Fred Harris, vice president at AvalonBay Communities, which is constructing its first Brooklyn project, a 631-unit tower on Gold Street in Fort Greene.

From the March issue: A handful of major real estate management and development firms that have long avoided Brooklyn — even as housing prices in the borough shot up and brokerages rushed in — are finally venturing across the river.

The reasons are twofold. First, new high-rise, high-end construction in Brooklyn fits their business model. And second, values of these new Brooklyn buildings appear to have tumbled further and faster than their Manhattan counterparts, according to brokers and developers. “Developers are looking for opportunities, 100 percent,” said David Maundrell, a Dumbo resident and the president of aptsandlofts.com, a brokerage with a Brooklyn focus. “But they are willing to do that because there is a viable market here. It’s become a destination as opposed to an afterthought for Manhattanites who want a cheaper place.”

Jamestown Properties is one of the developers that recently upped its bet on the borough. In early 2007, the firm had a 60 percent equity stake in be@Schermerhorn, a troubled condo in Downtown Brooklyn, which was developed by SDS Procida and saw construction and sales suspended last year. But in December, Jamestown bought the balance of the mortgage from a consortium of banks. The consortium had originally lent $100 million to SDS Procida.

More than $100 million worth of cultural and public projects are slated to break ground in the area surrounding the Brooklyn Academy of Music, marking the dawn of Fort Greene’s new cultural district after years of delays. Among the six projects planned are the new $56.5 million, 27,500-square-foot Theatre for a New Audience building, which last month received approval for funding that will allow it to break ground in December; a $24 million renovation of the Strand Theater, which will begin at the end of this summer; and a new $6 million park. BAM is also getting a new exhibition space: this week, the academy is expected to close on a 4,000-square-foot retail lease on the ground floor of the Forté condos. Planning for a cultural district in the area began over a decade ago, and the city took the helm in 2006 after a series of setbacks, though the delays did not stop there. In 2007, the Brooklyn Public Library reneged on a plan to build a Visual and Performing Arts Library and in April, the beleaguered real estate market put the planned Brooklyn Arts Tower, a residential and cultural center, on hold. Still, project officials remain optimistic, despite the continued building slump and the city’s budget deficit, and assert that funding has been secured for Fort Greene projects. “There is renewed momentum now,” said Karen Brooks Hopkins, president of BAM. [Crain’s]

Roberta Benzilio, an executive director of sales at Halstead, and Toren

The developer of Toren, the long-awaited condominium at 150 Myrtle Avenue in Downtown Brooklyn, has applied for Federal Housing Administration financing and is scheduled to begin closings by the second week of December, officials said. FHA financing, if approved, would help individual buyers close their apartment contracts, with low down payments and less-than-perfect credit scores, said Roberta Benzilio, executive director of sales in Brooklyn for Halstead Property, exclusive broker for Toren. “I think the FHA approval will help with the buyers who were initially only looking to put 10 percent down,” Benzilio said. “Some people don’t have the cash available.” The FHA program allows new homebuyers to finance up to $729,750 for a new home. The buyers only need a 3.5 percent down payment compared to 20 percent or more required for most bank loans in the current market. [more]

189 Bridge is now partly rental

From the November issue: Like many other development firms, the Clarett Group rode the wave of
the real estate boom expertly, building successful condos in Manhattan
and other markets across the country. Like a host of other developers,
however, the company hit a damaging riptide in Downtown Brooklyn. A few
months ago, Clarett’s condo, the Forté, went back to its lender,
Eurohypo AG. The move was the most boldface example thus far of the
difficulties developers have encountered selling condos in Downtown
Brooklyn, generally defined as the section of the borough bounded by
Nassau Street to the north, Ashland Place to the east, Schermerhorn
Street to the south and Court Street to the west. That catch zone
encompasses several micro-neighborhoods, including the western edge of
Fort Greene. Several big developers are feeling pain in the saturated
area, which has been generating a lot of attention lately because three
new luxury rental towers are preparing to launch. [more]

The Forte in Fort Greene

From the October issue: Few buyers who bought fancy condos in the last few years could have
predicted that their building would end up as a poster child for the
failed real estate market in the city. But at some buildings that’s
exactly what’s happened. Satian Pengsathapon, who is 30 and works in the advertising industry,
purchased a unit in the Forté tower partly because he liked that the
well-known architecture firm FXFowle designed the building. And having
gone to school at the nearby Pratt Institute, he was also a fan of the
neighborhood, Fort Greene. “I haven’t had buyer’s remorse,” Pengsathapon said. “If anything, I wonder why people aren’t buying in this building.”

[more]

From the October issue: Brooklyn’s official motto may be “Fuggedaboutit,” but the borough’s
real estate industry is not having an easy time shaking thoughts of
double-digit price drops and troubled residential projects. Overall,
the median closed sales price in Brooklyn has already fallen back to
2005 levels, dropping 19 percent over the past two years, according to
StreetEasy. Rental listing prices dropped 12 percent over the past
year, not including all of the concessions landlords are throwing in
these days. Meanwhile, a city tally early last month found that
Brooklyn had more stalled construction sites than any other borough
with 214 — a stunning 47 percent of all 448 projects citywide. What’s worse, most experts agree that the market has yet to reach bottom.

After attempts to market units in bulk failed at the Forte tower at 230 Ashland Place in Downtown Brooklyn, Manhattan-based developer the Clarett Group and partner Goldman Sachs are in the process of negotiating with the project’s construction lender to transfer control to the lender. The 108-unit, 30-story condominium development is still only 37 percent sold despite being on the market for two years and German-based Eurohypo Bank, which holds $41 million in debt on the tower, is exploring its options. Sales in Downtown Brooklyn dropped 42.8 percent during the second quarter from the same time last year, according to a recent Prudential Douglas Elliman market report. And although units at Forte will remain for sale, sources say investors are likely to be unwilling to pay more than $350 per square foot for the units, which previously sold for an average of $681 per square foot. [Crain's]