The last time Douglaston Development built something big in
Brooklyn, New York, it was a 565-unit condo project across two towers in Williamsburg that debuted in 2008, when credit markets were freezing and mortgages were hard to get. Now, Douglaston is taking a different path, building a 510-unit luxury rental tower right next door.
“The velocity at which the economic cycle moves and the fear of interest rates moving up made it very prudent to do a rental,” Jeffrey Levine, chairman of Douglaston, said in an interview. “Greed is always tempered by fear.”
About 15,300 new rental units are under construction or planned in the next two years for Brooklyn, compared with just 1,700 planned condos, according to New York brokerage MNS. Developers see rentals as a safer bet in a market where rents are climbing faster than in Manhattan and neighborhoods such as Bushwick, Greenpoint and Crown Heights are gentrifying, drawing professionals seeking more space and tree-lined streets.
. . .
Investors eager to capitalize on Brooklyn’s popularity are also buying existing buildings, which offer opportunities to collect higher rents after renovations.
Purchases of multifamily properties in the borough totaled $1.17 billion in 2012, up 23 percent from the previous year and the most since 2006, according to research firm Real Capital Analytics Inc. Sales this year are on pace to match that, with about $897 million of buildings changing hands this year.
The average deal size is $10.1 million -- 24 percent larger than in 2012, according to Ben Carlos Thypin, director of market analysis for New York-based Real Capital.
Read More: http://www.bloomberg.com/news/2013-10-04/brooklyn-condo-boom-cooled-by-manhattan-like-rents.html
Ben Carlos Thypin
I am currently the co-founder of Quantierra, the world's first data driven real estate brokerage and investment manager. In my former life as Director of Market Analysis at Real Capital Analytics, I worked with press outlets large and small to provide them with great data and insightful commentary. Here are some of the results of this collaboration. For the rest, please check out the News Archive.
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