It’s increasingly difficult to say anything about the Brooklyn real estate market without getting very trite, very fast. Industry players still use terms like “really taking off” and “up and coming” to describe price spikes that have motivated brokers (while stressing out renters) for years now.
But even so, it’s only recently that four Brooklyn neighborhoods — Dumbo, Cobble Hill, Williamsburg and Downtown Brooklyn — have seen their rents surpass the Manhattan average, according to an October report from the listing website StreetEasy. At least five other neighborhoods — Brooklyn Heights, Boerum Hill, Carroll Gardens, Park Slope and Greenpoint — are also within spitting distance.
With higher-end rental inventory on the rise, brokers are setting their sights on obtaining exclusive rental agreements with Brooklyn’s top building owners and developers.
This month The Real Deal ranked New York’s residential brokerages by the annualized asking dollar volume of exclusive rental listings in Brooklyn. The data was culled from listings posted in the widely used portal On-Line Residential in a one-day, late-October snapshot.
Like in Manhattan, exclusives only account for a portion of the rentals a company works on once open listings are considered. But the ranking offers a window into this competitive world and shows how the firms stack up against one another.
The big leagues
Corcoran Group, which opened its first Brooklyn office in 1998, took the top spot with $14.7 million in asking rent for its exclusives. That compared with the firm’s Manhattan total of $49 million.
Much of the firm’s exclusive Brooklyn inventory is spread out across existing buildings in brownstone neighborhoods like Park Slope, Fort Greene and Bedford-Stuyvesant.
Close behind Corcoran is Citi Habitats, fresh off its acquisition of Brooklyn new-development firm AptsandLofts.com, which was founded by David Maundrell in 2002. The companies’ combined listings, which totaled roughly $12.2 million in asking rent, were enough to move Citi Habitats from seventh to second in the ranking. (However, it’s important to note that Corcoran and Citi Habitats are both a part of the national real estate corporation NRT, meaning the top two spots belong to just one company.) Meanwhile, Douglas Elliman, which ranked No. 1 in TRD’s Manhattan analysis, took third place in New York’s second-priciest borough, with only $6.9 million in exclusive rental listings.
Brooklyn-based MNS, which recently relocated its headquarters from Gramercy to Williamsburg, took the No. 4 spot. The company has collaborated with builders on a number of new developments since starting up in 2006, most notably with Jeff Levine’s Douglaston Development, whose 510-unit waterfront tower, One North 4th, began leasing late last year. MNS has 25 active exclusives at the building out of its 160 Brooklyn total.
MNS CEO Andrew Barrocas said one of the reasons MNS has seen success is that it’s grown alongside Levine. “We’ve done almost 2,000 units for [him], either sold or leased,” Barrocas said.
Still, he noted, there’s competition on “every single project.” “It’s not just the big ones,” he said.
New construction rentals are indeed the name of the game in Brooklyn, where development sites are cheaper than they are in Manhattan. Those lower costs allow developers to more readily pencil out rentals.
While MNS counts several 100-plus-unit buildings in its book of business, more modestly sized projects — such as a 20-unit condo in Prospect Lefferts Gardens developed by Red Partners and the converted Pencil Factory in Greenpoint, which is now releasing — are also in the mix.
One of MNS’s biggest competitors, Aptsandlofts.com, had done a lot of business on the sales side in small condos, while also doing large rentals such as Fortis Property Group’s 131-unit Atelier Williamsburg. Now with Aptsandlofts.com under the Citi Habitats umbrella, the joint firm will cast an even wider net over Brooklyn’s teeming northern and Downtown neighborhoods.
“The biggest Brooklyn rental company is now owned by a Manhattan rental company,” said Nathan Horne, an agent at Brick and Mortar, a mid-sized Brooklyn-based firm.
Gary Malin, president of Citi Habitats, said his firm is aggressively going after new development projects.
“There’s substantial numbers of developments coming on line, and I think the reason they [owners] tap into firms like Dave’s and now us is because of our local knowledge,” he told TRD.
Citi Habitats’ acquisition was just one instance of a bigger Manhattan firm buying up a smaller Brooklyn shop in recent years. Still, it should be said that most of the remaining mom-and-pop companies in Brooklyn did not have exclusives listed in OLR, perhaps because they are not all members of the Real Estate Board of New York, which has rules about how new listings are shared.
Horne, a Georgia transplant and a former civil rights attorney, said owners are overwhelmed with options when it comes to choosing brokers for both sales and rentals.
His Brooklyn-based firm, which fell just outside the Top 10, saw the most competition from “all these guys from the city in Porsches” on a recent sales deal he completed in Williamsburg.
Whether their brokers are driving Porsches or Hondas, Manhattan firms have obviously been pushing deeper into Brooklyn for years now.
Town Residential’s executive vice president of leasing, Itzy Garay, said the competition, which is getting thicker by the day in Brooklyn, is a good thing. (Town, which does not have a Brooklyn office, took the No. 7 spot in TRD’s tally with $2.6 million in exclusive rentals in the borough.) The firm has the exclusive at Bonjour Capital’s luxury Brooklyn Heights rental 172 Montague Street, where several units have crossed $7,000 a month since launching in August.
Aron Gooblar, vice president at Washington Square Partners, a member of the ownership group at the 250-unit, nearly complete 7 Dekalb Avenue, said developers are looking for brokers with wide reach.
Eighty percent of the units at that project, which is part of Downtown Brooklyn’s three-tower City Point site, will be affordable.
Gooblar and his team settled on a co-exclusive with Corcoran and boutique brokerage Great Jones Realty, where Don Capoccia, the founder of 7 Dekalb Avenue co-developer BFC Partners, is also a broker.
Developers, of course, don’t pick a firm to exclusively represent a rental project without poring over numbers.
And sources say the more backup information the better when it comes to landing new business.
“Owners love to get into that data,” Malin said. “The more information [you can] provide is why people engage you in an exclusive manner.”
But some are quick to point out that there’s a lot of real estate in New York’s largest borough beyond the glass curtain walls of Williamsburg and Downtown.
Angelo Rodriguez of NY Casa Group, a boutique firm only a few spots from breaking into the ranking, noted that there is a lot business to be had in less obvious places.
“The majority of the borough is made up of small, privately owned homes or multi-family buildings,” he said. Exclusive relationships with those owners also provide a steady stream of business.
But on the new-development front, Barrocas said getting the gig is often a numbers game.
He cited one developer who used a complex matrix based on past representation and performance to calculate which firm to select for a new development.
At the largest and most ambitious development sites in the pipeline, where builders are often entrusting firms with the fates of half-billion dollar investments, there’s too much at stake to go off relationships alone.
“Relationships are great,” said Barrocas, “but they’re not going to win you projects.”
Correction: An earlier version of this article incorrectly stated that Great Jones Realty was affiliated with BFC Partners. BFC Partners founder, Don Capoccia, is also a broker at Great Jones Realty, but the two firms are not formally connected.