The Real Deal New York

Could amenities become more important than apartments in Brooklyn?

Features are becoming essential to attracting tenants, developers say
By Eddie Small | May 17, 2018 09:30AM

From left: Jonathan Mechanic, Seth Pinsky, Josh Zegen, Doug Steiner, Boaz Gilad, Alison Novak (Credit: Eddie Small for The Real Deal)

The future of Brooklyn may look a lot like the future of liberal arts colleges.

Alison Novak, principal at Hudson Companies, said universities seem to be constantly trying to outdo one another in terms of amenities for their students, which can give those students high expectations for the amenities they expect to find at their apartment buildings after graduation.

“They’re coming from that expectation,” she said. “They’re bringing it with them for their apartment rentals.”

Novak spoke on the final panel of the day at TerraCRG’s Only Brooklyn event on Wednesday, along with Brookland Capital co-founder Boaz Gilad, RXR Realty executive vice president Seth Pinsky, Steiner Studios chairman Doug Steiner and Madison Realty Capital co-founder Josh Zegen. The topic was what’s next for Brooklyn, and many panelists viewed building amenities like roof decks and common spaces as critical to the borough’s future.

Pinsky said RXR was looking into more non-traditional living arrangements at its projects, particularly at the developments geared more toward young people. He said they have a need for some type of transitional housing from college, comparing it to incubator spaces for new companies that are not ready to enter the commercial leasing market.

“There’s a need for young professionals, especially, to find space that’s affordable to them, and I think they’re willing to live differently than a lot of other people do,” he said. “It’s somewhere between a college dorm and an apartment, where the common space is much more important, where perhaps you’re willing to share elements of the apartment as long as you have a room to yourself.”

For some tenants, concerns about building amenities have already started to supersede concerns about their actual apartments, according to Gilad. He said younger tenants in particular are more focused on the overall experience they will get living in the building than on how large their unit within the building is.

“I care less about how much square footage I have in the bedroom,” he said, “but when I go downstairs, I want to hang out with my friends.”

This importance may soon be reflected in the economics of some newer buildings, according to Novak.

“Developers are setting aside an entire floor for amenities, with the idea that, if they’re not now, they will in the future charge residents separately from their rent,” she said, “which is not something that we’ve done at Hudson in the past.”

Although the number of new projects coming into Brooklyn has sparked concerns about oversupply, Pinsky maintained that the number of new people moving to New York City would prevent this from becoming a major long-term problem.

“The city’s population has expanded by almost half a million just this decade,” he said, “so there’s a lot of supply coming online, but there’s a lot more demand that’s coming into the city.”