More Developers Buying Land, Plotting Rentals

The Real Deal takes a look at the significant rise in the number of development-site purchases in Brooklyn this year—a total of 85 so far, which is a 74 percent increase from 2010, according to data from Massey Knakal—and argues that the hot rental market has a lot to do with the uptick. (While commercial real estate agents say prices are increasing, they’re still said to be down about 15 to 20 percent from pre-bust levels, according to one estimate.) The story notes the obvious, which is that banks continue to be wary of financing condo builds, but also that the high rents new apartments are bringing in means that developers can make a profit. Apartments in new buildings like Downtown Brooklyn’s the Addison and the Brooklyner are said to be renting for $50 or more a foot. Jason Halpern, a managing partner at JMH Development, which converted 184 Kent in Williamsburg into rentals, says it’s gotten to the point where demand for Williamsburg development sites is “overheated,” and some developers are “underestimating their construction costs and overestimating what their rents will be.”
A New Brooklyn Land Grab [The Real Deal]