Fixed-Gear Prospectors
by Brendan O’Connor
A few weeks ago, on one of the few truly cold days this fall or winter, members of New York City’s real estate industry gathered at the Brooklyn Library for the sixth annual Brooklyn Real Estate Summit. The networking breakfast was hosted by a company called “Aggressive Energy.” At the morning keynote, Richard Mack, the founder and chief executive officer of Mack Real Estate Group, was interviewed by Stephen Kliegerman, the president of Halstead Property Development Marketing. “Brooklyn is a great place to live,” Mack observed. In France, he said, when something is cool, they say, “C’est Brooklyn.” He apologized for his pronunciation. (“Among young Parisians, there is currently no greater praise for cuisine than ‘très Brooklyn,’ a term that signifies a particularly cool combination of informality, creativity and quality,” the New York Times reported in 2012.)
Apparently, Brooklyn was not always a great place to live. It was interesting, though, to hear how it became so, in Mack’s telling. “First, there was affordable housing,” Mack said. He was not necessarily talking about the kind of affordable housing subsidized by the city, state, or federal governments but rather the kind of housing that attracts students and artists. “Those were the organic, first steps of making the Brooklyn we know today so dynamic and interesting,” he explained. “There were also a lot of very aggressive zoning moves.”
Mack recalled hearing about how, many years ago, in Williamsburg, there were cool boutiques and artists living in warehouses. “That said to me, this is a place where young people want to live,” he said. “We just followed that trend.” Addressing the suits in the crowd (so, everyone), Mack said, “For those of you who don’t know, Williamsburg is cooler than Manhattan at night.” Kliegerman agreed. “Williamsburg is definitely very cool,” he said. “Brooklyn is very cool.” By his own admission, however, Mack himself isn’t cool. He isn’t worried about it. “I follow the exciting trends. I don’t need to be first.” Some years ago, his college roommate, a real estate writer for the New York Daily News, invited him to dinner in Bushwick, where he met a Broadway actress. This taught him that Bushwick was the new Williamsburg, and, in October, Mack Real Estate Credit Strategies lent $51.2 million to Dallas-based developer Lincoln Property Company to fund the acquisition of a six-story, hundred-and-twenty-five-thousand-square-foot former coffee-roasting facility at 1300 Flushing Ave and its conversion into a mixed-use office building called 455 Jefferson Street.
(Lincoln Property Company was also present at the summit. Senior vice president Jim Stein spoke on a later panel about “How Developers and Investors Take Hints From the Subway Map.” He said that after foot traffic through the turnstiles at the Jefferson Street L stop increased 13.4 percent over the course of a year, Lincoln decided to acquire 1300 Flushing. That is how developers and investors take hints from the subway map.)
“Think about what is driving San Francisco: Tech companies bringing not just their engineers but their creative workers downtown,” Mack suggested. The same thing is driving the Brooklyn real estate market, he said: Young, creative people working in technology and media jobs. These people and their interests were invoked over and over again over the course of the summit. In fact, Mack observed, many of these people work from home, or work from home sometimes and from an office other times. “Commuting on the L train to Google is no longer attractive,” he said. People who live in Brooklyn, Mack theorized, would like to also work in Brooklyn.
Then he began to make a larger point, about bicycles. “Don’t underestimate the change in commutational patterns as cycling becomes more important.” When looking to identify neighborhoods for residential investment and development, Mack said, “we’re looking for places where there are bike lanes, but more importantly where people are riding fixed gear bikes. I know that sounds funny.” The crowd laughed. “But go to Portland, Oregon. Go to downtown Seattle, downtown Los Angeles. Go to the greater neighborhoods of San Francisco. You’re gonna see a disproportionate amount of fixed gear bikes. You may laugh, but commutation patterns by bicycle are changing the way that cities are developed.”
Mack answered further questions about the role of fixed-gear bicycles in Mack Real Estate Group’s development choices over email. “We think it’s clear that there’s an impulse, among ‘Millennials’ particularly, to reduce the city’s reliance on cars,” he told me through a spokesperson. “That is something we support and respond to. Brooklyn’s cycling culture is expanding, and many of the people who live in our buildings are part of that, they’re riders. When we build we want to be responsive to the culture, in terms of where people want to live and how they want to live.”
“I believe that Brooklyn and Seattle, where we are developing several buildings, share many physical attributes that make them work for bicycles. Seattle is far ahead today in terms of both bicycle infrastructure and embrace of bicycle culture, but Brooklyn may catch up. Manhattan is more challenging but worth the effort,” he wrote. “Developing in Brooklyn, bicycle friendliness and appreciation — including for those very cool fixed gears that many people are passionate about — have clearly become an ingredient in a neighborhood’s appeal. Sometimes the fixed gear is a bellwether of sorts for us, but it’s part of a bigger picture.”
Later, during a networking break, Bruno Mars’ “Somewhere in Brooklyn” played over the auditorium speakers: “Little Ms. Perfect / Sitting at the train stop / Red Nike high tops / Listening to hip-hop.” Outside in the cold, anti-gentrification activists demonstrated. “All these people moving here talking about how the rents are too high — it’s been like that. You people don’t know what we went through around here. We went through hell.” one woman said into a microphone. Addressing the members of the industry inside the museum, she said, “They don’t care about marching. They don’t care about all this crap out here. They care about money.”
At all of its developments, Mack plans to build “more bike parking, less car parking. As much as we can get away with. Also it’s less expensive.” Kliegerman said that one of Halstead’s buildings in Manhattan offers a bike concierge. “They have a bike mechanic, too,” Kliegerman said. “Full service.”