by Tyler King, Resident Hipster

Brownstoner.com brought to my attention an exciting commercial real estate transaction. It looks like as I was trimming my tree, sipping on eggnog, and singing “Jingle Bell Rock”, Toll Brothers was out buying a development site in DUMBO, Brooklyn. If you recall, these are the same folks behind the large-scale condominium development Northside Piers in Williamsburg. This is big news because in 2009 there were essentially no large residential development site sales in Brooklyn (at least no arms-length transactions). This made it very difficult to value land in Brooklyn (unless, of course, you were a seasoned commercial real estate appraiser in which case it was elementary). The lack of sales was further disheartening as I wagered a significant amount of money at the end of 2008 that 2009 would be go down in history as “the year of the land sale”. I better stay out of Vegas.

So lets look at the nuts and bolts of the transaction. The site is zoned for residential and manufacturing. Being that Toll Brothers is a luxury home builder I am assuming they are planning on a condominium development rather than building a widget factory on the site. It appears that the site straddles two zoning districts making zoning a bit complicated. However, with my very preliminary back-of-the-envelope analysis it looks like that with a 21,700± square foot footprint the site could conceivably be built to around 85,000± square feet. Being that the site was purchased for $8.6 million this equates to just north of $100/SF buildable. Kah-Blam!! There we have it kids, a baseline for 2010.

Although there is one small caveat: the site is in the DUMBO historic district. This basically means that any new development is going to have to be approved by the city. Being a vacant site, this should not be too much of a hurdle. Just keep it contextual Toll Brothers, keep it contextual and I am sure any plans will fly. Just like Disney’s Dumbo with a feather in his trunk.