Investing in Brooklyn property for asset diversification
Posted by Wei Min Tan on December 1, 2019
Investing in Brooklyn property is a strategy investors take to benefit from the better price value compared to Manhattan (although it depends on the area and may not be the case anymore). Brooklyn is the most populous borough of New York City with 2.6 million people out of New York City’s 8.6 million. Brooklyn has developed a global reputation. It’s common to see kids in Asia wearing T-shirts or caps with “Brooklyn” on it. Brooklyn is mentioned in countless songs and is associated with character and coolness.
While people commonly refer to Brooklyn as if it’s one neighborhood, Brooklyn comprises many different neighborhoods, each with its own personality and character. I recently spent a week running several neighborhoods and visiting the many new launch condo properties being built in Brooklyn. This is an advantage of having a fitness lifestyle. I went on and on for hours each day. Running is the best ways to learn a neighborhood because it’s faster than walking and allows one to take in the environment and scene. Traveling by car doesn’t allow one of absorb a neighborhood.
Brooklyn Heights premium
Brooklyn Heights is known for townhouses, tree-lined streets, cafes and proximity to the water. It was the first suburb of Manhattan. Prices are at a premium and demand is high. The Brooklyn Heights Promenade, with its dramatic views of Manhattan’s skyline, is in Brooklyn Heights. One Clinton and Quay Tower are two new launch condo developments in Brooklyn Heights. Meanwhile, Pierhouse at Brooklyn Bridge Park was completed a few years ago and located right by the waterfront and next to the new and very cool 1 Brookyn Hotel.
There is definitely strong demand for a condo in Brooklyn Heights despite prices being close to Manhattan’s. The waterfront condos are selling at a premium and inventory is at a minimum. Although it’s still specific to the development. Some are dong better than others. Brooklyn Bridge Park and the ferry to Manhattan are amenities that make this neighborhood attractive.
Deal example: Represented client in buying this new launch condo in Midtown East at pre-construction stage. Rented at premium rents from the beginning.
Downtown Brooklyn and new condo developments
Downtown Brooklyn has so many things going on and residential condo developments everywhere. There is a new Trader Joe’s, Whole Foods, so many new restaurants. Dekalb Market, Borough Hall, Cadman Plaza Park and Metrotech are in Downtown Brooklyn. Proximity to the subway lines is a key benefit as all the subway lines meet here.
New launch property Brooklyn Point is a new Extell development with an amazing tax abatement program and perhaps the most comprehensive amenities of all of Extell’s projects. In response to the current market slowdown, the developer is paying 5 years’ common charges for their two-bedroom condos. 11Hoyt is another new development on an elevated level off the streets. At 11Hoyt, two-bedrooms at $1.5 million are about 50% less than similar quality condos in Manhattan.
Deal example: Client bought this new launch condo in Tribeca. Located opposite Goldman Sachs’ headquarters. Booked at pre-construction stage, prices went up significantly after completion.
DUMBO, tech hub with commensurate property prices
DUMBO is also one subway stop from Manhattan. DUMBO’s distinctive features are the lofts converted to residential condos, cobblestone streets and Empire Stores, an entertainment and shopping destination. DUMBO has become a hub for technology companies in recent years and prices increased commensurately.
1 John Street is a waterfront condo commanding premium prices and rents. Perhaps my favorite building in DUMBO. 1 Main Street is the famous Clock Tower, a prewar condo with low carrying costs and the most central DUMBO location.
There are several new residential developments such as 98 Front which has smaller sized units, and Front and York, which takes up an entire block.
Investing in Brooklyn
The above are just some of Brooklyn’s diverse neighborhoods and the ones I spent running recently. Investing in Brooklyn is definitely a viable strategy provided the condos are selected well to benefit from long term appreciation. The key drivers for investing in Brooklyn property remains the same as in Manhattan – proximity to transportation, demand vs supply and appreciation potential.
What We Do
We focus on global investors buying Manhattan condos for portfolio diversification and long term return-on-investment.
1) Identify the right buy based on objectives
2) Manage the buy process
3) Rent out the property
4) Manage tenants
5) Market the property at the eventual sale
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