Rental Boom in Brooklyn: Will It Turn Into A Glut?

The views of Manhattan, which was previously expansive from a building’s rooftop, are now blocked with rising towers. The Junior’s restaurant’s sign, which was once impossible to miss in the area, is now only visible in between new constructions.

Either completed or under construction, there were 19 residential towers in the 10 block area of Flatbush, which stretches from Barclays Center to Myrtle Avenue. Once all these towers are completed, these will add more than 6,500 apartments to the New York City’s overwhelming housing stock.

A research firm, Nancy Packes Data Services reported that there are numerous new apartments built in the neighborhood and roughly, one fifth of them are all rental units, which will become available in 2017. This might lead the Brooklyn rental market to take off right past boom – to glut.

Sofia Estevez, a developer and executive vice president of TF Cornerstone, said that the Brooklyn market has become saturated and may take two years or more to stabilize. Her company will start offering apartments in a 714-units and 25-stories rental building at the Bond Street next spring.

This overbuilding in Brooklyn has caused prices to soften, even in the highest end of the market. This construction boom as prompted many landlords to offer deals to fill their apartments, which dwarf down the surrounding row houses, tenements and brownstones. Some landlords offer two months free rent and free use of the building’s amenities such as the fitness center. The building consultants and developers are not predicting that rental fees will plunge. However, they do expect that rental fees will stagnate and may ease in a short period of time.

In a study conducted for Brooklyn rents, it has been reported that while median rents on an entry level apartment had increased by 50 percent since 2009 until today, the ones located at the area’s highest end had decreased by 4 percent.

Nevertheless, Mr. Schwartz, builder and owner of the Slate Tower located at 1 Flatbush Avenue, said that he is not worried about the number of residential towers going up. He further added that “Brooklyn is still the coolest place to live on earth.”