MNS Real Impact Real Estate

Introduction

MNS is proud to present the Second Quarter 2017 edition of our New Development Market Report.

New Development Sales data, defined as such “Arms-Length” first offering transactions where the seller is considered a “Sponsor”, was compiled from the Automated City Register Information System (ACRIS) for sponsor sales that traded during the Second Quarter of 2017 (4/01/17 – 6/30/17). All data summarized is on a median basis.

Market Snapshot

Year-Over-Year Median PPSF - up 15.6%
Quarter-Over-Quarter Median PPSF - down 2.4%

Year-Over-Year Median Sales Price - up 0.4%
Quarter-Over-Quarter Median Sales Price - up 27.9%

Brooklyn New Development Sales - down 39.5% from 1Q17
Neighborhood with the Most New Dev Sales - Prospect Heights (20.4% of all Brooklyn)

Total New Development Sales Volume - 44.2% to $285.5 Million from $511.6 Million in 1Q17

Highest New Development Sale:
130 Furman Street S404 , Brooklyn Heights – $7,789,613

Highest New Development Sale PPSF:
1 John Street PHA, Dumbo – $2,421/SF

Market summary:

The Brooklyn sponsor sale market decreased this quarter, from $511,568,409 to $285,517,050. This is a decrease of 44.2%. However, between the fourth quarter of 2016 (4Q16) and the first quarter of 2017 (1Q17), the sponsor sale market increased from $294,296,115 to $511,568,409, so the drop this quarter can be interpreted as the market correcting itself after a busy first quarter. There were 179 sales during 4Q16, 299 sales during 1Q17, and 181 sales during 2Q17, which further supports a market correction. Quantity decreased by nearly 40% between the first and second quarters of 2017, but increased by only 1.1% between 4Q16 and 2Q17. Over the last quarter, median price per square foot has decreased by 2.4%, and median sales price has decreased by 36.5%. Over the last year, median price per square foot has increased by 15.6% and median sales price has increased by 0.4%.

The highest sale this quarter occurred at 130 Furman Street in Brooklyn Heights, where unit S404 sold for $7,789,613, or $2,033 per square foot. The name of this 2015 development is Pierhouse at Brooklyn Bridge Park, and it contains 106 units with views of the river and many other luxury amenities such as an electric car charging station. The highest priced sale as measured by price per square foot occurred at 1 John Street in DUMBO, where Penthouse A sold for $7,249,026, or $2,421 per square foot. 1 John Street was built in 2016 and contains 42 units over 12 stories. Selling points for the building are its close proximity to Manhattan and the fact that all units have river views.

This quarter, units in Prospect Heights composed the largest proportion of the borough’s total units, at 20.4% of total inventory. There were 181 units that closed in the entire borough and 37 of them were in Prospect Heights. This is due to units at 550 Vanderbilt Avenue. In fact, every single closed unit from Prospect Heights was from this 2017 development, which contains 278 units over 17 stories.

Market up-swings:

The largest upswing this quarter occurred in Bushwick, where the median price per square foot increased by 20.1%, from $648 to $779. Additionally, the median sales price in this neighborhood decreased by 15%, from $600,000 to $510,000. This is due to low quantity. This quarter, there was only one unit closing from the 7 unit boutique condo at 1008 Decatur St so the price per square foot and sale price of that unit are the neighborhood’s median prices.

Market down-swings:

The largest downswing this quarter occurred in Carroll Gardens, where the median price per square foot decreased by 20.3%, from $1,219 to $972. Additionally, the median sales price in this neighborhood increased by 68.8%, from $1,221,900 to $2,061,957. These changes are due to low quantity levels, as there were only two units that closed this quarter.

Market Trends:

There were 14 studios sold, which is more than last quarter’s total of 13 studios despite lower overall inventory levels. Studios were 8% of the total inventory sold this quarter. One and two bedroom sales were 37% and 31% of inventory sold, at 67 and 57 units, respectively. Lastly, three plus bedroom sales were 24% of total sales (43 units).

*Neighborhoods where the majority of each unit type was sold in 2Q17:

Studios - Prospect Heights (50%)
One-Bedrooms - Prospect Heights (40%)
Two-Bedrooms - Bed-Stuy & Clinton Hill (16%)
Three Bedroom+ - Boerum Hill-Cobble Hill (42%)