Fulton Mall street view
Fulton Mall’s days as a sneaker store Shangri-la could be numbered. National retailers, as well as Brooklyn’s favorite hip-hop and up-and-coming real estate mogul, Jay-Z, are taking notice of Brooklyn’s busiest, and recently refurbished, retail corridor. This could mean promising days ahead for a tight-knit group of landlords controlling many of the street’s major properties.
Several surnames carry considerable weight when it comes to Fulton Mall real estate–Laboz, Chera, Jemal and Sutton among them. “These families will buy anything that comes available in the area,” said Marcia Rose Yawitz, who has worked with Fulton Mall investors for years as a principal at Eastern Consolidated Real Estate Investment Services.
Even agents sometimes learn of deals after the fact. “All these properties trade without hitting the open market,” said Robert F. Hebron IV, a downtown Brooklyn broker with Ingram & Hebron.
The owners’ real estate history on Fulton Street stretches back generations, and the retail formula has been refined during that time. As a group, the landlords seem to understand that a successful Fulton Mall requires a mix of locals and nationals, cachet and affordability.
The nationals, though, weren’t going to invest in the area unless they could see a local commitment. In 2004, the city rezoned downtown Brooklyn, enabling the residential towers that have shot skyward. It tacked on a $15 million Fulton Streetscape Project, now nearing completion, with enhanced landscaping, more public space and seating, and new lighting. The old lighting “made Fulton Street feel like an army barracks or a correctional facility,” said Joe Chan, president of the Downtown Brooklyn Partnership. “This can be a destination for all of Brooklyn, for an ethnically and economically diverse shopper base,” he said. “That’s what Fulton Mall was in its heyday, and that’s what it could be moving forward.”
Here’s a look at the properties, and respective owners, who stand to benefit most from changes underway on Fulton.
Owner: ISJ Management (Jemal family)
History: Bought in 2004 for $2.8 million
What’s coming: Unclear
This property, blessed and burdened with history, has struggled since famed restaurant Gage and Tollner closed its doors after more than 100 years. Two chains — T.G.I. Friday’s and Arby’s — have opened and closed, while Harlem soul food institution Amy Ruth’s never managed to turn the lights on.
The landmarked building must remain a restaurant, which may be the crux of the problem. Albert Laboz, Isaac Chera and others all said restaurants simply can’t afford Fulton Mall rent. But Joseph Jemal and family keep trying. Jemal, who declined to disclose the asking rent, said he’s showing the property to Manhattan groups that operate restaurants. (The restaurant would be two floors of the four-story building.)
Robert Hebron has tried to steer clients toward the property and thinks a well-known local is the answer. “Amy Ruth’s would’ve been a home run,” Hebron said. “With the changing face of the mall, it’s hard to say what would work there.”
497 and 505 Fulton Street: 100,000 sf residential + 81,000 sf retail
Owner: United American Land — Albert, Jason and Jody Laboz — since 1979
Out: Conway departed months ago; Fulton Closeout Center is temporary
What’s coming: H & M, and 100 loft rentals
Albert Laboz and family landed perhaps the most talked-about retailer for the rejuvenated Fulton Mall: H & M, the international affordable-fashion chain. Because a subway station sits below the property, United American Land is resolving issues with the MTA, a process that has slowed the 35,000-square-foot deal. But Laboz said H & M will likely get the keys either later this year or early next.
“Several major tenants” are looking at 46,000 square feet next to H & M’s future home (half the space is street level, the other half basement), he said. But the game-changer comes not in retail but in residential. UAL will convert the upper floors of the historic former Martin’s department store into Soho-style lofts with 15-foot ceilings. “We’re very impressed with absorption of the new residential developments,” said Albert Laboz, referencing the numerous condo and rental projects squeezing Fulton from all sides. “We’re bringing in a Manhattan product that will not be cookie-cutter.”
523 Fulton: 80,000 sf retail + 34,000 sf commercial
Owner: Allied Property Group (Michael Chera) since 1983
Out: Bed, Bath and Linen
Staying: Brooklyn USA, Gallery Jewelers, Sarit Shoes, Metro PCS, GNC, Foot Locker and GameStop
Allied and Michael Chera (who is related to Stanley and Isaac Chera but not connected to Crown) command an entire block with 523 Fulton. Berkeley College, a multi-campus school scattered throughout the NYC area, recently took the third floor, adding to Fulton’s newfound collegiate feel. (Long Island University first constructed dorm rooms in 2006 at the corner of Hoyt Street and Fulton.) Expectations run high for the soon-to-be-vacated street-level space.
“With the leases that have been signed, Fulton is a street that many retailers know,” said Barry Fishbach, an executive vice president at Robert K. Futterman who is representing Allied. “Those that weren’t aware of it, they know it now,” added Fishbach, who has a long roster of national retail clients.
He described the space at 523 Fulton, available this spring, as a bargain (about 5,000 square feet of ground-floor space for $128 a foot).
490 Fulton Street: 150,000 sf retail + 120,000 sf college dorms
Owner: Crown Acquisitions (Stanley and Isaac Chera in partnership with Eli Gindi)
History: Bought property for $59.4 million last year
Out: Young World Superstore, Strawberry, Ashley Stewart, $5 Shoe Warehouse and Pretty Girl
What’s coming: Syms/Filene’s Basement, Planet Fitness and Long Island University dorms
The Cheras and Eli Gindi made their own splash by luring a Syms/Filene’s Basement combo into 40,000 square feet. Planet Fitness will open its second Fulton Mall location at the back of the property. But the asset’s prime turf — 38,000 feet of street-level retail space plus an equal amount on the second floor — remains available.
“In the last 60 to 90 days, interest in the property has intensified immensely,” said Isaac Chera, a third-generation operator with his family’s Crown Acquisitions. “I’m on the street at least three times a week with different tenants. … They’re doing their homework.”
Chera expects the ground-floor real estate to fetch $250 to $300 a foot, a figure that would be the top end for this strip. He sees Fulton Mall as a “34th Street and Times Square hybrid,” where national chains within reach of the middle class prosper.
City Point (Fulton Street at Dekalb Avenue)
Owner: Acadia Realty Trust (in partnership with PA Associates and Washington Square Partners)
History: Acquired partial leasehold in 2007 from city; bought out unaffiliated partner last year
What’s coming: 50,000 sf of retail
City Point mall is the first baby step in a 1.5 million-square-foot mixed-use project. The sleekly designed four stories will be the first ground-up construction on the mall in decades, according to Acadia’s website.
None of the established Fulton families are involved, though Acadia did hire Brooklyn consultant Tom Montvel-Cohen, who serves on the Fulton Mall Improvement Association. And he said he expects new tenants to have an inclusive, broad attraction to shoppers.
It’s also possible that Fulton Mall’s estimated 100,000 daily shoppers might soon be seeing red. Some sources interviewed for this story have heard that Target is taking a hard look at City Point. A Target spokesperson said that the company, which has three existing Brooklyn stores, including a 220,000-square-foot facility a half-mile away at Atlantic Terminal on Flatbush Avenue, couldn’t discuss any projects until they are within a year of opening. Acadia expects the mall to open in spring 2012.