Investment Sales: Brooklyn will become the choice for New Yorkers who plan to stay

Market dynamics have been impacted enormously because of the COVID-19 pandemic and the displacement of tenants from main cities. Many longtime residents have opted to maneuver to the suburbs on account of workplace closure and want for extra space. A survey of homebuyers on Streeteasy highlights that many New Yorkers’ residence preferences modified due to the pandemic. Respondents cited further house (47%), out of doors house (38%), in-unit laundry (36%) and proximity to parks and public inexperienced areas (31%) as greater priorities than they have been earlier than.

Brooklyn offers all of those options at lower cost factors than Manhattan. Manhattan noticed rental costs lower about 17% yr over yr for This fall 2020 whereas Brooklyn noticed a lower of about 5% yr over yr for a similar quarter. In the course of the pandemic, buyers have been looking for multifamily buildings in brownstone Brooklyn neighborhoods (Park Slope, Clinton Hill, Cobble Hill, Boerum Hill). Particularly, buyers are interested in buildings with protected tax courses and buildings not topic to lease stabilization legal guidelines (underneath six items in NYC). Many longtime house owners of those Brooklyn buildings have opted to promote and 1031 alternate into passive funding automobiles, reminiscent of Delaware Statutory Trusts that spend money on multifamily and self-storage nationwide or triple web leased investments with credit score and COVID-proof tenants on long-term leases.

In the course of the pandemic, I offered 4 buildings that met these classifications in brownstone Brooklyn. The buyers for these offers plan to take a position vital capital into the buildings to reposition the property. The pricing for these buildings in Boerum Hill got here in round $650 per s/f. Buyers for these property have a long-term view of New York Metropolis and concentrate on property they’ll reposition. With the shifting dynamics of New York Metropolis, I imagine one of the best borough to purchase in now could be Brooklyn. Manhattan noticed the biggest lower in common value per s/f, dropping round 23%. Brooklyn has been probably the most resilient and pricing has remained comparatively regular.

Justin Conway is an funding gross sales advisor at Besen Companions, New York, N.Y.

— to nyrej.com

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