The Real Deal New York

Gowanus experiencing investment surge ahead of cleanup, possible rezoning

Gritty neighborhood saw 47% spike in investment last year: study
November 07, 2016 08:06AM

The Gowanus Canal (Photo by Catherine Gibbons)

The Gowanus Canal (Photo by Catherine Gibbons)

Gowanus is seeing a spike in rents and real estate investment as the city considers rezoning the neighborhood for more residential development, according to a new study.

Speculative investments rose 47 percent in 2015 from the year earlier, and during the same time the average price rose from $223 to $262 per buildable square foot, the Wall Street Journal reported.

The study, conducted by GFI Realty Services TRData LogoTINY, found that there’s been less development in the neighborhood because of the polluted Gowanus Canal. But that’s changing after the Environmental Protection Agency kicked off a $500 million cleanup of the canal earlier this year and the Department of City Planning announced a rezoning study that could allow for more residential development.

“The neighborhood hasn’t popped yet,” GFI president Michael Weiser said. “But it’s not a question of if it will happen, it’s a matter of when.”

The median monthly rent at the end of 2015 was just under $3,000, a 13 percent increase from the previous year. GFI forecasts another jump in the median rent at the end of the year due to the opening of the Lightstone Group’s 430-unit luxury rental at 365 Bond Street.

There are plans for four boutique hotels in the neighborhood, which already has nationwide chains such as a Holiday Inn Express and a Super 8.

“The arrival of boutique hotels speaks volumes that the neighborhood is shifting,” said GFI’s Justin Fitzsimmons,  who led the study. [WSJ, 2nd item] – Rich Bockmann