By Daniel Tropp, Vice President, Ariel Property Advisors
Brooklyn Daily Eagle
Bushwick caught the eye of commercial real estate investors years ago, but more recently developers have started snapping up vacant lots and building rentals for young professionals drawn to the neighborhood for its great transportation, affordable rents, and flourishing restaurant and art scene.
Recent Market Activity
Between 2011 and 2013, the number and price of development sites sold in Bushwick more than doubled, according to research compiled by Ariel Property Advisors. City records show that there were nearly 390 vacant lots in Bushwick in 2012, or 3.7 percent of all the property in the area.
In 2011, eight vacant lots sold for an average of $35 per buildable square foot, but that number increased the next year when 20 development sites sold for an average of $62 per buildable square foot, and in 2013 when 18 lots sold for an average of $74 per buildable square foot. Prices continue to climb and so far this year the average price for a vacant lot in Bushwick has risen to $100 per buildable square foot.
With the exception of 1209 DeKalb Avenue, which had 115,170 buildable square feet, most of the lots sold in 2012 and 2013 were relatively small—50 to 75 feet wide and from 2,500 buildable square feet to an assemblage totaling 35,640 buildable square feet. As a result, smaller residential projects are being designed in keeping with the neighborhood’s low-rise character of one- to two-family residential homes, which have been built on 20 percent of the neighborhood’s land. Nearly 30 percent of the area’s land is taken up by multifamily buildings.
Solid Development Pipeline
The Rheingold Brewery development is the largest of the projects currently planned for Bushwick and will feature a complex of 10, eight-story buildings containing nearly 1,000 apartments, of which 30 percent will be affordable. Developer Read Property Group shepherded the 6.4-acre former Rheingold Brewery site, bordered by Flushing Avenue, Bushwick Avenue, Melrose Street, and Evergreen Avenue, through a highly publicized rezoning process last year and scored a victory in December when the City Council voted to rezone the site from manufacturing to residential. The Rheingold Brewery opened in 1883 and its buildings were demolished in 1981, after the factory was shuttered in 1976.
The Rheingold development is expected to put Bushwick on the radar of national retailers eager to open stores in the complex, as well as other residential developers monitoring its progress. While many large manufacturers continue to operate in the area, some of the current factory sites are destined to be purchased and rezoned for residential use in the years to come, especially if the Rheingold development is successful.
Several blocks away from the Rheingold site, Read Property Group also developed Colony 1209, a 126-unit rental at 1209 DeKalb Avenue featuring a doorman, art-filled lobby, courtyard, communal roof deck, and gym. The units are being offered at $1,800 a month for studios, $2,000 for one-bedrooms, and $2,900 for two-bedrooms. The developer picked up the property in 2012 for $6 million in a foreclosure proceeding and recently sold the building for $58 million.
In addition, Slate Property Group received approval to rezone 83 Bushwick Place from manufacturing to residential and is planning to build a 20-unit, market-rate residential development with luxury-level finishes including, perhaps one of the best indicators of the neighborhood’s changing demographics, a rooftop dog walk.
On the other end of the spectrum, a four-story, three-family new residential development recently came online at 1099 Willoughby Avenue. Monthly rent was listed at $4,800 for one of the four-bedroom, 2.5 bath apartments featuring stainless steel appliances, roof access, a private backyard, bike storage, and laundry in the building.
In 2013, Ariel Property Advisors sold four vacant lots in Bushwick with a total of 32,900 buildable square feet including 137 Eldert Street, on which a four-story, four-family residence is planned, and 1164 Greene Avenue, on which a developer is planning a four-story, 10-unit building.
Ariel Property Advisors is currently marketing six development sites totaling more than 60,000 buildable square feet in Bushwick, which together have an asking price of more than $8.5 million. Two of the properties are being offered as a package and are located at 406 Cornelia Street and 1536 Putnam Avenue, which are zoned residential and offer 24,200 combined buildable square feet.
Other sites being marketed by Ariel Property Advisors include 189 Cooper Street, which allows approximately 8,800 buildable square feet as-of-right for residential use; 475-477 Central Avenue, which measures 50x100 and will allow approximately 11,000 buildable square feet as-of-right for residential use; 1157-59 Myrtle Avenue, a 50-foot-wide irregular vacant lot with approximately 7,689 buildable square feet as-of-right for a mixed-use building; and 1160 Greene Avenue, a 20x100 irregular vacant lot that will allow approximately 7,056 buildable square feet as-of- right for residential use.
Strong Fundamentals Support Future Growth
Although rents in Bushwick are rising, they’re still a bargain when compared to neighboring Williamsburg. Average rents in Bushwick in February were $1,800 for studios, $2,087 for one-bedrooms, and $2,173 for two-bedrooms, compared to average rents in Williamsburg for the same month, which were $2,612 for studios, $3,224 for one-bedrooms, and $4,240 for two-bedrooms, according to the MNS Brooklyn Rental Report.
The cheaper rents are just a few stops beyond Williamsburg on the L line, plus Bushwick is served by the M, J, and Z lines, offering multiple routes to Manhattan.
Young professionals enjoy the growing scene of restaurants and cafés including Verde Coal Oven Pizza at 254 Irving Avenue; Tortilleria Mexicana Los Hermanos at 271 Starr Street; and Palates café at 251 Wilson Avenue. So many popular restaurants have opened that they’re showcased each year during Bushwick’s Restaurant Week. Artists have also been at home in the community for many years and annually host Bushwick Open Studios featuring more than 600 shows in artists’ studios, curated group shows, and performances.
Bushwick is reinventing itself, but it isn’t the first time. Bushwick left its agrarian past behind when heavy industry moved in during the 1840s to produce refined sugar, oil, chemicals, and glue. The inventor, manufacturer, philanthropist, and founder of Cooper Union, Peter Cooper, built his first factory in in the neighborhood. By the 1800s, more than 10 breweries were operating in a 14-block area known as Brewer’s Row and the men who ran them lived in the large mansions along Bushwick Avenue and the townhouses on the side streets. Bushwick hit a low point because of the 1977 blackout, but the neighborhood has undoubtedly been on the rise ever since and is poised for even greater growth in the future.
More information is available at 212-544-9500 or arielpa.com.
Ariel Property Advisors is a New York City investment property sales firm with an expertise in the multifamily market and development sites. The firm also produces a number of research reports including the Multifamily Month in Review: New York City; Multifamily Quarter in Review: New York City; Multifamily Year in Review: New York City; Brooklyn Mid-Year and Year-End Sales Reports; Northern Manhattan Mid-Year and Year-End Sales Reports; and the Bronx Mid-Year and Year-End Sales Reports. More information is available at arielpa.com.