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With few places to build, condo developers get creative in Brooklyn Heights
Not many new units are coming on the market in Brooklyn, and old buildings with interesting histories are hot
NEW YORK DAILY NEWS
Friday, May 30, 2014, 2:00 AM
In Brooklyn Heights, land is so tight, zoning so strict and the landmark rules so unbreakable that developers are creating new condos from old banks, dorms, churches and even an NYPD stationhouse.
Transforming these buildings adds a headache for the developers but can be incredibly profitable, especially if the building’s past life makes for a narrative that will appeal to buyers.
“You’d be lucky to find a lot where you can build one or two homes,” said developer Roger Fortune of the Stahl Organization. “So you’re seeing developers look to conversions of commercial buildings.”
The few apartments that are being created in this manner have a great narrative, but they’ll do little to satisfy would-be residents of Brooklyn, where the condo inventory crisis has reached epic proportions.
There were only about 500 condo sales by developers in Brooklyn last year, according to StreetEasy, compared to 1,128 in 2012. And there have only been 21 so far this year, a shockingly low figure.
And just 1,163 new condos are expected this year in prime Brooklyn neighborhoods, according to Corcoran Sunshine, a new development marketing company. Fewer than 800 will come online next year.
That’s nothing compared to the 10,000 new condominium units slated within the next three years in Manhattan — though that borough is also suffering a shortage.
“There are long reserve lists for grand openings,” said David Maundrell, CEO of Brooklyn brokerage AptsAndLofts.com. “And if a buyer today wants to purchase with 90% financing, they will likely get outbid” by a cash buyer.
How tight is the market in Brooklyn? There are seven units in the building at 875 St. Marks Ave. in Crown Heights. At last month’s open house, about 300 people showed up.
In Brooklyn Heights, the lack of developable land has led to these conversions:
1. Real-estate scion Jared Kushner, Ivanka Trump’s husband, is cashing in on the single-family house market by turning three Brooklyn Law School dorms — at 100 Pierrepont St., 27 Monroe Place and 38 Monroe Place — into mega-mansions.
There’s no word on what Kushner will charge for the properties postconversion, but the median price for a Brooklyn Heights townhouse is close to $7 million.
2. On the corner of Pierrepont and Clinton Sts., the Stahl Organization is converting the upper floors of a limestone Italian Renaissance-style building formerly home to the Brooklyn Trust Co. bank.
The landmarked property was designed by York & Sawyer, one of the most prominent architectural firms of the early 20th century, and still houses a bank on the ground floor — albeit a Chase branch.
Stahl snapped up the building for $9.7 million in 2008 and is converting it into 12 high-end, family-sized condos, most which will have at least three bedrooms — all with access to a common rooftop terrace, a children’s playroom, a gym and even a pet spa.
The developer is preserving some of the property’s historic details and is even moving a stately piece of the bank’s original facade into one of the living rooms, where it will make for a striking conversation piece.
Units will start at $3 million. Part of the price is related to the challenge of coming up with “great architectural plans given the limitations of the existing building,” Fortune said.
3. On nearby Poplar St., between Hicks and Henry Sts., another developer is marketing the converted units at a police stationhouse that closed in the 1980s.
The city sold the vacant building at auction in 2005 to a developer who had ambitious plans to add a tower to the building but ran into landmark troubles and strong neighborhood opposition.
The Daten Group bought the building for $7.5 million in 2011 and scaled back the plans in order to get landmarks approval.
Daten is converting the main building into 13 units and making the precinct’s former stable and garage into a duplex townhouse with a private rear garden and a roof deck. Among other things, Daten shaved 8 feet off the back of 72 Poplar in order to meet the requirements for light and air in a residential building.
The process is expensive and time-consuming, developers said.
“You don’t really know what you’re getting into until you get in there and get inside the walls,” said Brendan Aguayo, a broker with Halstead Property.
The whole process, including applications and construction, has taken about three years. Work is slated to be completed by this fall.
“It’s like a Broadway show,” said David Ennis of Daten. “It looks easy, but there’s a whole lot that goes on behind the scenes.”
Still, the building’s former life makes for a great story — and helps command a premium price. Units currently on the market have asking prices ranging from $2 million to $4 million.
“You could still see the marks of where the original holding cells were” when Daten bought the building, Ennis said.
The Landmarks Preservation Commission is also requiring that Daten retain the iron bars that engulf the lower-floor windows.
“You have to be creative and open-minded as to what you’ll develop,” Ennis said. “There is not a lot of vacant land where you can start from scratch on a clean slate. You’re seeing a lot of buildings with a lot of former lives.”
CONDO RELIEF ON THE WAY
Hey, Brooklyn apartment shopper: Put that cash on ice and wait a year — prices might drop.
A couple of projects in the pipeline will more than double the number of new-development condos available.
About 144 condo units are due to come on the market at 388 Bridge St. in Downtown Brooklyn this year, and a new project in DUMBO, dubbed Pierhouse, will bring 108 units to Brooklyn Bridge Park’s Pier 1 in 2015.
That’s not nearly enough units to satisfy anxious buyers, brokers said, but it’s a start.
“Greater inventory means greater power to buyers,” said Alan Lightfeldt, an analyst at StreetEasy. “I would expect the overall median sales price to level off a bit once inventory is up.”