Luxury Brooklyn Condo Project Pivots To High-Priced Rentals
The coronavirus pandemic has pushed one Brooklyn developer to change course on its condo project at nearly the last minute.
As construction nears completion on One Boerum Place, which was initially conceived as a luxury condominium building, the property’s owner, Avery Hall Investments, will put the 138 units on the market as luxury rentals instead, Bloomberg reports.
This comes after a year that has pummeled both the luxury rental and condominium markets throughout the city. Even before the pandemic, there was an excess of supply in the condo market — 25% of apartments in the city were for sale as of September 2019 and sales declined 16% year-over-year for units costing more than $4M between 2018 and 2019.
Between last April through July, many more condos came onto the market than were sold, according to Bloomberg. But during the first quarter of this year, listing inventory remained the same year-over-year while the number of sales increased 26.6%, according to data compiled by Miller Samuel for Douglas Elliman.
The median rental price for luxury units went down as well — prices dropped 5.4% between March 2020 and March 2021, according to Miller Samuel.
One Boerum Place's developers told Bloomberg they believe that they will be successful as rentals, especially as former Manhattan residents migrate to Brooklyn.
The units will be priced between $4K per month and $12K per month for one-, two-, three- and four-bedroom apartments, according to Bloomberg. The building also contains 22K SF of retail space on the ground floor, according to Avery Hall’s website.
The decision could become a case study for other developers on whether the condo-to-rental recasting is more broadly viable.
“Everyone is waiting to see what happens,” UrbanDigs co-founder John Walkup told Bloomberg. “There’s a lot of developers who’ve done the math on the sales and rentals side.”