Tuesday, December 2, 2014

Brooklyn Real Estate Booming

Brooklyn Buildings Booming
Since 2011 finding an affordable dwelling in Brooklyn has become increasingly difficult. In neighborhoods like Clinton Hill and Red Hook prices have soared from $120 per buildable square to $212 in 2014.  In Williamsburg and Greenpoint we see the same kind of rise, from $107 to $209. Even in low income areas such as Bushwick, Crown Height and Bedford-Stuyvesant prices are almost doubled from $51 to $93 per square foot.

With such soaring prices developers are searching elsewhere in Brooklyn for more affordable projects. Some of the newbies to the building boom are Prospect Lefferts Gardens, Flatbush and Kensington.

“I always want to be more on the affordable side,” said developer Eli Karp. 

Karp was explaining why he was moving his work to some of Brooklyn’s budding, under-developed neighborhoods such as Prospect Lefferts Gardens and Flatbush.

“Most of the land I bought in Prospect Lefferts Gardens I bought for $40 to $65 per square foot,” he said, “whereas in Crown Heights, people are asking close to $100 or over.”

Making money on the development is not a sure thing, however. Lower priced areas are generally not in great demand, and it is not always known if that will change just because someone builds a new building.

“Are you going to be able to rent those units? Are people going to appreciate the value you’ve put in those projects?” Karp said.

Another problem for builders is opposition from neighborhood residents who may be unaccustomed to new building development.

“There are long-term residents in a lot of these marketplaces who may not completely embrace the new construction,” said David Maundrell, president of the brokerage firm Aptsandlofts.com.

Maundrell pointed out the case last summer of the Hudson Companies’ high-rise at 626 Flatbush Avenue in Prospect Lefferts Gardens. A community group had filed a lawsuit which had temporarily halted construction on the 23-story tower. Since the developer was in compliance with all the relevant zoning and construction laws, the suit was dismissed, but not before Hudson Companies incurred added expenses to their project.

“Some people have made fortunes,” on such projects, a Hudson Companies principal David Kramer explained. But, he said, “You never know what’s going to happen.”