NOWHERE is the high-water mark of New York real estate more visible than the former Jehovah's Witnesses distribution facility at One Brooklyn Bridge Park.
The 14-story condominium complex shattered the borough's price ceiling when real estate entrepreneur Elizabeth Stribling agreed in March to pay US$6.05 million to live there. Now, two-thirds of the 449 units in the 1.2-million-square-foot building remain unsold, testament to the financial excesses brewed up across the East River in the Wall Street canyons framed by One Brooklyn's floor-to-ceiling windows.
"We were killed," said Robert Levine, chief executive officer of RAL Companies & Affiliates LLC, who masterminded the US$550-million waterfront project with views of the Brooklyn Bridge and the Statue of Liberty, along with amenities such as virtual golf, a movie theater and a planned 85-acre park. "We have negotiated and done some contracts, but people are clearly much more aware of the current economy."
So are his backers. Levine's partner in the Brooklyn Heights development, 10 blocks south of the Jehovah's Witnesses headquarters that abuts the Brooklyn Bridge, is a US$300-million fund run by American International Group Inc's real estate investment unit, a business that is itself on the block as New York-based AIG sheds assets to pay an US$85-billion government loan, Bloomberg News said.
Jobs loss
Just when sales at One Brooklyn should have taken off after New York real estate's annual June-August lull, Lehman Brothers Holdings Inc went bankrupt, Merrill Lynch & Co was forced to sell itself and Congress authorized a US$700-billion bailout of the nation's financial system. About 160,000 New Yorkers may lose their jobs, including 45,000 in finance and related businesses, according to Governor David Paterson.
The result: Stribling Marketing Associates, exclusive broker for the property, has sold just 18 units since March, compared with an average of 14 a month in each of the prior 10 months. Levine, 56, is seeking about US$1,684 a square foot for the most expensive unit, triple the average price in Brooklyn and higher than the US$1,240 average for Manhattan's Upper East Side.
The building itself is among the most eye-catching on the waterfront, occupying roughly the same space as the Chrysler Building, the art deco skyscraper on 42nd Street in Manhattan, according to www.mrofficespace, a real estate data site.
One Brooklyn faces a particular challenge because it's cleaved from the rest of Brooklyn Heights by the Brooklyn-Queens Expressway, said Cliff Finn, director of new development marketing for real estate brokerage Citi Habitats. The Robert Moses-era beltway spews fumes and noise 24 hours a day from cars and trucks heading between the Verrazano Bridge and La Guardia Airport. The nearest subway, at Brooklyn's Borough Hall, is more than eight blocks away and accessible by shuttle bus.