North Brooklyn’s Land And Vacant Building Grab Is Back With Renewed Competition
Williamsburg and Greenpoint have not lost the cool factor for developers, as former industrial land and vacant buildings with air rights remain a strong asset class in the area. North Brooklyn continues to have a strong inventory to satisfy development.
Rabsky is in contract to buy a 2.65-acre development site at 500 Kent Ave., along the Williamsburg waterfront, from Consolidated Edison for $50M, south of Eliot Spitzer’s 857-unit rental project at 420 Kent Ave. While Marcus & Millichap broker Mike Salvatico had seen land purchases wane over the past six months, these and similar deals mark a new vigor and competitiveness for the asset class in North Brooklyn.
“The ebb and flow of land has been interesting over the past 12 months,” Salvatico said. “It has been kind of unique to the market, because land was very hot 12 months ago and then six months ago it seemed like a dying breed and now it is coming back in a very strong way.”
Salvatico said developers prefer vacant buildings for the ability to quickly enact business plans without handling tenants or dealing with the politics of rent-stabilized properties. They can also take advantage of the J-51 tax abatement program if renovating a residential apartment building.
North Brooklyn still has a number of mom-and-pop industrial owners who have yet to sell, and competition remains fierce among developers, many of whom have seen the transformation of the area into one of New York's most desirable. The creation of attractions like the high-end William Vale Hotel have changed the perception of the area as a hipster enclave.
“It seems like it is shifting to a West Village-type of neighborhood. You have high net worth and young professionals living in the area now,” Salvatico said. “Williamsburg used to have a rep for hipster culture, but it seems like that is more in Bushwick now.”
The imminent L-train shutdown remains the elephant in the room, but it has yet to freeze progress in Williamsburg.
“We are putting a property under contract today for $500 per buildable square foot just for residential land and that is a price record in a market where the L train is going down, and that is in prime Williamsburg,” Salvatico said. “It’s a telltale sign that people really aren’t that scared of the L train.”
But some developers have turned their attention toward commercial properties along the Greenpoint waterfront. Mortar secured three sites on the G train route where it plans to build 10- to 20-unit projects, one on Frost Street in Northern Williamsburg, another on Diamond Street in Greenpoint and the third on Eagle Street. Greenpoint Landing, a 22-acre redevelopment project on the border between Brooklyn and Queens, will transform the former industrial area into a 10-building complex with 5,000 apartments, a 640-seat elementary school, retail space and a waterfront park.
“The northern portion of Brooklyn near the waterfront is starting to become more commercial, almost like a Meatpacking District for the borough,” he said.
Salvatico sees North Brooklyn development rivalling Manhattan neighborhoods as more commercial development comes into the area.
“The cultural dynamic is very strong and the momentum is there for people to live-work-play in North Brooklyn,” Salvatico said.
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