Buying a home is a challenge in any market, but purchasing a property while you’re living half a world away is a formidable task indeed. In November of 2014, I was referred to Laura and Greg, a Singapore-based couple interested in purchasing a residential property here in NYC. The property would initially be used as an investment to rent out, although Laura and Greg wanted to leave open the option of moving in, should they ever decide to relocate to NYC permanently. Laura, a NYC area native who works in technology, and Greg, a financial services professional originally from London, wanted to diversify their investments and settled on New York real estate. Having lived in Singapore for the past 10 years, they weren’t familiar with the whims and peculiarities of the NYC market. Neighborhoods had changed. Streets had transformed. Parts of the city had undergone a metamorphosis.
Laura and Greg’s goal was to purchase a 2-bedroom/2.5-bathroom unit in a full-service Manhattan doorman building. With a budget of $1.5 million, options were very limited.
The thirteen-hour time difference also limited how often they could speak on the phone. So before our first call I prepared a detailed report summarizing market trends, along with a survey of new development condos. Utilizing my own financial industry background, I conducted an in-depth analysis of the market to bring them up to speed as quickly as possible. Because their budget was limited, my report focused on changing neighborhoods, emphasizing the value play in Lower Manhattan and Brooklyn. Both areas are expected to experience an uptick in property values, and I see them as excellent investment opportunities. By way of comparison, I also provided a sampling of quality condo buildings in Tribeca, Chelsea and the West Village. All of these properties had recent sales in the $1,700 to $2,000 per square foot range. The report allowed them to quickly understand their budget would probably limit them to a one-bedroom.
However, I advised Greg and Laura not to rush into a quick purchase, but to consider what would make the best investment, given they expected to hold onto the property for a minimum of five to seven years. Since they realized they would most likely have to scale back their plans to buy in Manhattan, I encouraged them to consider Brooklyn, where purchasing a home in a new development would allow them to compete for renters in this highly competitive luxury market. I found a potential match in 345 Carroll Street, located between Hoyt and Bond Streets, on the border of the Carroll Gardens and Gowanus neighborhoods.
I sent Laura and Greg extensive information about the building and availabilities, along with photos of the development. Since they were thousands of miles away, I wanted to give them all the information I could. We also continued to explore other options, including 51 Jay Street in DUMBO, a boutique, Tribeca-style warehouse conversion priced at $1,300 to $1,400/square foot. But they felt DUMBO was relatively isolated, and the neighborhood’s gritty industrial aesthetic, while popular, just didn’t appeal to them, especially should they decide to move in themselves someday. They preferred the brownstone feel of Carroll Gardens and Cobble Hill.
While waiting for a digital presentation on specific available units at 345 Carroll, the couple grew anxious. They wanted to resume a search in Manhattan and pursue options on the Upper East Side, their initial preference. Based on their request, I prepared a detailed survey of 2-bedroom/2.5-bathroom condos at $1.5-1.7MM with an average price of approximately $1,300/square foot. The comprehensive report helped them see that while Manhattan was still an option, their money just wouldn’t go nearly as far here as in Brooklyn. A majority of the properties available were in buildings constructed in the 1980s and ’90s, between York and Second Avenues. Many of the units had dated kitchens and baths, making them difficult to compete with new luxury rental buildings.
Although the couple decided against 345 Carroll Street based on its location,I encouraged them to keep exploring Brooklyn and sent them a New York Times feature about a new development, The Boerum. A few days earlier, I had gone to the Boerum sales gallery to preview the development and was impressed. Set at State and Smith Street, where Boerum Hill meets Downtown Brooklyn, it’s just ten minutes from Manhattan and next to all major subway lines, with the borough’s best dining and shopping nearby. It’s a high-quality property with beautiful design by some of the city’s top architects—and it’s a good value, selling at just under $1,300/square foot. With the growing popularity of Brooklyn among young people working in the technology, advertising, media and information sectors, as well as owners of large area brownstones downsizing, the rental potential here was excellent. In stark contrast to what they saw on the Upper East Side, here they could get the new high-end luxury condo they wanted, with excellent rental possibilities, and all in an area where they can expect their investment’s value to rise significantly and quickly. It was the perfect fit.
Laura and Greg responded almost instantaneously. They loved The Boerum and were excited to learn more about the property and surrounding neighborhood. I suggested that they initiate a conference call with the sponsor’s sales team to ask questions and obtain meaningful perspectives on the development and buyer mix. Then, after several days of careful review, they hesitated again. They were concerned about the Brooklyn Detention Center, a large institutional building that takes up an entire city block nearby. I explained that so many of today’s in-vogue Downtown Manhattan neighborhoods – the Meatpacking District/West Village, Chelsea, Tribeca, and the Bowery/Lower East Side – were all gritty 20 years ago, and that an ongoing influx of new residents is currently transforming Downtown Brooklyn.
Tapping into my extensive professional network to obtain endorsements, I set out to convince the couple of what I already knew: The Boerum was a seriously smart investment play. I reached out to Laura Greenfield, Vice President at M&T Bank, which provided the acquisition and pre-development loan for the property. Laura was deeply pleased by the sales velocity and the market’s early enthusiasm for the property. Next I contacted Howard Klein, Senior Vice President of Finance at Forest City Ratner Companies, a major owner and developer of commercial/retail space in Downtown Brooklyn. Forest City’s offices are located near the Boerum, and Howard was bullish about the neighborhood. A strong believer in the area’s potential, he thought The Boerum was a great value at just under $1,300/square foot. I also reached out to Jamie Fedorko, a Warburg Realty colleague and long-time neighborhood resident, who does a significant amount of business in Brooklyn. Jamie wasn’t deterred by the Brooklyn Detention Center, which he explained isn’t a safety risk to the surrounding area, where the thriving cosmopolitan neighborhood only continues to grow.
Lastly, I sought out my cousin, Russell Albanese, Chairman of the Albanese Organization, a real estate development firm with a strong record of building luxury rental and condo properties in Manhattan. Russell strongly endorsed The Boerum’s quality and design. He had been looking at sites throughout Brooklyn and confirmed the property is uniquely priced, positioned and located.
I always want to make sure that my buyers, particularly if they’re located far away, have both personal recommendations and the data they need to make an effective evaluation. So I prepared a summary of a comparable set of condo properties similar to The Boerum. Looking at the comparisons confirmed my hypothesis that there were few other high-quality new condo developments in Downtown Brooklyn and surrounding areas. The Boerum, in fact, was a true rarity.
After careful consideration, Laura and Greg requested to have a conference call with the sales team. After an in-depth discussion they decided to move forward on the purchase. Their selected unit is a 1,283-square-foot, 2-bed/2-bath, priced at just $1.585 million—or $1,235/square foot. Although they had originally wanted 2.5 baths, this particular floor layout provided additional living area by giving up the half-bath, and they viewed this as a net positive.
Just three months after the couple first contacted me, they executed a purchase contract, having found exactly what they wanted: a great residential property investment in a premier new building. From half a world away, I had been able to effectively guide them towards a property that was a perfect fit for their needs. While I believed from the start that Downtown Brooklyn/Boerum Hill was a smart play for Greg and Laura, my process here exemplifies what I believe every client deserves: to be equipped with all the data, analysis and insight needed to make a fully-informed decision. I was immensely proud to help Greg and Laura do just that.