South Brooklyn real estate is no get-rich-quick scheme, panel says
Developers discussed less heralded part of the borough at TerraCRG event
Demand for South Brooklyn real estate may be heating up, but it’s not a place where investors should go if they’re looking to double their money right away.
“If you want to get rich in real estate tomorrow, I wouldn’t suggest you go buy in South Brooklyn,” Jason Muss, principal of Muss Development, said at a panel on Wednesday. “But if you want to own solid properties that will be filled up by good tenants, and something that will gradually increase in value, I think that’s the kind of market South Brooklyn is.”
Muss was joined by Hello Living founder Eli Karp and Shamco Management partner Edward Setton on TerraCRG’s first panel focused on South Brooklyn at its annual Only Brooklyn event.
The panelists described the market as much more stable than Brooklyn’s trendier neighborhoods — a part of the borough where developers are unlikely to see dramatic price swings in either direction.
“It’s more of a mature neighborhood,” Setton said. “Not everybody wants to live where ‘everybody is,’ so to speak. Everybody has a reason to be where they are: they have family, they have friends, they have community. It’s not just, ‘Oh, I have to live in X.’”
The panel acknowledged that South Brooklyn doesn’t have anywhere near the number of large projects coming to places like Downtown Brooklyn, which Muss attributed to a shortage of land.
Muss’ firm has been working on 1 Brooklyn Bay, a 28-story mixed-use project on a 2.5 acre lot in Sheepshead Bay, in partnership with AvalonBay Communities. But the company hasn’t been able to find land for another big development in the area.
This is partly because South Brooklyn property owners are more sentimental about their holdings, according to Muss.
South Brooklyn landowners are “incredibly stubborn, and they hold tight to their properties,” he said. “It’s actually harder to assemble in South Brooklyn than it is in Manhattan because in Manhattan people are very transactional … The people in South Brooklyn, family wise, they own for generations, and they’re emotional about the properties.”
But a lack of big development in South Brooklyn also means there aren’t the same concerns about oversupply. And unlike other parts of the borough, its rental market isn’t particularly reliant on concessions, according to Setton.
“Sometimes we pay the broker fee,” he said, “but that’s the extent of how far we go with concessions.”