Real Estate

Brooklyn bump

This one-bedroom duplex in Warehouse 11 is 1,164 square feet and has 1 1/2 bathrooms, an open chef’s kitchen with lacquer cabinets and white-oak accents. There is also a washer/dryer. The doorman building features a garage, gym, nursery, lounge and four outdoor common spaces. Agent: Joseph DeLorenzo, The Corcoran Group, 212-572-3163 (
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This one-bedroom duplex in Warehouse 11 is 1,164 square feet and has 1 1/2 bathrooms, an open chef’s kitchen with lacquer cabinets and white-oak accents. There is also a washer/dryer. The doorman building features a garage, gym, nursery, lounge and four outdoor common spaces. Agent: Joseph DeLorenzo, The Corcoran Group, 212-572-3163 (
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This one-bedroom plus home office in Be@Schermerhorn has white-oak flooring, an open kitchen with stainless-steel appliances, white-lacquer cabinetry and Caesarstone counters, a bathroom with granite floors and chrome fixtures and wiring for Verizon FiOS. The building has a gym and laundry. Agents: Rhoda Dunn and Barbara Lombardo, The Corcoran Group, 718-210-4036 and 718-210-4047 (
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This one-bedroom plus home office in Be@Schermerhorn has white-oak flooring, an open kitchen with stainless-steel appliances, white-lacquer cabinetry and Caesarstone counters, a bathroom with granite floors and chrome fixtures and wiring for Verizon FiOS. The building has a gym and laundry. Agents: Rhoda Dunn and Barbara Lombardo, The Corcoran Group, 718-210-4036 and 718-210-4047 (
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It’s something of a swan story. Back in the bad old days, four years ago when the economy was tanking, a lot of new developments suffered. But some buildings had it worse than others, with preconstruction units languishing on the market, banks moving toward foreclosure, construction loans drying up and buyers deeming entire buildings damaged goods. In desperation, a handful of Brooklyn developers with ugly-duckling developments chose to sell their units at fire-sale prices, lopping off 20 percent or more.

Now, like the fairy-tale duckling, these condo buildings are suddenly realizing their worth.

Take Williamsburg’s Warehouse 11. According to David Maundrell, president of aptsandlofts.com, which marketed the building, the project was 75 percent complete in 2009 when the bank threatened foreclosure. Panicked, the developer negotiated a deal that allowed him to take proceeds from early sales and pay back a discounted amount on his loan. The catch was that he had a very limited time in which to do it.

“I set off the fire sales there,” says Maundrell. “We sold 30 apartments of the 120 in the first night, at $500 a foot.”

Now, a mere four years later, these same units are being resold for $900-plus per square foot — nearly twice the price of their initial sales.

This is no isolated incident. Downtown Brooklyn’s Be@Schermerhorn and Fort Greene’s Forte were both faced with similarly dire situations that also led them to slash prices. Both have recovered their value — and then some.

“Once we reduced the prices, we sold the building in less than a year,” Rhoda Dunn, senior associate at the Corcoran Group, says of Be@Schermerhorn, where she was part of the original sales team. “The bottom line was the price.”

Dunn just helped resell unit 12B. The 662-square-foot one-bedroom closed in February 2011 for $400,000. Just over two years later, in March, the same unit sold for $620,000 — a price increase of more than 50 percent.

So what’s changed? Basically, everything.

“[At the time there] was also the Forte and Toren and Oro, all this inventory, and now it’s all gone and there are these people who want to buy,” Dunn says. “People are feeling good about the economy, and the interest rates are still low. There’s demand and little inventory. It’s really a function of supply and demand.”

It helps that the buying public has no long-term memory.

Forte, built in 2006, sat so long on the market that it found itself with a bad reputation.

“Part of the problem was they were comparing themselves to One Hanson in regard to pricing, but One Hanson had better finishes and more amenities. This was the primary reason that the units sat on the market and eventually got stale,” says Rodolfo Lucchese, a senior vice president at the Corcoran Group, which took over sales of Forte in 2009. “[The listings] were dead in the water; it had lost its buzz, so you’re looking at sales that were really slashed.”

Lucchese just helped resell unit 28C. The 1,200-square-foot, two-bedroom sold in 2010 for $614,000, or $511 per square foot. It just resold for $899,000, or $750 per square foot — nearly 50 percent more, just two years later.

“Three years ago . . . it did look like some of these buildings had made mistakes. They created smaller bedrooms, they had awkward layouts, and that figured into people’s decisions,” says Michael Connolly, senior vice president at Halstead Property. “Now, when you’re looking at the one-bedroom with an awkward layout in a nice condo building in a nice location versus nothing else? That one-bedroom looks like a steal.”

Plus, he continues, these are different buyers than the ones who were looking during the slower period: “They’re only looking at everything in its own bubble. Things that people could have been critical of when they had more choice, they can’t afford to be critical of right now.”

The savvy are taking advantage. The owner of Be@Schermerhorn’s 12B unit that Dunn helped sell was an investor who had never lived in the apartment. He sold to another investor who’s already rented the apartment. When the owners of 3H heard about the sale of 12B, they decided to put their apartment on the market, too. They’d recently relocated and had planned on renting their unit before reconsidering in light of the great sales market. Now their apartment is listed for $639,000. They paid $362,000 in December 2010.

“The biggest hurdle now to getting these deals is getting the appraisal,” says Connolly. “There aren’t comps to support them.”

But prices are rising all over Brooklyn, with certain new developments going from $1,000 to $1,500 per square foot, according to Steve Kliegerman, president of Halstead Property Development Marketing. And buildings like Warehouse 11, Be@Schermerhorn and Forte offer finishes and amenities similar to brand-new construction — at something of a discount.

“An appraisal will first look at the building sales, but if there’s nothing in the building, then they’ll look at the neighborhood, which is what brought us to the higher listing price of $895,000 for penthouse C,” says Lucchese of another Forte unit, which he sold in December 2012. When he was pricing that unit, the last sale in the building was for $710,000. But he looked at what Fort Greene, at large, was selling for, and risked the higher price. “There were a ton of people at the open house, and it went into a bidding war and went a little above ask at $900,000.”

Explains Maundrell: “This part of Brooklyn [around Fort Greene] is very different than when Forte was initially marketed. BAM is expanding, Downtown Brooklyn is becoming more of a residential area. That’s the neighborhood maturing, which is why it’s worth more.”

All of which has been very good for the original buyers.

“The bank took over [Forte] and fire-sold that building at a 20 percent discount to what they would have received if they’d had more patience or staying power,” says Kliegerman. “That was a great opportunity for buyers.

“Those buildings [though] sold themselves short. Had those developers or the banks had more faith in the marketplace, they would have done better.”