For AvalonBay Communities Inc., the next promising area for New York development is in southeast Brooklyn, at the second-to-last stop on the B train and off a bustling strip of discount stores and fruit stands.
There, in Sheepshead Bay, the second-biggest publicly traded U.S. apartment landlord is planning 200 luxury rentals in the tallest tower the community has seen in decades. The project, about a 45-minute subway ride from midtown Manhattan, is also the most remote within the city for the company.
For all the attention Manhattan’s ultra-luxury condominium towers have captured -- with their sky-piercing heights and record-shattering prices -- New York City’s largest residential construction boom is in the farther reaches of the outer boroughs. Builders of rental and for-sale housing are being drawn to Brooklyn and Queens neighborhoods where land is more plentiful and expenses are lower than across the East River. They’re betting on high demand for their projects as the costs of living in and close to Manhattan continue to climb.
“There’s a lot of opportunity for developers to serve New Yorkers who are not billion-dollar bankers,” said David Maundrell, president of Brooklyn brokerage AptsandLofts.com, who consulted on the Sheepshead Bay project with AvalonBay’s local partner, Muss Development. “To be able to build a luxury tower near the Atlantic Ocean in New York City is an extremely unique opportunity. It’s probably the wave of something bigger.”
There are 37,243 residential units planned for outer sections of Brooklyn, beyond the borough’s popular northwest riverfront communities such as Williamsburg and Dumbo, according to data from Nancy Packes Inc., a marketing consultancy for New York developers. An additional 17,352 units are slated for the farther reaches of Queens, defined by the firm as everything outside Long Island City and Astoria. Combined, they surpass the 44,427 homes that Packes estimates are planned or under construction in Manhattan.
Coney IslandSome upcoming projects are by developers with roots in Brooklyn and Queens, including Rubin Schron, who became a billionaire as an apartment landlord in the outer boroughs. His firm, Cammeby’s International, plans 544 residential units in Coney Island a 430-foot (131-meter) tower that would be the tallest in south Brooklyn, according to filings with the city’s Department of Buildings.
In Brooklyn, the dollar volume of lot sales east and south of Prospect Park jumped more than five-fold, to $355.2 million. Buyers paid an average of $290 a square foot, compared with $652 a square foot in northwest Brooklyn, closer to Manhattan, Real Capital data show.
“Buying land well is the surest way to have a profitable development,” said Nancy Packes, the development consultant. “And spotting areas early means buying land well.”
AvalonBay and Muss bought their Sheepshead Bay lot, at 1501 Voorhies Ave., for $16.2 million last year, land records show. The partners plan 200 rentals and 50 condos on the site, 21 stops on the B train from Rockefeller Center in midtown Manhattan. AvalonBay will manage construction, set to begin by the end of June.
Plans also call for a parking garage with a swimming pool and dog run on top, said Theresa Scavo, chairwoman of Brooklyn Community Board 15, citing a meeting with developers last year. One-bedroom condos would sell for about $700,000, Scavo said. AvalonBay, based in Arlington, Virginia, declined to comment on the project.