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Brooklyn real estate living up to boro’s cultural hype

Eye On Real Estate

August 2, 2013 By Lore Croghan Brooklyn Daily Eagle
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Buyers got busy chasing Brooklyn investment properties this year.

The number of purchase deals rose 20% in January through June and the number of properties sold increased 17% compared with those in first-half 2012, according to a report released Wednesday by Ariel Property Advisors.

“The positive changes in Brooklyn continue to attract investors, developers and retailers from throughout the city and in some cases, the country,” said Ariel vice president Jonathan Berman.

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A hefty 498 buildings changed hands in 362 transactions in first-half 2013, versus 426 buildings sold in 301 transactions in the year-earlier period, the investment property sales brokerage’s stats indicate.

Dollar volume on the deals was $1.43 billion, down 4% from $1.48 billion in the first half of last year.

Much of the increased transaction volume came thanks to avid trading in multi-family properties, which rose 21%, and development sites, which increased 36% from first-half 2012.

The dollars generated from the sale of development sites rose a hefty 65% from the year-earlier period, to $657.4 million.

A Brooklyn Heights multi-family building sale was one of the stars of the first half of the year, trading for more than $600 per square foot. The five-story walk-up apartment building at 161 Columbia Heights changed hands for $3.95 million in early June, city Department of Finance records show. The buyer was 161 Columbia LLC, headed by Jean Daniel Hertzog, the city records indicate.

In years past, the property had belonged to the Jehovah’s Witnesses. Investment and management firm Sugar Hill Capital Partners paid $3 million for it in 2012, property records show.

Multifamily property purchases were made ever more desirable by continuing increases in rents in neighborhoods including Crown Heights, Gowanus and Bushwick, though Brooklyn Heights and Williamsburg rents have stabilized, said Ariel associate vice president Daniel Tropp.

“It will take several years for all the ongoing new residential construction to be completed,” he said. “Barring an macroeconomic shock, we expect rental growth to continue into the foreseeable future.”

Development sites were avidly sought, a “ripple effect” from the opening of iconic Barclays Center and the gearing up of development at the Domino Sugar Factory site in Williamsburg, Ariel executives said.

TF Cornerstone’s $70 million purchase of the parking garage and storefronts at 300 Livingston St. in Downtown Brooklyn came out to about $140 per buildable square foot. The developer plans to build 600 apartments at the site – and help kick off a retail renaissance on Livingston, an unglamorous commercial corridor in the shadow of powerhouse Fulton Street, the Brooklyn Daily Eagle has reported.

Another big development-site deal took place in DUMBO, where an assemblage of three properties with a combined 150,000 buildable square feet – 173 and 177 Front St. and 200 Water St. – changed hands.

One Brooklyn Heights development site sold in the first half of this year: 153 Remsen St., the abandoned building near Brooklyn Borough Hall which the late Fred  Musser planned to convert to a small hotel. An LLC formed by Upper West Side-based Quinlan Development Group – a residential converter that’s busily working in Brooklyn – paid $2.79 million for the property, the Eagle recently reported.

In the first half of this year, there were 87 transactions in Bed-Stuy/Bushwick/Crown Heights – nearly one-quarter of the entire borough’s investment-sale deals, the report said. There were 80 transactions in Williamsburg/Greenpoint, 22% of the borough total.

Downtown Brooklyn/Park Slope led the dollar volume tally – with $340.8 million in sales, or 24% of the $1.43 billion borough-wide total.          


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