Brooklyn Condo Rewrites NYC Luxury Pricing

OK, kids. Get out your pencils and show your work: When something new in a former industrial area costs less than half of something old in a classic neighborhood, will lots of people buy it?

The Pencil Factory, so named because it used to be a pencil factory, consists of 93 one-bedroom (starting at $372,000) and two-bedroom apartments (starting at $535,000) a couple of short blocks from the Brooklyn, N.Y., waterfront. It covers three lots, attaching a new brick-clad structure to a landmark site where the pencils once flowed. And it may be the cheapest deal in New York City for a buyer who wants to live the lush life (and doesn't mind the rumble of passing trucks).

On Wednesday, according to broker Hans Schenck of Prudential Douglas Elliman, nearly four dozen folks from New York's brokerage community partied on the Pencil Factory rooftop. What made them so giddy?

Nothing less, it seems, than the return of luxury new construction to Gotham's anxious market.
According to Schenck, who showed off a staged unit this morning, response has been "overwhelming" since the property began pre-construction sales earlier this year. Prudential says it has entered contracts on 41 of the 93 units. (Schenck also mentioned that architect Daniel Goldner was so pleased with the construction that he's buying a unit -- which is either a sign that the price is right or a sign that a developer is trying to goose sales.)

The sales proposition is pretty clear: a lot of goodies for not much scratch. Greenpoint is solidly commutable to most business districts in New York, now that a two-lane bike path to the Williamsburg Bridge sits a block from the Pencil Factory's door. There are hipster bars and at least one muffin shop. There's an emerging little park. And in the building there will be a basement gym; a pool table and a Wii; a catered kitchen; an off-site surveillance system; and a washer and dryer in every apartment.

All that for, on average, $515 per square foot for a one- or two-bedroom. Not exactly crazy, especially if you can get a sweet mortgage.

So is the Pencil Factory heralding a new normal in New York real estate -- one where waterfront access, space, and common-area perks mean more than prime location? The once-unrelenting combination of cushy amenities and hurry-up construction has left a lot of Manhattan buyers in debt -- and sometimes in court. Small wonder, then, that a new property at the edge of gentrified Brooklyn sells most of the perks that came standard in Manhattan's boom -- at less than half of Manhattan's peak.

Call it the new math.

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