Opinions on New Devs in Williamsburg

From what I have seen (and I have only seen a few buildings so this may not be the majority) but these new developments seem very cheaply put together. A friend who lives in one commented that the walls are all so thin she can hear every conversation her neighbors have and every step they take above her. I think there is a general concern that they will begin to fall apart and have problems pretty early on.

They are nice looking though.

Way to speculate cracker. I would go on a case by case basis. There has been no movement on UrbanGreen lately. The Toll Brothers developments really have quality finishes but you pay a price for it, but still easily get a 2br for 1M<. Go to some open houses and see for yourself. Many of the buildings will even take you inside to see some of the units before they are finished all the way, that way you get an idea of the job they are doing there.

Thanks guys. northsider, any idea why the slowdown on UrbanGreen? The remaining 2BRs look pretty good. I'm checking out those 4 buildings I mentioned this weekend (7berry, Ikon, Metropolitan, and UG), just wanted to prepare myself as much as possible before heading in.

I had checked out Sophia Lofts (on 9th/Roebling) and those were pretty nice, but only 1 2BR which went quickly. The broker told me new devs really only go at asking when I suggested offering 5k under, which seems ridiculous to me, but maybe that's really the case. Anyone have experience there?

There are other threads here on Metropolitan which you should check out, some helpful info about the developer there. There hasn't been any movement on the ground at UG and in this credit climate, I wouldn't put money into a development where there isn't at least some foundation work or exterior going up. As far as price cuts, it really depends on the developer. Take a good look at their inventory, selling patterns etc via streeteasy, that way you'll know before going in. If you go in without a broker to the sales office you can at least negotiate that much down on price (anywhere from 2%-3%) if not more in today's market. The new devs factor in the commission into their pro forma so if you show up without a broker, they'll easily knock it off and won't even blink since it was projected to come out of their pocket anyway.

bjw2103, selling prices have been reported down in WB 2007 over 2006, something in the Times recently mentioned 15% (don't know if it was avg or median, and it was actual sales, not necessarly listing prices). There was a quote recently from a broker at Apts and Lofts, which handles a lot of WB property, actually saying something along the lines of "right now, my sellers are open to hearing every offer." I think they've built way more than demand justifies over there, a lot more is going up, and I think you'll see prices going down this year and next. Even the Toll Bros premier property, Northside Piers, has cut prices a bunch since the sales office opened. When I visited there, the person handing me the price sheet immediately said "prices are negotiable."

There's a lot of snark and sarcasm to weed through at curbed.com, but there is a ton of WB coverage and a number of testimonials from disgruntled new dev buyers you might want to investigate.

At the very least, I'd make agressive offers at a few developments and see what the response is.

tenemental, very true on the curbed boards - they hate every single building in that area, which is a bit scary to read when you know little about them yourself. I guess my question is: is the hating justified? Which devs should I be wary of? What would you consider an agressive offer? 10% below asking?

bjw2103, my interest in WB was fleeting. I got a bit caught up in the sheer scope of development for a short time last year, but then admitted to myself that a) I don't want to leave Manhattan, even if it means a smaller apartment b) I don't want to be at the mercy of the overcrowded, unreliable L train. It's bad enough taking it in the East Village. At least when it konks out or shuts down for a weekend (like this last one) I can take a bus or a cab.

I looked at maybe a dozen buildings, but there are many more and I didn't pursue it, so I can't give you many development specifics. I'm sure some of them are great, but between the price chops, tremendous supply, news reports and palpable broker fear, it seems like there's lots of room for negotiation. Those reports of shoddy construction (of course each bulding is different) also give me pause.

I would go at least -10% and ask that they cover transfer taxes, etc., since there is such a huge outlay w/ new construction. There are so many buildings, why not make such an offer at a bunch of them? I bet you'll get some very reasonable counteroffers. I also think (of course, only my opinion) that prices will continue to fall this year and next, if you have the time to wait. And I'd avoid the East Williamsburg/Bushwick area. No offense to residents there, but let's just say that as the market turns down, areas like that are the first to fall.

Curbed does require some sifting to get the real news, but some of the coverage is valuable. The building with the celebrity impersonators on the catwalk at the opening party was priceless.

Thanks tenemental. I've struggled with the same issues (not wanting to leave Manhattan and fearing the L) but in my price range, it's really tough to find something decent below 23rd St and not FiDi. And I prefer WB to the UES and even UWS in some respects. I won't touch anything east of Driggs really, so I think I'll be relatively ok even if the market turns worse than I expect.
Agreed about curbed, I read it all the time despite the sifting.
Anyone know more about UrbanGreen? Or Sevenberry?

I would argue that if you find a financially solid developer, North Williamsburg is better bet than places like the East Village. The EV has prices that are nearly 30% higher and the transport is virtually the same. Waiting out the spring however would be a good idea. With a number of new devs coming online including Warehouse 11, another Berry Street Development next to Seven Berry and 166 north 4th, there's going to be a lot of supply end of summer.
BTW On the question of Roofspace I think these developers are way off base. Who is going to pay $300/SF for a option to keep a grill on the deck. Makes 35K/Parking space (about $250-300/month with its maint) sound very reasonable.

I disagree about the transport being nearly the same. The EV and WB may share the miserable L train (down again last weekend and a disaster this morning), but depending on where you are in the EV you're within walking distance of the F, V, 6, N, R and W trains and a bunch of busses, with plenty of cabs available on the avenues.

A couple of other thoughts. South WB must be suffering from the seasonal cancellation of the Water Taxi, and the fact that its operators are looking for a subsidy no one wants to give them.

Also, when The Edge is built, will the presence of so much new waterfront property further reduce the value of inland property, which is already heading to an oversupply?

The L is a major issue no matter where you are in the northside. EV really depends where you are. If you're on 8th and D, I'd say that's worse, but 3rd and A is more than fine. As crappy as the L is, getting more space and new construction might tip the scale for me.

Saw a few of the new devs yesterday, some good, some not so good (and dear Lord, one of the sales agents was the fakest person I've ever met, which is saying a lot when I've been dealing with these types for almost a year now), and am seriously considering a bid. Will let you guys know if they're willing to negotiate on price, if anyone's curious.

Would anyone prefer having nothing to choose from, being forced to pay what those very few properties command? Absolutely not. I can't begin to tell you all how many people go to the open houses every weekend. Close to 10 an hour. Granted, some project are poorly built, but anyone who is shopping for a new home, regardless of location (Manhattan included) would be wise to do their due diligence prior to signing a contract. Buyer's also must relaize that developers margins are getting smaller and smaller and although they are providing a home to people (a very emotional thing), they are also running a business. Offering 10% below may not be a terrible idea, however serious buyers must be willing to conduct productive negotiations and not use inferior properties to leverage a negotiation at a superior project. Developers will at their breaking point decide to rent out these units if they do not sell; I can assure you they will not just give them away. Yes, things are taking time to sell, but I think we all just got used to new developments selling out the first day they were listed (see two0three years ago). The average days on the market for a Manhattan apartment is 123, and guess what new data shows in Brooklyn: 123 days. Developers are patient and buyers are patient, this is healthy and is needed. Regardless, spending $700-$800/sf and getting a brand new home 10 minutes from the city (by cab) is a fabulous option for those who want to be home owners but cannot due to the absurdity of some Manhattan prices.

jmb, some reasonable points in there, but i'm guessing you're a broker. Both of the agents i've talked to are willing to negotiate...

bjw...I am a broker and in this type of forum it is great to get perspectives from both sides, buyers and sellers (or their brokers). I never said not willing to negotiate, I would encourage offers to be made when I have interested customers. My point was more for those who make offers, regardless of how low they are to be prepared to come up in your offer rather than a best and final type of deal. A lot of people are kind of fishing these days, throwing out something unreasonable or almost insulting and then never responding when a counter offer is made. Not a generalization, just some of my experiences lately.

JMB, thanks for admitting to being a broker (not all do)

Obviously the best place for a buyer to be is fit into that breaking point before the rental equation begins to make sense. (and be one of the last closing so you get your financing)

In your experience what is the breaking point for a Developer to throw in the towel and rent the property. I see the PSF trending toward $650 in the lesser developments rather than 7-800 on the water. With the contruction cost at $300+/sqft and land costs very variable but let's say $200/Buildable squarefoot. The finances of each development are unique but I would guess that some of these north Williamsburg properties would go rental if the number went to $550-600/sqft?

You are way off Anon 101. Again, much of this depends on when the land was acquired by the owner. Prime North side is averaging roughly 800 per foot at the moment. Development is no longer as lucrative as it once was. Four years ago you could begin making profit after selling roughly 50% of the building at the current market value. Now we would need to hit over 75 - 80% to do well on a project. Between land acquistion, construction, marketing, advertising, hiring a brokerage and many other variables I would go rental before taking less than 725 a foot. To be perfectly honest I don't even think I would do a deal at that price point either. It is becoming increasingly easy to get high rents in prime Williamsburg and I would much rather hold the apartments, collect rent and put them on the market at a later date. Also, just as an fyi, the waterfront developments are averaging 900 to 1000 per ft on anythign with the view. In fact Northside is charging that for apartments that are going to lose their view...

jmb, appreciate the honesty and non-buyer perspective completely. My reporting on the negotiating was in no way a denial of your comment, just updating on what I'd mentioned earlier. As for when to throw in the towel and go rental, I don't know much at all, but I'd guess it's well above $650, though nycdev, I would guess your numbers are maybe a bit optimistic given your screen name, no?

What are you guys' thoughts on asking that the developer pay the closing costs? Do they prefer this over a lowball, as the sale price is still where they want it, or does it not make much of a difference?

I can tell you from my perspective that I would not pay a buyer's closing costs. I have paid transfer a couple of times, but never will I pay all closing costs. Whether or not the owner would prefer to pay transfer taxes or take money off the asking price, I would imagine varies based on who the owner is. In regards to putting in a low ball offer, I would not respond to it. I think it is offensive and to be perfectly honest I would rather not deal with a person who puts in an insulting offer.

As far as being optimistic with those numbers, they are factual numbers that I am dealing with right now. So I believe they are pretty on point. Hsving said that, I am in the beginning stages of this project and by the time we are actually ready to sell, which is a while, I imagine the market rate will be higher than it is now. Perhaps not drastically higher, but 3 - 5% higher.

Take it easy nycdev. Isn't it a bit of bad business not to even respond to an interested party? Unless the starting bid is egregiously low (25% below asking), there's no reason to be "insulted." That's just being overly sensitive, imho, and not very useful to anyone in the long run. I understand your position given your profession, but I think you have to appreciate a buyer's position as well: to try and get the best deal he/she can as well, especially in a market that seems to slightly favor that side for a change. It's a cycle after all!

As far as building costs if we take Karl Fishers statements on Sqft and Building costs we can begin to build up costs. For 229 North 8th, The site states 60,000 squarefeet for construction cost of 15mm. That works out to $250/Gross SF. Would an arbitrary 25% loss for common space be reasonable for a $333 per residential SF. If you add Architect Fees 10%? architect fees, Permits, and Marketing would we hit $400 before land?

With rents are you assuming a $50/Sf annual rental number for the northside? That would translate into a 1000 SF 2 BR going for $4,200/month

NY DEV, what importance do you give to parking and roof in the negotiations. Would a purchase of both give the seller more reason to take a few dollars off of the total package? I've also heard that going direct (no buyer broker) can help

All...Having negotiated many deals with developers that I represent, there are many alternatives to the price that can have an outcome on a sale. Like Anon said, there can be parking spaces, storage spaces, roof spaces, transfer taxes, and seller's concessions (though that is not really a benefit to a lower price for a buyer) that get negotiated if the buyer is willing to pay the listing price. Also, my thoughts are that a lot of apartments, new devlopment or re-sales list the unit to allow for some flexibility in price. Maybe $20,000 is marked up to allow the buyer to get a break while the seller can still collect enough to make a small profit.

I think you will see developers starting to rent out more units as their banks put pressure on them to meet their loan requirements. Construction loans are high interest and developers must pay them by certian timeframes or they accrue high penalties interest. When the bank comes a knocking and these people do not have the money to pay back they will ultimately rent, and they will egt high rents. Also, if buyer's continue to play hard ball there will be a stalemate as the developers will not budge and then rentals become more attractive. I couldn't exactly put a number on it, but figure this. You have aqcuisition costs of about $200/buildable sf, hard costs of about $250-$300/sf and soft cost of about $20 of the hard costs. Now do the math and in an area like Greenpoint or McCarren Park or East Williamsburg if these guys cannot get around $650-$700 a foot they are in the negative.

My thoughts are still that you shop for a place you love and don't consider the PPSf so much. I just saw a place in Park Slope for myself and it was around $900/sf. That is way above what the market demands for similar properties, but I loved the place and don't really care. I think it is a good buy at the price listed. Make your decisions on other factors rather than the PPSF and you will be much happier in what you purchase. If you just look at the numbers you will never be happy, especially when you hear of other people getting slightly better deals.

jmb, I think that's solid advice/analysis. Do you think an offer that's 5% below asking (including a parking space) would fly?

bjw...I think an offer of 5% below asking price is reasonable and a good place to start. However, if you are also asking for a parking space to be included (how much is the the space-$35K?) then that may be too much. What is the asking price of the unit you are interested in? I would say that if you make an offer of b/w 5-7% (all inclusive-parking, transfer taxes, price, etc.) and are willing to come up a bit that you should be able to get a deal done around 3% off total asking price. Again, it would really depend on the seller, how long the unit has been listed, and how desirable the apartment is. If you are willing to settle at 3% off the asking price, then make the offer at 5-7& below and come up and do a deal. Remember, pick your apartment because you love it and not so much because of the PPSF or the "deal" you are getting.

JMB

jmb, I'm looking at 3 different buildings, with several 2BRs in each that are interesting. Pricing is in the 750-900 range. I didn't mean throw in the parking space for free, but 5% off the combined price. Thanks for the advice, and you're right, ppsf isn't going to make or break it, but you have to love the apartment too. If not, walking before acting impulsively is also "smart."

bjw...agree with your assesment of walking away rather making an impulse decision, but if you are on here discussing the matter and have seen the 3 competing properties on numerous occassions, your decision, whenever it may be will not be impulsive, rather it will be thought out. If you have been pre-qualified and know what you can afford, then making an offer of 5% below asking price is a good decision and a reasonable amount to begin negotiations. I would expect a smart seller to settle at about 3% off. That is my advice. Best of luck.

Anyone see the new releases at 125 north 10th this weekend?

Yeah, they were pretty impressive. Some nice finishes, lots of good layouts (I'm looking at 2BRs exclusively) and the prices are comparable to similar buildings in the area. I don't really love having a 24 hr doorman, and the parking spaces are way overpriced, but otherwise definitely worth checking out.

Regarding the doorman, I was able to look at an offering plan they had on site and the cost of a full service 4-shift doorman is budgeted at $170,000 annually. That pretty much floored me. I would have guessed 75K.

$75,000 to employ a post 24 hours a day, 7 days a week? So you were guessing the doorman made about $8.50/hour? And it floored you to learn they make about $16/hour?

jsey9, for one doorman, you need to have 4 people. thats 42k for each doorman, which includes health insurance - why does that floor you?

Sorry - I guess its about $20/hour?

dmag you're right on, the extra 4 bucks an hour goes to benefits such as health insurance, pension, replacements for sick days etc.

New condo, 2BR/2BA + indoor parking spot in northside Williamsburg @ $785/sqft. Good deal or no?

bjw2103: Not sure if you narrowed your search. Have you considered 80 Metropolitan? I bought/signed a contract for a unit there and posted my reasons for selecting the building under the "80 Metropolitan" discussion. I live in Manhattan at the moment (at least until I close next year). Every year I waited I was priced out of a different neighborhood - WV, EV, HK, Chelsea, etc.. Thought I would take the plunge and get into the Williamsburg market while it is "affordable." A lot going up at the moment which may impact prices, but if you can stay put for the next 5 years, you will be glad you got in now. I have the offering plan for 80 Metropolitan so if there is anything you want me to look up, shout out. Check out Northpoint Towers at the top of McCarren Park if proximity to the subway isn't a priority. Those units are high quality - great feel. About your inquiry - $785/sq.ft. seems like a good deal especially for a unit with a parking spot. But it's all relative. The $/sq.ft. reflects location and quality of building. If you get that price per square foot in one of the higher end buildings, that is a bargain. Good luck.

BillyRes, went to the sales office at 80 Met two weeks ago. The broker was awful and unfortunately turned me off. I like the building but felt the common charges are high, don't need a pool or "zen garden" and prefer the location of a few other buildings. Can I email you with more detail offline? Curious to hear your thoughts about other places you may have looked at and WB in general...

bjw2103: Sure. Email address is in the 80 Metropolitan discussion. Sorry to hear you didn't have the best experience - sometimes brokers can be a bit abrasive.