Eye On Real Estate: Up the Block, Landmark Brooklyn Trust Building To House Upper Floor Condos
By Lore Croghan
Brooklyn Daily Eagle
The corner of Montague Street and Cadman Plaza West is a sacred spot for sports fans. In upcoming innings, will an apartment building be constructed there?
The Brooklyn Dodgers' office was located at the site in 1945 when president and general manager Branch Rickey signed Jackie Robinson and ended segregation in Major League Baseball.
The 10-story building at 215 Montague St. where the historic signing took place was torn down in recent decades. In its place stands a five-story building with a slightly different address – 205 Montague St. – where TD Bank and Bank of America are the retail tenants and Massey Knakal Realty Services has an office.
Midtown Equities, the Cayre family's real estate firm, bought 205 Montague for a substantial $33 million in 2010.
Midtown Equities, of course, is the developer whose plans to rebuild the Empire Stores properties in Brooklyn Bridge Park were announced last week. The company beat out a bevy of contenders for the 96-year lease of the former coffee warehouses.
In summer 2012, the company quietly filed plans with the city Buildings Department to convert the three office floors of 205 Montague to residential use and construct an additional six residential floors. By doubling the size of the property to 133,035 square feet, there would be enough room for 100 apartments.
The Cayres did not have to seek approval from the city Landmarks Preservation Commission. The site is famous, but the building is not landmarked – though a modernized building they own nearby, 200 Montague St., is included in the Borough Hall Skyscraper Historic District.
There was a complication, though: The City of New York wrote restrictions into 1959 and 1960 property deeds that limited development at 205 Montague. In December, the city granted a deed modification that removed those restrictions, online records indicate. In return, Midtown Equities paid the city $3.2 million.
With those restrictions wiped out, it's a whole new ballgame for the developer, real estate executives told Eye on Real Estate.
“An awful lot more can be built than what's in the Buildings Department plans,” one source said. “I don't see why they don't tear down the whole thing and build a humungous new building.”
The location, at the intersection of Brooklyn Heights and Downtown Brooklyn, would be a home run with apartment seekers, another source said.
“Can you think of a more prominent, prestigious corner of Brooklyn for residential development?” he asked.
Midtown Equities did not respond to our query by deadline.
A PLEDGE TO PRESERVE HISTORY ON MONTAGUE STREET
At the other end of the block, the Stahl Organization is constructing 12 condos on the upper floors of 177 Montague St., a land-marked bank building modeled after a palazzo in Verona. Yes, that's Romeo and Juliet's hometown.
Sales are set to start in the fall on the three, four and five-bedroom apartments, with prices starting in the low $3 millions, a teaser website about the Brooklyn Trust Company Building indicates. Occupancy is expected next summer.
“When the building became available, we jumped on it,” Stahl co-president Gregg Wolpert told Eye on Real Estate. “It's one of the icons of all of Brooklyn.”
The developer paid $9.7 million in 2008 for the 1913-vintage Italian High Renaissance-style building.
“York and Sawyer [177 Montague's designer] was the premier architect of these bank buildings,” he said. “They're renowned.”
The building will have some fancy features such as a pet spa, a music practice room and a children's playroom. Chase is expected to remain a tenant in the banking hall.
“We will take good care of the historic features, and do a high-quality job on the exterior as well as the interiors,” Wolpert pledged.
A few years ago, Stahl did a condo conversion at a York & Sawyer-designed Apple Bank branch on the Upper West Side. The Italian palazzo at Broadway and W. 73rd Street was beautiful but needed considerable work to shape it up.
“It had 80 years of soot on it and window air conditioners,” recalled Wolpert – who thinks it turned out just fine in the end. “I live there,” he said.
CHASING BIG BUCKS ON FULTON MALL
Show me the money. Please!
The gentrification drive on Fulton Mall seems unstoppable these days. Andy Das wants just a little piece of it.
“I am kicking myself out,” said Das, who is both shopkeeper and landlord at 463 Fulton St – and is offering his building for rent.
“All these national tenants are coming to the Fulton Mall,” said Das, 61, who has operated Nu Castle Jewelers in the mid-block brick rowhouse for the past 30 years.
“A national, credit-worthy tenant would be the way to go,” said the jeweler, who bought the four-story building a decade ago. “I don't have a pension like transit and corrections officers and people who work for the city. If I rent my building, that will be my pension.”
He has watched as upscale tenants from Shake Shake to bling-and-baubles seller Swarovski have decided to settle on Downtown Brooklyn's famous shopping corridor. In July, gentrification hit a new milestone when heavy-hitter Swedish clothing giant H&M opened an eye-popping 30,000-square-foot glass-box store built by developer Albert Laboz.
Business in Das's jewelry store was at its best in the 1980s, when the price of gold was cheaper. Now, to keep the customers coming, he stocks gold-fill jewelry instead of more valuable solid gold pieces he formerly carried. He also has a big inventory of perfumes and cellphones.
Real estate brokers looking to get in on the action at the popular mall have been cold-calling him for the longest time. Last spring he said yes.
The Massey Knakal agents to whom he gave the exclusive on his 6,000-square-foot building told him it might take a year to find the right tenant. So far, a couple mom-and-pops like himself have made offers. He turned them down.
“I want a brand name,” he said. “I don't want to have to say, 'Hey, where's my rent?'”
In bygone days, Fulton Street was an upscale place where the elevated train brought crowds from all over Brooklyn to do their shopping. Abraham & Straus, Mays and Martin's were the big-name department stores; Gage & Tollner was a fine place to dine.
In the 1970s, when Fulton Street was hit with hard times, merchants banded together as the Fulton Mall Improvement Association to fight back. In the 1990s, the street became a huge revenue generator with high-volume electronics and jewelry stores.
Now that the mall is trending toward big-name chains, rents have soared to the high $200s per square foot.
That's how much Das is asking for the 1,200-square-foot ground-floor selling space in his building. The upstairs floors are unused – as is the case in numerous Fulton Mall properties. A retailer looking to make a big splash could fix them up and occupy them.
“I don't lose hope,” he said, vowing patience until he lands the type of tenant he wants. “I just keep hanging in there.”
Bringing national, credit-worthy tenants to Fulton Street is a feat that's being accomplished for the most part by high-powered real estate players. Das is a mom-and-pop property owner on a street dominated by Major League landlords.
Take American Eagle Outfitters, a national chain with preppy clothes for teens and 20-somethings. It opened a factory store at 442 Fulton St. on Monday, Sept. 9. In February, Jeff Sutton's Wharton Properties bought a one-third stake in the two-story building.
Sutton is known among Manhattan landlords for the $300 million lease he signed with American Eagle at 1551 Broadway, a Times Square building he owns. He also signed a $120 million lease with American Eagle at a SoHo building of his, 599 Broadway.
Sutton's extensive Brooklyn holdings include about a dozen Fulton Mall properties. One of them, 474 Fulton St., is occupied by national fashion tenant Aeropostale – which has a shop in a building of his on W. 34th Street in Manhattan.
Shoe chain Aldo – whose Manhattan flagship is located in one of Sutton's W. 34th Street buildings – is also a tenant of his in Downtown Brooklyn, at 466 Fulton St.
Another big-time Fulton Mall landlord that's racking up wins with national tenants is the Chera family and its company Crown Acquisitions. The building where workers are now installing cabinets for Swarovski's store, 490 Fulton St., belongs to the Cheras. Fashion chain Express and furniture chain Raymour & Flanigan have already opened in other parts of the building.
The Chera family's high-profile retail properties include 1 E. 57th St., where Louis Vuitton's Manhattan flagship store is located. Interestingly, the present generation's grandfather, Isaac Chera, got his start in Downtown Brooklyn by opening a children's clothing store on Fulton Street in the 1940s.
One of the principals of their company's leasing affiliate, Crown Retail Services, is Ginny Pittarelli, a veteran retail broker from Madison Retail Group and before that, Trammell Crow. Her client list includes Nordstrom Rack, Kate Spade, Juicy Couture and British retailer Jack Wills.
Crown Retail Services is marketing 50,000 square feet of vacant space that remains at 490 Fulton.
The firm is also looking to fill an empty storefront at 450 Fulton St., a land-marked limestone building that also belongs to the Chera family. The property once housed A.I. Namm & Son department store. (The name is still faintly visible on the stone facade.) A Modell's sporting goods store and plus-size fashion retailer Ashley Stewart are located in the building.
Crown Retail Services is also on the hunt for tenants for 522 Fulton St., a building the Chera family controls through a net lease.
Mega-landlord Acadia Realty, which brought Armani Exchange to the first phase of its CityPoint development on Fulton Street, needs tenants for the 450,000-square-foot retail building it is now constructing there. So far, Alamo Drafthouse Cinema, a chain from Austin, Texas, has signed on, along with designer discounter Century 21.
At nearby 468 Fulton St, the U.S. Polo Association – a chain with a store in Times Square – is opening a shop. A for-profit subsidiary of the association (which is the governing body for polo-playing in America) sells shirts decorated with a logo with two polo ponies and riders – kind of like Ralph Lauren's, except his logo is a lone horse and rider.
The landlord that landed the polo-shirt shop is an LLC whose managing member is Raymond Betesh of powerhouse urban retailer Dr. Jays. (BTW, there's a Dr. Jays store nearby, at 485 Fulton St.)
To be sure, some landlords are still signing up small-fry entrepreneurs as tenants. A pizzeria called Mamma Mia is opening at 435 Fulton St. in space that had been occupied by a jeweler, Buildings Department records indicate.
The building belongs to a partnership that includes Joseph Jemal, whose family has owned a big portfolio of metro-area retail properties for three decades.
He didn't get back to us, so we don't know why he took on a tenant without a high-profile name. But we're looking forward to eating at the new pizza place.
Shake Shack's French fries and frozen custards are superb. But we really should eat something else, once in a while. And Gage and Tollner's not coming back.