NEW YORK — Firefighters battled a large fire at a Brooklyn apartment building Sunday night.
It happened just after 7 p.m. on Schenck Avenue near Wortman Avenue in East New York.
Fire officials say crews arrived to find fire in the courtyard of the building, where there were building materials and scaffolding. The fire spread inside the building and into about 12 apartments, some of which were unoccupied.
Some residents were told to shelter in place while others were told to evacuate.
Officials say seven people, including two children and two firefighters, were taken to a local hospital. All seven suffered minor smoke inhalation.
Some neighbors say they heard fireworks outside, then looked out to see the courtyard on fire, causing chaos and sending people running out of the building.
“I heard the fireworks, and right after the fireworks, I heard everybody and the commotion in the hallway,” one resident said. “I panicked, grabbed my jacket and my bag. Luckily, I keep my handbag on my bed.”
“I heard the boom, boom, boom, and when I came on out, back on the other side of the building, it’s on fire. Like a bonfire. But I’m glad everybody is out, thank God,” resident Susan Aeiken said.
Officials say 80 people have been displaced and were taken to a temporary shelter.
The cause of the fire is under investigation.
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A 34-year-old woman was stabbed to death inside a Brooklyn apartment early Wednesday, police said.
Cops called to the 14th-floor Starrett City apartment found the victim sprawled on the floor suffering from multiple stab wounds about 6:15 a.m. She died at the scene.
The victim’s name was not immediately released.
A 31-year-old man found inside the apartment on Pennsylvania Ave. near Geneva Loop when cops arrived was taken into custody for questioning.
A bloody knife was recovered from the scene, police said.
View of the Manhattan bridge from Dumbo, Brooklyn, New York City, USA
Getty Images/iStockphoto
For the past two decades Brooklyn has developed and emerged as a super borough; an alternative for institutional capital in New York City, and in some metrics, topping the undefeated borough of Manhattan.
The following major factors have contributed to this trend:
No longer second class. Brooklyn has become the first choice for residents, businesses and investors.
Size. The borough accounts for 23% of New York City’s land area and includes 31% of the city’s population, resulting in a densely populated 39,438 residents per square mile.
Diversity of products and locations. Brooklyn offers quality assets available for institutional investment. For example: multifamily, office and development assets located Downtown; industrial/warehouse in Red Hook and East New York; development in newly rezoned, up and coming areas like Gowanus and previously rezoned neighborhoods like Williamsburg; and affordable housing-driven locations in multiple neighborhoods. This diversity attracts different buckets of institutional capital such as: opportunistic, core, core plus and mission driven.
Brooklyn Investment Sales 2017-2022
In 2022, Brooklyn saw 1,226 transactions totaling just over $10 billion, which represents a 20% and … [+] 28% increase year over year respectively.
Ariel Property Advisors
Brooklyn Saw Record Dollar Volume and Nearly Half of NYC’s Transactions in 2022
The desirability of Brooklyn as a destination for capital was evident in last year’s numbers when total investment sales exceeded $10 billion for the first time ever, surpassing the previous record of $9.19 billion from 2015, which is a remarkable milestone, highlighted in Ariel’s 2022 Brooklyn Year-End Commercial Real Estate Trends. The borough also accounted for 45% of New York City’s 2,716 transactions, and 25% of the city’s $38.4 billion in dollar volume.
Brooklyn Investment Sales Volume 2022 vs 2021
Last year marked the first time ever that the Brooklyn market cracked the $10 billion mark in gross … [+] dollar volume, surpassing the previous record of $9.19 billion from 2015.
Ariel Property Advisors
My partner Sean Kelly noted that Brooklyn “finished the year with 16 transactions of $100+ million, nearly doubling the nine from 2021. Building off 2021, which saw rents and vacancy rates return to pre-pandemic levels, many investors reemerged from the sidelines and helped Brooklyn achieve its best year to date.”
The significant $100+ million transactions included:
Avanath Capital Management’s $314.5 million purchase of the fully free market multifamily building at 38 6th Ave & 535 Carlton Ave, which was the California-based investment firm’s first purchase in New York City.
The second largest sale in Brooklyn was A&E’s $248.7 million purchase of the Lefrak South BK Multifamily Portfolio consisting of 14 buildings with over 75% of the units rent stabilized.
Additionally, KKR purchased for $190 million 80 Dekalb Ave in Fort Greene, a mixed-use, elevator building with a 25-year 421a tax exemption that began in FY 2010-2011.
Multifamily Market Recorded the Most Transactions Ever
These large deals contributed to Brooklyn’s multifamily market having its strongest year to date in 2022, finishing with 807 transactions, the most ever recorded in the borough. This represents a 29% increase from 2021’s 624 transactions. Dollar volume ended the year at $5.3 billion, also an all-time high, and up 10% from 2021. Excluding the Starrett City Portfolio partial interest sale in August 2021 for $1.3 billion, the year-over-year dollar volume would have increased by 33%. The average price per square foot for multifamily reached $459, a 23% increase compared to 2021 and the highest average ever recorded in the borough.
However, like the rest of the city, the Housing Stability and Tenant Protection Act (HSTPA) of 2019 changed investor behavior last year, prompting institutional investors and other buyers to bypass rent stabilized buildings in favor of free market multifamily assets, including smaller buildings.
“Although the borough saw many sizable deals, small multifamily buildings with fewer than six units actually accounted for over 50% of the multifamily transactions in the borough last year, and 93% of the multifamily sales traded for $10 million or less,” said Director Stephen Vorvolakos. “Our team has had a tremendous amount of success with smaller properties and receive multiple offers as soon as we go to market with these buildings. We don’t see this momentum slowing down anytime soon unless the laws governing rent stabilized buildings change.”
The Carlyle Group is one example of institutional capital that has been pursuing buildings with 10 units or less and last year refinanced a loan for 39 properties in Brooklyn and Queens for $500 million.
Development Market Remained Strong Despite Expiring Tax Abatement Program
Brooklyn’s development market remained strong, recording over $1.6 billion in sales across 166 transactions, with most of these deals allowing developers to build rental housing. Brooklyn saw 38 development transactions of $10 million or more, a 31% increase from 2021, and the average price per buildable square foot rose 10% to $278 in 2022 compared to the previous year.
“This substantial development activity is no surprise because every day we talk about the perpetual shortage of housing in New York City, which is driving up rents,” Kelly said. “Higher rents have somewhat offset the increase in labor and material costs, so pricing has remained pretty stable.”
Williamsburg continued to be the hot spot for development with 33 transactions totaling $325 million accounting for 19% of sales in Brooklyn last year. In Gowanus, which was rezoned for residential use in late 2021, transaction volume saw a strong uptick with eight transactions, doubling its total from 2020 & 2021 combined. Madison Realty Capital’s purchase of 350-355 Hicks Street in Cobble Hill for $142 million was the largest development site sale in Brooklyn since 2019. The next two highest sales were in Flatbush and Brighton Beach, an indication that developers are spreading their projects throughout the borough.
Politics also played a role in investor decisions in the development market last year. The New York State Legislature allowed the 421a/Affordable New York tax abatement to expire on June 15th, which caused a burst of sales activity in the months before as developers rushed to get their shovels in the ground before the deadline.
We’re hopeful that a successor program to 421a will be introduced as both Gov. Kathy Hochul and Mayor Eric Adams are advocating for incentives to encourage new housing development. The governor also has proposed extending the deadline to obtain a TCO for 421a projects by four years to 2030. Under the current program, developers are required to finish construction by June 2026 to receive the property tax break.
“Without an extension, it’s going to be very, very difficult for the larger projects to complete their projects in three years, although it will be achievable for the smaller to mid-sized projects,” Kelly said. “So, I think there’s going to be a lot of transactional volume in the capital markets, financing the construction for rental projects and we’ll see some sales as well. We’re actually just hitting the market with a site in Gowanus that will allow for the construction of 140 units.”
Industrial/Warehouse/Storage Sales Jumped 76%
The industrial/warehouse market continued to thrive in Brooklyn during the post pandemic era as more retailers shifted into the online space. Dollar volume totaled $1.3 billion, a 76% increase year-over-year, the highest amount ever recorded in Brooklyn, while transactions were flat at 99. The $492 per gross square foot average is a Brooklyn record, surpassing 2021 of $425 by 14%, which was the previous high.
The rise in dollar volume can be attributed to the $332 million sale of 640 Columbia Street in Red Hook and the $228.5 million sale of 554 & 578 Cozine Avenue in East New York, both in the first half of 2022. Both properties are fully leased to Amazon and are the two largest industrial/warehouse sales ever in Brooklyn. In addition to the Columbia Street sale, Red Hook saw six transactions totaling $70 million in 2022.
What to Expect in the Balance of 2023
Brooklyn today provides a growing and significant alternative to any type of institutional capital. We believe that 2023 will be another strong year for the borough and are already aware of several assets slated to close from affordable housing complexes to opportunistic development sites. In a way, Brooklyn offers everything available in Manhattan, the Bronx and Queens in one borough. The institutional narrative is strong.
To read the full Brooklyn 2022 Year-End Commercial Real Estate Trends report, please click HERE. Please see my podcast about the Brooklyn market below.
In this podcast, Shimon Shkury, President and Founder of Ariel Property Advisors, Partner Sean Kelly … [+] and Director Stephen Vorvolakos discuss the outstanding performance of the Brooklyn market in 2022.
Have a breaking news tip or an idea for a story we should cover? Send it to Eyewitness News using the form below. If attaching a video or photo, terms of use apply.
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