http://nypost.com/2014/07/16/forget-...ondos-booming/
Forget rentals, Downtown Brooklyn condos booming
Michelle Lipchin checks out the view from 388 Bridge St., a new condo/rental hybrid in Downtown Brooklyn. She is buying a one-bedroom there.
By Max Gross
July 16, 2014
Quote:
“The first two weeks were a gold rush.”
That’s how William Ross of Halstead described the pace of sales at 388 Bridge St., the 53-story rental/condo tower in Downtown Brooklyn that put its condos on the market in June.
Since then, 42 of the 60 units on the market have contracts out. (The building will have a total of 144 condo units when all are released, alongside 240 rentals, which are about 75 percent occupied.) The condos have been moving at around $1,150 to $1,200 per square foot — with the unreleased penthouses expected to go for $1,600 to $2,100 per square foot.
“We’re thinking of raising prices again,” says Ross. “We’ve raised prices twice already.”
These condos have attracted young and old; families and singles — everybody who wants one elusive thing: To buy in Downtown Brooklyn, where rentals have reigned supreme in recent years.
“There’s very little to buy,” says Michelle Lipchin, who, while living at the Brooklyner, a 491-unit rental, decided she wanted to purchase something in the area. She looked at a few lackluster resales until she found a roughly 700-square-foot one-bedroom unit at 388 Bridge that she’s now in contract for.
“Downtown Brooklyn was largely rental-driven since Lehman Brothers fell,” says Doug Bowen of Core. Prior to that, condos like Toren and 110 Livingston took root, but when the market crashed, developers stuck with the safer investment. “Most of the development — especially anything of size like the Brooklyner, or [the upcoming] Avalon Bay — was rental.”
But perhaps 388 Bridge signals a change — are developers in Downtown Brooklyn going to start turning once again to condos?
....A number of residential buildings in the works have been notably mum about their intentions: Oro 2, the sister building of Oro, which was one of the pioneer condos of Downtown Brooklyn, is well underway even though the developers won’t say whether the finished product will be condo or rental.
Back in February, Brooklynites were beating their breasts when they found out that Junior’s was selling its location to developers. No deal has been finalized, but “If someone’s going to pay the price anticipated, which is $400 to $500 buildable, someone’s going to choose to do condos,” says Stephen Palmese, a partner with Massey Knakal.
JDS Development’s 340 Flatbush Ave. Extension, which SHoP is designing and at 70 stories will be the tallest building in Brooklyn when it’s finished, will consist of 555,000 square feet of space. But the developers say they still aren’t sure whether they’re going to make its 495 units rentals or condos.
.....Back in February, Brooklynites were beating their breasts when they found out that Junior’s was selling its location to developers. No deal has been finalized, but “If someone’s going to pay the price anticipated, which is $400 to $500 buildable, someone’s going to choose to do condos,” says Stephen Palmese, a partner with Massey Knakal.
JDS Development’s 340 Flatbush Ave. Extension, which SHoP is designing and at 70 stories will be the tallest building in Brooklyn when it’s finished, will consist of 555,000 square feet of space. But the developers say they still aren’t sure whether they’re going to make its 495 units rentals or condos.
It should be noted that JDS’s founder, Michael Stern, is one of the most outspokenly bullish people in New York real estate when it comes to Brooklyn.
“In Manhattan, land costs are higher than the costs to build a building,” says Stern. “In Brooklyn, that’s not the case — there’s quite a bit of room for growth. And there are a large crop of people who are choosing to live in Brooklyn as their first choice.”
Which definitely helps explain why developers have been so focused on Brooklyn. But something else is driving the trend towards condos instead of more rentals — and that is the explosion in land prices.
.....all of the commercial and retail development in the works is only going to make the area more attractive for buyers.
City Point, for instance, the 1.9 million-square-foot complex (of rental and retail) which will be released in phases and completed in 2020, promises 700,000 square feet of retail, including an Alamo Drafthouse theater and a CityTarget.
“There’s been significant growth in retail in last 7 years, but we still think there’s a tremendous gap,” says Paul Travis, managing partner of Washington Square Partners, which is developing City Point. As for future commercial tenants, “It’s going to be very Brooklyn.” By that he means artisan and local.
Collectively all this development has attracted the kind of buyer who never before would have considered Downtown Brooklyn.
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