TerraCRG Brooklyn | solely South Brooklyn
While demand for South Brooklyn property is growing, it’s not a place investors should go if they want to double their money right away.
“If you want to get rich in real estate tomorrowI wouldn’t suggest you go shopping in South Brooklyn, ”said Jason Muss, director of Muss Development, on a panel On Wednesday. “But if you want to own solid real estate that is replenished by good tenants and something that is gradually gaining in value, I think this is the kind of South Brooklyn market.”
Muss was assisted by Eli Karp, founder of Hello Living, and Edward Setton, partner of Shamco Management, on TerraCRG’s first panel focusing on South Brooklyn at its annual event in Only Brooklyn.
Panellists said the market was much more stable than the hippest neighborhoods in Brooklyn – a part of the borough where developers are unlikely to see dramatic price fluctuations in either direction.
“It’s more of a mature neighborhood,” said Setton. “Not everyone wants to live where ‘everyone’ is, so to speak. Everyone has a reason to be where they are: they have a family, they have friends, they have community. It’s not just, “Oh, I have to live in X.”
The panel acknowledged that South Brooklyn doesn’t have nearly as many large projects coming to places like Downtown Brooklyn, which Must attributed to a lack of land.
Muss’ firm worked with AvalonBay Communities on 1 Brooklyn Bay, a 28-story mixed-use project on 2.5 acres in Sheepshead Bay. But the company couldn’t find land for another major development in the region.
This is in part because property owners in South Brooklyn are more sentimental about their holdings, according to Muss.
South Brooklyn landowners are “incredibly tenacious and hold on to their properties,” he said. “It’s actually harder to congregate in South Brooklyn than Manhattan because the Manhattan people are very transaction-oriented … The South Brooklyn people have been family owners for generations and emotional about the real estate.”
However, a lack of great development in South Brooklyn also means that there aren’t the same oversupply concerns. And unlike other parts of the borough, the rental market isn’t particularly reliant on concessions, according to Setton.
“Sometimes we pay the brokerage fee,” he said, “but that’s how far we go with concessions.”