The Real Deal New York

Once unlikely, Downtown Brooklyn conversions grow

By Alison Gregor | November 01, 2004 01:55PM

The heart of Downtown Brooklyn has never topped any list of hot spots for residential real estate, but that could change as a slew of new projects reshape the area, with one already completed and selling fast.

Surrounded by gentrified neighborhoods such as Brooklyn Heights and Cobble Hill, Downtown Brooklyn has often been identified as a business center and has suffered from a perception that it is somewhat isolated from residential development opportunities.

A lack of adequate zoning and appropriate development sites prevented the residential renaissance of nearby districts from remaking Brooklyn’s core, an area roughly bound by Cadman Plaza West, Atlantic Avenue, Flatbush Avenue and the Brooklyn-Queens Expressway.

But Downtown could soon take center stage as a development spot, though it might not be equal to the massive gentrification that has turned some Brooklyn neighborhoods into pricey locales.

Overall, Downtown Brooklyn “is mostly commercial, and there are some streets that have some residential buildings,” said Frank Percesepe, managing director of the Corcoran Group’s Brooklyn Heights office.

The number of residential buildings is set to increase because a massive rezoning of Downtown Brooklyn is attracting developers. A city master plan for the area calls for about 1,000 new apartments, mostly on the fringes of revitalized neighborhoods such as Boerum Hill and Fort Greene/Clinton Hill.

Downtown’s first big new residential development, Boulevard East at 53 Boerum Place and State Street, was originally planned as a rental property until developers opted for condominiums.

About 80 percent of the 99-unit condominium development has sold since it went on the market in August, with 50 percent of the studio, one- and two-bedroom apartments snapped up in their first week on the market.

The fringes of Downtown Brooklyn are also attracting developers because they are unable to build in neighboring landmark districts like Brooklyn Heights and Cobble Hill.

One project in this fringe area is the Toy Factory Lofts at 176 Johnson Street between Gold and Prince Streets. The project bills itself as being in Downtown Brooklyn, though it is technically in Fort Greene.

Two weeks after sales opened in September, about two dozen contracts had gone out for the 56-unit building. At the Sept. 9 grand opening ceremony, the first 15 loft units put on the market were sold within 15 minutes.

Elan Padeh, CEO and president of The Developers Group, which is marketing the building, said buyers are paying an average of $540 a square foot for condos in the former toy factory. Units range in size from 600 to 1,200 square feet, and prices start around $250,000.

“Starting with this project, you are going to see a lot more development in Downtown Brooklyn,” said Padeh.

Within the formal boundaries of Downtown, the Court House Apartments, a 320-unit project on the northeast corner of Court Street and Atlantic Avenue, is scheduled to hit the market in January. Two Trees Management president David Walentas, who led the successful efforts to market the Dumbo area, is the developer. Also part of that complex will be a 600-unit parking area, retail space and the first YMCA to be built in Brooklyn in 60 years, said William S. Ross, executive director of sales for Halstead Brooklyn.

Just across the street, Brooklyn Law School is constructing a residence hall for 450 to 500 students, expected to be completed at the end of the year, he added.

Regarding future residential development, Walentas will be leaving his calling card all over downtown Brooklyn. He will be converting 110 Livingston Street, headquarters of the former b te noire of city government, the Board of Education, into about 320 condominiums, according to Ross.

In the distant future, Shaya Boymelgreen, developer of Newswalk, is planning a complex of residential condominiums and hotel space at the edge of Boerum Hill on Smith Street, Ross said.

On a similar timeline, Time Equities Inc. will build out the entire square block bounded by State, Smith, Schermerhorn and Hoyt Streets with residential units on top of retail space. The plan calls for townhouses on State Street and apartments on Schermerhorn, Ross said.

That development lies just outside the area recently rezoned by the City Council to allow the creation of 1,000 apartments, along with 5.4 million square feet of office and retail space by 2013. The portion designated for residential development is bounded by Schermerhorn and State Streets to the south, Flatbush Avenue to the east, Smith Street to the west and Fulton Avenue and Livingston Place to the north.

“It allows for much more aggressive residential building on the north side of Schermerhorn and the south side of Livingston,” Ross said.

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