Fourth Avenue undergoes transformation
After a pause during the recession, new residential developments are again rising on Brooklyn’s Fourth Avenue and more are on the way along the 120-foot-wide corridor that separates the historic brownstones of Park Slope from the emerging neighborhood of Gowanus.
In the first half of this year alone, 13 investment properties valued at more than $60 million traded on Fourth Avenue along the borders of Park Slope and Gowanus, compared to 10 properties totaling $35 million in all of 2013 and six properties totaling $26 million in all of 2012.
In fact, sales along this stretch of Fourth Avenue made up 17 percent of the 73 investment properties sold in Boerum Hill/Cobble Hill/Carroll Gardens/Park Slope/Gowanus and Red Hook combined in 1H2014, and 21 percent of the $290 million dollar volume of these trades, according to Ariel Property Advisors’ Brooklyn 2014 Mid-Year Sales Report.
One of the largest transactions in the first half of the year was 470 Fourth Avenue and 235-243 11th Street, a portfolio of seven properties that sold in February for $20 million, or $232 per buildable square foot. Slate Property Group, Adam America Real Estate Group, and Naveh Shuster Limited are planning to develop a 12-story, mixed-use, 105-unit residential building on this site, which is one of three projects with a total of about 325 units that Slate and its partners are planning on Fourth Avenue, according to the company’s website.
Along with Adam America, and AEW Capital Management, Slate also executed a long-term lease at 535 Fourth Avenue in April where the development team plans to construct a 12-story, 148-unit residential building. In addition, Slate principals Martin Nussbaum and David Schwartz partnered with Adam America to acquire the McDonald’s site at 275 Fourth Avenue last year for $14.8 million and plan to develop an 11-story, 73-unit residential building.
The largest Fourth Avenue trade in the first half of 2014 was the sale in May of 35 Fourth Avenue for $25 million, or $231 per buildable square foot. No development plans have been filed with the city for this site to date, however.
Other Fourth Avenue developments on the horizon include Brookland Capital’s 13-story, 45-unit condominium with ground floor retail at 550-554 Fourth Avenue at 15th Street, a property that was recently purchased for $7.4 million. And, a local developer purchased 269-271 Fourth Avenue for $4.4 million at the end of last year and plans to develop a 20-unit condo project.
Although Fourth Avenue was once characterized exclusively by auto repair shops, gas stations, warehouses, and mixed-use, low-rise buildings, the corridor began changing in 2003 after the City Council voted to rezone it from Warren Street to 15th Street, allowing for the construction of residential buildings up to a maximum height of 120 feet with a maximum base height of 85 feet.
Two years later, the City Council extended Fourth Avenue’s up-zoning to 24th Street and permitted Inclusionary Housing bonuses to create incentives for the development and preservation of affordable housing in new rental and condominium projects.
After grumbling by local officials and residents that the new developments on Fourth Avenue were sterile because they didn’t include ground floor commercial uses, the City Council adopted the Special Fourth Avenue Enhanced Commercial District in 2011 to ensure that ground floor spaces promoted a “lively and engaging pedestrian experience along Fourth Avenue.”
As part of this effort, former Brooklyn Borough President Marty Markowitz announced he wanted to rename Fourth Avenue “Brooklyn Boulevard” and feature widened sidewalks, medians with gardens, traffic calming measures, trendy shops, art galleries, and improved housing. Markowitz convened a task force to explore ways to improve the corridor.
Today developers are betting on the future of Fourth Avenue because of its network of subway stops for the F, G, N, and R trains and Atlantic Avenue transportation hub, newly opened Whole Foods, restaurants, and recreational amenities in Gowanus, trendy restaurants and shops in Park Slope, and the Barclays Center up the street. With the Brooklyn brand still hot, demand for housing high, and the popularity of Gowanus rising, we anticipate the trend of new residential development on Fourth Avenue will continue.
For a copy of Ariel Property Advisors’ Brooklyn 2014 Mid-Year Sales Report, please visit http://arielpa.com/newsroom/report-APA-Brooklyn-mid2014-Sales-Report. For more information about Ariel Property Advisors call 212-544-9500 or visit arielpa.com.
Ariel Property Advisors is a New York City investment property sales firm with an expertise in the multifamily market. The firm also produces a number of research reports including the Multifamily Month in Review: New York City; Multifamily Quarter in Review: New York City; Multifamily Year in Review: New York City; Brooklyn Mid-Year and Year-End Sales Reports; Northern Manhattan Mid-Year and Year-End Sales Reports; and the Bronx Mid-Year and Year-End Sales Reports. For more information see arielpa.com.
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