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2009 report: one year to fill market-rate buildings; some affordable units faster than others

New apartment buildings don't just fill up lickety-split. Buildings get TCOs (temporary certificates of occupancy) that approve certain floors for residence, while work continues elsewhere.

The interest in market-rate units fluctuates with price and competition. So luxury units at the slowly-opening 461 Dean, for example, have been said to come with "incentives" (aka discounts), as do others in the for-now glutted market in and around Downtown Brooklyn.

Even low-income affordable units don't fill instantly, despite huge demand, because of the challenges in processing applications. Moderate- and middle-income affordable units also face challenges, apparently.

One huge lesson of Atlantic Yards/Pacific Park is that predictions are fuzzy.
How fast are they filling up?

We don't know exactly how fast the rentals are filling up at 461 Dean, which is said to be partly occupied, and which includes 181 below-market units and 181 market-rate ones. (Maybe we'll learn at the recently rescheduled Quality of Life Community Meeting, set for Jan. 24.)

My October 2016 annotation of August 2014 tentative timetable
It has a TCO dated 11/1/16, which expires at the end of January; more than half the building is ready for occupancy. However, as I wrote yesterday, the lights are on, but few, if any people seem to be home.

By contrast, neither of the two other nearly finished buildings are ready for occupancy, though contracts have been signed at the condo building and, presumably, tenants are being selected for the rental one.

There's no TCO yet for 535 Carlton, the "100% affordable" rental building, which developer Forest City Realty Trust--parent of Forest City Ratner, part of Greenland Forest City Partners, said 11/3/16 "is expected to begin phased opening in the fourth quarter of 2016."

Nor is there a TCO yet for the 550 Vanderbilt condo building, which Forest City said is "expected to begin phased opening in the first quarter of 2017." The fourth tower, the "100% affordable" 38 Sixth Avenue, "is expected to begin phased opening in the second quarter of 2017."

As Forest City suggested in a document filed with the Securities and Exchange Commission, each of the three upcoming buildings--and, I'd guess, 461 Dean--might take up to a year to fill up.

It's not clear if that relates to the slow absorption of apartments and/or a fuzzy start for leasing.

How fast do buildings fill?

But it's worth looking back to a 2009 report on Atlantic Yards by the consultant KPMG. The report was conducted for the Empire State Development Corporation, the state authority overseeing/shepherding Atlantic Yards, and it rather unwisely supported the purported ten-year project buildout.

The report is not necessarily current, since it addresses a configuration of buildings that has since changed, but it does suggest that market-rate buildings could take a year until 100% occupancy was reached, with a few rental buildings coming faster (but the largest building quite slow), and the condo buildings taking a year.

From 2009 KPMG report
The report stated:
Given the lack of affordable housing in New York City, and its waiting list, it is reasonable to assume that low income units at each building will be absorbed as soon as they are brought to the market. Displayed on the following page are the market and middle income absorption estimates for the Subject Property.
Yes, the low-income units will be absorbed quickly, so any delay has to do with the processing of applications. But it's interesting to see that, at least in 2009, KPMG estimated that below-market middle-income rentals would take seven months to fill up.

It's not clear why, but presumably that was based on the history of other projects. I'd guess that, as long as enough people participated in the lottery, they'd be easy to fill up. Maybe it has something to do with the possibility that the more expensive below-market units will be on higher floors that get the TCO later in the construction process.

From 2009 KPMG report

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