Friday, June 01, 2007


REITs Pouring Investment Into Dense Urban Corners - May 31, 2007 - The New York Sun

Zoning changes and REITS are playing a vital role in ushering a residential and commercial boom in major urban centers like Brooklyn.

A residential boom is sparking commercial development in downtown Brooklyn, the head of zoning and land use at Herrick Feinstein LLP, Mark Levine, said. "The city helped set the stage for the redevelopment by a major upzoning passed by the City Council in 2004," he said.

One of the most active investors in the urban redevelopment of downtown Brooklyn, the Bronx, and Manhattan is Acadia Realty Trust. On February 23, the real estate investment trust announced that it has entered into an agreement for the purchase of the leasehold interest in the Gallery at Fulton Street and the adjacent parking garage in downtown Brooklyn for $120 million through its Fund II New York Urban-Infill Redevelopment initiative with P/A Associates and Paul Travis of Washington Square Partners. The fee position in the property is owned by the city of New York and the agreement includes an option to purchase this fee position at a later date. Acadia P/A-Travis is partnering with MacFarlane Partners, the leading national minority-owned real estate management firm.

Plans for the property include the demolition of the existing building and the development of a 1.6 million-square-foot mixed-use complex to be called the Center at Albee Square. The residential portion will include both moderateincome and market-rate rentals under the city's 80/20 affordable housing incentive program.

Acadia P/A-Travis, a majority partner, together with MacFarlane, will develop and operate the retail component, which is anticipated to total 535,000 square feet of prime shopping space. Acadia P/A-Travis will also participate in the development of the office component with MacFarlane, which is expected to include about 125,000 square feet of Class A office space. Together, they plan to develop 900,000 square feet in a new residential tower and operate about 1,000 residential units with underground parking.


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