To enter the Pacific Street office of the commercial brokerage firm TerraCRG, visitors must buzz reception and walk a few yards through a parking garage before hanging a right.
There’s Sena, an African hair-braiding salon, next door, and beyond that is a row of brownstones that, with minimal touchups, could be airlifted to Park Slope and go unnoticed.
But TerraCRG also sits practically in the shadow of the Barclays Center, and the eye travels to that rusty bird’s nest as you wait for the welcoming buzz.
This location at the traffic, geographic, demographic, architectural and developmental crossroads of Brooklyn suits TerraCRG, a firm launched by Ofer Cohen in 2008 that keeps a strict focus on the ascendant borough’s commercial real estate market.
Vice President of Retail Services Geoff Bailey joined TerraCRG in June of 2010, with previous experience in Brooklyn from five years in sales at Massey Knakal, where he had worked with Mr. Cohen. Mr. Bailey specialized in southeast Brooklyn back then, but thought there was untapped real estate potential throughout the borough.
“Brooklyn is one of the most under-retailed urban areas in America,” Mr. Bailey said. “Even the Gateway Center—one of the top-performing strip malls in the country—is an afterthought. The question for tenants is, ‘How do I assemble 100,000 square feet in Brooklyn to build a big-box store?’ It’s very, very difficult.”
These days, Mr. Bailey’s attention has shifted from Brooklyn’s more suburban, big-box-friendly precincts like Canarsie to Williamsburg, which is comparatively dense in population, as well as in proclamations trumpeting its cool—or at least the potential to cash in on its trendy cachet.
Mr. Bailey helped the stylish fitness center SoulCycle take part in the gold rush last November when he secured it a lease for 4,300 square feet at 184 Kent Avenue, on the Williamsburg waterfront. (Mr. Bailey also represented the landlord, JMH Development.)
“I had to work a lot with SoulCycle to show them the demographic shift of the neighborhood, that the local client was affluent enough for their service,” Mr. Bailey said. “SoulCycle is successful on the Upper West Side, Upper East Side, Tribeca and the Hamptons. And they realized they could find that same success in Williamsburg.”
There’s an 18,000-square-foot retail base at 184 Kent Avenue, but a bigger opportunity exists a few blocks away at 185 Wythe Avenue, where Mr. Bailey recently listed a 92,000-square-foot retail block.
In the past year, Kent and Wythe Avenues—particularly Wythe—have seen a torrent of leasing activity. The 72-room Wythe Hotel arrived last May, opening the floodgates for a boutique hotel invasion. A 150-room lodging from the development firm Heritage Equity Partners is in the works one block away. Output, an 11,424-square foot, 800-person-capacity nightclub at 74 Wythe Avenue, opened last month, and at least one more dance floor—this one reportedly around 7,500 square feet—will follow on the strip. (Mr. Bailey hinted that he is in talks with other nightlife operators, but demurred when asked for details.)
“You’ve got about 2,500 luxury residential units going up around the waterfront,” Mr. Bailey said. “That’s what’s driving Kent and Wythe.” He said that preschools and children’s play spaces are intrigued by 184 Kent Avenue and 185 Wythe Avenue. Those potential tenancies stand in stark contrast to the adult playgrounds farther north, a factor of the change from residential to industrial zoning at North 10th Street.
Meanwhile the buzz, if not the asking rents, has cooled around Bedford Avenue, for years metonymic with Williamsburg when it was still a bohemian backwater to non-locals. “Bedford Avenue doesn’t have the bones for a lot of big retailers,” Mr. Bailey said. “Most of it is still mixed-use walk-up buildings where you have less than 20 feet of frontage and maybe room for a 1,500-square-foot store.”
Despite that, Whole Foods will open a 39,000-square-foot branch at 242 Bedford Avenue by the middle of next year. Across the neighborhood’s main drag, a 55,000-square-foot cluster of properties between North Third and Fourth Streets dubbed the Bedford Portfolio sold to Red Sky Capital last year for $66 million. J.Crew is likely to snatch a 35,000-square-foot perch in that parcel.