Brooklyn rental building investment wave nears end

TRD New York /
May.May 30, 2012 09:00 AM

Investors have been scooping up rental buildings in Brooklyn at record prices, but the trend could be reaching its inflection point, according to the New York Times. The strict lending standards are continuing to force many would-be buyers into the rental market and rents are ticking ever higher as a result. Rents in Brooklyn increased 10 percent in 2010, 7 percent last year and are expected to rise another 5 percent to 10 percent over the next 18 months, according to TerraCRG.

These figures are compelling investors to pay record prices for rental buildings in the Brooklyn. In the last year Invesco bought 75 Clinton Street and 150 Fourth Avenue for well over $600,000 per unit, Equity Residential bought 175 Kent Avenue for $673,000 a unit, and as The Real Deal first reported, American Realty Advisors paid a non-Manhattan record $895,000 per unit at 111 Kent Avenue.

But the supply of such buildings is beginning to wane. Many of the stalled condominium sites that made for perfect rental conversions have already been scooped up and those that remain may eventually hit the sales market. Recovering sales prices and escalating land costs are beginning to make condo development appear more financially sound than rental development. [NYT]


Related Articles

arrow_forward_ios
Daily Digest Thursday

Worker killed at Lam Group construction site, Uber signs WTC lease: Daily digest

From left: Brookfield's Ric Clark, 3333 Broadway and L+M's Ron Moelis (Credit: Brookfield, L+M, StreetEasy)

L+M, Invesco close on Putnam portfolio with $823M in Wells Fargo financing

Benchmark Real Estate Group's Aaron Feldman (left) and Jordan Vogel (right) with 25 Monroe Place in Brooklyn (Credit: LinkedIn)

Benchmark looks to sell BK Heights rental building for $70M

From left: 278 Henry Street and 296 Sackett Street

Brooklyn’s resi market saw 20 contracts close above $2M last week: Stribling

Brooklyn and Queens rents rise as incentives decline: Elliman

Brooklyn and Queens rents rise as incentives decline: Elliman

“Rent control is a risk, just like climate change:” Equity Residential unbowed by affordable advocates

“Rent control is a risk, just like climate change:” Equity Residential unbowed by affordable advocates

Why Brooklyn and Queens buyers are “camping out”

Why Brooklyn and Queens buyers are “camping out”

Equity Residential to part with 800 Sixth for $240M

Equity Residential to part with 800 Sixth
for $240M

arrow_forward_ios