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February 15, 2012

Betting on slow eminent domain and instant retail potential, investor buys Atlantic Avenue building destined for second phase of Atlantic Yards

Atlantic Yards Report

This is a bit of a head-scratcher: real estate investors apparently believe the second phase of Atlantic Yards--notably the element that involves construction over the Vanderbilt Yard and adjacent properties that bump into the railyard--is so far off that they're buying property slated for eventual condemnation.

In an article today headlined Brooklyn Arena Pulls More Retail, the Wall Street Journal reports:

A real-estate investment company has closed on the purchase of a 105-year-old industrial building near the site of the new Barclays Center sports arena in Brooklyn.

Waterbridge Capital is considering turning the 40,000-square-foot facility at 700 Atlantic Ave. into a retail center, a person familiar with the matter said. Waterbridge bought the property for about $7 million, this person said.

Retail rents in the area may double from the current $50-$60/sf when the arena opens.
...

The building is in the area indicated in blue on the map (from DDDB) above right.

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The Wall Street Journal, Brooklyn Arena Pulls More Retail

The site is located within the second phase of Forest City Ratner Cos.' master plan for its larger Atlantic Yards development, which will include residential towers. Forest City eventually plans to build three apartment buildings on the block that includes 700 Atlantic Ave.

But Forest City hasn't begun any residential construction because of the financial downturn. The company expects residential work to begin on the first phase of the project by the end of the year. The second phase of construction, however, is still years away.

The Real Deal, Waterbridge Capital bets on Barclays Arena

“Up until a year ago, people didn’t know if they could finish” the arena, said Ofer Cohen, president of TerraCRG, who was not familiar with the Waterbridge transaction. “It’s going to unfold in the next couple of years… and people want to take advantage of it.”

Posted by eric at February 15, 2012 4:14 PM