Sunset Park is fast becoming New York's next hot neighborhood.
Sunset Park's journey from a down-and-out portion of South Brooklyn to a revitalized neighborhood with a character and style all its own has been well documented in the press. A quick Web search of articles about Sunset Park in the late '80s and early '90s reveals that the neighborhood was yet another battlefield in New York City's larger struggle with high crime rates. Recent press has emphasized the vibrant cultural mix on Sunset Park's two main commercial corridors, 5th Avenue and 8th Avenue, as well as its reasonably priced brownstones.
In a January 29, 2006 article, titled, "On the Trail of Brownstones in Brooklyn," The New York Times noted that savvy real estate investors have begun to look beyond the borders of what has traditionally been known as "Brownstone Brooklyn," namely Carroll Gardens and Park Slope, for good deals on brownstones in Sunset Park. Brownstones in Sunset Park generally sell for less than $1 million, the usual starting price for most brownstones in trendier neighborhoods.
Property values in the area are inextricably intertwined with the vitality of retail business along the Avenues, particularly 5th and 8th Avenues. Prime retail space here has climbed as high as $80 per s/f, with an average of approximately $55 per s/ f, and national chains like Radio Shack, Payless and Burger King and Subway have opened there. Banks like Chase Manhattan, HSBC, Citibank and Washington Mutual have also opened branches in the neighborhood.
Sales of commercial and residential properties have also been robust. The average sale price of mixed-use properties on the Avenues increased by nearly 66% from 2004 to 2005. In 2004, these properties sold for approximately $150 per s/f, skyrocketing to nearly $250 in 2005. The growth of these vibrant retail corridors has corresponded with an increased demand for housing in and around 5th and 8th Avenues. Residential investment properties--usually considered multifamily buildings with six or more units--began to sell at previously unheard of levels for Sunset Park. In 2005, many investors saw fit to pay at least ten times a property's gross rental income and, in rare cases, some properties even traded as high as 11 and 12 times the gross rental income.
Sunset Park's prosperity can be traced directly to the continued influx of foreign immigration that has supported the growth of and need for retail amenities on 5th and 8th Avenues. 5th Avenue is a well-blended microcosm of Latin cultures from Mexico, Central and South America, Puerto Rico and the Dominican Republic. 8th Avenue represents New York City's third largest and fastest growing Chinatown.
An article in the May 2005 edition of Crain's Small Business Special Report Magazine focused on the dramatic effect Sunset Park's 5th Avenue Business Improvement District has had on the resurgence of 5th Avenue and the neighborhood's ability to attract national franchises. In January, Curbed, a popular real-estate Web blog, discussed the relocation of many Brooklynites to Sunset Park, including portions of the artistic community, primarily because they had been priced out of Park Slope. The Curbed article seemed to be invoking a widely held belief in the real estate community that one could identify the next hot neighborhood by following the artists. In Sunset Park, one need look no further than the recent opening of the Tabla Rasa art gallery at 224 48th Street between 2nd and 3rd Avenues, which features the works of local artists.
Perhaps most exciting, plans for development of a waterfront recreation area are moving forward. In April 2005, Congresswoman Nydia Velazquez earmarked approximately $10 million of a proposed $18.25 million federal aid package to be used for development of a 22-acre park along the Sunset Park waterfront. This could lead to rezoning of much of the area surrounding First, Second and Third Avenues from industrial to residential use, which would almost certainly create a ripple effect raising property values as far east as Ninth Avenue.
These economic and cultural shifts have transformed Sunset Park from a poorly regarded industrial zone plagued by crime into an up-and-coming neighborhood with affordable brownstones and great deals on commercial and residential investment properties. It's only a matter of time before the area is widely discovered and the properties get snapped up quicker than a snow crab on 8th Avenue.
Adam Hess, Sales Director Massey Knakal Realty Services
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|Publication:||Real Estate Weekly|
|Date:||Mar 8, 2006|
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