Sunday, December 03, 2006

Crown Heights Draws Developers and Bargain Hunters

By Gabby Warshawer.
One look at the Brooklyn enclave of Crown Heights makes it clear that this is a neighborhood with one foot in the past and one striding to the future.
As the city moves forward with a plan to confer landmark status upon a large swath of northern Crown Heights, a condo construction boom is under way in the southern section of the neighborhood.
While the deep cultural and racial divides in Crown Heights are evident in its housing stock and market, both the notoriously polarized black and Orthodox Jewish sections are enjoying a healthy real estate climate -- though in very distinct ways.
In the predominantly West Indian and African-American area to the north, the landmarked district is poised to be the city's largest designation in over 10 years.
"The overall district will include 1,800 buildings, and we hope to designate them in phases," says Lisi de Bourbon, a spokesperson for the Landmarks Preservation Commission.
"We had a hearing for the first 472 buildings on Sept. 19, and we're hoping that the commissioner makes a designation on those in April. After that goes through, we'll move on to another chunk.
"The proposed designation is largely due to the many impressive late-19th and early-20th century Romanesque Revival and Queen Anne-style rowhouses on blocks such as Dean Street between Nostrand and New York avenues.
These houses aren't just getting recognized for their architectural significance and beauty -- they're also looking more appealing to buyers.Gregory Todd, a Corcoran Group agent, recently brokered the sale of 1252 Dean Street, which he describes as a distinctly well-preserved, 1895-vintage rowhouse.
The property is in contract in the high $900,000-range. Another house on the same block just sold for $850,000, the lower price reflecting the fact that it had been chopped up into a multi-family residence.
"These prices are unheard of," says Todd, who lives in the neighborhood and is the special events chair for the Crown Heights North Association. "A friend of mine who lives on that block bought a house there for half that just a few years ago.
"The rising prices in northern Crown Heights can also be attributed to their proximity to the future Atlantic Yards complex.
"The market is strong in areas near the Atlantic Yards development, and that includes Crown Heights," says Matthew Fotis, an investment sales specialist with Marcus & Millichap.
"There's a lot of value in owning a multi-family house around there."Renters -- a significant number of them young, white professionals who'd have stood out even five years ago -- are also discovering the area's value and appeal.
Among them are Katy Hope and her husband, who moved from Clinton Hill to an apartment on St. Francis Place this summer.
"We vastly prefer it because it's so much friendlier," says Hope, who works in publishing. "Our feeling in Clinton Hill was that it was a neighborhood that had gentrified too quickly.
There are these brownstones going for $2 million, but there's still drug dealing happening out in the open.
"While Hope considers her new two-bedroom apartment, which rents for $1,800, "not a bargain," rents in the area are cheaper than in neighboring and more firmly gentrified Prospect Heights.One-bedrooms in the proposed historic district average between $1,000 and $1,300, with two-bedrooms generally starting at around $1,400.
Todd said that while longtime residents are concerned about maintaining infrastructure, the wave of new renters and buyers is bringing positive changes.
"We have more squeaky wheels in the newer residents, who tend to complain when they see something they don't like," Todd notes.
In the largely Hasidic community of southern and southeastern Crown Heights, meanwhile, demand is also high, but for new construction.
At least 10 new condo projects are set to hit the market within the next six months.
The apartments surrounding the worldwide Chabad-Lubavitch headquarters on Eastern Parkway are generally larger and less expensive than in many other areas of the city, accommodating big families.
"Crown Heights has always been behind in pricing," says J.J. Katz, an agent with Heights Realty, which specializes in the area.
"Almost all the people here are Hasids and have large families, and they can't afford to live in Park Slope or Brooklyn Heights.
"Nevertheless, condo prices have been rising sharply in the past couple of years, according to Katz.
Most new projects sell for around $325 a square foot, a significant increase from the $200 a square foot they fetched only a couple of years ago.And Katz says interest in new developments is keen.
That assessment is echoed by Mendel Drizin, the developer of the largest of the new projects, a 280-unit condo development on Crown Street between Albany and Troy.
"I am flooded with calls from all over the world," says Drizin. "People want to have them as time-shares for when they come to visit the Lubavitch community or they want to buy them for their children who already live in the neighborhood.
"The first phase of Drizin's project, with 94 units, will be completed in the spring. He expects to sell the apartments in the seven-story property for around $350 a square foot.
And he is not concerned about other new buildings coming to the market at the same time, counting his amenities -- including a ground-floor shul and gym -- and location as more valuable than the competition.
"This is the center of Crown Heights," Drizin says. "After you get past the fourth floor, you can see Brighton Beach on one side of you and the Manhattan skyline on the other."

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