As lack of affordable housing is a constant talking point in New York, among other cities, a $66 million sale in 2023 is set to increase the number of affordable housing units built in Brooklyn’s Bedford-Stuyvesant neighborhood since 2014 by more than 50% in just a single project.
In what’s billed as one of the last few large, new residential developments eligible to receive a real estate tax exemption under the now-expired Affordable New York Housing Program, or 421-a, Douglaston Development and its partners are developing a 456-unit mixed-income housing development in the Bed-Stuy neighborhood, with 137 of the units to become permanently affordable residential units.
Douglaston, one of the city’s major multifamily developers, bought the 474,000-square-foot mixed-income housing development site at 1057 Atlantic Ave. for $66 million from the partnership led by BEB Capital and Totem, which assembled the site between 2019 and 2020 and successfully rezoned the land to allow for residential use, Douglaston said.
BEB and Totem recruited brokerage firm TerraCRG to identify and secure a qualified institutional-grade, majority-fee ownership buyer and development partner that can land construction financing and complete the project on time to make sure it will qualify for the 421-a program, which gives developers tax incentives in exchange for a portion of housing being affordable. Describing it as a transaction years in the making, TerraCRG said it also brokered the sale of the original site assemblage in 2019.
The sale won a CoStar Impact Award for the sale of the year for Long Island, where the property is grouped under CoStar’s research markets, as judged by real estate professionals familiar with the market.
About the Project: Construction of the project is expected to wrap up in late 2025. The development will also include 31,000 square feet of ground-floor retail space. Amenities for the building will include a gym, game room and children’s playroom. The $320 million development last year received $287 million in combined construction financing and preferred equity from parties including Wells Fargo Bank.
What the Judges Said: "The sale of 1057 Atlantic Avenue represents the best possible community partnership and impact for a development site,” said Aaron Yassin, director of operations, design and planning at Hive Developers. “This one project will increase the number of affordable units built in Bed-Stuy by 50% in the last 10 years.”
They Made It Happen: TerraCRG's Ofer Cohen and Daniel Lebor handled the sale.
CoStar Market Manager Grant Hunt contributed to this report.