63 Schermerhorn Street
Essex Capital has substantial experience with ground-up residential projects, and 63 Schermerhorn Street in Brooklyn, New York, is an excellent example of the company's flexibility and superior sense of market timing. At the time of construction in 2006, all of New York City – and especially the downtown Brooklyn neighborhood – was in the midst of an unsustainable wave of high-end condominium development.
Essex Capital decided to buck the trend and position the 50,000-square-foot building as a rental property, a strategy that paid off when the local real estate market suffered a collapse that greatly affected luxury condominium product, with rental buildings emerging as a strong and reliable investment in troubled economic times.
Many investors had ignored the property because the land's owner, a local church, favored a ground lease over the outright sale of the property. That ruled out the development of condominiums, and, at the time, their ability to reap quick profits. but Essex Capital saw the long-term value of the site, which is located in an up-and-coming section of Brooklyn that is attracting young professionals priced out of Manhattan. Essex Capital structured a long-term ground lease with the church and was able to maximize the allowable square-footage built on the tight site.
Eschewing the luxury units popular at the time in favor of more modest, affordable apartments, which appeal to new college graduates and students from the nearby Brooklyn Law School, Essex Capital was able to take advantage of the amenities afforded by new condominium construction nearby, while offering appealing rents to tenants and avoiding competition with the glut of condos built at the height of the real estate boom.
As the recession put many new real estate developments into a tailspin, this property was well positioned to weather the crisis and capitalize on the subsequent high demand for affordable rental units. Essex continues to own and manage 63 Schermerhorn Street, and the property is a strong, long-term asset ready to profit from downtown Brooklyn's continued revival.
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