By Liana Grey
Not long ago, the price of one- and two-bedroom apartments in Brooklyn rose while studios lagged behind.
Now, smaller units across the borough — which has seen some of the highest demand for new development in the city — are red hot.
In its latest market report, the brokerage firm MNS calculated that studio prices in Brooklyn jumped by 2.3 percent over the past month alone, compared to a one percent increase for one- and two-bedrooms. In Park Slope, prices shot up by 5.6 percent.
MNS founder Andrew Barrocas attributes the rising demand to general societal shifts. “More people in their late 20s and early 30s are still single, as opposed to 5 to 10 years ago, when people in this demographic were married with kids,” Barrocas explained.
Because they don’t have families of their own, even some of the most financially successful Gen Yers are in search of studios rather than sprawling apartments, in Williamsburg, Downtown Brooklyn, and other trendy neighborhoods with recently constructed condos and rentals. “When marketing smaller units, we see renters come in that are extremely qualified,” Barrocas said.
Less affluent apartment hunters — the artists and writers, for instance, who are drawn to Brooklyn’s cultural scene — often receive help from mom and dad. Not long ago, parents might have insisted on purchasing a studio in Manhattan, to benefit from the strong market there. Now, real estate in Brooklyn is considered a solid investment in its own right.
Over the next 20 years, according to Barrocas, the borough’s population is slated to double in size, with
developers expected to build a million new units. “[Parents] look at the figures and say, ‘Wow, this is an incredible area,’” he said.
Investment activity in Brooklyn isn’t limited to generous family members, of course. “We’re starting to see investors buying smaller units and renting them out, because rental rates are skyrocketing,” said Barrocas.
Eric Benaim, founder of the brokerage firm Modern Spaces, which recently opened an office in Williamsburg, said that the average studio in the neighborhood rents for $2,400 to $2,500 a month.
“Yesterday, someone walked into our office looking for a studio to rent,” Benaim recalled. “Their budget was $2,000. It was pretty much impossible.”
The client’s budget would still work in Long Island City, where Modern Spaces was launched in 2008. But even there, Benaim said, a shortage of small apartments may eventually lead prices to catch up to those in Williamsburg.
Many of Williamsburg’s young professionals are “growing out of the room-mate stage,” Benaim said, giving a boost to the studio market. “It’s almost equivalent to Manhattan,” Benaim said.
In neighborhoods elsewhere in the area, studio prices have also begun climbing into the low $2,000s. Two years ago, David Maundrell, founder of the Brooklyn-based brokerage firm aptsandlofts.com, listed studio rentals in the $1,300 to $1,700 range across northern and western Brooklyn.
Now, small apartments are renting for $2,100 and higher. “We’re seeing it in Williamsburg, Downtown Brooklyn, Boerum Hill, and Clinton Hill,” said Maundrell.
Several weeks ago, his firm completed a leasing campaign at 307 Atlantic Avenue, a former stamp factory in Boerum Hill, at the nexus of Downtown Brooklyn, Brooklyn Heights, and Cobble Hill. StreetEasy.com recently listed a 491 s/f studio there for $2,200 a month.
With no amenitie spaces besides a roof deck, the building isn’t exactly swanky. But it has modern, high-end finishes, and is within a five to ten minute walk of about 12 subway lines. Most importantly, it has an elevator, an amenity that still comes slightly cheaper in parts of Brooklyn than across the East River.
In the Second Borough, “young professionals want a nice, clean apartment by the train,” Maundrell said. “They don’t want walkups. It’s more of a Manhattan mentality.”