The Real Deal New York

Still bullish on Bushwick

Sales slow, but developers move forward with condo projects

March 31, 2008
By Claire Levenson

Bushwick hasn’t lived up to the hype of recent years as Brooklyn’s next up-and-coming neighborhood for young buyers priced out of Williamsburg, and now it has fallen prey to the downturn affecting many fringe neighborhoods.

The area has a fair share of public housing projects, with few restaurants and shops. Amenities associated with gentrification have been slow to materialize, and many old buildings have not been restored. Sales have slowed, and at least one appraiser sees development slowing this year as well.

Still, despite the gloomy picture, a number of developers have new projects rising, some in the neighborhood’s industrial area. Optimistic brokers are betting that buyers will indeed move east along the L train line, seeking bargains.

Several ground-up projects with over 100 units are planned for the neighborhood. Construction has started on Troutman Gardens, a 140-unit condominium by developer Mayer Schwartz, who built the Opera House lofts in East Williamsburg.

Brokers are hoping to attract buyers with prices under $500 a square foot for loft spaces in renovated stone houses that offer a relatively quick commute of about 20 minutes to Union Square. While the most attractive areas are around the Jefferson Street L train stop, some developers are pushing the boundaries and going farther east, close to Bushwick’s border with Ridgewood in Queens.

At 358 Grove Street, a new ground-up, high-rise building with large windows went on the market last September. The first two months of sales were slow — the building’s location is close to the L train’s Myrtle-Wyckoff stop in an area with few signs of gentrification — but 30 of the 59 units have sold in the last six months. There are also new developments and conversions on Jefferson and Troutman streets near the Central Avenue M train stop, closer to Manhattan.

Halstead broker Brian Cohen said buyers are in their 30s, and trying to find apartments cheaper than in Williamsburg and Harlem, where prices per square foot for condos are around $750 and $800, respectively, he said. And with the average price per square foot about $1,180 in Manhattan, prices in Bushwick are more than half off.

“Bushwick is the place to go and develop,” said Cohen, who is about to start sales on a dozen units on Linden Street, which is in the same area. “People are looking for
better prices.”

A tough sale

Still, despite the new projects, Bushwick appears to be a tough sell for brokers.

The volume of sales for single and multi-family houses in Bushwick plunged by more than half in 2007, compared to the prior year, according to a recent report by HMS Associates, a real estate appraisal firm. Sales of two-family houses went from 356 in 2006 to 168 in 2007. The firm has no data on condominium sales in Bushwick; Sam Heskel, executive vice president, thinks there will be less development in the neighborhood this year.

Brokers are already seeing a slowdown in sales.

“Compared to the first condo projects in Bushwick two years ago, prices are down, and sales volume has also slowed,” said David Maundrell, president of aptsandlofts.com.

However, Maundrell said buyers in Bushwick may be somewhat cushioned from the economic downturn because mortgages under $417,000 have lower interest rates, making it easier to buy.

Elan Padeh, CEO of the Developers Group, said the volume of sales in Bushwick had slowed down at the end of 2007, but had picked up a little since. He said prices remain the same since that period.

Heading east

The firm aptsandlofts.com, which traditionally focused on Williamsburg and Greenpoint, expanded to Bushwick in 2006. Its brokers have sold more than 50 units in seven condo developments. Most of these buildings are rehabilitations of 1900s stone row houses on Putnam Avenue, Decatur and Troutman streets with original details and modern amenities. Prices range from $325 to $400 a square foot, depending on the distance from the L train.

The firm represented 1060 Putnam Avenue, on the border of Bedford-Stuyvesant, a six-unit rehabilitation with stylish interior design that sold five units in two weeks. On 289 Troutman Street, two blocks from the Jefferson L train stop, eight of the residence’s nine units sold for $400 to $450 per square foot in four months. The two ground-floor duplexes have a private garden, and all other units feature large balconies and exposed brick.

“Unlike Williamsburg, this neighborhood is not just about artists and creative types. There is a broader market,” said Maundrell of aptsandlofts.com. “We had people from
all walks of life: firemen, nurses, public service employees.”

The six condo units at 1271 Decatur Street, which is much farther from Manhattan and close to Ridgewood, also sold relatively quickly at approximately $250 per square foot.

At 223 Maujer Street, the Developers Group marketed units in a four-story building with a glass curtain façade and Jacuzzis in the apartments at $500 per square foot.

Padeh thinks there definitely is a future for Bushwick because developers and architects have done several high-quality projects. “Good architecture will have a long-term positive effect on the neighborhood,” he said.

Other brokers are also betting that these new projects will help the neighborhood get over its turbulent past, when looters burned buildings during the 1977 blackout.

Where zoning doesn’t allow residential units, a former garment warehouse is being converted into commercial lofts. Bellmarc broker Joe Irving said the Varet Street lofts target artists in need of a cheap workspace. Prospective buyers include photographers, architects and designers.

The price per square foot ranges between $250 and $370, and Bellmarc is currently doing test marketing to see if there is demand for hotel units in the building. “The transformation of Bushwick over the past five years has been incredible,” Irving said. “During commute hours, trains are packed.”

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