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Brooklyn Real Estate Residen1al Market and New Development
Memorandum By Frederic Maingois
Table of Content § Brooklyn Residen1al Market Status § Brooklyn Historical Prices § Brooklyn Inventory and Month of Supply § Sizing Up Brooklyn
ü Timing, Opportunity and risk adjusted level ü A Strategic investment opportunity ü Brooklyn 4 key growth drivers
§ Williamsburg/Greenpoint ü KPI and Market Status ü Growth Drivers ü Key New Developments
§ Brooklyn Heights/Dumbo/Downtown ü KPI and Market Status ü Growth Drivers ü Key New Developments
§ Fort Greene/Clinton Hill/Prospect Heights ü KPI and Market Status ü Growth Drivers ü Key New Developments
§ Ques1ons and Commments
Williamsburg, Greenpoint
29%
BK Heights, Cobble Hill, Dumbo,
Downtown 16%
Fort Greene, Clinton Hill, Prospect Heights 12%
Park Slope, Gowanus
7%
Carrol Gardens,
Boerum Hill, Red Hook, 6%
Bed Stuy, Crown Heights,
Lefferts, Bushwick, 12%
Kensington, Windsor Terrace, Ditmas,
Flatbush, 6%
South Brooklyn 12%
Brooklyn Residen1al Market Status Values ‘16 4,776 2,267 6.0 80 $797K $884
Indicators Sales Inventory Months of Supply
Days on the Market
Average Price
Average Ppsf
2015-‐16 Change
-‐14% +13% +38% +24% +16% +10%
Neighborhood Market Share Price Point Market Share
Brooklyn Historical Prices New Development 3Q08-‐4Q16
+5.7% $950K
+5.4% $1,079
+3.3% $918
Indicators Median Price
Average PPSF
Median PPSF
Resale Condo 3Q08-‐4Q16
+7.9% $880K
+1.3% $888
+2.3% $942
New Development Historical Prices Resale Condo Historical Prices
Brooklyn Inventory and Month of Supply Co-‐op vs Condo Inventory 1Q10-‐4Q16 Annual Change in Inventory by Price
18%
49% 48%
13%
2%
-‐13% -‐20%
-‐10%
0%
10%
20%
30%
40%
50%
60%
Sizing up Brooklyn -‐ Most populous NY Borough with
2.63M people -‐ Density of 37,137 people/sq mile
or about half Manhaban’s. -‐ Unemployment Rate of 4.5%
⇒ 50% drop from 2010 ⇒ Fastest rate of employment Growth In 2016 (+3.8%)
-‐ Brooklyn’s weekly wages ($825) are increasing Faster than in Manhaban (+1.5% vs -‐1.09%)
-‐ Residen1al Vacancy Rate: 3.06%
Timing, Opportunity Costs, and Risk Adjusted levels are favoring real estate investments ü Timing: As a consequence of the recovery of the 2008 financial crisis,
the real estate market has manifested into a unique investment opportunity in terms of disconnect of risk vs return.
ü Rent vs Own Spread Closing In: As a result of credit 1ghtening, the poten1al for people to purchase residen1al assets has been dras1cally reduced. In addi1on, poten1al buyers have turned to the rental market, which has experienced a surge in pricing despite recent increase in concessions. As a result, real estate ownership is s1ll a beber posi1on.
ü A8rac:ve Risk Adjusted Investments: Heightened risk and vola1lity in equity markets, infla1onary pressures to devalue the bond market and US Treasury holding lower amer weak 10-‐year sale @2.35%.
Brooklyn: a strategic investment opportunity Target… …Neighborhoods rooted with history, art, innova1on con1guous to the diverse cultures that have sustained Brooklyn’s authen1c community. Promote… …the best of both worlds: easy access to Manhaban for work while experiencing the rise of New York’s current most unique and sought amer neighborhoods at a frac1on of Manhaban’s Prices. Respond… …To the posi1ve migra1on from higher income Manhabanites, who desire to seble for more without sacrificing their access to Manhaban.
Brooklyn’s fast expansion is a result of the synergy of 4 drivers Proximity – Authen1city – Crea1vity – Economy
Proximity -‐ Over 50 subway stops < 20 min of Manhaban -‐ 14 Subway Lines -‐ 3 Bridges (Toll Free) -‐ 3 Ferry Lines -‐ Host to JFK Airport and easy access to
Laguardia
Economy -‐ NY 3rd largest business district -‐ Development of 50 acres of Tech and Media
center to rival Midtown South -‐ Metro Tech Downtown Brooklyn -‐ Barclay Center, home of the Nets NBA team
and an entertainment power house
Crea1vity -‐ Suppor1ve of the ar1st’s migra1on movement
who previously led to the gentrifica1on of West Village/Soho/East Village
-‐ Navy Yard’s Steiner Studios -‐ Brooklyn Academy of Music
Authen1city -‐ Home of the first landmark neighborhood:
Brooklyn Heights -‐ Preserva1on of historical sites -‐ Neighborhoods rooted with history and
European architecture influence
THE BETS ARE ON THE SIDES WILLIAMSBURG -‐ GREENPOINT
KPI and Market Status Williamsburg/Greenpoint ’06-‐’15 (annualized return)
+8.18% +3.22% +2.08% +3.38%
Annualized Rate of Change in Sales Average Price Median Price Price Per Square Foot
Williamsburg/Greenpoint Q4 ‘15-‐’16
-‐13% 122
+36% $1.43M
+18% $1.125M
-‐6% $1,145
ü Median and Average Price both reached an eight-‐year high.
ü PPSF value declined slightly due to increased ac1vity in South Williamsburg which currently trade at a discount to North Williamsburg.
-‐
200
400
600
800
1,000
1,200
1,400
Condo Price '000 Condo PPSF
950
1,219 1,125 1,155
Median PPSF & Sales Price: Condo
4Q15
4Q16
Williamsburg & Greenpoint: Growth Drivers • Mature retail landscape in North Williamsburg giving easy access
to the peripheral areas to a stellar offering of shopping alterna1ves.
• Established Food and Bar scene in constant growth. • Development of the water front with parks and recrea1onal
ac1vi1es further boosted by the ongoing Domino Factory Two Trees development.
Key New Developments
The Oosten: 429 Kent Avenue • # of Units: 216 • Av. Sales Price: $1.9M • Av. PPSF: $1,211 • From $980K to $6.49M
The Greenpoint: 21 India Street • # of Units: 95 • Av. Sales Price: N/A • Av. PPSF: N/A • From N/A
190S1TH : 190 South 1st Street • # of Units: 32 • Av. Sales Price: $1.25M • Av. PPSF: $1,517 • From $624K to $4.4M
WATERFRONT HEAVEN BROOKLYN HEIGHTS – DUMBO
KPI and Market Status Dumbo Stat ’06-‐’15 (annualized) -‐9.10% +5.16% +5.40% +5.16%
BK Heights Stat ’06-‐’15 (annualized) +19.76% +6.48% +6.30% +4.79%
Annualized Rate of Change in Sales Average Price Median Price Price Per Square Foot
Blended Q4 ‘15-‐’16 -‐2% 165
+50% ; $2.135M
+18% $1.190M
-‐5% $1,190
ü Median PPSF down but average up by 14% ($1,433)
ü Average condo price was the highest in the Borough ($2.135M) due to closings at high end New Dev on the Waterfront
-‐
200
400
600
800
1,000
1,200
1,400
1,600
Condo Price '000 Condo PPSF
1,230 1,251 1,455
1,190
Median PPSF & Sales Price: Condo
4Q15
4Q16
Dumbo/BK Heights: Growth Drivers • MetroTech is the na1on’s largest urban academic-‐industrial research park. • Dumbo Heights is a magnet to TAMI tenants (700) with ongoing plans to
further develop the retail landscape. • The 85-‐acre Brooklyn Bridge Park stretching 1.3 miles along the East River
and built as a world class recrea1onal, environmental and cultural des1na1on.
Key New Developments
The Standish: 171 Columbia Heights • # of Units: 31 • Av. Sales Price: $3.61M • Av. PPSF: $1,988 • From $1.260M to $11M+
51 Jay: 51 Jay Street • # of Units: 75 • Av. Sales Price: $2.594M • Av. PPSF: $1,606 • From $2.025M to $6M
The PierHouse: 90-‐120 Furman Street • # of Units: 106 • Av. Sales Price: $5.767M • Av. PPSF: $2,051 • From $3.4M to $11M+
A DYNAMIC TRIO
FORT GREENE – CLINTON HILL – PROSPECT HEIGHTS
KPI and Market Status FT Greene Stat ’06-‐’15 (annualized) +7.38% +6.08% +5.04% +4.22%
Annualized Rate of Change in Sales Average Price Median Price Price Per Square Foot
FT Greene/Clinton Hill/P Heights Q4 ‘15-‐’16
-‐27% 125
+5% $941K
+10% $915K
+4% $964
ü Drop in Sales Volume as well as inventory (-‐10%).
ü Median Price reached the second highest in over 8 years
ü Healthy ac1vity in New Development should boost these numbers in 2017-‐18
750
800
850
900
950
1,000
Condo Price '000 Condo PPSF
835
931 915
964
Median PPSF & Sales Price: Condo
4Q15
4Q16
Fort Greene/Clinton Hill and Prospect Heights: Growth Drivers • Pacific Park 22 acres mega development bringing a new connec1ng
and connected neighborhood to historic Fort Greene and Clinton Hill.
• 15,000 new residents expected to move in by the 1me of comple1on of the Pacific Park (2020s).
• One of the best example of truly diverse neighborhood.
Key New Developments
550 Vanderbilt: 550 Vanderbilt • # of Units: 278 • Av. Sales Price: $1.077M • Av. PPSF: $1,422 • From $890K to $6.86M
The Waverly: 500 Waverly Avenue • # of Units: 49 • Av. Sales Price: $1.24M • Av. PPSF: $1,290 • From $790K to $2.6M
Ques1ons and Comments [email protected]