One of the highest-profile adaptive reuse senior housing developments is on pace for a spring 2020 opening, and the companies involved have started to showcase what they are bringing to market.
The Watermark at Brooklyn Heights is transforming the landmark 16-story Leverich Towers Hotel in Brooklyn into 275 units — 204 assisted living, 42 memory care and 29 independent living — along with 50,000 square-feet of amenities and unobstructed views of downtown Manhattan and the Statue of Liberty.
Private equity investor Kayne Anderson Real Estate Advisors (KAREA) and Tucson, Arizona-based Watermark Retirement Communities acquired the property in November 2017. Real estate investment and services firm Tishman Speyer is the other partner in the venture. Watermark will operate the building.
Built in 1928, the Leverich Towers Hotel was acquired in 1975 by the Watchtower Bible and Tract Society, a.k.a. the Jehovah’s Witnesses, and incorporated into an astounding portfolio of Brooklyn real estate valued at $1 billion. Beginning in 2011, the Watchtower began selling off the portfolio in individual tracts. The KAREA/Watermark/Tishman Speyer JV acquired the Leverich property for around $200 million, and earmarked an additional $100 million for redevelopment.
The Watchtower used the building for dormitories and church events, and maintained the property in excellent condition, Watermark Chairman David Freshwater told Senior Housing News. This, along with the building’s location and views of the city, made for an enticing opportunity for a developer with the funding.
The key component to the building, however, was the amenity space. Where a developer looking to build market-rate condos would view the amenity space as cost-prohibitive in the expensive New York City real estate market, a senior housing operator could repurpose the space into a theater, workout rooms and other amenities that today’s senior housing resident expects in private-pay, luxury communities.
“It was a perfect storm. The Watchtower used [the building] as a space for everything: events, kitchens, medical offices and living quarters,” Freshwater said.
Watermark and its construction partners, New York-based architects Montroy DeMarco Architecture and interior designer Lemay + Escobar Architecture, were impressed by the building’s condition once they got a peek inside, Montroy DeMarco Principal Richard DeMarco told SHN.
“The Jehovah’s Witnesses kept the building in immaculate shape,” he said.
Notably, the team was able to repurpose the building’s vintage, mahogany-trimmed windows into the design, which allows ample amounts of natural light into the building in addition to the views, Lemay + Escobar Architecture Partner and Design Principal Andres Escobar told SHN.
“The windows add visual and architectural value that can’t be recreated,” he said.
The construction team discovered the Watchtower installed plumbing risers into the building which were still viable enough to be incorporated into the redevelopment process, and for designing ADA-compliant restrooms, kitchens and living units around the risers.
There were aspects of the building that were a bit tired for some aspects of what the construction team were trying to achieve.
In the building’s past life as a hotel, it had a two-story dining room that the Watchtower filled in with a slab to create more space, effectively shunting the dining to the cellar level with no access to natural light.
The dining room is being restored to its original Leverich Towers Hotel design, Escobar told SHN. This will house a main restaurant called The W Room, serving three restaurant-style meals each day, as well as Gustoso & Family, an eatery offering a European-inspired exhibition kitchen, including a brick hearth oven for chef-driven, casual recipes.
The basement level will be home to fitness and wellness amenities, including a warm-water therapy pool where residents can swim laps and do water walking exercises, as well as participate in water aerobics and aqua therapy classes. To fit the pool into the wellness center, teams had to dig it into the ground, between building foundations, DeMarco told SHN.
A theater, salon and spa are also located on this level.
One challenge for the design team was making this level feel as though residents and their guests were not in a basement. Freshwater highlighted Lemay + Escobar’s work to achieve this.
“[Escobar] did a phenomenal job allocating space and making hallways grand. As you circulate in the lower levels, they don’t feel pinched. They are airy and spacious,” he said.
The memory care unit is located on two floors with self-contained dining and salon services, a residential-style living area for residents to visit with their families, a private outdoor courtyard and The Greenhouse, a horticultural therapy and planting room featuring raised beds which residents can enjoy.
On the rooftop level, residents can enjoy a terrace, garden and club room with unfettered views of New York Harbor, the Manhattan skyline, the Brooklyn Bridge, and the Statue of Liberty. These views are protected as The Watermark at Brooklyn Heights is located in a height-restricted neighborhood, DeMarco told SHN.
Growing pre-lease velocity
As Watermark moves closer to an anticipated March 2020 opening, interest in The Watermark at Brooklyn Heights is growing. The operator opened a leasing office a couple months ago that has generated over 1,000 leads and approximately 30 units pre-leased, to date, Freshwater told SHN. And interest is beginning to snowball, with coverage of the project appearing in local newsletters and architecture-focused websites.
“We signed eight new leases in the last week alone,” he said.
Rates start at $8,245 per month for a studio apartment and top out at $22,000 for some two-bedroom units.
Watermark joins a growing number of high-profile operators looking for a piece of New York’s luxury senior housing pie, which has been fueled by favorable market dynamics. Projects under development include Welltower’s (NYSE: WELL) forthcoming 17-story community on Manhattan’s Upper West Side; Maplewood’s Inspir Carnegie Hill project; and a planned 44-story tower from former New York Governor Eliot Spitzer and New York City-based Related Companies that could include 126 long-term care facility dwelling units.