Home News Developers Have Rediscovered Bedford-Stuyvesant. Can It Sustain the Boom? – Commercial Observer

Developers Have Rediscovered Bedford-Stuyvesant. Can It Sustain the Boom? – Commercial Observer

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T.Bedford-Stuyvesant’s gentrification has been in full swing for over a decade, but it looks like it’s entering a new phase.

A small Nigerian restaurant that opened on Nostrand Avenue during the pandemic has been named a finalist for the James Beard Awards. Chipotle and Shake Shack are on the corner of Franklin Avenue and Fulton Street. The Bedford-Stuyvesant Restoration Corporation plans to redevelop its eponymous Fulton Street Plaza into an office building.

The Nigerian restaurant is Dept of Culture, a nondescript storefront at 327 Nostrand Avenue between Lexington Avenue and Quincy Street. Seating 16, 1 large table, bring-your-own-alcohol policy, unpretentious, relaxed, West African neighborhood, but with $97 per person 4-course tasting menu and limited reservations It is also a somewhat upscale store. Released in seven two-hour blocks. Chef-owner Ayo Balogun does all the cooking himself, New Yorker It was reported last year with the help of the hostess waitress and dishwasher. in a magazine, he Bukathis is a casual, hole-in-the-wall style Nigerian restaurant.

Culture Department. Photo: Catherine Marks/Commercial Observer

The evolution of Fulton Street, another major drag in the Brooklyn neighborhood, has taken different but related paths. In recent years, domestic retailers have increasingly flocked to Fulton, between Classon and Nostrand Avenues. Shake Shack he announced plans to open on the corner of Bedford Avenue and Fulton Street in January. This location is a new residential building that replaced Discount His store during the pandemic. Chipotle is also open on his ground floor of the 1190 Fulton building. Bond Vet, a fast-growing veterinary chain with outposts in New York, Boston and DC, recently opened another new apartment complex on the corner of Franklin Avenue and Fulton at 1134 Fulton West at He 1 You have leased space in the block. They will join Blink Fitness, a third national chain, along with Lincoln Market, a boutique local grocer.

As a result, the rent of the store also increased, Spark of Concern Smaller local businesses will be pushed by landlords who think they can get higher prices. Neighborhood retail space rents range from $40 to $90 per square foot, and newer buildings like 1134 and 1190 Fulton are in that range, according to Cushman & Wakefield retail broker Mitzi Flexer. at the upper limit.

“When I started Bed-Stuy in 2015, we were desperate to get $50 per square foot,” says Flexer. “The corridor between Franklin and Nostrand in Fulton is very hot right now. [quick-service restaurants]Flexer added that interest in Bed-Stuy retailers has increased recently from accountants, banks and financial advisors.

Fulton Street
Fulton Street in Bed-Stuy. Photo: Catherine Marks/Commercial Observer

Residential rents have also risen dramatically over the past few years, despite the overall drop in rents brought about by the pandemic.

“We have been working in the area for about 20 years. [Classon Avenue]we were pushing it more into Clinton Hill,” said Andrew Barokas, CEO of housing broker MNS. “But now Bed-Stuy is a destination and a desirable one. It’s always had great roots, great history, and great composition.

He estimated that Bed-Stuy rents are about 15% higher than before the pandemic. Many Brooklyn neighborhoods, he said, are “the best price point ever.” His average monthly rent for his one-bedroom in Bed-Stuy plummeted from $2,358 in March 2020 to $2,059 in January 2021, reaching a recent high of $2,834 in August 2022. That’s what the MNS rental data shows.

However, the nearby condominium market is slowing down. A number of small condos have been completed over the past few years, both new construction, built from scratch, and brownstone conversions. However, rising mortgage rates are driving prices down for many potential buyers, many of whom are planning to buy their first home.

Matt Cosentino, Investment Sales Broker at TerraCRG, said: “Mortgage payments may be too high right now. I think you may have.”

He added that the June 2022 expiration of 421a — a developer-friendly tax exemption for new construction — is complicating both leasing and condominium development in Bed-Stuy. “In the current interest rate environment, not many people are considering a Bed-Stuy condo project without the tax break,” said Cosentino. “If you can’t do a rental project because of 421a and you can’t do a condo project, then you have no choice but to wait for construction.”

Multifamily sales in the neighborhood are trending upwards, with 37 apartments trading last year, up from 28 in 2021. Due to the strong rental market, market priced rental buildings in the area are selling well. However, a change in state rent laws in 2019 that dramatically limited rent increases for stabilized apartments has dampened the sale of rent-stabilized buildings.

“There are a lot of six- and eight-unit rent-stable buildings in Bed-Stuy, but buyers weren’t really interested in those types of deals,” he said. “They haven’t benefited from rent increases, but utility bills have gone up and taxes have gone up.”

And while new residential construction in Bed-Stuy may be slowing slowly, the restoration plaza redevelopment will be the biggest new commercial project in decades. The Bedford-Stuyvesant Restoration Corporation (BSRC) told the Department of City Planning in January to enable a new three-tower commercial and retail project at the Plaza, which has occupied Fulton Street between New York and Brooklyn Avenues for almost a year. We applied for repartition to do. 60 years.

The 2-acre complex will be demolished and three buildings (expected 16, 13, and 4 stories) will be constructed over the next five to ten years. The 840,000-square-foot development will include space for local nonprofits occupying existing office space in the Plaza, as well as new cultural and program spaces for BSRC. The Community Development Corporation currently operates an art gallery, an amphitheater, a large public plaza, multiple retail spaces, as well as programs for employee training, financial education, and homeownership assistance.

Reconstruction Plaza
Restore Plaza. Photo: Catherine Marks/Commercial Observer

The new iteration of Restoration Plaza has all that plus more office and retail space. The largest commercial tenant is Super Food Town, which is expected to remain in the first half of construction. The first phase he will consist of two small towers, and when it is completed, the supermarket will move to the completed part of the project. His Applebee’s, the US Post Office, and Nicholas, a clothing store, have also been on the square for years. It’s not clear if they will stay, but the new development will retail for 190,000 square feet.

BSRC President and CEO Blondel Pinnock said: “We can move some of his space in the office we have into a building on New York Avenue.”

Pinnock said the total cost of the project is likely to be in the $500 million to $700 million range. His four-story “cultural building,” which will serve as BSRC offices, will receive $50 million in funding from the city. The rest of the project has yet to be funded, Pinnock said, but the nonprofit will receive funding from city and state sources, as well as from private investors such as Goldman Sachs Urban He Investment Group. I would like to raise funds.

Not only does she want to provide nonprofits with subsidized offices, she also wants to provide subsidized stores for local businesses. Providing vocational training programs and providing space for local universities is a top priority for BSRC, she explained.

“Restoration has been in the community since 1967,” says Pinnock. “What we do know is when the recovery started. It started to bring stability and much-needed services to communities that desperately needed it. We know Brooklyn is in a much different scenario than it was then.One of the fastest growing boroughs.Black and Latinx residents benefited from the growth that happened in the borough and Bed-Stuy. We need to make sure we are meeting our communities in terms of racial equality.We must make sure we close the racial wealth gap .”

Rebecca Baird-Remba can be reached at: [email protected].

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