May 13, 2019
Welcome to the newest New York Real Estate Update from Brooklyn Made.
While we’re still dealing with rumors of a softening market and a lot of regulatory issues, this month’s data shows some surprisingly strong data, as well as ongoing strength in development. Many even think this could just be the beginning for the rebound of some property types.
The market may have changed, but there’s no holding back New York as an innovative playground for real estate developers, architects, and creatives.
Keep listening to get the scoop on all of this, the most notable news this month and what it means for landlords and investors.
In the commercial real estate headlines…
Despite all the doom and gloom talk a few months ago NYC rental prices are still heading up. Manhattan rents just hit a 3 month high, while Queens and Brooklyn hit new all-time record high rental prices.
Protesters continue to march for universal rent control. We all know the rent is high. We all know that there are bad owners and landlords who have not been nice to renters. Yet, it is hard to have it all. It’s hard to demand government subsidies and public services, which end up coming out of landlords’ pockets in the form of higher property taxes, and then to expect the rent not to go up. Some landlords in NY have been facing property taxes going up by more than 50% per year. Unless they can pass those costs onto tenants, they may not have a place to live in soon anyway.
Airbnb continues to be a touchy subject in NYC. Prospect Leffert Gardens tenants recently sued their landlord after finding routine maintenance unsolved, while the property owner fitted empty units with luxury appliances so they would rent on Airbnb.
The hot new neighborhood amenity that’s trending in Brooklyn this month? Have you tried axe throwing yet? You’ll now find axe throwing venues popping up in Gowanus, Greenpoint, Downtown Brooklyn, and Williamsburg.
Crain’s says that NYC is still creating jobs, but is still bleeding residents. New York recently topped the list of US states for people leaving. People will always want to move to the Empire State. Especially from overseas. Yet, many New Yorkers are finally being forced to cave and move to where it’s cheaper and the taxes are lower.
This comes right when new legislation and regulations are set to make it even more expensive to build in NY, and maybe even block new developments like the Hudson Yards. This may be specifically true of carbon-cutting measures and forced cuts to buildings’ energy consumption levels. Someone has to pay for the changes, and that’s often going to fall on the building owners. This is all going to make it more expensive not only to build but in turn to renting the end units.
Another new hit to big developers is the recent closing of the mechanical void loophole, preventing supertall buildings from jacking up building heights with empty space to bolster their bragging rights and enable them to charge more for higher floor apartments.
One response to all of this is a new spree in building pod hotels. BD Hotels is planning 50 new buildings with micro rooms as small as a sixth of the size of a regular hotel room. They already have at least four across Manhattan and Brooklyn.
The really good news this month is that mountains of capital have been raised for investing in real estate. BisNow reports there is $338B in dry powder capital waiting in funds, ready to be invested as of April 2019.
Another incredible bright spot for commercial real estate may be what’s next for today’s hugely popular online retail brands. Some are arguing that instead of online replacing brick and mortar, physical stores may now be a must for eTailers. They may be the key to continuing growth. That could lead to a new hot spot in retail. Especially in smaller, right-sized stores.
For Brooklyn Real Estate News
If there is a downturn happening, someone forgot to tell Brooklyn.
According to The Real Deal, Brooklyn real estate just had its best month of the year. Brooklyn’s luxury market saw 18 contracts signed for almost $54M in just one week in the middle of April. The previous week saw 10 contracts signed for $30M.
Netflix is bullish on Brooklyn too, planning a $100M expansion between our borough and Manhattan.
Construction just wrapped up at 1 Flatbush in Downtown Brooklyn. The 201-foot tall building sports residential apartments with a coworking space, fitness center, bicycle storage and game room with vintage video games and arcade machines.
Brooklyn also has a new tallest tower, with Extell’s Brooklyn Point. The 720-foot tall high rise has 458 luxury units starting at $850k.
One project that may not happen yet is the twin 16 story towers proposed in Crown Heights. A judge has issued a temporary restraining order halting construction which could block sunlight from the botanical garden.
In other boroughs
Over in the Bronx, a former army reserve center is being transformed into housing for homeless veterans. The renovated building will offer 90 affordable and low-income housing units.
Manhattan’s luxury market also saw an uptick in the middle of April. In just one week 19 contracts were signed for $139M. 150 Charles Street topped the deal list at $15M. Selling in just 98 days after hitting the market.
Over on Staten Island, the Bay Street rezoning proposal has moved to the next level. The plan is hoped to bring 1,800 affordable housing units to the area. Though with units that could rent for upwards of $3,000, we may one day have to ask what affordable really means.
This month’s New York real estate news roundup is definitely positive. In spite of rising inventory levels in luxury condominiums and retail spaces, those who can afford it are still clearly in love with NYC and are willing to pay a big premium for it. The new tech scene is likely to further feed the market, especially in Brooklyn. Any temporary slowdowns reported last year are certainly are not deterring world-class developers, architects, and innovators from unveiling progressive new buildings and communities. If you have the right product, in the right place, at the right price, and it is marketed well, investors can still expect great successes.
Well, that’s it for this month’s roundup. Look out for our other upcoming reports, and check out the latest data on the Manhattan and Brooklyn residential and multi-family market, and which features and neighborhoods are yielding the best rents at NewYorkMarketReports.com.
Make sure you like and share this report, and leave your comments on this news, or any trends you think we overlooked or you want to hear more about in the comments section.