Olympia Dumbo could turn Fortis’ development ship

UPDATED, March 10, 1:45 p.m.: From a leaning tower and labor strikes to accusations of fraud and a close call with foreclosure, Fortis Property Group has had to contend with a series of complications at its latest developments. 

Buyers backed out last year of its unfinished One Seaport tower, which tilts about three inches north of where it should point. And the developer was forced to sell its planned Cobble Hill development at the former Long Island College Hospital campus to avoid foreclosure. 

But Fortis has a hope to wow with its sales performance at a prime property as closings begin at Olympia Dumbo — the glimmering, sail-shaped condo between the Brooklyn and Manhattan bridges. 

The developer said the first residents already started moving in last month, but only three closings had hit the books by early March. Construction on 30 Front Street isn’t expected to complete until the spring.

Olympia Dumbo is Fortis’ flagship project in the neighborhood, part of a wave of new development in the area over the last few years. The developer has 11 other projects in Brooklyn, primarily in Williamsburg, as well as three in Manhattan and two in Boston. 

The property, which broke ground in June 2019, has pushed pricing in the borough to new heights. The 33-story, 76-residence building came in as the most valuable filing of 2021 with a projected sellout of $404 million, and it’s on pace to be the borough’s priciest condo project per square foot.

The project is smaller than other closely-watched developments in the area, but Olympia’s individual units are priced much higher. JDS Development’s Brooklyn Tower has over 500 units across its 93 stories, including around 150 condos. The property’s most expensive current listing is a penthouse asking $6 million, according to StreetEasy, and Marketproof data reported last year projects the total sellout for the condo portion of the property at over $380 million.

Though prices in the building are often compared to Quay Tower, the Cobble Hill development has a higher projected sellout at about $500 million. 

The building, which launched sales in October 2021, was originally expected to launch sales in early 2020 and open in 2021. 

The first closings were for units across the building’s lower floors, including two that closed close to asking. Unit 19A scored a $5.2 million deal, and 17B sold for $1.8 million, according to property records. Unit 18A closed for $4.6 million, about $400,000 under asking. 

Aside from its three sales, Olympia Dumbo has 25 units in contract and 13 active listings, according to Streeteasy. The in-contract units would generate about $165 million in sales — about 40 percent of the building’s projected sellout — if they close at their asking prices. 

Casey Drake, Fortis’ vice president of sales and marketing, called the condo’s sales momentum an “outlier” among “fluctuations in the luxury housing market.”

In January, one of its star penthouses entered contract for the full asking price of $17.5 million, which will be the neighborhood’s most expensive sale on record if it closes for that amount. A 29th-floor unit nabbed a nearly $13 million contract in February 2022, and Brooklyn Nets player Ben Simmons also signed a contract last September to purchase two condos in the building for $13 million.

“Olympia Dumbo saw immediate traction on its larger residences and sold really top down,” co-listing agent Fredrik Eklund with Douglas Elliman said in a statement. “Activity was high at the start of 2022 with several of the priciest contracts signed in the borough in February.”

Olympia Dumbo’s priciest unit — the penthouse on the 32nd floor — remains on the market with an asking price of $19.5 million. But the unit likely won’t break a sale record in the borough, even if it’s sold for the full ask. Quay Tower claimed that prize last year when it sold two adjacent penthouses for $20.3 million. 

Fortis purchased Olympia’s development site from Jehova’s Witnesses in 2018 with $91 million in financing from Madison Realty Capital. The private equity firm later provided Fortis with a $163 million construction loan, which the developer retired when it received $284 million from G4 Capital Partners in 2021. 

Olympia Dumbo is a bright spot for Fortis as the developer juggles its troubled projects, including its 60-story leaning tower of Seaport that was stunted by construction delays and litigation. 

Bank Leumi sought to foreclose on a $120 million loan, and the developer then sued the bank. Both cases are headed to trial after mediation talks broke down in the summer of 2021. Mack Real Estate later accused both the developer and the lender of fraud in connection with a $66 million mezzanine loan.

Fortis and its construction manager, Pizzarotti, also sued each other over the Seaport tower’s lean. Fortis swapped the contractor for Ray Builders, whose workers walked off the site in July 2021 because they weren’t being paid. Ray Builders filed a lawsuit against Fortis on Tuesday, claiming the developer still owes them $11.5 million for its work on the project.

Fortis also planned a controversial three-building luxury condo development in Cobble Hill at the former Long Island College Hospital campus. The developer failed in its efforts to rezone the site and moved ahead with an all market-rate project. Fortis eventually sold the sites at 350 Hicks Street and 91-95 Pacific Street to its lender, Madison Realty Capital, after it initiated a UCC foreclosure sale last September. 

Correction: An earlier version of this story misstated the condo portion available at JDS Development’s Brooklyn Tower and its projected sellout.