Repositioning Condominiums As Rentals Proves Hot In Brooklyn
Showing an advantage that multi-family buildings have over single-family buildings, Brooklyn's condominium developers were able to "reposition the projects as rentals" or sell "the properties to investors who converted them into rentals."
Julie Satow's article in the "Square Feet" report in the business section of the Times about the Brooklyn market centers on such a conversion (see photo) of a 62-unit building in Williamsburg.
"The market for multifamily buildings in Brooklyn has been heating up over the last year. But the recent sale of 111 Kent Avenue in Williamsburg was stunning even in a hot market....The buyer paid $55.5 million, or more than $895,000 for each of 111 Kent's 62 apartments. The price paid per apartment is a record for such properties outside Manhattan.
In addition to a strong rental market, Brooklyn is attracting waves of investors because of the many stalled condominium sites that are primed for conversions into rental buildings. During the market bubble, neighborhoods like Williamsburg were inundated with condominium developments, but many of those projects were left half-finished when the market turned."
"Any time people build condominiums and the market doesn't support it, there is a shift to rentals - that is not a new phenomenon," said (a spokesperson from the firm selling 111 Kent). "What is new is that we are seeing this happen in Brooklyn."