Market Report Prediction: Rentals Will Go Condo

You might have noticed that rents in Crown Heights are going up, up, up — and so has MNS. Their October rental report for Brooklyn, released today, notes average rents increased 12 percent or $192 in October compared with the same month last year. They don’t seem to be slowing down, either, because rents increased 3.1 percent, or $59, vs. the previous month. One-bedrooms increased the most, $88, in October vs. September. Another category that saw a big increase year over year was studio apartments across the Brooklyn areas MNS tracks. These rose 12.1 percent, MNS said. Meanwhile, in the very different world of commercial sales of multi-family buildings, Massey Knakal reported, Brooklyn is holding its own. It led in dollar volume sales for 2012 vs. 2011, compared to the rest of New York City. In sheer number of apartment buildings sold, it came in second. More specifically, Brooklyn is on track to see 405 properties change hands this year, which would be 65 percent above the 245 sold last year. Dollar volume looks like it will come out at about $1.5 billion, which would be 127 percent above the $644 million in 2011. “Brooklyn is rapidly nipping at the heals of Manhattan as the most desirable destination for many multifamily investors,” said the report. “We expect these trends to continue as rent appreciation escalates and vacancy rates continue to drop. Look for the rate of rental property conversion to condominium ownership to rapidly increase as prices per square foot continue to climb, particularly in emerging neighborhoods like Williamsburg.” Very interesting.
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