Real Estate Weekly | August 25th 2016
RXR is continuing its push into emerging sub-markets with the $28.7 million purchase of 810 Fulton Street in Brooklyn.
The developer will press ahead with approved plans for a 363-unit, 328,000 s/f residential building on the site with below-grade parking and 33,235 s/f of retail facing Vanderbilt Avenue, Fulton Street and Clermont Avenue.
“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,” said 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.
“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 sale of the lot by GFI marks the completion of the firmʼs value-add strategy for the site, which is adjacent to 470 Vanderbilt Avenue, a property it redeveloped as premier office space and sold to RXR for $194.5 million in 2014.
The acquisition of 810 Fulton Street builds on recent acquisitions by RXR of almost two million square feet of commercial space that includes 470 Vanderbilt, the Standard Motor Products building in Long Island City and 47 Hall Street, adjacent to the Brooklyn Navy Yard.
THe company’s New York Metro Emerging Sub-Market initiative focuses on undervalued neighborhoods in the Outer Boroughs and suburban downtowns that have robust transit infrastructure and that RXR believes are well-positioned for investment. RXR is also undertaking mixed-use development projects in New Rochelle, Yonkers, Stamford, Glen Cove, Hempstead and Huntington Station, with a pipeline of over 3,000 residential units.
810 Fulton Street is situated in an area that has been revitalized significantly in recent years with a range of new developments, including the Barclays Center and the adjoining Pacific Park mixed-use project.
Broadway Construction Group, an affiliate of GFI Capital Resources Group, and RXR have entered into a Construction Management Agreement for the construction of 810 Fulton Street. Construction is expected to begin in earnest in fall 2016, with leasing anticipated to start in 2018.
Since acquiring the leasehold interest of 470 Vanderbilt Avenue and 810 Fulton Street, GFI worked with various government agencies and the local community through the Uniform Land Use Review Procedure (ULURP) to increase buildable square footage.
“We acquired the leasehold interest of the full city block in 2007,ˮ said Steven Hurwitz, president of GFI Development Company, an affiliate company of GFI Capital Resources Group. “This marks the end of a very successful execution for us and our investors. We wish RXR much success on the project.”