In the late 1990s,West Chelseaproperties values were less than a tenth of what they are today. The game changer for the area was the arrival of the art galleries which were pushed out ofSoHo. Following them were trendy restaurants, luxury residential, and most recently the Highline. Now the area is becoming too expensive for many galleries. Many are moving to the north, the Lower Eastside, and now Bushwick,Brooklyn.
According to Crain's, in the last year alone, three cafés, two bars, one organic grocer and several other retail businesses have opened in Bushwick. More galleries have also arrived. In December, the 950 Hart Gallery opened joining Factory Fresh at1053 Flushing Ave., English Kills at114 Forrest St., and more than a dozen others that have opened in recent years.
Crain's goes on to say “the main reason they're moving in is simple: Bushwick is relatively convenient to get to, and it's cheap. While the average one-bedroom apartment inWilliamsburg rented for about $2,400 per month in 2010, the average one-bedroom in Bushwick went for about $1,300. And while that sum is up 63% from an average of $800 four years ago, it still represents aNew York bargain.”
These changes to the neighborhood are fueling the investment sales market. Our firm recently sold a 17,500 SF one story warehouse at413-421 Troutman Street, in theNorth Bushwick neighborhood, for $2,375,000.
This former refrigerated truck manufacturing facility is ideally located next to the Jefferson Street L train station and close to the Brooklyn-Queens Expressway. It sits on a 200' x 100' lot.
“This property, which will be subdivided into three lots, was purchased as a joint venture between a local investor and a fourth generation Argentinean framing company,” said Massey Knakal First Vice President of Sales Michael Amirkhanian who exclusively represented the seller in this transaction with Senior Vice President of Sales Paul Smadbeck.
“The central bay will be owner-operated as a showroom and gallery space, while the side bays will be leased to restaurants and other creative uses. With the sister property across the street (428 Troutman Streetsold earlier in 2011) also undergoing a similar conversion, this entire block will see an exciting transition over the next 12 months,” added Amirkhanian.
According to Amirkhanian, rents in the area are around $10/SF NNN for old line manufacturing uses. However, if a property is renovated and converted for artist/office space, leases can reach $20 psf. With Troutman Street selling for $135/SF, this property will be in a good position to capitalize on future upside as the areas improves, while generating a strong income stream. Who knows, maybe one day the area will become too expensive and mainstream for galleries!