Brooklyn is in its townhouse era.
The property type has long drawn wealthy buyers to the borough, particularly in neighborhoods such as Brooklyn Heights, Cobble Hill and Park Slope, but lately, homes in some of the lesser-known enclaves have snagged record-breaking deals.
Earlier this week, an unfinished five-story home in Fort Greene set a record for the neighborhood when it was sold for $8.8 million. The seller, a local developer, bought the property at 39 South Portland Avenue last year for $4.7 million with plans to convert it into a four-unit condo.
At the beginning of the month, a new construction townhouse in Greenpoint, configured as a home with two condo units, landed the borough’s priciest inked deal after asking $7.2 million. If the home at 111 Noble Street closes for that price, it would set a new record in Greenpoint.
At The Real Deal, we track sales over $5 million across New York City, and my colleague recently noted that a large number of those flagged to us in the city register have been Brooklyn townhouses. A closer look at the data showed that since 2022, townhouses have accounted for a growing share of deals in the borough’s luxury sector, solidly over the $5 million mark.
Between January and July, townhouses accounted for nearly 78 percent of deals above $5 million in the borough, compared to 76 percent in the same period last year and 69 percent in the same period in 2022.
Demand for homes in the borough has grown significantly since the pandemic, when buyers flocked to Brooklyn in search of more square footage and outdoor space. The surge in demand drove inventory down and sent prices climbing, inspiring some sellers to part with their long-held properties for a premium.
The phenomenon isn’t contained to legacy properties, like a cluster of homes on Montgomery Place and Carroll Street in Park Slope that hit the market for a combined $100 million last summer. New development inventory in the borough has expanded to include townhouses, such as the Fort Greene and Greenpoint homes on track to set records for their neighborhoods.
Not so fast…
A long-dreaded day is here for residents of the Carnegie House co-op.
Owners at the 57th Street building could be on the hook for a 450 percent increase in rent on their ground lease, which is slated to rise from roughly $4 million to $24 million annually, the Wall Street Journal first reported. The hike means monthly costs for residents would grow from roughly $5,000 to $13,000.
The skyrocketing cost comes after legal battles between the co-op owners and the ground lease owner, an LLC linked to Rubin Schron and David Werner. The developers paid $261 million to buy the land underneath the 324-apartment building in 2014. At the time of the purchase, the ground lease had more than 50 years left in its term with a rent reset scheduled for 2024.
The co-op board and an entity controlling the building’s retail space sued Schron and Werner last year in an attempt to pause negotiations over the rent while the landowners sorted out what would happen if the co-op were to dissolve in the face of unaffordable rent costs. Under state law, the building would convert to a rent-stabilized building.
But earlier this year, a state court judge tossed the lawsuit, arguing the board’s opposition was “premature” since the arbitration process was still ongoing. The arbitration panel ruled in favor of the landowners last week, allowing them to raise the rent significantly.
The court must confirm the ruling before it takes effect.
NYC Deal of the Week
The priciest deal to hit the city register this week was a condo at Extell Development’s 50 West 66th Street, which closed for $25 million, or $3,500 per square foot, according to public records. The six-bedroom apartment sold to an anonymous trust, the 1301 AOA trust, with attorney William Brick as the trustee.
Douglas Elliman’s Janice Chang and Ann Cutbill Lenane had the listing, which last asked $24.6 million. Unit 17D spans 7,100 square feet and has six bathrooms. Amenities at the Lincoln Square building include a pool, fitness center, garage parking and doormen.
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