In the wake of plans for Brooklyn’s massive Atlantic Yards project, developers rushed into Prospect Heights with dollar signs in their eyes. Now many of those developers’ condominium units are on the market, but brokers are starting to question whether there is enough demand to support all the new development.
And while the wave of building appears to be drawing newcomers to the immediate area — as well as neighboring Crown Heights, where listings are sometimes called “Prospect Heights vicinity” — community groups are pressing for a landmark designation to limit future projects.
Plans for the $4 billion, 22-acre Atlantic Yards stadium-housing-office mega-development have served as a magnet for new condos. Between the start of 2006 and May 31 of this year, developers submitted plans to the attorney general’s office for 230 new condo units in 11 new Prospect Heights projects.
So far, demand for that new construction has been strong.
Prices — for both units in new developments and existing co-ops — have increased significantly over the past three years. According to Trulia.com, the median price of an apartment in the area climbed 48 percent from 2004 to 2005, and 24 percent from 2005 to 2006.
Estimates for 2007 suggest that although prices may not be rising at the same rate, they are holding steady.
But a number of brokers said supply threatens to outstrip demand, and that prices in Prospect Heights may have risen too precipitously over the past few years.
According to Sonni Woodbury, an associate broker and manager at Fillmore Realty who lives in the neighborhood, developers and brokers need to run a reality check on what buyers are actually willing to pay.
“A lot of developers came in with high ideas, and they are slowly beginning to realize they can’t demand the numbers they were demanding initially,” he said. “We have to be realistic in what we sell. Units are sitting, some for close to a year.”
Those “high ideas” had their basis in the run-up in values — and hype — of the past few years. Aside from the lure of being close to the future Atlantic Yards site, Prospect Heights became more marketable as new businesses came into the neighborhood and it gained more cachet, according to brokers.
“I noticed restaurants opening on Vanderbilt, and I began working with more buyers in the neighborhood,” said Florence Clutch, a sales associate with Halstead who lives on the border of Crown Heights and Prospect Heights. “Addresses now being called Prospect Heights until last year were called Crown Heights.”
Betting on demand
Developers are trying to lure Manhattanites to Prospect Heights and its vicinity with more space, amenities and modern architecture.
But despite recent price appreciation and fancy new construction, are there enough buyers to fill hundreds of condos?
“That’s the question,” said Merle Williams-Adkins of the Corcoran Group, which handles celebrity architect Richard Meier’s On Prospect Park, on the southwestern edge of the neighborhood, near Grand Army Plaza. “[There is demand] if they come on at the right price, so the new buyer who is in the $400,000 to $500,000 range can afford them.”
According to developer Mario Procida, 25 of roughly 100 of the Meier units have sold since going on the market in December 2006. These units are by far the most expensive in the area, currently going for $1,200 a square foot.
Fillmore’s Woodbury estimated that early on, developers were trying for $700 to $800 per square foot. Now, he said, prices are beginning to drop to more realistic levels, in the range of $550 to $575 per square foot, and about $100 higher than that for luxury units.
Woodbury cited two overpriced condos at 647 and 651 Washington Avenue that have lagged in sales. He also said new units are languishing at 425 Pacific Street and at 540 St. Marks Avenue, a development from Supreme Builders where the asking prices, he said, are “astronomical.”
The problem, he said, was an early misconception on the part of developers regarding potential buyers. Woodbury contends that Prospect Heights buyers are mainly professionals who value the diversity of the area and aren’t looking for a Manhattan-style, or even Park Slope-style, location. “People who are coming in are environmentally conscious,” Woodbury said. “They are burning environmentally efficient light bulbs and using eco-friendly soaps. They don’t want to pay through the nose. A billboard touting Sub-Zero refrigerators and Viking stoves is not going to be a draw.”
More condos coming
Woodbury estimated that about 1,000 units will be coming through in the next year. Currently under construction are three more condominiums from Supreme; a gut renovation of a prewar brick building at 807 St. Johns Place, on the corner of Classon Avenue, by private developers; and another across the street on 504 Sterling Place.
Fillmore is also currently working on a deal for a 23,000-square-foot green building on Classon Avenue and Eastern Parkway.
Roslyn Huebener and Peggy Aguayo, co-owners of Brooklyn-based Aguayo & Huebener, have a lot riding on the neighborhood’s ability to draw in buyers: The company reps several of the condos in the area, including HelloLiving, the two properties formerly known as Pacific Blue at 925-935 Pacific Street, which borders the currently less-sought-after neighborhood of Crown Heights.
However, sales there appear to be going well. According to Aguayo, HelloLiving has sold 15 of 26 units since they went on the market in April.
The souped-up apartments begin at $379,000 for a small one-bedroom and top off at $1.3 million for a 1,475-square-foot three-bedroom, two-bath apartment. Most of the residences fall at a price somewhere in the middle and are selling at $650 to $750 per square foot.
Four more buildings are planned, with common spaces like a billiard room and home theater to help foster community-based living.
The firm also represents the Washington at 35 Underhill Avenue, which has 11 of its 39 apartments left, and the Newswalk properties on Dean Street, which have roughly 140 units and were put on the market in three phases. The last phase went on the market this winter, and only four units remain. Aguayo said that they were mostly bought by “Manhattanites who didn’t even know how to get over the bridge but came because they saw signs for Soho-style lofts for one-quarter of the price.”
The Firehouse Condominiums, at 735 Dean Street, have one of seven units left since going on sale over a year ago. Aguayo attributes the lengthy time on the market to developers’ sticking to their prices; she said units sold for $700 per square foot a year ago.
In terms of existing co-ops, Huebener reports a recent sale at 135 Eastern Parkway in Turner Towers, a prewar doorman building overlooking the park, where a 1,600-square-foot unit in need of bathroom and kitchen renovations had multiple bids. The apartment sold for just over $1 million, or $625 per square foot.
She estimates that one-bedroom apartments are going, on average, for just under $400,000.
Looking for landmarks
Prospect Heights is also bordered by Park Slope, Fort Greene and Clinton Hill. But unlike these areas, it is the sole neighborhood that does not have a landmarked district.
In April, the Landmarks Preservation Committee designated 472 buildings in nearby Crown Heights as the Crown Heights North Historic District, the 17th neighborhood in Brooklyn to receive landmark status from the city. Now, Prospect Heights community members hope to hear back from the city about a proposed landmarking of their streets and buildings, before the next wave of developers sets their sights there.
Local activists say that without a landmark designation, Prospect Heights’ historic brownstones and open spaces are vulnerable to unmonitored large-scale renovations and new construction.
“There is concern that the neighborhood is unprotected and development pressure from the Atlantic Yards could cause demolition or inappropriate changes to the architecture of the neighborhood,” said Lisa Kersavage, director of preservation and a fellow at the Municipal Arts Society, a nonprofit organization that lobbies for historic preservation in New York. This winter, Kersavage and community volunteers delivered to the LPC a survey of Prospect Heights that included photographs of 1,200 buildings and proposed boundaries for a landmark district.
Patty Viccone, who is involved in the effort to landmark Prospect Heights, has lived in the neighborhood for 16 years.
“We’re a close-knit community and much more diverse than other parts of Brownstone Brooklyn. Atlantic Yards caught us by surprise. We didn’t expect to be getting so much attention, and it has galvanized us.” She said she is well aware of her neighborhood’s newfound appeal to developers. Viccone cites a historic single-family home on her block of Park Place, between Vanderbilt and Underhill avenues, that was torn down and replaced with a five-story condo. It is this kind of activity that she and other community members want to prevent.
“We are not against development; we just want it to be contextual. It’s about trying to maintain the integrity of our distinct architecture,” Viccone said.