The Real Deal New York

Why Brooklyn has become the apple of New York investors’ eyes

August 21, 2012 03:30PM

The competition among developers for residential sites in Brooklyn has arguably never been fiercer, and according to the most prolific commercial broker in the borough, that’s because of the size of the available sites. Stephen Palmese, the director of sales at Massey Knakal Realty Services who the New York Observer credited with brokering about 8 percent of Kings County’s $1.5 billion of building sales in the first half of the year, said the smaller square-footage of a typical residential development in Brooklyn has helped fuel demand at a time when massive projects are still seen as risky.

“In Manhattan, 1 million feet is big,” Palmese told the Observer. “In Brooklyn, it’s 100,000 feet. So you have a lot of developers competing for sites that are 100,000 to 200,000 square feet, and there aren’t that many of them.”

In a profile of the 30-year-old Bay Ridge native, the Observer traced his quick ascension from graduating from Georgetown University to completing his first deal for a Greek family in Bay Ridge to eventually becoming a leading Brooklyn agent. He said he’s been so successful in this market because of “the ferocity of people buying and selling,” which has led him to dub the era “The Great Sell-Off of 2012.”

Contrary to popular belief though, Forest City Ratner’s Atlantic Yards project should not be credited with increasing interest among investors in the borough, Palmese said. While it may be helping the specific retail district surrounding the new arena, he argued that the extra visibility could actually decrease residential rents. [NYO] — Adam Fusfeld