Developers unveil another reason to get off the Belt

Real Estate Weekly, May 23, 2001 by Elaine Misonzhnik

The Verrazzano's days as the most exciting thing near the Belt Parkway are numbered.

In a venture estimated at $192 million, The Related Companies and Backacre Capital Management have bought 50 acres of land on Seaview Avenue in Brooklyn, and will develop the long-abandoned property into a 640,000 SF shopping center, featuring such stores as Target, Circuit City, and Bed, Bath & Beyond.

According to David Rosenberg, executive vice president of Robert K. Futterman & Associates, the retail leasing agent for the property, "This is a one-of-a-kind development. [The center] is facing the highway, it has the infrastructure to get onto the highway, it has grade-level parking... You are never going to see another development like this in New York. Space just doesn't allow it."

The Related Companies hopes that the Gateway Center, as the development is called, will become "the regional retail center for all of Brooklyn and Queens." In an effort to give it a more relaxed, suburban feeling, the developers have spent several million dollars on design consultants, eventually going with a one-story, high facade look. "We wanted to have more of an original design, as opposed to the retail center prototype look," explained the Related Retail Corporation vice president Glenn Goldstein.

But whether it's the design or the convenient location the leasing efforts have so far been very successful. According to Rosenberg, the center is currently 90% leased, with such stores as Home Depot, Marshall's, and B.J.'s paying $30-$40 per SF for the space.

"We've got pretty high rents, relative to the size of the spaces, and with the sheer demographics within a fifteen minute drive in any direction, we anticipate being very successful," he said. "This shopping center could be anywhere in suburbia in the United States, but the fact that it's in Brooklyn, on a highway, in an area so densely populated, made the leasing efforts a lot easier."

At the moment, there are only 72,000 available SF left at Gateway, and Futterman & Associates is currently negotiating with two potential tenants to lease the remainder of the space. "We expect to be 100% leased by the time the project opens in 2002," assured Goldstein. Rosenberg wouldn't disclose the names of the stores involved in the negotiations, but "they are both well-known, well-respected, national chains. We are anticipating these two leases to be wrapped up pretty soon."

Both the Related Companies and Futterman & Associates were eager to point out that they are doing a good deed by bringing a development like the Gateway Center to East New York, a somewhat overlooked area.

Everybody looks at the project, but I think you have to look at it in the reverse, in how the project affects the neighborhood," said Rosenberg. "It's a piece of land that has been vacant for a while, it had grown over with weeds, and I think [the project] cleans up an area that has been sitting there long-dormant, basically just growing over. It is going to create a lot of jobs, it is going to bring a lot of revenues to the area, it will create confidence in the economy, in the demographics."

""We just feel that all of Brooklyn has prospered along with the rest of the City in the last economic upturn," said Goldstein. "And we are confident that this area of Brooklyn has turned around, that the Gateway Center will be a regional retail center."

About 150,000 cars pass each day through the Belt Parkway Highway.

"I would anticipate that for most of these people the center should be in their top 5% of chain stores," concluded Rosenberg.