Bidders Prep Starrett City Offers
What’s likely to be the biggest real estate deal in Brooklyn this year is starting to take shape. There are now seven confirmed bidders for Starrett City, the massive East New York affordable housing complex, according to Crain’s: The Bluestone Group, Christian Cultural Center coalition, Enterprise Community Partners, L+M Development Partners, The New York Housing…
What’s likely to be the biggest real estate deal in Brooklyn this year is starting to take shape. There are now seven confirmed bidders for Starrett City, the massive East New York affordable housing complex, according to Crain’s: The Bluestone Group, Christian Cultural Center coalition, Enterprise Community Partners, L+M Development Partners, The New York Housing Partnership, and Omni New York. The deadline for bids is July 8th, and they’re expected to range from $600 million to $1 billion. Omni is headed by ex-Met slugger Mo Vaughn and has other investments in East New York; L+M Equity’s many affordable projects in Brooklyn include redeveloping Wallabout’s Brig and building the affordable component at Williamsburg’s Schaefer Landing; the Christan Cultural Group is a local church with 29,000 members; and Bluestone is part of the team developing the Public Place property in Gowanus. After July 8th, Starrett City’s current owners are going to narrow the field of bidders to two or three finalists and consult with local, state, and government officials in order to choose a winner.
Seven Groups Ready Bids for Starrett City [Crain’s]
Photo by gkjarvis.
I think it’s great that East New York has improved. I know that stuff does improve. But, 4:45, although I’ve only been in Brooklyn (on and off) since 1990, I grew up in a city where I saw stuff improve, then get worse, then improve, then get worse… etc. etc. Philadelphia has had none of New York’s advantages.
I think East NY is one of those neighborhoods that has recently been gutted by rampant real estate speculation. I remember a year ago running a search on houses for sale in Brooklyn and the most affordable properties were all in ENY. Sounds reasonable, right?
Sure, except they were still about $700,000.
Now, that is more than my family can afford to pay and we’re semi-affluent.
Who’s buying those houses? Investors? So they can rent out three apartments for $1200/each a month? Does that math even remotely make sense?
Not everything will gentrify. Not everything SHOULD gentrify. There’s some gorgeous housing stock in East NY, yes. Starrett City is not it… but whatever.
There’s also some extremely dodgy valuations.
As an affordable housing industry insider, I’m fascinated as to where these folks are raising their equity and leveraging from. There are a couple of natural pairings in the group, and it’s no longer unusual for up to four groups to buddy up for a major development (NB: Public Place), but good lord–$1 billion is a reach for most of these guys, and the credit market–even in the less risky affordable universe–is just not good these days. How realistic can the bids be? Color me skeptical.
And yeah, those of you expressing skepticism about the market in ENY are right. Yes, there’s been development. Also, foreclosures. And lots of vacancies. At a certain point, it’s way cheaper to go to Yonkers or Jersey for about the same commute.
Heather & 2:48,
Heather your thoughts are well taken but as I mentioned it will take some time to change, not sure how long you have lived in BK but my family has for over 30 years and I can tell you many areas of BK have changed for the good, I grew up in Fort Greene when it was a war zone, even some parts of Park Slope had there tough times, it does take a while for things to turn around but they will,
2:48, I also lived in E. NY for a little while and walked to the J train and it was a 25 min commute to midtown, depends on where in the city you are traveling to. Otherwise good housing needs to be available to all income brackets even those who live in E. NY.
ENY has changed quite a bit over the past 20 years. It’s much safer, vacant lots have been replaced by new construction, and a Bangladeshi community has formed in the northern part of the neighborhood. Still, I think that heather’s point stands – people getting priced out of the more expensive areas of Brooklyn are unlikely to travel this far from Manhattan for a good deal.
I don’t see that happening, 2:15. Not there and not now.
12:56 you are correct in saying that they will not get market rate rentals however, things will change over time in E. New York, as the housing market gets more pricey and congested in the downtown Brooklyn area, people will start to venture north of Brooklyn where it is more affordable, developers will start to come soon enough,
I know I’m out of my depth with this one, but I can’t help but think that this sale is a very bad idea. Starrett City is, I think, reasonably well-run now. Furthermore, there’s not enough demand in that area for market-rate rentals to go up that much. This isn’t Stuy town. I just have a feeling that the financiers who broker the deal are the only ones who are going to win.
But like I said, I really don’t know what I am talking about… it just seems like if it isn’t broken, why is it being fixed?
I’m confused. Dozens of community activists, politicians, and tenants rights folks rejected a bid of 1.3 billion, saying that it would price people out, but now they are OK with bids of up to 1 billion?