By Rayna Katz, GlobeSt.com
Office landlord RXR Realty is making its foray into residential development in the city after purchasing its first multifamily property here. The Fort Greene, Brooklyn property was acquired in keeping with the firm’s emerging markets strategy as the building is in the Fort Greene section of Brooklyn.
An affiliate of GFI Development Co. has sold the long-term leasehold of 810 Fulton St. to RXR. The sale price was $28.7 million. The property is adjacent to 470 Vanderbilt Ave., where RXR acquired GFI’s leasehold interest back in 2014 for nearly $195 million. That 10-story, 650,000-square-foot building includes two million square feet of commercial space.
The sale of 810 Fulton St. represents the completion of GFI’s value-add strategy for the parking lot adjacent to 470 Vanderbilt Ave., following the company’s repositioning of that building as a premier office property. For RXR’s part, the latest acquisition builds on recent acquisitions of the Standard Motor Products building in Long Island City and 47 Hall Street, adjacent to the Brooklyn Navy Yard.
The approved plans for 810 Fulton St. which qualifies for 421a, call for a 363-unit, 328,000-zoning square foot residential building (consisting of 393,000 gross square feet), with below-grade parking and 33,235 square feet of prime retail space facing Vanderbilt Avenue, Fulton Street and Clermont Avenue. Initial site work began at the end of 2015.
“Our emerging sub-market initiative grows out of our belief that the New York metropolitan region continues to have among the strongest fundamentals in the world,” says Scott Rechler, chairman and CEO of RXR Realty. “As costs rise for commercial and residential space in core New York markets, this will create demand in new areas, such as Fort Greene and other emerging sub-markets.”
He continues, “We know that 810 Fulton will not only benefit from this trend, but, with its mix of first-class retail and residential space, will help to make this already attractive Brooklyn neighborhood even more attractive to renters from across the city.”
The property is situated near a diverse array of nightlife, shopping, and dining establishments. The area has been revitalized significantly in recent years with a range of developments, including the Barclays Center and the adjoining Pacific Park mixed-use project. Both 810 Fulton and 470 Vanderbilt front Vanderbilt Avenue, Clermont Avenue and Fulton Street.
Since acquiring the leasehold interest of 470 Vanderbilt Ave. and 810 Fulton St., GFI has worked to increase the latter property’s buildable square footage from approximately 100,000 zoning square feet to approximately 328,000 zoning square feet.
Prior to this transaction, GFI repositioned 470 Vanderbilt Ave., transforming the formerly vacant telecom hotel into an 88% occupied office building with numerous credit tenants. The firm ultimately secured leases at the building with the NYC Human Resources Administration; the League Education and Treatment Center; and the New York City Housing Authority.
“Our team has worked tirelessly for almost 10 years to develop properties that will be dynamic assets to the Downtown Brooklyn community,” adds Steven Hurwitz, president of GFI Development Co., an affiliate company of GFI Capital Resources Group. “To date, our efforts have brought hundreds of construction and engineering jobs and attracted over several hundred more permanent jobs to the area. 810 Fulton Street will bring much needed high-quality housing to the neighborhood and help spur continued job growth for Brooklyn.”
The RXR platform manages 69 commercial real estate properties and investments with an aggregate gross asset value of approximately $18.1 billion, comprising approximately 24.6 million square feet of commercial properties, inclusive of a multi-family residential portfolio of approximately 2,600 units under operation or development, and control of development rights for an additional approximately 3,600 multi-family and for sale units in the New York Metropolitan area. Gross asset value compiled by RXR Realty in accordance with company fair value measurement policy and is comprised of capital invested by RXR and its partners, as well as leverage.