Carlos Saavedra was hoping for a repeat.
Standing on the roof of a converted multifamily property on Clinton Street in Brooklyn Heights, Saavedra points to a brick building on Sidney Place with a nearly-abutting back lot. He’s planning to do something similar there to the Clinton Street property he converted into a single-family townhouse and hopes to sell for an unnamed — but sure to be astronomical — price.
Saavedra, a co-head of developer Eckstrom, says he thinks Brooklyn Heights could use more condos. But the single-family opportunity proved too hard to resist.
He’s not the only developer who has started to see piles of cash in the shape of stately townhouses when a vacant lot or multifamily property hits the market. Brooklyn Heights is an epicenter of the phenomenon, where developers like Saavedra have sought to use the momentum from big-ticket deals for renovated homes to build their own tricked-out single-family offerings.
Developers in the area are following a flow of affluent New Yorkers to Brooklyn and a surprisingly resilient luxury market across the city that have spurred relentless price growth in the borough’s in-demand neighborhoods.
In Brownstone Brooklyn, which includes luxury-heavy neighborhoods like Cobble Hill and Park Slope, the average price per square foot was up 16 percent in the third quarter from the same time last year to reach $2,231. That mark set an all-time record, which is something that has happened more often than not each quarter for the last two years, according to appraiser Miller Samuel.
But the seemingly uncapped upside for single-families might be finally hitting its imported-Danish-wood ceiling, with some projects seeking record-setting prices now starting to linger on the market.
And developers like Saavedra have been eying newcomers warily, concerned that their carefully manicured reputations will suffer from imitators trying to make a quick buck.
“It almost seems like we make it look easy, but it really is not easy,” he said. “Just one developer not doing a good product — it’s really bad for all of us.”
When the price and timing are right
Brownstone Brooklyn’s cramped streets have attracted attention before the current spate of developers trying their hands at single-family homes.
The Kushner Companies secured a six-property portfolio in Brooklyn Heights for $36.5 million in 2014, turning three of the buildings that had served as multi-family homes into rentals.
But the Kushners may have overestimated the upside in the area at the time. One of the homes on 100 Pierrepont Street, which the company bought for roughly $6 million, gut renovated and listed for $10 million in 2017 — only to sell the 5,900-square-foot house for $6.4 million four years later after a series of price cuts.
But developers who have flocked to the area in recent years say price points have risen to the point where newly-built townhouses can pencil out.
Jon Schippers, whose firm, Steering House, takes on projects in various iterations of developer, architect, builder or all three, said he “just couldn’t find very good deals” around Brooklyn Heights, even when he was looking for “portfolio pieces.” But now, $15 to $20 million sellouts are feasible.
“I don’t want to be too aggressive and say it’s a sure thing, but you can easily comp that,” he said. “Given that, it makes it a lot easier to pull the trigger on certain asking prices.”
Schippers’ firm worked as the builder on the Brooklyn Home Company’s renovation at 1 Sidney Place, which sold for $22.1 million last year, the second-most expensive sale in Brooklyn.
“It used to be that clients were coming to our active work area looking for good value, and now most of the time, that client cares very little about money and wants the best,” he said. “When we’re designing developments, we’re thinking a lot less about the budget and a lot more about designing and building something really unique and one of a kind.”
The appetite in the luxury segment, where all-cash buyers remain undeterred by high mortgage rates, has far outpaced everything else. In the first nine months of this year, luxury sales in Brooklyn rose by over 23 percent from 2024, compared to just a 2 percent increase in the rest of the market.
At 170 Clinton, which Saavedra bought for $4.75 million in 2023, Eckstrom had initially scoped out doing five floor-through condos in the building, which used to be a 10-unit multifamily. But he dropped the plan to two units after seeing that buyers of the larger units were going to be less affected by rates.
The switch to a single-family came by chance, after a subcontractor knocked down a back wall by mistake. Rather than wait for approval from the attorney general’s office on an offering plan — contingent on approval from the Landmarks Preservation Committee — Saavedra tried marketing the whole building as a single-family and put the home into contract over one year ago with a last asking price of $14 million.
A boom in progress
Schippers is currently in the midst of building a 4,700-square-foot passive house at 33 Joralemon Street and looking to find a buyer willing to pay a hefty price point for the opportunity to have a say in most of the finishes. He also has another pre-construction project on Pierrepont Street.
His projects are a few in a rising wave that has dotted the neighborhood with scaffolding. In 2024, the Department of Buildings fielded 118 job applications for Brooklyn Heights and surrounding areas that involved converting a lot into a single-family home, up from just 42 applications in 2019.
“I have investors calling me all the time, looking for buildings in the neighborhood,” said James Lee Wall, a broker with specialty townhouse firm Leslie Garfield. “They’re actively pursuing buildings that they think can make a big turnaround.”
But asking prices and closed deals are two different things.
Developer Vladem Brodsky listed two of his projects, at 295 and 299 Hicks Street, for $26 million and $18 million. The offering at 295 Hicks Street, which he bought for just over $4 million in 2021, sat on the market for six months before it was rented, while the asking price for the home at 299 Hicks Street dropped from $18 million last year to $15 million this year. (Brodsky did not respond to multiple requests for comment).
The homes lingering on the market speak to the idiosyncratic nature of single-family development, where homes need to feel one-of-a-kind but not “stick out like a sore thumb,” according to Schippers.
And while Brooklyn Heights seems to be an incubator for eight-figure homes, not all blocks in the neighborhood are created equal, which makes a difference when developers are trying to seek top-of-market prices.
“Sometimes the mistake developers make is that they’ll try to get the same A+ prices on a B- location,” said Compass’ Noah Plener.
Just a couple hundred feet can change the calculation, according to Saavedra. Such could have been the case at 307 Hicks Street, which sits two blocks north of the main thoroughfare Atlantic Avenue, and went into contract asking $15.5 million at the end of last year.
“If this house was the next block over, a little bit closer to Atlantic, we would have definitely not done one-family,” he said of 307 Hicks.
Wall also questioned the $18.5 million asking price at 175 Clinton Street. The underway project is located next to the Key Foods on Atlantic Avenue, a potential noise pollution concern and value killer. “That’s aspirational, but this is what developers are seeing in the neighborhood,” he said.
Brooklyn Heights still has more room to grow with a host of projects expected to be seeking big numbers. But the neighborhood could also serve as a blueprint for projects and developers in other corners of the borough where prices are rising, but the luxury townhouse market is still in its nascent stages.
Brodsky this summer set a neighborhood price record in Fort Greene, where he purchased a townhouse at 39 South Portland Avenue for $4.7 million with plans to create condos before a buyer offered $8.8 million in all-cash for the unfinished home.
At the corner of Berry and Second streets in Williamsburg, Lior Barak and Christine Blackburn snagged a deal in July for a 5,500-square-foot home they developed on an empty lot asking $10 million. The contract was the most expensive deal for a residence in the neighborhood by nearly 20 percent.
In Greenpoint, a landmarked townhome was initially converted into two condo units but sold to a single buyer as a two-family for $6.9 million in July, shattering the neighborhood’s price record.
