NY Post excerpt-
“In Manhattan, land costs are higher than the costs to build a
building,” says Stern. “In Brooklyn, that’s not the case — there’s quite
a bit of room for growth. And there are a large crop of people who are
choosing to live in Brooklyn as their first choice.”
Which definitely helps explain why developers have been so focused on
Brooklyn. But something else is driving the trend towards condos
instead of more rentals — and that is the explosion in land prices.
“In the last 18 months, asking prices have gone from $75 to $350 per
square foot,” says Tucker Reed, president of Downtown Brooklyn
Partnership. “That’s in the space of 18 months. That’s unheard of. And
that makes rental development difficult. … That’s why developers have
turned continuously towards condo.”
Gabriel Saffioti, a director at the investment sales brokerage firm
Eastern Consolidated, is currently marketing a parcel of land at 295-309
Schermerhorn St. in the mid-to-high $50 million range, which comes out
to around $400 per square foot of buildable space. “We’ve had people who
have looked at it from a hotel, a rental and a condo perspective,”
Plus, all of the commercial and retail development in the works is only going to make the area more attractive for buyers.
City Point, for instance, the 1.9 million-square-foot complex (of
rental and retail) which will be released in phases and completed in
2020, promises 700,000 square feet of retail, including an Alamo
Drafthouse theater and a CityTarget.
“There’s been significant growth in retail in last 7 years, but we
still think there’s a tremendous gap,” says Paul Travis, managing
partner of Washington Square Partners, which is developing City Point.
As for future commercial tenants, “It’s going to be very Brooklyn.” By
that he means artisan and local.
Collectively all this development has attracted the kind of buyer who never before would have considered Downtown Brooklyn.