New York developers are capitalizing on record high rent prices in and around the Big Apple. While demand for many commercial real estate assets remain low - residential projects offer developers a near-guarantee of profit. Moreover, with interest rates on construction loans reaching above 10%, many developers are selling off or pausing their larger, more ambitious projects.
Over the last year, Brooklyn and NY have seen the largest increase in newly-constructed residential units of any city in the US. The question we might ask now is: when will this opportunity be fully tapped?
NY-based Domain Companies recently closed on a $170M construction loan for their 420 Carroll Street project. The waterfront development will be comprised of two buildings standing at 15 and 20 stories respectively. Together, they’ll offer a combined 360 residential units and ~27,000 sf of retail space.
Work has begun on MacQuesten’s affordable housing project in Bed-Stuy. The 108 unit project is one of many made possible by NYC’s Department of Housing Preservation and Development’s Extremely Low and Low-Income Affordability Program. The 10-story residence is due to open in 2024.