Letter of Intent – Changing the Skyline

Residential developers are scrambling for a piece of the action, looking to stake their claim to what is seemingly a “crazy” market, since when questioned, that seems to be the first reaction to any question regarding the state of the market. Development sites in the most desirable neighborhood have reached the $1,200 per buildable s/f mark, pushing pricing upward for the end user. With quality inventory at an all-time low in nearly in all neighborhoods in N.Y.C., developers are racing to offer a luxury product at record-breaking prices. In speaking to a developer who just picked up a site in what could be considered an “off” West Village location, he expects new product to fetch between $3,000 and $4,000 per s/f…crazy. The outer boroughs have also seen a sharp rise in both affordable and market rate housing, most especially in Long Island City and Hunter’s Point neighborhoods. Hunter’s Point South is a proposed mixed-use, middle-income housing development situated on 30 acres of prime waterfront property in Long Island City. The city is accepting proposals from numerous developers who intend to build up to 5,000 housing units, 60% of which will be affordable to middle income families. I’m fairly certain that by now, I don’t need to talk about the hotbed for all new development, the new “must-get-a-piece-of-the-action” location…Brooklyn. Some 14,000 units are in some stage of planning at the moment in Brooklyn, 6,100 of which are planned for the Greenpoint Waterfront District. More than 3,500 market rate apartments, which include a 20% component for affordable units, are under development in Downtown Brooklyn, Gowanus, Williamsburg, and Fort Greene by major developers. Developers are following the Williamsburg model: build as big and beautiful as possible on any waterfront piece of land they can get their hands on. The model seems fair, where is the next place people will go when Manhattan product is full or too expensive? Both sides of the rivers seem like the next best option. This trend has actually coerced not only residential construction, but that of office and creative workspaces as well, as the new breed of business wants to live, work, and play in the same place. Food for thought: Office rents in certain Brooklyn neighborhoods have broken well through the $50 per s/f threshold, more than Manhattan’s West Side commands.