What Worries Brooklyn
Is Brooklyn a victim of its own success? While the Barclays Center has been a boon and more people are moving in than out, tenants are finding little space to grow and residents under-retailed as Brooklyn struggles to catch up with its popularity.
One problem with its immense growth: mid-sized businesses are leaving for New Jersey and Long Island, where there's more space, says Brooklyn borough president Marty Markowitz, who keynoted our Future of Brooklyn event last week. "We need to keep the startups here in Brooklyn." Just how popular is the borough? Find out what happened when Marty and his wife visited Vienna a few weeks ago by clicking the video above.
Who loves Brooklyn? 350 of our attendees at the New York Marriott-Brooklyn Bridge. Here's what Marty would like to see for the borough: more healthcare, as it has the talent and incubator space; more manufacturing; outlet stores; a casino in Coney Island; a Google Store (Brooklyn's obviously too cool for Apple); and a pro soccer team, "which is the only true world sport," he says. (Brooklyn's made up of residents from 130 different countries.)
And Brooklyn's still growing. "We're not even close to peaking," says Midtown Equities principal Jack Cayre, left. However, Invesco director of acquisitions Todd Bassen, right, says that growth will depend on mayor-elect Bill de Blasio and whether he'll raise taxes, which affects multifamily. Bill's also pro-union, which drives up prices of projects 25% to 30%, he adds, although there's still demand to build.
All the growth is mimicking what happened in Manhattan, says Muss Development principal Jason Muss, as peripheral highways help communities grow organically. One reason people like Brooklyn: It's pretty easy to get elsewhere. Muss' Oceana development in Brighton Beach, for one, has access to Long Island, Staten Island, and New Jersey. (We also suspect there's an underground snowbird tunnel between Brighton Beach and Boynton Beach.)
Eastern Consolidated senior director Benjamin Tapper (left, with moderator Mitch Korbey of Herrick Feinstein) warns that future growth may also be constrained by infrastructure—just try to board a rush-hour L train. It's also underserved by retail, with multifamily outpacing services needed. Todd says it's hard to find sites over 10k SF for retail, and many retailers--particularly grocers--still want 3:1,000 parking, even in transit-friendly neighborhoods. "It's easier to go up in the air with residential than retail," Jason says, adding it took six years to put together 40k SF of retail at 345 Adams.
But that isn't stopping major retailers. Fulton Street is attracting Alamo Drafthouse, a Target store, and a Century 21 flagship, says Acadia Realty Trust CEO Ken Bernstein, whose company is building City Point with Washington Square Partners. On the manufacturing side, the 16-building, 6.5M SF Industry City is targeting both manufacturers and innovative companies as tenants. "We want to work with the makers," says Jamestown director of leasing Caroline Pardo. In October, it opened a furniture-maker's market, uniting 40 local designers under one roof.
Forest City Ratner project manager Adam Greene (with moderator Debbie Levinson of CohnReznick) says the Brooklyn Navy Yard has been a great place for putting together the modular components of B2, the 32-story residential tower it's putting up at Atlantic Yards. (They're assembled in a 100k SF facility.)
Downtown Brooklyn Partnership prez Tucker Reed warns an office space crisis is imminent as companies scale up. "There's no room to expand," he says. (You could open an office on the end of the Nets bench, since half the team is out injured.) But RFR, Kushner Cos, and Invesco (in conjunction with LIVWRK Holdings) are redeveloping buildings it acquired from the Watchtower Society in DUMBO into creative office space. "It's always been a shroud of mystery, but soon you'll see it thriving," says LIVWRK CEO Asher Abehsera.
CPEX managing partner Tim King (right, with Asher) is marketing 100k SF of retail at the Watchtower buildings. He's particularly bullish on Sunset Park. "It may be the best-kept secret, is well-served by infrastructure, and is a mature market between Bay Ridge and Park Slope," he says.
After the panels, we snapped great event sponsor Meridian Capital Group's Kyle Kite, Jonathan Stern, Dina Finnegan, Josh Sabzevari, and Aggelos Sklavenitis. Meridian was founded in Brooklyn in April 1991 and this year will close over $3B in financing in Brooklyn alone. It's been particularly active with developers in burgeoning neighborhoods like Williamsburg, Greenpoint, Park Slope, Bushwick, and Crown Heights, as well as Downtown Brooklyn. To see more photos from the event, click here.