Brighton Beach, 'Little Secret' Next Door To Coney Island, Remains Developer Enigma
On Brighton Beach Avenue, $2 can buy a meat pierogi sold by a babushka out a store window. If luck strikes, a man may be playing the accordion on the corner as seagulls fly overhead.
Even in the middle of a weekday, the streets of Brighton Beach buzz with locals inquiring about the $200 serving tray in a shop window, the materials of the shawls hanging from various kiosks or the freshness of the caviar sold in the supermarkets.
Follow the seagulls a few blocks west, and the Cyrillic signs plastered all over the Brooklyn waterfront neighborhood fade. Cranes, as well as rollercoasters, rise.
While Coney Island has drawn the eyes of big-name developers in recent years, attracting new housing, mixed developments and a casino proposal, next door, Brighton Beach remains an enigma to institutional investors and a cash cow for largely Eastern European insiders.
“This can be my little secret that nobody really knows about, but I get frustrated,” said Evmorfea Barbatsis-Savidis, principal broker at Brooklyn-based boutique brokerage Morsav. “How do you not see what is down here and how much people are paying for property?”
Money is flowing into the neighborhood, with $720M in investment sales over the past decade, equal to the amount spent in Coney Island in that time span, according to PropertyScout data provided to Bisnow. Last year, four retail properties traded hands in Brighton Beach at an average price per SF of $670, higher than any other neighborhood in South Brooklyn, according to a report by Brooklyn brokerage TerraCRG.
In the last decade, 730K SF of new building applications and permits have been filed in Brighton Beach, according to data provided by PropertyScout. That stands in contrast to the more than 6M SF of development that has been filed in Coney Island, more than any other neighborhood in South Brooklyn, according to data provided by PropertyScout.
But many of the buyers are local developers whose names are unknown outside of this corner of South Brooklyn.
“Developers are taking big risks, but they're also risk-averse in terms of the neighborhoods that they're going to develop in,” TerraCRG partner Matthew Cosentino said. “It's the people on the ground who are the first movers.”
They have been able to reap the benefits of an active shopping district where retailers pay $80 to $100 per SF in rent, Barbatsis-Savidis said. On Greenpoint’s Manhattan Avenue and Dumbo’s waterfront, average asking rent was $67 per SF in the second half of 2023, according to a report by the Real Estate Board of New York.
“You're not going to ever walk down Brighton Avenue and it's not a madhouse,” Barbatsis-Savidis said.
But the neighborhood's distinct culture and community mean not everyone can succeed. In 2015, Wendy’s opened on Brighton Beach Avenue, a street where the only retail chains are banks.
Curiosity led the international fast-food restaurant to give the neighborhood a shot. However, it shut down soon after — its last Yelp review was posted March 2017.
“The logic was, we see $100K cars driven around Brighton Beach, but the median salary is $35K. How does that make sense?” said Arsen Atbashyan, CEO of local property brokerage Commercial Acquisitions.
“They closed very soon after that because that type of product was not catering to that community,” Atbashyan said. “Not because there wasn't any money there, there's plenty of money there.”
Though Brighton Beach was originally an Orthodox Jewish community, Russian immigrants moved to the area in waves throughout the 1970s, '80s and '90s, both before and after the fall of the Soviet Union. The area is nicknamed “Little Odessa” because the proximity to the water reminds residents of the Ukrainian port city on the Black Sea.
Displays of wealth in Brighton Beach often lead to suspicion from outsiders. After all, in 2022, several members of the Russian mafia were arrested, alleged to be operating out of the neighborhood, according to the U.S. Attorney's Office.
But most families here have clean money. While some are privileged to generational wealth via Russian oligarchs, others have created their own nest egg by simply chasing the American dream.
Russian and Ukrainian are still the first language for many Brighton Beach residents, which has made it harder for developers looking to assemble properties to make inroads, real estate players in the neighborhood said.
The same mid-sized residential zoning that spreads across most of Coney Island extends to Brighton Beach, as does the opportunity zone that covers both areas. Both benefit from a less-than-hour-long commute to Midtown, are close to airports and have the luxury of cheap land at a time when Manhattan faces shortages.
As a result, Brighton hasn’t been able to completely evade the scaffolding. But unlike Coney Island developers, who put out press releases and report quarterly earnings, those in Brighton maintain a minimal presence.
Google searches for their names may come up with a related, or unrelated, Facebook profile, and Department of Buildings records often are linked to an unsuspecting AOL email address.
"It's the same players over and over again. They all originate from here, they understand the product, they understand the people," Atbashyan said. "I don't have to educate anybody about why this building is good, or why this area is good. They come knowing exactly what they want."
A nearly 13K SF development at 1002 Banner Ave. is being developed by Yelena Maksumov, who also filed a permit for a 108K SF mixed-use building in Sheepshead Bay.
At 23 Brighton 11th St., Natalya Zagranichny filed to build an eight-story, 30K SF community center. Zagranichny is also behind several other condo and office projects in the area, according to city property records.
On the same block as a few other lots surrounded by green fences with work permits plastered to them, Lev Kheyfets is proposing a new, 13-unit residential development at 2948 Brighton 4th St. He has previously filed a permit for a 15-unit mixed-use building at 537 Brooklyn Ave. in North Central Brooklyn.
Next door is 2920 Brighton 4th St., which is advertised as setting “a new standard for new rental developments in Brooklyn.”
None of the developers responded to Bisnow's inquiries or could be reached for comment.
The projects in Coney Island include the area’s first luxury apartment complex, developed by John Catsimatidis, along with 324 units at 1515 Surf Ave., 464 units at 1709 Surf Ave. and 216 units at 2006 Surf Ave.
Last June, Tredway made its first foray into Brooklyn with a $150M Coney Island acquisition. Thor Equities is hoping to land one of New York City's only casino licenses in the neighborhood in a partnership with Saratoga Casino Holdings, the Chickasaw Nation and Legends.
But neither Barbatsis-Savidis nor Atbashyan feel the need to reach out to new developers to pitch Brighton Beach projects.
There’s a sense that they either wouldn’t call back in the first place or wouldn’t understand the appeal of the area. A few outsiders do get it, though.
Muss Development delivered Oceana, a 16-building development that sits on the boardwalk and features glitzy resort-style offerings on what were the Brighton Beach Baths, a recreational club and nude beach. Muss calls the project “a crown jewel” of its portfolio on its website. In 2009, the area the complex sits on was rezoned to allow for taller residential developments and a commercial overlay.
Condos in the building have recently sold for as much as $2.5M, according to StreetEasy records. Muss didn't respond to a request for comment.
“Many of those apartments sold for anywhere between $800 and $1K a foot — million dollar apartments in Brighton — which would have been unheard of,” said Eli Weiss, principal of Joy Construction, whose grandparents owned real estate in Brighton Beach. “But Muss, I think they had tremendous foresight.”
Rybak Development’s 20-story Sea Breeze Tower on the border of Brighton Beach and Coney Island is 100% leased, with waitlists for rentals costing between $2K and nearly $5K a month.
“In my community, we would love the opportunity to develop, but the zoning just doesn't allow for the scale that would justify us looking there,” Weiss said. “If that were to change, obviously, that would be a game changer.”
Next door, Coney Island, famous for its bright lights and loud sounds, is better zoned for retail, while Brighton Beach secludes most of its retail to one strip.
“The community, I think, did not want such high density,” Weiss said. “A lot of times, that's to keep the character of the community.”
At the crux of the matter is a neighborhood still seen as inaccessible to many developers. Not just due to language barriers, but because of stubbornness.
Goetz Fitzpatrick Senior Partner Josh Oberman, who has done work in Coney Island, said that, unlike Manhattan, there is no standard in this part of Brooklyn for simple fees, like to access a neighbor's property. Some will attempt to charge exorbitant fees because they know the blueprints have been drawn.
If a judge needs to get involved and it is possible to track down the owner of a neighboring property, which can be a big if, that owner may not show up to court, prolonging the construction timeline, he said.
“It’s a combination of people being unreasonable and people not wanting to work with you at all,” Oberman said. “You have to worry about your construction loan.”
At the end of the day, in a neighborhood heavily influenced by the Soviet Union, trust is earned with a jar of homemade pickles and a handle of Russian Standard vodka. Not a check from a fancy-sounding name.
“It could be very lucrative for institutional investors, but there’s resistance,” said Zair Cheema, clinical assistant professor at NYU’s Schack Institute of Real Estate, who grew up in Brighton Beach. “[The residents have] been there for years and they're doing pretty good.”
“The developments that are happening, people are more comfortable doing business with native people,” Cheema added. “It gives them a sense that it's happening to make our neighborhood better.”
