Rentals take shape at stalled Gowanus condo site

Developers JDS, Property Markets plan to exploit “really, really strong” Brooklyn rents

New York /
Mar.March 30, 2012 12:00 PM

A 51-unit rental building is rapidly taking shape at 202 8th Street, an L-shaped lot in Gowanus that was originally slated for condominiums when developers JDS Development Group and Property Markets Group acquired the site in 2008.

Construction crews completed the 12-story superstructure this week, and the developers have scheduled a small “topping off” ceremony for next Friday, Michael Stern, the managing partner of JDS, said. While superstitious builders may have shied away from the inauspicious date, Stern embraced it. “You can’t forget Friday the 13th,” he said.

The building, which will also have an entrance at 438 Fourth Avenue, is one of numerous residential complexes that have sprung up near Brooklyn’s Fourth Avenue corridor. Last month, the Board of Standards and Appeals approved a variance for a 52,000-square-foot Whole Foods at Third Avenue and 3rd Street; next week, the City Council will vote on the plan.

JDS is gearing 202 8th Street to a luxury-minded clientele. The units — a mix of one-, two- and three-bedrooms — will rent for an average of between $53 and $54 per square foot and range from 620 square feet to 1,260 square feet, Stern said. That would put rent for the smallest units at an average of about $2,740 to $2,790 per month.

Stern has also promised tenants high-end finishes and amenities more typical of condos, including a gym, a children’s playroom, 3,500 square feet of outdoor space, a terra cotta façade, and a small private park on the Fourth Avenue side of the building.

The developers have also enlisted the services of CetraRuddy, the architecture firm behind 141 Fifth Avenue and One Madison Park. JDS, Property Markets and CetraRuddy are also collaborating on Walker Tower, the luxury condo conversion of a Chelsea Verizon building where some units will be priced at $10,000 per square foot.

JDS Had Originally Planned Condos For The 8th Street site as well, but about six months ago changed directions, Stern said.

“Residential rents in Brooklyn have been really, really strong, to the point where when we factor in all the considerations [of building condos], tax issues, etc., etc., it actually makes more economic sense for us to do rental,” Stern said.

The project would not be the neighborhood’s first such conversion: the Iconic Group’s Arias at 150 Fourth Avenue followed the same condo-to-rental trajectory. Dallas-based Invesco acquired the 95-unit Arias for $57.5 million last April. Units there have rented for an average of $50 per square foot, according to listings aggregator Streeteasy.com.

The developers of 202 8th bought the site in March 2008, paying a total of about $5.8 million for both lots, according to city property records. Soon after, they poured the foundation, but like so many other builders, halted construction when the credit markets froze up in the fall of 2008, Stern said. The developers restarted construction last May.

Stern anticipates the building will be completed by Sept. 1, with a temporary certificate of occupancy to follow shortly after, and occupancy is slated for Oct. 1. The company has not yet hired a broker to find tenants, and doesn’t intend to put the units on the market until September at the earliest, Stern said.

“We have seen in our Brooklyn properties typically such velocity on the rentals, we really don’t need much time to lease it up,” Stern said.


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