MULTIFAMILY MONDAY: BROOKLYN BOOM

Call it the Jay-Z effect: Brooklyn is so hot that we're having our first ever Bisnow Future of Brooklyn event this Friday at the New York Marriott at Brooklyn Bridge. (You thought the opening of the Barclays Center was the year's biggest event? Think again.) 13 of the borough's top CRE execs will be joining us to discuss trends driving the market (sign up here), but here's a sneak peek.
Costs for condo development sites in Brooklyn's hottest neighborhoods are as much as double the last boom, says Massey Knakal's Stephen Palmese, one of our speakers. He tells us he recently negotiated land sales at 61 Park Place, Park Slope and 295 Hicks St, Brooklyn Heights, and that last one drew 58 offers. Who's putting up money? He says institutional developers have now joined the locals in looking for land in the borough.

The lowest interest rates in 18 months are here just as Brooklyn's broken condos are regaining a footing, so let the trades begin. Marcus & Millichap's John Horowitz (who's also speaking—see the full agenda here) tells us cap rates are attractive compared with the cost of money, which is lubricating those deals. The firm recently sold a 32-unit Park Slope building for $12.3M, which is just over $384k/unit. Equity players seeking stable returns are looking in Park Slope, Downtown Brooklyn, Brooklyn Heights, and Carroll Gardens, which are just as stable as Manhattan but offering high returns, he says. Opportunistic investors are also hunting in Bushwick, Bed Stuy, and Crown Heights.
CPEX's Brian Leary (left, with fellow managing partner Timothy King) says infill housing, especially around transit hubs, is going up and being absorbed as quickly as the projects can be built. In neighborhoods where residential density is at critical mass, retail is vibrant, too. CPEX is working on the sale of Bed Stuy's Slave Theater at 1215 Fulton, which should close by year-end. It's by-right zoned for retail and residential. Hear more from Stephen, John, and Brian this Friday: it's your last chance to register!

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