Downtown Brooklyn’s rental worries are a thing of the past
March 05, 2019
By Steve Cuozzo
Fear that downtown Brooklyn’s apartment market was headed for a bust turned out to be — a bust. A tidal wave of new units coming to market has yet to make a dent in sky-high occupancy rates or rental costs, according to new data from a business-advocacy group and from the developer of Brooklyn’s tallest tower.
Just one year ago, the New York Times cited a “sinking feeling” among developers due to the impending addition of 28,400 rental units in Brooklyn. Doug Steiner, the developer of the 52-story project called The Hub that was then under construction, worried that it might not have enough amenities compared with competitors.
“It’s impossible to know where the market will be when we finish,” he said in March 2018.
He needn’t have worried.
Data just released by the Downtown Brooklyn Partnership show that occupancy is above 95 percent at both old and new rental buildings. Absorption remains strong as most new properties report leasing between 20 and 40 units every month.
Most new buildings stabilized with a year of being put on the market with lease-up periods ranging from four to 20 months — in line with developers’ expectations, the partnership said.
Regina Myer, president of the partnership, which oversees three different business improvement districts, told The Post: “We want to dispel any notion that there’s a glut. All the talk of oversupply has been overblown. We see only tremendous demand to live downtown.
“No owner has complained about a slow lease-up,” she said.
Meanwhile, landlord concessions have fallen and in some cases, disappeared.
Myer noted that it’s important not to conflate downtown with other Brooklyn neighborhoods such as the Williamsburg and Greenpoint waterfronts. Median asking rents in downtown Brooklyn jumped by 15 percent from 2014 and 2018, even while the median rent fell more than 10 percent borough-wide from 2014 to February 2019.
An “unprecedented” 14,000 units at 70 locations have been added to downtown since a 2004 rezoning, the partnership said. Among rentals that opened in 2018 were Rose Associates and Beneson Capital Partners’ Hoyt & Horn (368 units); Red Apple Group’s The Eagle (440 units); and AmTrust Realty’s The Amberly (270 units).
Myer credited her district’s strong performance to the fact that “downtown has this double-edge feel. It’s a central business district with high-rises, but because of its proximity to brownstone neighborhoods, it also has a lot of amenities.”
Steiner said that the 750 apartments at the $432 million Hub are 99 percent rented. He said its success reflects a strong leasing market all around. “Everybody’s doing well,” he said.
Despite old reports that some buildings were offering more than a month’s free rent, Steiner said he’s only given two-week concessions on studios asking from $2,750 to 3,200 a month and one-bedrooms from $3,450 to 4,650.
“We’ve had about half the concessions of others and leased up twice as fast,” he said. Part of The Hub’s appeal is its location at 333 Schermerhorn St., close to a dozen subway stations, and a 40,000 square-foot amenity space that includes an indoor pool.
“The more units that come on the market, the more attractive the area becomes,” he said, as new residents also draw stores and restaurants.
This article originally appeared in the New York Post.