The luxury buildings in DUMBO keep going up, but for the first time, it
looks like the prices are coming down, at least a little bit.
At 85 Adams St., developer Leviev Boymelgreen has cut prices over the
last two weeks, and has even classified some units as “negotiable”
— which, roughly translated, means it’s time to start moving
the goods.
In addition to reducing prices at 85 Adams — the 79-unit Beacon Tower
— Boymelgreen, who has five residential projects in DUMBO, dropped
prices on some units at The Nexus, a 12-story luxury building on Front
Street, further from the F station that is DUMBO’s main connection
to the world beyond.
Boymelgreen says he remains “bullish” on DUMBO. The price drops
— from $990,000 this fall for a 1,165-square-foot condo at the Beacon
to a current price of $950,000 — reflect nothing more than the push-and-pull
of negotiation in a hot market, the developer’s spokeswoman, Sara
Mirski, said. “There is a balance we seek to achieve [and] a price
reduction is frequently a reflection of [that].”
The slip in prices shows there may be growing pains ahead for a neighborhood
whose namesake bridge overpasses — DUMBO stands for Down Under the
Manhattan Bridge Overpass — had once confined luxury-seekers to their
long-established haunts in Brownstone Brooklyn.
Prices in DUMBO jumped 15 percent last year, from $620 per square foot
in 2004 to $717 — the highest in Brooklyn.
The average apartment now goes for $1.25 million, up from $987,000 last
year — also the highest in the borough.
But DUMBO is in the midst of a new building boom that will quadruple the
number of residents, according to The Developers Group, a real-estate
marketing firm. At least 10 buildings, ranging in size from 16 to 31 stories,
are expected to open by the end of this year.
“Unless things slow down on the supply side, there is will be an
illusion of surplus,” said Jerry Minsky, a vice president at Corcoran.
“Last year, DUMBO was Brooklyn’s iPod, but if you have too many
iPods out there, they aren’t going to sell as well.”
DUMBO’s gentrification began in 1997, when the neighborhood’s
pre-eminent property owner, Two Trees Management, converted four imposing
brick factories into waterfront condominiums. The neighborhood’s
ascent has remained as steady as the clock atop One Main Street, where
Two Trees’ pioneering developer David Walentas lives.
But demand had always exceeded supply — until now.
“For the first time in over 10 years, supply has surpassed demand,”
said Minsky.
Minsky sold four condos in January. One buyer haggled with the condo’s
developer until he agreed to take $75,000 — one percent — off
the asking price.
Even Two Trees developer Jed Walentas admits that there may be a period
of slight adjustment.
“As lots of new units come on line, there will be some absorption
issues,” he said. “But as the far as DUMBO’s long-term
prospects, I am not worried.”
