The Real Deal New York

This condo has dominated the Brooklyn luxury market all summer. Here’s why

Units at the Pierhouse have been topping sales in the borough for past five weeks
By Eddie Small | August 23, 2018 08:30AM

The Pierhouse at 90 Furman Street and the Brooklyn Bridge (Credit: Pixabay)

It has been a busy summer at the Pierhouse.

The 106-unit condominium development from Toll Brothers City Living and Starwood Capital Group on the Brooklyn Heights waterfront has dominated the borough’s luxury sales market since mid-July, according to weekly reports from Stribling & Associates.

The streak started during the week of July 16, when a unit at 130 Furman Street was the second most expensive deal in the borough with a contract price of about $7.5 million. The next week, a unit at 90 Furman Street topped the list with a $5.75 million price tag, and a unit at 130 Furman was No. 2 the following week at $4.75 million.

The week of August 6, a unit at 90 Furman Street was No. 1 again with a roughly $6 million contract price, and a 90 Furman Street unit was number one last week as well with a $4.75 million price tag. The streak appears set to continue this week, as a unit has gone under contract for about $5 million, which was still the top contract of the week as of Wednesday.

“It’s been a wildly busy summer,” said the Corcoran Group’s Deborah Rieders, who handles sales at the Pierhouse for the developers.

Rieders cited the recent completion of landscaping efforts at the property as one factor that has been driving sales. She also said some of the sales momentum builds on itself, as people become more likely to buy units in the building as they realize how few vacancies there still are.

There are currently five open units left in the project, according to Rieders.

“These are people who came and looked at the building as much as two years ago and finally actually came back and signed contracts when they realized that there wasn’t much left,” she said.

Rieders also said some buyers were waiting to get a look at Quay Tower, a nearby luxury condo project from RAL Development Services and Oliver’s Realty Group, before making a final decision on the Pierhouse.

Stribling began releasing its weekly Brooklyn luxury reports in February, and this current streak from the Pierhouse is the first time that the same building has occupied one of the top two spots for more than one week. Garrett Derderian, director of data at Stribling, said the recently sold units had all gone under contract at fairly steep discounts, which could help explain the building’s popularity.

“Especially right now, we’re seeing significant discounts,” he said, “and higher than the market average, even if you’re looking at the luxury segment of the market.”

The Pierhouse deal from last week went under contract at a 30 percent discount from its initial asking price, while the deal from the week prior went for a 25 percent discount, according to Stribling. Units from the prior three weeks went under contract at discounts of 21, 45 and 17 percent, and the unit that went under contract this week did so with an 18 percent discount.

This brings the average discount for Pierhouse contracts over the past six weeks to 26 percent. By comparison, the average discount throughout Brooklyn during the second quarter was just 4 percent, and the average discount in Northwest Brooklyn—the Pierhouse’s submarket—was only 2 percent, according to Stribling.

Toll Brothers spokesperson Michael Duff said the company was happy with the recent sales at the Pierhouse and declined to comment on the discounts. Representatives from Starwood did not respond to a request for comment.

Rieders, who lives at the Pierhouse herself, said they had been giving “some substantial discounts” on units but said it was unclear how much this impacted sales velocity.

Derderian attributed these large discounts to the increasing volume of high-priced luxury condos hitting the market in Northwest Brooklyn, particularly on the waterfront. He noted that luxury condo sales have seen a slowdown throughout the market, with some of the biggest drops occurring in Brooklyn.

“However, we still see buyers willing to engage the market if they feel like they are getting a ‘good deal,’ as evidenced by the steady stream of luxury contracts,” he said. “It is a matter of pricing to where the market currently is, and is going, rather than where it has been.”