Brooklyn Real Estate Summit: Brooklyn is hot, getting hotter
‘Demographics is destiny; the borough is changing’
Attendance surpassed all expectations at the 2013 Brooklyn Real Estate Summit held on Thursday at the Brooklyn Academy of Music (BAM) in Downtown Brooklyn.
“It was insane,” Chris Havens, director of commercial property for aptsandlofts.com told the Brooklyn Eagle. “Over 600 registered and more than 525 people attended – our biggest yet.”
“So why are we all here? The answer is simple: Brooklyn real estate is hot,” Carlo A. Scissura, president and CEO of the Brooklyn Chamber of Commerce said during his opening remarks. He called real estate “one of Brooklyn’s biggest economic development engines.”
Real estate professionals filled the auditorium or caught the action on video monitors set up inside BAM Café as speakers shared their insights on Brooklyn’s retail corridors, hotel development boom, residential development, arts and entertainment districts and more.
Brooklyn’s changing demographics, fueled by an influx of “knowledge workers,” was a theme running through the panels.
“We started to buy in Brooklyn 10 years ago,” said Daniel Benedict, principal at Benedict Realty Group, speaking on a panel made up of multi-family buyers. “Brooklyn started coming alive ferociously, and many opportunities are still there.”
Arik Lifshitz, CEO of DSA Property Group, said that Brooklyn was its own brand. “Now people don’t want to live in Manhattan – it’s too rich, too corporate. Brooklyn is vibrant, you see families with strollers, it’s affordable.”
Morning keynote speaker Deputy Mayor Robert K. Steel told the crowd, “We believe Brooklyn is one of the lasting legacies of Mayor Bloomberg’s administration.”
Steel pointed to the administration’s economic strategy as fostering such major Brooklyn developments as NYU’s planned Center for Urban Science and Progress at 370 Jay St.; the developing cultural district around BAM, which Steel called “the next Lincoln Center;” Admiral’s Row at the Brooklyn Navy Yard; Two Trees Management’s Domino Sugar Factory project; and various projects at Coney Island.
Introducing a panel on the ways arts and entertainment drive development, Karen Brooks Hopkins, president of BAM, said, “This is Downtown Brooklyn’s moment, and we waited for it a long time.” Hopkins said Brooklyn’s “culture corridor” extends from the Brooklyn Navy Yard, with Steiner Studios and Brooklyn College’s Film School, all the way to Barclays Center.
Arts and entertainment groups stressed their added value on local real estate. Lance Pinn, president and CMO at Brooklyn Boulders, said that after a rock-climbing gym moved into Gowanus, “Littlefield and Crossfit popped up,” and the real estate value of their building increased. “The other side paid triple what we paid,” Pinn said.
At a panel discussing “active players” in Brooklyn’s strongest retail corridors, moderator Geoff Bailey, VP of Retail Sales at TerraCRG, said that retail in Brooklyn has “turned the corner.”
“Everything is happening” at the Fulton Mall, retail is booming in Williamsburg, and New York City’s largest trade happened at Kings Plaza, he said. Related’s 600,000-plus sq. ft. Gateway Project is “80 to 90 percent leased, in the middle of a sand lot in East New York,” he said. “The market is live and active.”
Paul Bernstein, a principal at RedSky Capital, said it was “spectacular” what has happened since 2005. “Demographics is destiny! The borough is changing.”
While Bernstein “loves Fulton, Bedford Avenue is right there as one of the most desirable streets in Brooklyn. People on Bedford really care about ‘curated’ retail. You put in a Subway [sandwich shop] and people riot.”
At a panel discussing the hotel development boom in Brooklyn, Toby Moskovits, founder and CEO of Heritage Equity Partners, said there is a “tremendous disconnect between demand and supply for hotel rooms in Williamsburg.” Moskovits said that $289 a night “is typical, and Brooklyn-facing views are in demand, not Manhattan. They’re here for the Brooklyn experience.”
Panelists on the residential development pipeline panel were unabashedly enthusiastic. Moderator Ofer Cohen, founder and president of TerraCRG, said there was “exemplary robustness in this market,” with “11,000 residential units in the development pipeline. Most broke ground in the last 18 months or are about to break ground. And 3,500 are about to, or came online, in greater Downtown Brooklyn.”
David Von Spreckelsen, senior VP at Toll Brothers, developing condos and a hotel in Brooklyn Bridge Park, said Brooklyn has “an enormous demand from knowledge workers,” a sentiment echoed by other developers.
“Knowledge workers want to live next to theater and culture,” said Kas Sanandaji, senior VP of Investments for the Lightstone Group. He talked up the Gowanus neighborhood. “There’s access to transportation, themed retail on Smith and Court Street, a Whole Food is going to open – there will be tremendous demand.”
Josh Walentas, principal at Two Trees Management and the afternoon’s keynote speaker, described his company’s far-reaching plan to develop the massive Domino Sugar factory on five blocks of the Williamsburg waterfront. Two Trees’ challenge was to better integrate the project with the neighborhood, he said.
“Instead of cul-de-sacs and private courtyards, we’re trying to integrate the street grid and create a new waterfront park.” The old plant is an “incredible industrial relic,” Walentas said. “We’re going to retain as much industrial archaeology as possible.” The waterfront park, with separate areas for active and passive recreation, will “revitalize the Williamsburg community,” he said.
Morris Matalon, a consultant with Burke Leighton Asset Management, which owns and manages multilevel residential apartment buildings, said he was attending the conference to network with developers and make contact with possible investors.
“Brooklyn is exploding with young residents, 20 to 30 years old, who are enjoying a lifestyle similar or better than Manhattan,” he told the Brooklyn Eagle. “’Hot and getting hotter’ is the only way to describe it.”
The Brooklyn Eagle will cover the Summit’s panels in depth in future issues.