SEE ALSO: NewMark Merrill\u2019s Future San Bernardino County Shopping Hub Signs 11 Tenants<\/a><\/p>\n Poor policymaking, construction hurdles and widespread retail vacancies were shared sore spots for the gathered panelists. Bright spots shone through, however, in the form of wealthy buyers, eager office tenants and the burgeoning residential face of the borough\u2019s Gowanus neighborhood.<\/p>\n Alvin Schein, a partner at Adler & Stachenfeld<\/a>, got the conversation started in a keynote session with Justin Elghanayan, principal and president of Rockrose. The multifamily developer landed in Brooklyn in 2019. This year, it\u2019s busy piecing together a multi-parcel assemblage in Cobble Hill and wrapping up its 49-story rental tower the Everly at 180 Ashland Place in Fort Greene.<\/p>\n The changing demographic makeup of Brooklyn, and an accompanying shift in local housing preferences, was first on the docket. The exodus of Manhattan\u2019s trust funders to the other side of the East River has accelerated the borough\u2019s high-end market, Elghanayan said. This broader cultural trend, which he dubbed \u201cthe luxury-ification of cool,\u201d is giving Brooklyn a gravitational pull.\u00a0<\/p>\n \u201cWe go where things are popular and where people want to live, and people want to live in Brooklyn,\u201d Elghanayan said.<\/p>\n As a consequence, Rockrose is planting its flag only in \u201cthe cream of the crop,\u201d or established neighborhoods, like Brooklyn Heights and Cobble Hill, where it believes investments will appreciate faster.\u00a0<\/p>\n Deep-pocketed buyers have little impact on the chronic challenges of high construction costs and the high demands of the city\u2019s 485x tax incentive. Schein pointed out the persistence of developers stringing along 99-unit buildings<\/a> to skirt the program\u2019s wage rules. The task of building 100-plus-unit buildings is an increasingly difficult one, Elghanayan said, with higher labor costs , onerous reporting requirements and severe penalties for developers that slip up.<\/p>\n \u201cEven if you believe in doing something, if the numbers are too high, it\u2019s hard to justify doing it,\u201d he said. \u201cI\u2019m not convinced that it is feasible under the current framework. The current framework has to change.\u201d<\/p>\n Schein and Elghanayan, like the day\u2019s later panelists, expressed hope that the political establishment will take notice of what\u2019s not working, and be willing to fix it. Elghanayan suggested the build-more crowd could use better PR, switching from \u201cabundance movement\u201d to a \u201cmake more housing and the rent goes down movement.\u201d The gathered crowd appeared on board.<\/p>\n The rising costs and rapid absorption of Brooklyn\u2019s cool factor carried into the first panel of the event, \u201cBrooklyn 2026 Market Outlook,\u201d moderated by Dan Marks, CEO of TerraCRG<\/a>.<\/p>\n Randy Peers, president and CEO of the Brooklyn Chamber of Commerce, said Brooklyn has become an international brand, citing the pop-up of a Brooklyn Made Store opening in Tokyo this summer. In the borough itself, however, the health of retail<\/a> varies widely, with stubbornly high vacancies in neighborhoods like Williamsburg and Downtown Brooklyn, Peers said, and a net loss of 1,000 businesses citywide reported last spring.<\/p>\n But the gathered investors can still hang their hats on the borough\u2019s strong housing market. Shawn Katz, president of Silverstein Capital Partners<\/a>, the lending platform of Downtown Brooklyn\u2019s Brooklyn Tower owner Silverstein Capital, said the conversation has shifted from enormous supply to rapid absorption.\u00a0<\/p>\n In Williamsburg, the first phase of Naftali Group<\/a>\u2019s waterfront megadevelopment Williamsburg Wharf has seen a 90 percent lease-up in less than six months, according to David Hochfelder, Naftali\u2019s chief investment officer. Condos are averaging $2,000 per square foot. Compared to just five years ago, Hochfelder said, the numbers are staggering.\u00a0<\/p>\n \u201cPeople used to look at Brooklyn as a low-cost alternative. It\u2019s no longer a low-cost alternative,\u201d Hochfelder said. People are moving for a better lifestyle, he said, seeking more bang for their buck on space and amenities.<\/p>\n Panel members shared their own grievances over the encumbrances of NIMBYism and construction woes, with Hoschfelder acknowledging that high costs, insurance and interest rates mean that \u201clarge rental buildings don\u2019t pencil for us.\u201d<\/p>\n Due praise was given, however, to policies like City of Yes. Katz said City of Yes dramatically improved Silverstein\u2019s ability to increase its retail and commercial offerings at Brooklyn Tower, which include an 80,000-square-foot Life Time<\/a> gym. Peers chimed in that there\u2019s positive signs in Mayor Zohran Mamdani\u2019s new Block-By-Block plan<\/a>, with two major rezonings slated for the borough.<\/p>\n \u201cThere are some elements that might be uncomfortable to some people in this room,\u201d Peers said, referencing tenant protections. \u201cBut beyond that, let\u2019s acknowledge the fact that it\u2019s a comprehensive approach to bringing much more supply into the marketplace.\u201d<\/p>\n A panel on \u201cBrooklyn\u2019s Economic Engine\u201d followed, in which leading commercial brokers zeroed in on the neighborhoods and sectors driving demand. Alyssa Zahler, managing director of commercial leasing at Two Trees Management, said that just 10 years ago, selling office tenants on Brooklyn was \u201cexhausting.\u201d That\u2019s all changed.<\/p>\n \u201cI don\u2019t sell Brooklyn anymore. Brooklyn sells itself,\u201d Zahler said.<\/p>\n Williamsburg\u2019s The Refinery at Domino, the current apple of Two Trees\u2019 eye, has found success in its mixed-use approach to tenant curation, Zahler said.\u00a0<\/p>\n Alexander Radmin, director of leasing at Global Holdings Management Group<\/a>, which manages 25 Kent, added that Brooklyn\u2019s commercial sites require amenitized spaces and institutional, highly curated retail to succeed in today\u2019s market, and leasing office space to smaller Brooklyn tenants<\/a> requires flexibility.\u00a0<\/p>\n Retail softness remains the biggest story in Downtown Brooklyn, Regina Myer, president of the Downtown Brooklyn Partnership, told moderator Zachary Bernstein, partner at Fried Frank<\/a>. While closures like the neighborhood\u2019s historic Macy\u2019s store<\/a> are troubling signs, the area has found success in retail that meets the needs of its booming residential population, including three new supermarkets on Fulton Street.<\/p>\n When it comes to the borough\u2019s next big submarket, all signs point toward Gowanus<\/a>.<\/p>\n \u201cWe\u2019ve been buying quietly for the last couple of years there,\u201d Zahler said, which had the crowd of attendant competitors leaning in a little closer.\u00a0<\/p>\n Global Holdings\u2019 long view on Gowanus is evident in 450 Union Street, its mixed-use residential project along the canal, where they just kicked off leasing. The vote of confidence, Radmin said, comes down to fundamentals.\u00a0<\/p>\n \u201cThere\u2019s amazing access to transportation, you\u2019re surrounded by some of the best neighborhoods in Brooklyn, some amazing school districts,\u201d he said. \u201cI wouldn\u2019t say we were early. I would say we were right on time.\u201d\u00a0<\/p>\n He referenced the nearby arrival of Life Time<\/a>. The oft-cited luxury gym appears to be a Brooklyn developer\u2019s signpost for ROI.\u00a0<\/p>\n The final panel of this year\u2019s forum, \u201cThe Borough\u2019s Residential Report,\u201d was less rosy than preceding panels. Moderator Zachary Steinberg, executive vice president of the Real Estate Board of New York<\/a>, led the discussion that delivered a clear verdict: Affordable housing policy is not making affordable housing builders\u2019 lives any easier. Gowanus, however, received some more flowers.<\/p>\n The current uptick in building should\u2019ve happened 20-plus years ago, said Sam Charney, founder and principal of Charney Companies<\/a>.\u00a0<\/p>\n \u201cIt\u2019s infill between Park Slope and Carroll Gardens,\u201d Charney said. \u201cThat is just such an easy place to look to create housing, and really, it\u2019s the smartest blend of public and private partnership working together to clean up contaminated soil to create affordable housing and preserve a lot of the culture that is there.\u201d<\/p>\n Kieran E. Harrington, CEO of RiseBoro Community Partnership<\/a>, said it\u2019s his group\u2019s intention to keep Brooklyn a home for all New Yorkers, not just the fortunate few. Serious obstacles remain in their way. Changing requirements on soil remediation forced Charney Companies to undertake an unplanned project of filling 30 feet of concrete below a Gowanus project, Charney said. The rezoning timeline, too, remains a sticking point.\u00a0<\/p>\n \u201cThe [Gowanus] rezoning took about 15 years,\u201d said Kirk Goodrich, president of Monadnock Development<\/a>. \u201cAnd if you care about housing and creating the kind of dynamic housing market where people can build and affordability is naturally occurring, you can\u2019t take 15 years or 10 years or six years.\u201d\u00a0<\/p>\n![\"Rockrose's](\"https:\/\/www.newsbeep.com\/us-ny\/wp-content\/uploads\/2026\/06\/CommObsBrooklyn25Kent3June2026GMorris_138_1521.jpg\" "\\"Fierce")
Rockrose\u2019s Justin Elghanayan (left) and Alvin Schein of Adler and Stachenfeld LLP. PHOTO: Greg Morris\/For Commercial Observer<\/p>\n![\"Naftali](\"https:\/\/www.newsbeep.com\/us-ny\/wp-content\/uploads\/2026\/06\/CommObsBrooklyn25Kent3June2026GMorris_240_1614.jpg\" "\\"Fierce")
Naftali Group\u2019s David Hochfelder (left) and Silverstein\u2019s Shawn Katz. PHOTO: Greg Morris\/For Commercial Observer<\/p>\n![\"From](\"https:\/\/www.newsbeep.com\/us-ny\/wp-content\/uploads\/2026\/06\/CommObsBrooklyn25Kent3June2026GMorris_451_1913.jpg\" "\\"Fierce")
From left: REBNY\u2019s Zachary Steinberg, Kieran E. Harrington of Riseboro Community Partnership, Sam Charney of Charney Companies, Monadock Development\u2019s Kirk Goodrich, and Ofer Cohen of Ailanthus. PHOTO: Greg Morris\/For Commercial Observer<\/p>\n