Crain's New York Business
May 4, 2012
A new 85-unit luxury rental development will rise in Brooklyn’s Boerum Hill, just a block from Park Slope.
Developer The Naftali Group, along with its partner AEW Capital Management, recently closed on the purchase of a 90,000-square-foot site at 316 Bergen St., at the corner of Third Avenue. The price was roughly $6.7 million, according to a source. The owners expect to close on their construction financing in a few months and begin building shortly thereafter. Residential brokerage aptsandlofts.com, the project’s exclusive leasing and marketing agent, is expected to begin promoting the building in the summer of 2013. Near the site, Naftali Group is building a 104-unit luxury residential property at 267 Sixth St., at the corner of Fourth Avenue. That project is also expected to come online next year.
“While we were already in the process of developing a 104-unit luxury rental down the road, upon being presented with this unique opportunity, we took it,” said Miki Naftali, CEO of The Naftali Group, in a statement. “Having AEW partner with us in the venture further supports our belief in the strength of the Park Slope market.”
The new development is near the long-awaited Whole Foods market that was recently approved for construction at Third Street and Third Avenue, next to the Gowanus Canal. It will include a health club, a resident lounge, a courtyard and roof deck with views of both Brooklyn and Manhattan.
The Park Slope area has attracted a number of institutional investors in recent months. In December, Invesco paid a reported $57.5 million for a 95-unit residential building called Arias Park Slope., which was conceived as a condo but was later converted into a rental. Currently apartments in the area are fetching per-square-foot rents close to $54—almost $10 more than the prices they commanded a year ago.
Experts believe that rents will continue to increase in Park Slope and Boerum Hill, in part because of the relative paucity of new development entering the market, especially compared to other parts of Brooklyn. Less than 500 rental units are expected to enter the market versus more than 1,500 units anticipated in Williamsburg, observers note.
“We are delighted to invest in this high-quality, well-located site to develop a luxury rental property in Brooklyn,” said Anthony Crooks, director at AEW, in a statement. “We believe the property will attract young professionals and families looking for affordable, quality housing, good amenities and access to public transportation.”
The Naftali Group currently owns 100 apartments and 20,000 square feet of retail space in Brooklyn. In a major step up, the firm is in the process of constructing roughly 400,000 square feet of residential developments in Brooklyn and Manhattan. Partner AEW is global real estate investment advisor that manages over $47 billion of real estate assets and securities.