NEW YORK CITY—CPEX Real Estate has arranged the sale of a development site at 88 Schermerhorn St. at a record price for Downtown Brooklyn. Located on the border of Brooklyn Heights and Downtown Brooklyn, the site has a footprint of approximately 3,333 square feet but features the prospect of featuring up to approximately 33,330 buildable square feet “as of right” for residential use. The sale price was $11 million, or $330 per buildable square foot.
“We have not seen a $300 a foot trade for a high rise site in Downtown Brooklyn,” declares CPEX managing director Sean Kelly to GlobeSt.com. “This is $40 to $50 above the next highest priced transaction. This transaction traded at this level because the property is basically in Brooklyn Heights, where the condo pipeline is virtually non-existent.”
By comparison, CPEX notes, last year 155 and 157 Remsen St. were each sold, in two separate transactions, for about $6.2 million for 23,000 buildable square feet, or $286 per square foot.
The price of 88 Schermerhorn may be a harbinger of the future, Kelly continues. “You're going to start to see transactions in the $300's but I think you'll see it in areas driven by retail.
The property, between Court street and Boerum place, has a four-story, 10,570 square foot building that was delivered vacant. The site has a maximum floor area ratio of 10.0, which will allow for the additional building.
The buyers plan to build a luxury 20-story condominium building, says Kelly. “This sale signifies the demand for new condominium product in Brooklyn Heights. There is a lack of condo inventory in Brooklyn Heights and the surrounding neighborhoods, and there are less than 200 units in the pipeline.”
CPEX's development and conversion investment sales team, led by Kelly, represented the seller, 88 Schermerhorn, LLC, who purchased the property in October of 2013 for approximately $3.8 million. The brokerage firm also procured the buyers, Heights Realty Advisors and Rockwood Capital. Kelly attributes the surge in the site's price simply to market conditions. “Land values are up probably 50%.”
Kelly looks toward the future of the site and his positive view of the buyers. “This site offered a rare opportunity to purchase a development site in Brooklyn Heights as most of the neighborhood is landmarked. We had several offers from very capable buyers, but Heights Realty Advisors and Rockwood Capital stood out because of their presence in this market and their ability to move quickly.”
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
