The New Coney Island - Brooklyn's Times Square by the Sea

Wednesday, October 9, 2013

Rental Units soaring in Brooklyn

Bloomberg excerpt-

Brooklyn condo boom cooled by rentals

Developers are choosing to build rentals instead of condos in the borough, mainly to take advantage of soaring rents. Rents in August climbed higher in Brooklyn than in Manhattan, up 4.6% compared with 1.8%, from last year.

(Bloomberg) -- 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.

The median apartment rent in Brooklyn, the most populous of New York's five boroughs and once a refuge from Manhattan's sky-high costs, was the highest in at least five years in August, rising 4.6% from a year earlier to $2,850, according to appraiser Miller Samuel Inc. and broker Douglas Elliman Real Estate. In Manhattan, rents gained 1.8% to a median of $3,150.

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