WSJ: Investment Group Pays $76.5 Million for Downtown Brooklyn Development Site
Brooklyn Law School sells property to cash in on Brooklyn boom
By PETER GRANT
December 1, 2016 - An investment group has paid $76.5 million for a downtown Brooklyn property, in a sign that demand for development sites in the New York borough remains strong despite indications of softening in some of the city’s real-estate markets.
The investment group, which includes Avery Hall Investments,Allegra Holdings and Aria Development Group, has purchased the 40,000 square foot office building at One Boerum Place from Brooklyn Law School. The 115-year-old school, which has about 1,200 students, has been selling property into the borough’s hot real-estate market to boost its endowment.
The group hasn’t finalized its plans, but it will likely replace the existing building with a 160,000 square foot mixed-use tower with a combination of residential and retail space. Office space also is possible, said Brian Ezra, a principal of Avery Hall.
The deal comes at a time when some real-estate investors are beginning to question how long Brooklyn’s boom is going to last. Developers of rental buildings are offering more concessions as thousands of new units are delivered.
Mr. Ezra said his group isn’t concerned and plans to break ground on the project next year. He pointed out that the site is well-located and near numerous subway lines. He said he believes the Brooklyn rental and condo markets remain strong.
“On the rental side, there’s definitely a lot of product coming to market, but we think it’s all going to lease,” he said.
Brooklyn Law School in 2013 sold a package of six Brooklyn residential buildings, and last year sold 2 Pierrepont Street, another residential building. It replaced those properties with a 22-story residential hall on State Street that opened about a decade ago.
The sales campaign has helped the school double its endowment to about $225 million over the past five years.
The school is planning to move the offices now in One Boerum Place into leased space nearby that is closer to the residential hall and the school’s main building at 250 Joralemon St.
“It’s more efficient and more of a campus,” said Nicholas Allard, the school’s president.
Avery Hall has been an active developer in Brooklyn, with projects inCarroll Gardens, Boerum Hill and Park Slope. Allegra Holdings is a Spanish real-estate investment company, and Aria is a real-estate firm with holdings in New York, Washington, D.C., and Miami.
The sale of One Boerum Place was brokered by Savills Studley.