May 29, 2012

A Rental Market Surge in Brooklyn

Mentions News

The New York Times

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, American Realty Advisors, 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, according to the data company, Real Capital Analytics.

“It was an eye-popping number,” said Douglas Steiner, a developer and investor and the chairman of Steiner Studios. Mr. Steiner most recently acquired a 60-unit rental in Carroll Gardens for $24.5 million, or $408,000 a unit, and is in contract to buy another rental building in the borough.

Several factors are behind the trend, including a strong rental market and low interest rates. Rents in the borough increased by 10 percent in 2010 and were estimated to increase by 7 percent last year, according to a market report by TerraCRG, a brokerage firm based in the borough, citing research by Marcus & Millichap Real Estate Investment Services. Ofer Cohen, the founder and president of TerraCRG, estimates Brooklyn rents will climb another 5 percent to 10 percent over the next 12 to 18 months.

Read more here.