Real Deal: lack of condo inventory in Brooklyn means 550 Vanderbilt will be sold out before opening next year
This month, The Real Deal looked at all of the condominiums slated for Brooklyn, and found that the trickle of projects in the works will not be enough to meet the demand.With Atlantic Yards, now Pacific Park, the developer--then Forest City Ratner, now Greenland Forest City Partners--had flexibility to build condos in multiple buildings over a long buildout.
TRD combed through Department of Buildings records and found 23,700 Brooklyn residential units in the pipeline across 137 projects. Of those, only 1,900 (or about 8 percent) are expected to be condos. Plans are unclear for 4,200 of the units, while rentals account for the bulk: 17,600.
“I think that there’s not enough on the market right now and there’s not going to be even in a year,” said Ofer Cohen, founder and president of Brooklyn commercial brokerage TerraCRG, who regularly works with residential developers looking for sites to build on. “It’s going to take a long time for condo inventory to get into this pipeline, and for the foreseeable future there’s not going to be enough of it.”
The imbalance in the market is largely an echo of the recession. The 2008 downturn, of course, made lenders hesitant to underwrite condo projects in Brooklyn. In the years that followed, rentals also seemed like the logical choice for developers who wanted to protect themselves against market fluctuations....
Prices at the project will range from $550,000 for the least expensive studios to $5.5 million for some of the maisonette and penthouse units. Sales launched in mid-June, and the building should be ready for move-ins by the end of 2016.According to Streeteasy, 34 units are in contract as of today, with 62 active sales. (So 96 units is a little more than one-third of the total 278 units.)
“We anticipate being sold out by then, no problem,” said Jodi Ann Stasse, managing director of new development for Citi Habitats, who is marketing the building.
Given that the building is being marketed to Chinese buyers, thanks to lead partner the Greenland Group, based in Shanghai, one question is whether the buyers in 550 Vanderbilt are people who want to live in Brooklyn or just want to invest.
The burgeoning demand, as I wrote in June, is such that the asking price for units at 550 Vanderbilt, on a per square foot basis, is well ahead of the 2009 projections for 2015, which then were considered aggressive.
That doesn't mean it was realistic to approve the project in 2006 and assume a ten-year buildout. It does mean that, when a real estate developer gets "entitlement," it can often build at its own pace and thus time the market.