June 28, 2015

Pacific Park Condo Gets Construction Loan

A rendering of the 550 Vanderbilt condominium building in Brooklyn.ILLUSTRATION: VUW STUDIO

The sprawling residential development surrounding Barclays Center just got a $200 million construction loan from HSBC Holdings PLC to finance its first condominium project.

The developer, a venture 70%-owned by China-controlled Greenland Group, has already broken ground on the condo project at 550 Vanderbilt Ave., slated to be 17 stories and include 278 units. Most of the units will be in the $565,000 to $1.5 million range, but a few of the penthouses will be priced at as much as $7 million.

Greenland’s partner in the project is Forest City Ratner, the developer of Barclays Center and master planner of the 15-building Pacific Park Brooklyn megaproject. Forest City agreed to sell the majority stake in most of the residential portion of the project to Greenland in the fall of 2013.

The condo at 550 Vanderbilt is just one of four residential buildings under construction at Pacific Park. Three rental buildings also are under way, with close to 1,000 units, many of which will rent at “affordable,” below-market rates.

“In a very short period of time, just 12 months since we’ve closed our partnership, there’s been a lot of activity,” said Jeff Rosen, executive director of the joint venture, Greenland Forest City Partners.

The project is scheduled for completion in the fall of 2016. The entire Pacific Park project is eventually slated to have 6,430 units, 2,250 of them affordable.

Mr. Rosen declined to put a price tag on the condo. But generally construction loans are equal to 60% to 65% of project value, say real-estate experts. The venture recently received approval from the New York attorney general’s office to start sales and marketing of the condos.

—Peter Grant

Two Trees Has Tenant for Flatiron Property

A $25 million project to upgrade and reposition an office building in the Flatiron District is paying off for owner Two Trees Management Co.

The Brooklyn-based developer has signed a five-year lease with SoundCloud, a music- and audio-sharing service that will move its New York office from 111 Fifth Ave. to 50 W. 23rd St. Headquartered in Berlin, SoundCloud will take 43,669 square feet on the 9th and 10th floors.

Two Trees, which owns, manages and has developed more than 6,000 apartments and more than 4 million square feet of office and retail space, is known for its role in transforming Brooklyn’s Dumbo neighborhood into the trendy locale it is today. In Manhattan, the company is focusing that expertise on 50 W. 23rd St., its only office building in the borough.

Two Trees purchased the 13-story building near Madison Square Park in 2010, and is making major upgrades. In addition to a new lobby and heating and cooling systems, Two Trees will begin construction this fall on a new roof deck. Since the company purchased the building, old leases have expired, making about 139,000 square feet of space available.

The developer has tapped James Corner Field Operations, which helped design the High Line park in Manhattan, to design the building’s outdoor space, said Jed Walentas, principal at Two Trees.

“The rooftop will be the defining characteristic of the building,” Mr. Walentas said. “It’s our job to provide the best work environment for our customers, who are trying to get the best team they can to work for them.”

—Keiko Morris

Venture Adds Hotel to Bushwick Project

A development group that’s converting a former steel-fabrication warehouse in Bushwick, Brooklyn into an office and retail hub is adding a hotel to the mix.

The venture of Heritage Realty Partners and Lichtenstein Group has filed plans to build a 144-room hotel on the property that it purchased in 2014 for $28.2 million. The venture already is converting four interconnected, one-story warehouse buildings on the 2.3-acre property to about 80,000 square feet of retail and office space, according to Ben Waller of ABS Partners, the project’s leasing agent.

The conversion comes at a time of transformation for the formerly industrial neighborhood of Bushwick. While many warehouses have been converted for residential and retail use, the arrival of office space is new for the area.

This May, Normandy Real Estate Partners announced its renovation of a former printing press into an office, retail and restaurant hub, the first for the neighborhood. Mr. Waller said a variety of media, fashion, art and food tenants have expressed interest in leasing at 215 Moore Street. Asking rents are in the mid- to high-$40s a square foot, he said.

ABS Partners is close to signing the building’s first tenant, a media company that will relocate from Manhattan. “The company realized many of their employees lived in Brooklyn already, so the move made sense,” Mr. Waller said.

A 3,800-square-foot office space within the complex is complete, and two more offices are under construction. Mr. Waller said the rest of the renovation will depend on tenant demand. Turn-around time on office space ranges from three to six months.

The interior renovation will take advantage of 14- to 25-foot ceiling heights, with the addition of floor-to-ceiling windows and mezzanines.

“It’s a flexible, unique space that should work out to about 80% office and 20% retail,” said Mr. Waller.