pinsky and RXR heard LIU was having issues with its campus, which was in dire need of restorations and upgrades, and also had unused air rights, they reached out to the college about striking up a partnership.
“They had gone down the road with other developers but the interference with the campus was too great,” said Pinksy.
His firm took pains in their plan to make sure the campus could still function during construction, and as well as contributing to the university’s endowment, part of the agreement included building LIU a new athletic field and classrooms. RXR paid LIU $76 million for the development rights, of which the university has chosen to spend $35 million.
In Brooklyn Heights, The Hudson Companies is building a new public library, STEM lab, parking, retail, and 133 condos. The project replaces the former Brooklyn Heights library at 280 Cadman Plaza West Street, which was torn down. Of the 133 apartments, 114 will be affordable.
Eschewing the typical topping out ceremonies that developers often throw to celebrate construction milestones, The Hudson Companies had a “bottoming out” ceremony after laying the foundation at the project, said Novak.
In East Williamsburg, Novak and her firm are also developing The Breeze, a conversion project in the heart of industrial Williamsburg/Bushwick.
Three contiguous industrial buildings with 86,000 s/f will be converted into a mixed-used development for creative office and retail tenants and will also include a rooftop penthouse and event space for a future bar or restaurant tenant.
The Hudson Companies will take out the walls on the first floors to create storefront retail space, and a corridor will cut through the buildings to create a breezeway (where the building takes its name from) that will lead into a landscaped courtyard.
“That part of Brooklyn is a little gritty, so we wanted to bring you into a little oasis,” said Novak.
Hudson acquired the three-story warehouse building in August 2016. The design for the project is led by S9 Architecture and construction began last summer, with an anticipated completion date of summer 2018.
Developers of Brooklyn residential projects dismissed any notion that a glut of product entering the market is having trouble selling or being rented. Instead, they have found that as long as the projects have strong amenity packages and are located in neighborhoods with excellent public transit, sales and leasing are a breeze.
“The city’s population has expanded by 500,000 just this decade,” said Pinsky. “There’s a lot of supply, but there’s a lot of demand too.”
The new age of amenities seems to have brought new development rental and new development condo up to the same playing field, as buyers and renters alike are expecting the same kinds of high-end appliances, finishes, and offerings.
“As long as interest rates stay low, the market is the same for buyers and renters,” said developer Boaz Gilad of Brookland Capital. He added that young people now expect more of an “experience” in their building, and care less about the square footage of apartments and more about common spaces and how tenants can interact with one another.
In the Hudson Companies’ residential project the Park Line in Prospect Lefferts Gardens, the luxury rental has the entire 24th floor set aside for amenities including a private chef’s kitchen and bar, roof terrace, private screening room, on-site parking, and vegetable garden.
“If we had built this building five or six or seven years ago, we may have made a very different decison on what went up on the roof,” said Novak. “But now we’re competing with everyone downtown and this BAM area that have amenities.”
