Tuesday, May 1, 2007

Hot or Not? Reading the tea leaves on the PLG real estate scene

There's been, to put it mildly, a lot of movement in the PLG (and environs) real estate market...and I'm not talking about those mint $1.2 million Brown Harris limestones on Midwood, either. In the past couple of weeks, two major developments -- which combined could add thousands of new local residents -- have come on the market: 123 Parkside (which is located just west of Ocean Ave) and a package of three sites down by the Club Medical, which is a bit east of PLG proper. (That link, to a Brooklyn Eagle article, is, annoyingly, pay only. For the life of me I can't understand why small papers alienate potential customers like this...but I digress.)

The three sites by Kings County Hospital, et al, make up two buildings, three vacant lots, and have 55,950 buildable square feet; they're on sale for a combined $11.8 million. At first blush, that seemed like a steal; then I realized that my predecessor got $1.2 million for his house -- located on a lot with, if I recall correctly, somewhere around 15,000 of FAR. All of which is to say I have no idea how to assess the relative costs of empty lots, especially in an area with as many variables as ours.

The Parkside property seems like much more of a sure thing -- and, I'd imagine, is going to cost a pretty penny more as well. That site has a whopping 220,000 square feet of buildable, residential FAR, and off the top of my head I can't think of any other significant and empty property adjacent to the Park. The Prospect Park improvements are only going to make this area more attractive, and the presence -- and hopefully proliferation -- of excellent restaurants like The Farm on Adderley in Ditmas (and excellent coffee shops like K-Dog in PLG) should help bring in Manhattanites who don't want to spend a million plus for a one-bedroom in Chelsea. It's hard to imagine a developer buying that site and not trying to maximize his investment by putting in high end condos, and with penthouses a couple of miles up the road going for upwards of $6 million, well, who's to say what a top-notch place could go for down there.

All of which raises a chicken/egg question: one of the main knocks -- as far as I'm concerned, the only knock -- on PLG is the lack of services. It is an issue, to be sure. But there seems to be a fair amount of vacant storefront property along Lincoln and Flatbush; will more forward-thinking/enterprising merchants take the opportunity to establish a presence when retail rents are (I'd guess) lower then they are elsewhere in Brooklyn? Or will it take an influx of new residents to get restaurants, etc., to follow?


diak said...

First, welcome Son. Thanks for keep the site up.

A fairly high-end project on Parkside would almost certainly push PLG development. Hard to imagine park-view condo buyers shopping at Pioneer and snacking at McD's. But another cinder block box will probably leave us with the same old mix of fast food and hair salons. (Has anyone else wandered down toward Wingate and seen how many of these plain brick boxes have sprouted up just to our south?)
Also, don't forget there's another "knock" on PLG -- lack of good schools. When I was looking to buy in (1999) that was the reason I heard most often from sellers.

Gary of PLG said...

On Prospect Park is a clear sign that high-end developers recognize the value of a park location. The Caledonian is a rare and very valuable opportunity - a full block is a major prize, and it will be bought dearly and developed luxuriously. I expect that the big dogs from Dumbo and downtown Brooklyn will jump on this hungrily.

The developer who bought the previous Planet blogger's home is probably small fry, but he was willing to pay a lot for this property and therefore will be building expensive apartments. The die is cast, change will come both slowly and in big jumps.