Sweet News On the Waterfront
Big news from Brooklyn... maybe.  The Community Preservation Corporation and it's partner, the Katan Group, may or may not be looking to sell the Domino Sugar Factory.
Per the Full Story below, all or part of it is being shopped around.
How much of it? For how much? To Whom?
Originally purchased in 2004 for just under $56M, CPC and Katan spent several years and an unknown sum of money pushing the M3-1 zoned lots of 774600SF through a variety of levels of city and state government.  As of May last year, they succeeded in having the entire parcel rezoned as R8 with a small lot on the east side of Kent Avenue made into an R6The total buildable SF now stands at over 4.6M.
To put those numbers in some kind of context, the ground area is equal to 3 full size midtown blocks and the buildable SF is enough for 1.75 Empire State Buildings.  The CPC Katan partnership planned to fill this volume with 2200 housing units and several hundred thousand SF of commercial and community facility space.
So what is it worth?  How much can it make?  At Cubed Advisory, we help many clients figure out exactly that.  In this case though, the analysis goes much deeper than blog post math.  One needs to balance the potential earnings of the site against the cost of construction, which in this case includes significant infrastructure and an enormous amount of demolition.  Hazardous material remediation is a factor as the existing structures are full of asbestos.  Lower returns from 220 low income housing units cemented into the rezoning deal can be balanced by possible tax incentives.  Possible city partnerships for waterfront development? Correct balance of rental/condo mix?  The number of variables grows very quickly.
As potentially the first significant Brooklyn development after the condo crash and coming in on the run up of a hot rental market- expect this project to dictate the pace and price point of development in Brooklyn.  Provided of course that deep enough pockets can be matched to the ambitious amount of SF to build.

Labels: , , , , ,


Post a Comment