A long-term ground lease has been arranged for the development of a hotel at 95 Rockwell Place in Brooklyn, near the Brooklyn Academy of Music, it was announced last week.
The news of hotel development comes on the heels of Mayor Bloomberg’s November 2012 announcement of plans to begin the development and construction of 600 units of mixed income housing, as well cultural and commercial space in the area. The site, bounded by Fulton Street, Rockwell Place and Ashland Place, is to be developed through the Gotham Organization and DT Salazar.
Mayor Bloomberg also announced a public review of the development of 50,000 square feet of creative, cultural and community space, as well as a new public plaza in the neighborhood.
The ground lease at 95 Rockwell Place was arranged for the building’s owners, Hertz Family LLC, through the CPEX New York Development and Conversion Investment Sales Team. The development and operation of the property will be coordinated through a partnership between Second Development Service and Florida-based hospitality management company Trans Inns. SDS and Trans Inns will partner with a major flag hotel, according to a statement from CPEX.
Second Development Service recently completed the Be@Schermerhorn and Richard Meier on Prospect Park.
The building’s owners, who had run a financial services business in the building, had scaled back their use of the space to about 30 percent, Brian Leary, managing partner at CPEX, told The Commercial Observer. Rather than renovate and rent the available space, the original objective was to sell the building at an asking price of approximately $9.25 million, according to Mr. Leary.
Interest from hotel groups motivated CPEX to suggest a deal be structured based on a ground lease with a developer and hotel operator. “From an owner’s point of view, they ended up netting a number higher than if they had sold it at the asking price,” Mr. Leary noted.
Based on zoning permits and a recently signed contract to acquire air rights, the maximum build-out space for the site is approximately 105,300 square feet above grade, according to the CPEX statement. The current site consists of an approximately 6,030 square foot lot with an existing five-story office building totaling 26,850 square feet.
The project is currently in the design phase, according to Mr. Leary. “One component is closed, the air rights component will close in six months,” he said.
Calls to SDS and Trans Inns were not immediately returned.