Brooklyn's Top of the Heap, But What Next?
The Biggest Borough in New York is about to get bigger, but experts worry that accommodating all that growth might harm the character that makes it such a special place.
Brooklyn Borough president Eric Adams, who gave the opening remarks to 350 at our 2014 Brooklyn State of the Market event Tuesday at the New York Marriott at the Brooklyn Bridge, said Brooklyn needs to remain welcoming to everyone who lives here: housing has to be affordable, including in nontraditional locations; there have to be jobs in tech hubs, but also new factories and stores; and buildings have to be green.
CohnReznick partner Debbie Levinson, Clipper Equity partner David Bistricer, and the Red Apple Group CEO John Catsimatidis participated our Keynote Conversation. (Because speeches are so last century.) They say Brooklyn is becoming a young person's borough, which makes the outlook for commercial and residential real estate growth very positive. But that doesn’t mean the business cycle is going away. There will be ups and downs, but long-term investors are going to do well. The city’s stated goal is to build a lot of affordable housing, but the details are still lacking, and that makes developers and lenders nervous.
Our moderator David Pfeffer of Tarter Krinsky & Drogin, CBRE EVP Sacha Zarbe, and Two Trees Management director Dave Lombino. In the commercial realm, MetroTech, Dumbo, Navy Yards (the Tech Triangle) Williamsburg, Red Hook and Bushwick are all seeing organic growth. Our panel noted that some large firms are deciding to stay in Brooklyn because their employees live here, and their corporate culture is now rooted here. More tech firms want to be here, and Brooklyn needs to provide them the infrastructure they need to thrive--the right open-plan office space, retail options and amenities.
Washington Square Partners managing partner Paul Travis, Forest City Ratner EVP Kathryn Welch, Jamestown (Industry City) VP Andrew Peerless, and CPEX managing partner Tim King. JP Morgan Chase had to move about 2,000 employees out of Manhattan when Hurricane Sandy hit, relocating them into MetroTech. When it came time to move them back, they said they wanted to stay in Brooklyn. Gone are the days when a CEO decided unilaterally where a company’s going to be. Employees are opting for the borough, and C-suites are going along with that. (And it isn't just tech companies.)
Herrick Feinstein partner Mitch Korbey, who also moderated, MNS partner David Behin, and Slate Property Group principal David Schwartz. In the coming years, there might be as many as 17,000 new apartment units in Downtown Brooklyn to satisfy demand for residential space, and if so, that’s going to be the single largest influx of residential in the city during the rest of the 2010s.
Carlyle Group managing director Andrew Chung, Meridian Capital Group senior managing director Ronnie Levine, and TerraCRG partner Adam Hess. Don’t call it the Manhattanization of Brooklyn. Brooklynites are touchy about that, and they should be, our speakers stressed. Brooklyn is Brooklyn. Even so, the borough needs denser neighborhoods. Not everywhere, but in places best suited for building up without harming its historic character, such as along Atlantic or Fourth avenues, which have excellent access to transit and would be well suited for taller residential buildings.
Eastern Consolidated director Andrew Sasson and Cayuga Capital Management principal Jamie Wiseman. The need for affordable housing is going to remain a pressing issue, the panelists agreed, and the city and developers need a more creative dialogue. The problem isn’t just about low-income housing, as Brooklyn is losing middle-income housing. In the long run, density is the answer to getting more middle-income housing built, the speakers asserted. In the short run, clearing up the current uncertainty about the 421-a property tax exemption would help spur development.