Living LIC Q&A: A Conversation With David Brause
Brause Realty president, LIC BID chair talks new Purves Street rental tower, LIC’s growing commercial market and his take on 421a
By Rey Mashayekhi
David Brause is president of Brause Realty, the family-run real estate firm founded by his grandfather, Jack Brause, in 1963. Brause’s family has been active in the real estate business since the 1920s, and the Midtown-based company he now leads owns and manages properties nationally – from the Tri-State area and upstate New York, to Maryland and Florida.
But Brause Realty remains heavily focused on its hometown market, owning more than 3 million square feet of property in the New York City and the surrounding region. The firm was also an early believer in the Long Island City market and has owned property in the neighborhood since 1980, long before the LIC’s emergence as one of New York City’s fastest-growing residential destinations.
Brause’s investments in Long Island City include the renovation and expansion of the historic Brewster Building, at 27-01 Queens Plaza North, into a 700,000-square-foot office building that now serves as JetBlue Airways’ headquarters. The company is now nearing completion on its most ambitious Long Island City development yet: a 38-story, 272-unit luxury rental building at 44-28 Purves Street, which it is building in partnership with Gotham Organization and ABS Partners Real Estate.
In addition to leading his family’s real estate business, David Brause also chairs the Long Island City Business Improvement District and serves on the Long Island City Partnership’s board of directors. He took some time last week to speak with Living LIC about the Purves Street project, why more retailers are eyeing LIC and how the neighborhood’s transit infrastructure bodes well for its future growth.
(This interview has been edited and condensed for clarity.)
Where do things stand with your luxury rental project at 44-28 Purves Street? How close are you to completion, and when do you expect to start leasing?
David Brause: We are nearing completion. We are topped out, we are windowed and the cranes are starting to coming down. We’re working on our interiors as quickly as we can and hope to be open for renting in May. We hope to have a leasing office open by the end of April, early May. [Note: Midtown-based Marketing Directors will manage leasing at 44-28 Purves Street.]
We’ll be competitive with the leasing market in Long Island City. Right across from us the [Rabsky Group’s 26-story, 284-unit rental building] Halo LIC has opened, not far is [Rockrose Development’s 42-story, 709-unit rental building] Linc LIC. Things seem to be holding on their own. It’s a very strong market rental market right now.
What can you tell us about your partnership with Gotham Organization and ABS Partners Real Estate on the building?
DB: We have two partners on the development. First, we brought in the Gotham Organization; the Picket and Brause families have been partners for years. We’ve been friends with them for a long time, and have been looking for a site to build together. Then we brought in ABS Real Estate Partners; they have also been long-term family partners in real estate all over New York City, and they’ve been wonderful partners as well.
As far as the product itself, what differentiates it, in your view, from the considerable number of new rental towers being developed? Is separating your building an important challenge, given how much new residential supply is set to come to marketing Long Island City?
DB: Absolutely. First, I’ll start with the construction. We’re LEED-certified; we’re getting full environmental LEED certification. We’re one of the first building to introduce wind and solar panels in the building, and will have both powering our [26,000 square feet of] amenities. We’ll have a beautiful green roof with hammocks and chaise lounges, an outdoor movie screen, a beautiful gym with a spin classroom and yoga room. An outdoor grass area, a library, a workspace room, a private party room, a beautiful sky deck with a spectacular view of Manhattan.
When you walk into the building, you’re going to be greeted with a very cool FXFOWLE Architects design that welcomes the history of the neighborhood, with rusty steel and exposed rivets and exposed beams and natural woods and concrete. But when you’re in your apartment, you’re going to see a condo-level finish – we went above and beyond with the finishes. There will be washers and dryers in every apartment, even the studios. It will feel like a very different building than what Long Island City now has to offer today.
44-28 Purves Street is only one in a glut of residential skyscrapers that are transforming the LIC skyline. How much was the project motivated by the clearly emerging market for high-rises in Long Island City?
DB: We’re not new to Long Island City; we’ve owned real estate here since 1980. In 2011, we found this site when it was in foreclosure. We went through the foreclosure process, and eventually started building on the site in 2015. We’re a long-term family business that thinks ahead – we got in for a pretty low land value because we bought it years ago, our construction costs are at a nice number, and our financing was done in a different market.
When you look at the competition in the area, there are a lot of units coming to Long Island City, but they’re not flooding the market all at once – they’re coming over a couple years. And there’s a continuous supply of renters coming to Long Island City because there’s a continuous supply of renters coming to New York City. We’re competing in a much bigger universe than just our neighborhood.
How much work remains to be done in the LIC commercial real estate sector? It seems the office sector is really taking off, via projects like Tishman Speyer’s new office development and several warehouse-turned-office rehabilitations.
DB: Between the residential, office, hotel and retail sectors, you have a real 24-hour community opening. You’ll have WeWork, Bloomingdale’s, and JetBlue with offices in the area. We really feel like Long Island City is well-positioned for the future. This transit-oriented, mixed-use neighborhood is what people want.
The thing about the rezoning of Long Island City [in 2001] is that they only rezoned part of it; to the east, you have these highly commercial, industrial warehouse buildings that were built with thick slabs and high windows, and those are now being converted to suit the needs of creative and TAMI (technology, advertising, media and information) office tenants. There’s RXR Realty’s Standard Motors Buildings, Jamestown’s Falchi Building – all of it feeds off each other. Wouldn’t you like to be able to walk to work and have cool funky nightspots within walking distance of both your home and office? If they live in Long Island City, do they work in Long Island City? Not always, of course. But there is a great community that is being established when you have Jamestown putting all this money into retail [at the Falchi Building]. That investment feeds the ability to build a community.
There still appears to be room for improvement as far as retail offerings in the neighborhood. How important is this for residential developers, as far as bringing new amenities to the neighborhood while retaining a unique character that will attract residents?
DB: We’re putting retail into our [Purves Street] building. Our neighbors will all have retail, Rockrose announced all this new retail going into their building on Jackson Avenue. Tishman Speyer as well, and that will serve their [office and residential] projects on both sides of [Jackson Avenue]. There’s going to be a healthy amount of retail space. I’m hearing rumors of more national retail tenants coming; they’ve been circling the market and waiting to what’s happening in the neighborhood. Now there are enough cranes up, so it’s going to be exciting.
Where are your views on the neighborhood’s transit offerings? They get talked up quite a bit, but they may face added strain in the future with the tens of thousands of new residents promised to arrive in coming years. How much faith do you have in infrastructure projects like the Brooklyn-Queens Connector [streetcar line] and the Citywide Ferry expansion?
DB: The Brooklyn-Queens Connector is going to go right through the Long Island City, and that will be a nice development instead of having to rely on the G train. You’ll have the ability to connect from Astoria right down to Red Hook. It’s going to be really great for the city, but that’s also many years and billions of dollars from now.
You have eight subway lines connecting in Long Island City; you can’t replace that. That’s one of the main calling cards of why Long Island City is so successful. Will there be more strain on the transit system? Absolutely. But compare it to Hudson Yards; that one [34th Street—Hudson Yards] subway stop is going to have to serve all that residential and commercial development. If there’s one problem, you’re stuck. But when you’re sitting in the middle of Court Square, if the 7 train is not working, it’s not fatal. It’s really an incredible connectivity that you would never pay for in this day or age [due to transit infrastructure improvement costs], or be able to replace. If I work there or live there, I know that if one subway stop goes down, I’ll still be able to get around.
I’m a huge fan of Citi Bike. We now have 11 Citi Bike stations in Long Island City itself. If you go back and forth on the Pulaski Bridge, it’s all bikers now. That is a huge benefit to connectivity. We’re going to have room for close to 100 bikes [in storage at 44-28 Purves Street]. More and more people are relying on public transit and biking in Long Island City.
The political gridlock over 421a continues, nearly 18 months after the tax abatement expired. Will the abatement’s expiry have a profound impact on future residential development in Long Island City, or do you think the neighborhood is insulated in the near-to-medium term because of how many units are already slated to come online and are grandfathered in under the previous law?
DB: As you pointed out before, there are so many units being built right now, either in the ground or going up. You have so many thousands of units in development here that you’re not going to feel 421a’s loss as much as you will in other neighborhoods. You’ll probably see the effects -- and construction companies and architects are feeling it already – around four years from now.
As far as the evolution of Long Island City is concerned, we’ve finally hit that tipping point where you’re starting to have that 24/7 density. So once we’re done with this mini-boom in the next three to four years, you’re already going to have this incredible neighborhood that’s built out. Hopefully it’ll be a short-term silent period [due to 421a], and then you’ll go back to what’s expected.
There’s a lot of people building in New York City right now, so as far as I’m concerned, it’s nice to have a breather every once in a while – as long as it’s just a breather. We certainly hope affordable housing comes back. There should be some formula that works; there should be enough of a tax benefit for the city to continue a nice amount of construction every year. A lot of people need homes; this is one of the most desirous places for people to come when they finish college. Where are they going to live, and where can they afford to live?
What can you tell us about the work being done at the Long Island City Business Improvement District (BID), which you chair?
DB: The BID is in the process of expanding. It started in 2005 focused around Queens Plaza and Jackson Avenue and incorporated the main commercial areas [of Long Island City]. Ten years have gone by, and now we’ve gone through this process to double the size of the BID; instead of stopping at Court Square, it’s going to extend down Jackson Avenue to Vernon Boulevard, and all the way up to 44th Drive.
Hotels will be in it, a lot of residential buildings and commercial space will be in it, and we’ll be able to provide the level of service we have been providing to areas like Vernon Boulevard, where there’s a real need. There are a lot of improvements those retailers need, in terms of landscaping, marketing, sewer systems [and other infrastructure development]. If you’re a resident [in the BID], you’ll see beautiful plantings and landscaping, street banners, new benches, new lighting. As you go up and down Jackson Avenue now, you can see where the BID is and where the BID isn’t – it’s very obvious. It’s going to be very positive. We hope to have approval in the next couple of months.