05.18.15 | Crain's

Investment firms bet on Brooklyn Heights Montague Street as the next Spring Street

Imperium Capital and Centurion Realty paid $8.5 million for the five-story Brooklyn Heights building with hopes that rent on the corridor will rise.

Imperium Capital, along with Centurion Realty, is betting that Montague Street in Brooklyn Heights will become the city’s next hot little shopping corridor.

The pair has acquired 142 Montague St., a five-story residential building with six rental apartment units and two levels of retail, for $8.5 million. Imperium, a firm founded by two young real estate investors, Daniel Glaser and Sam Schneider, has been investing in prime retail spaces in neighborhoods that are experiencing a run-up in rents. In recent years, the pair has purchased retail space in SoHo and Williamsburg.

Now they see an upside in Brooklyn Heights, a neighborhood that has long been known as one of the city’s most scenic and exclusive residential enclaves. Given the areas demographic of wealthy residents, Messrs. Glaser and Schneider see an opportunity for more luxury retail.

“It will transition in the future,” Mr. Schneider said. “Luxury retailers can pay higher rents and still make money.”

One of the reasons Montague Street is so attractive is that many of the buildings there have two levels of retail. Retail rents on the street are in the $150s per square foot, according to Mr. Schneider, adding that he sees that rising in the near future.

At 142 Montague St., the women’s footwear store Aerosoles and a sushi restaurant, which occupies the second level, are leasing the property. But Mr. Schneider said the retail scene is going upscale. The high-end skin-care shop Kiehl’s recently opened on Montague Street. And the Bossert Hotel is expected to open at 98 Montague St., adding to the increasingly luxury-oriented streetscape with its planned retail space.

“The residential has always been good in Brooklyn Heights,” Mr. Schneider said. “Now the retail is catching up.”