Heart & Soul: TerraCRG’s Geoff Bailey on Williamsburg’s Next Act
Billy Gray Feb. 5, 2013, 11 a.m.
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.
When asked how he encourages purported progress without fully extinguishing a neighborhood’s edgy character, Mr. Bailey acknowledged that Williamsburg is in at least its “fourth wave” of gentrification—the first being artists looking for cheap, open space, and so on—but he is also optimistic that it will retain at least a semblance of its rakish, sleeve-tattooed self.
“I don’t want to call them mom-and-pop stores, but Williamsburg is a bit more homegrown, despite the zoning changes that [Mayor Michael] Bloomberg pushed through in 2005,” Mr. Bailey said. “It still has that aesthetic. There’s a certain ethic and sensibility that holds Williamsburg together that’s still there.
Mr. Bailey likes to play the guitar in his downtime, and he has “gone to [the bowling alley and live rock venue] Brooklyn Bowl quite often.” Life changes have mostly kept the Tribeca resident away from the Williamsburg scene, though. “Being married with a child—and another on the way—has put a damper on my clubgoing,” Mr. Bailey said.
Still, he’s critical of the “generic” retail—Duane Reade, CVS—that has popped up at the base of The Edge, the high-rise and high-income residential building that has become a punching bag for those who malign the neighborhood’s glam transformation. Mr. Bailey also acknowledges that seamy rock clubs like Monster Island and Bruar Falls have been priced out even as new dance floors pulsate.
High-rises and spinning boutiques have been slower to spread on Williamsburg’s south side, the area bounded by Grand Street and Broadway, around the Williamsburg Bridge. “Historically, it’s the more residential part of the neighborhood,” Mr. Bailey said. “You can’t find a 40,000-square-foot warehouse or an entire block to convert. I think it will maintain its character a bit more, kind of like the East Village, where there’s a few big developments but mostly smaller mixed-use properties.”
Yet the old Domino Sugar Factory was purchased by the developer Two Trees from CPC Resources last October for $185 million, following months of messy legal disputes between Two Trees, CPC and the Katan Group, which bought the 11-acre waterfront property for $55 million in 2005. Two Trees has not finalized all its plans for the site, and is “in dialogue” about responsible development with locals. But the former sugar refinery is likely to introduce around 2,000 new units of residential housing.
“The Domino project is comparable, though not on the same scale, to Hudson Yards,” Mr. Bailey said. “If you take the size of Manhattan and you shrink it to Williamsburg, it will have a similar impact.”
Asked to make another comparison between Williamsburg and the Manhattan neighborhood it might most closely resemble in five years, Mr. Bailey shied away from labeling it the next Meatpacking District or Lower East Side. But he did say that one indicator of the neighborhood’s directional shift was the opening of a Tribeca Pediatrics at 212 Berry Street. “It shows that there are affluent families in the area that need services,” Mr. Bailey said. “You look to neighborhoods like Tribeca, where you have strollers, nannies and affluent parents who work in the city. Wiliamsburg has a Tribeca and an Upper West Side feeling in that way.”
How long might it be before a large national retailer (other than Whole Foods) moves into what was until recently the city’s best-known alternative district? “I think you could see medium-sized box stores—10,000 to 20,000 square feet—move in within six months or a year,” Mr. Bailey said.
But don’t shed an ironic tear for the lost hip soul of Williamsburg just yet. Mr. Bailey added that there “is interest, but also trepidation” from big-box stores when it comes to waters untested by national retail behemoths like Marshall’s, K-Mart or Target.
Large-format stores also have to contend with the stubborn local indie ethos as they inevitably circle the neighborhood and its vigilant community board members, whose idiosyncrasies they relish even as they attempt to monetize them.
“It’s all about brand identification,” Mr. Bailey said. “Like with SoulCycle—our brand identifies with Williamsburg and we want to be part of the Williamsburg brand. Let me identify with cool Williamsburg, which is now known nationally, if not worldwide, as the hippest place.”