| I’ve always found it interesting how NYC legislation can affect the value of different types of buildings, though I probably shouldn’t be surprised. Recent legislation has dramatically increased the value of manufacturing buildings in Brooklyn (especially along Atlantic Avenue on the border of Bed-Stuy and Crown Heights) over the past few years. The City of Yes, enacted in January of last year, along with the Atlantic Avenue Mixed Use Plan, greatly increased the value of properties that were once limited to manufacturing use. I had heard about the City of Yes, but it really came into focus a few weeks ago when I learned about an owner looking to sell a row of buildings on Atlantic Avenue in Brooklyn for $29,500,000. At first, I thought that number was insanely high. Then I spoke with a developer who had already reviewed the deal and said he had offered “in the low 20s.” That told me $29,500,000 wasn’t crazy — it was achievable. I started digging deeper and realized I had a personal anecdote that reflected what was happening. My brother had been renting a small space inside a larger manufacturing building on Atlantic Avenue (he’s a welder and needs space to store equipment and work on jobs). About a year ago, he was asked to leave because the owner was selling the building and the new owner wanted it delivered vacant. That building sat on a large lot — over 17,000 square feet — and sold for nearly $8,000,000, with the buyer planning to build housing. Right next door, 2413 Atlantic Avenue sold after that for $3,000,000 on a lot less than half the size. If the buildings had never be rezoned, I don’t think the larger one would be worth more then $2,000,000 as pure manufacturing space. This trend is happening up and down Atlantic Avenue. Next to the $29,500,000 development site, there is another property with a small manufacturing building where similar residential conversion is possible, currently asking $4,000,000. Another piece of legislation passed last year was the Atlantic Avenue Mixed Use Plan. This rezoned a group of properties on Atlantic Avenue between Vanderbilt Avenue and Nostrand Avenue, on the border of Bed-Stuy and Crown Heights in Bushwick, further west from the sites I’ve talked about. After this legislation went into effect, Marcus & Millichap sold 918 Atlantic Avenue for $7,000,000. Link here to an article about the sale. That property has a lot size of 8,282 square feet — less buildable square footage than the 17,000 square foot lot, but in an area where higher rents are achievable. Here’s an article with a rendering of what the new building will look like (it was formerly a gas station). Many of these sites will likely qualify for bonus buildable square footage if some of the units are designated as affordable housing. I haven’t spoken to every owner along Atlantic Avenue, but even based on a small sample of activity, there appears to be a high level of sales activity in the area. A recent article in the New York Times suggests that the City of Yes is actually helping to address New York City’s housing crisis. Here’s a link to the article. I’m curious to see what these buildings will look like and how it’ll affect rent prices throughout Brooklyn – more housing means possibly lower rents. Would you be interested in buying any of these development sites — or possibly selling one? I know buyers who are actively looking to purchase and owners who are considering selling. Are you a property owner that wants to sell their condo, investment property or needs to rent an apartment or retail space in New York City? Call or text me: Sam Moritz, licensed real estate agent, 203–209–3640. Do you know a property owner that might need real estate help? Refer me! I provide great and professional real estate services across all five boroughs. |
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