The Brooklyn real estate market remains strong, and the borough might even be at the beginning of a new cycle of prosperity, according to experts at the first-ever Brownstoner Real Estate Conference, which took place Wednesday in Williamsburg.
“The old game is over, and we’re in a brand new cycle of Brooklyn real estate. To use a baseball term, we’re in the third inning,” said Brooklyn real estate veteran Bob Knakal. Currently chair of New York Investment Sales at Cushman & Wakefield, he cofounded Brooklyn commercial real estate powerhouse Massey Knakal.
Although sales have slowed in the borough, with fewer closed deals, prices continue to rise, particularly in Central Brooklyn, he pointed out. Concerns about the current real estate cycle ending are unfounded, he said.
CEO of Schneps Communications and Brownstoner publisher Josh Schneps kicked off the morning by introducing keynote speaker James Patchett, President of the NYCEDC, in front of an audience of several hundred.
Brooklyn’s booming economy has led the EDC to focus on creating jobs and affordable housing in an effort to lift all boats.
“We have to protect our diversity, and create an economy that works for everyone. We have to recognize our economy is changing,” he said. Office space in the borough is key.
“The single thing companies complain about is the cost of doing business — so we need to expand the office space available. We’re looking to the real estate community to provide that space,” he continued.
In Search of Jobs and Affordable Housing.
One of the city’s largest landlords, the EDC strategically invests in Bush Terminal and other holdings to grow jobs. At the nearby Brooklyn Army Terminal, which has fostered more than 3,700 jobs, the EDC has invested more than $100 million.
Another Brooklyn priority is mixed-use developments, such as the Bedford-Union Armory and Flatbush Caton Market.
“We’re pioneering mixed use developments so people can live closer to where they work,” Patchett said.
Cool Rules in Brooklyn Offices.
The panel on commercial real estate featured Dan Conlon Managing Director of Leasing at Two Trees, Andrew Kimball, CEO of Industry City, and Shlomo Silber, CEO of Bond Collective, with Timothy King of CPEX Real Estate moderating. The discussion mainly explored the trends surrounding the rise of co-working spaces and changes in commercial real estate in Brooklyn.
Digital media companies and “creators” that start out small and can grow along with their space are typical co-working tenants. Etsy, a former Two Trees tenant, grew so big they exceeded the amount of space Two Trees had available for them, Conlon said.
Increased competition has led to more and better commercial office space becoming available in recent years in Brooklyn, he continued.
“The new world of real estate is all about competition,” he said. “The good thing about competition is that it gives the tenant choices, and it allows the landlord to take a look at their inventory and take a look at what’s going well and what can do better. It forces you to constantly improve the product.”
Brooklyn office tenants want cool spaces, and commercial real estate developers should make full use of the borough’s historic properties, said Kimball. Collaborative workspaces will help tenants grow, also, which can only benefit the landlord, he added.
“Take advantage of opportunities when you can to bring old beautiful properties back to life,” he said. “The younger work communities want these spaces, they speak to a culture of ‘making’.”
As for helping tenants grow, “you need to also build an ecosystem of tenants — as a landlord, help them grow,” Kimball continued. “You should create common areas and spaces to help them grow” and develop their workforce. “We made rooftops and courtyards. If you can assist these small companies with their growth, it’ll help you as they’ll be stronger economically and that’s higher rent at the end of the day.”
Central Brooklyn Still Hot.
The residential real estate panel featured Elizabeth Ann Stribling Kivlan, president of Stribling; Trish Martin, Halstead’s managing director of sales for Brooklyn; Ryan Serhant, Nest Seekers broker and star of ‘Million Dollar Listing’, and Max Dobens, executive manager of Brooklyn sales for Douglas Elliman. The panel was moderated by attorney Zerline Goodman. Panelists swapped tips and stories about selling real estate, and had some valuable tidbits about the state of the Brooklyn market.
When asked about the Brooklyn residential market, Stribling-Kivlan made a culinary analogy.
“I still think there’s a lot of well-priced stuff in the market. It’s like calling all food from Italy Italian — there’s Venetian, Neapolitan. You can’t just call it one thing. I still feel positive on it. More and more it’s about product than area. No longer is Brooklyn the alternative, but the destination,” she said.
Martin echoed these sentiments. “It’s hard to make one single statement on it. Everything under a million is flying off the shelves, but the high market is a bit slower. You can’t paint it all the same.”
Martin also spoke about buyer preferences in the brownstone market.
“We’re at an interesting time in the brownstone market. Folks are coming in and shifting the footprint of old homes to make them more adjustable to today’s lifestyle. People are looking for renovated brownstones with the modern touches rather than ones with fully original detail, at least in terms of price point.”
Serhant and Dobens both pointed to Central Brooklyn as an area for investment and purchasing opportunities, as prices there remain lower than the rest of the borough’s hotspots, despite rising in recent years. Serhant said of the area, “If you can be 15 minute ride from Union Square for under $3 million, that’s a pretty good deal.”
Dobens added, “If I was buying, I’d be looking at a two family. One unit for living, one as an investment. It’s a good way to get around the cost of a home. I’d be inclined to look at Crown Heights. Bed Stuy is also a good neighborhood.”
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