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Conversions Pace Growth in Manhattan, Brooklyn
"The market is so hot that even a Mafia burial ground on the Brooklyn-Queens border was recently bought for row-house development. In the South Park Slope area, near Sunset Park, there's construction underway of a multistory building adjacent to Greenwood Cemetery. Who'd have thought there'd be a market for a high-rise in a sleepy place like that?"
THE MAIN STORY COMING OUT OF New York City's multifamily market is that 2005 is "The year of the condo." On the development side, according to the US Census Bureau, some 9,000 new apartments will be permitted in Manhattan alone, this year, with mid- to high-priced condos stealing the show. The trend to converting hotels, office buildings, and rental apartments to condo apartments is sure to continue and intensify. Apartment construction in Brooklyn is 43% ahead of last year's figures, according to Prudential Douglas Elliman.
Demand for multifamily residential is high because of relatively rapid population growth in the city through the 1990s (more than 100,000 new residents in that decade) and into the 2000s. The end of the Cold War has led to an influx of ambitious, hardworking immigrants from Eastern Europe, and ongoing job creation has brought talented labor from all over the US. This upscaling of New York has contributed to the continuing drop in the crime rate. Finally, the success of the multifamily market has attracted more investors who are eager to increase the supply.
New York City hardly has such a thing as a "bad neighborhood" anymore, particularly in Manhattan and Brooklyn. In Manhattan, once-doubtful areas like Harlem and the Lower East Side are red-hot. Brooklyn is so suddenly trendy that Manhattanites are moving there by choice-not necessarily because they've been priced out of Manhattan, as was often the case in the 1980s.
BROOKLYN'S BOOMING
"The new axiom is there are no bad neighborhoods in New York, and that is driving development in places where it would have been unheard of even a short time ago, keeping prices up, and driving dollars into existing complexes," reports Ken Fisher, partner at WolfBlock. "Will Rogers once said, 'Buy land; they're not making any more of it,' but in fact the city government has been making new land...