Development sites in Brooklyn

How we read a Brooklyn lot before anyone talks price

Every Brooklyn site conversation should start with the same question: what can actually be built here, as of right, without a public approval? The answer comes from the zoning map, the lot’s dimensions and a stack of rules that interact with each other. Floor area ratio is the headline number, but it is rarely the whole story.

1. Zoning district and overlays. We confirm the district, any commercial overlay, special district rules and whether the lot sits in an area that requires affordable housing under Mandatory Inclusionary Housing.
2. Lot geometry. Width, depth, corner versus interior and irregular shapes all change what fits. A narrow interior lot in Bushwick may not be able to use its full floor area once setbacks and rear yard rules are applied.
3. Height and setback. Contextual districts cap building height and require setbacks above a base height. That can push floor area into a building shape that does not work for apartments.
4. Existing building. Is it vacant, occupied, landmarked, in a historic district or worth more as is? Demolition is not always the best answer.
5. Neighbors. Shared walls, adjoining foundations and whether we will need access to a neighbor’s property during construction.
6. Environment and flood. Prior industrial use, any environmental designation on the lot, and the flood zone.

We then build a massing and unit estimate with an architect or our own preliminary model and turn it into a residual land value: what a builder can pay for the land after construction cost, soft costs, financing and a required return. That number, not price per buildable foot pulled from a rumor, is what drives our pricing.

As of right versus rezoning in Brooklyn

An as-of-right project only needs Department of Buildings approval. A project that needs a zoning change or a special permit goes through the city’s Uniform Land Use Review Procedure, known as ULURP, which includes the community board, the borough president, the City Planning Commission and the City Council. Expect a long, public and uncertain process with real carrying costs.

Some developers seek out sites that only work with a rezoning, and price them accordingly. Most buyers we see want as-of-right certainty. For landowners, that means a site’s value depends heavily on what is allowed today. If a buyer is paying for upside that requires a rezoning, the contract terms usually reflect that, with longer approval periods or a price that adjusts.

Citywide changes such as City of Yes have changed the as-of-right math on many lots. Rules are still being interpreted, and we confirm the current answer with a zoning attorney or architect on every serious site.

Air rights and zoning lot mergers

In Brooklyn, unused floor area on one lot can sometimes be used on an adjacent lot. This is done through a zoning lot merger, recorded with a zoning lot development agreement between the owners. A low-rise building next to a development site may be able to sell its unused rights without selling the building itself.

These transactions take careful legal and zoning work. We value the rights, find the counterparties and coordinate with attorneys on both sides.

Environmental and flood issues on Brooklyn sites

Much of Brooklyn’s development land was once a factory, a gas station, a lumber yard or a truck depot. That history follows the lot. A buyer’s lender will want an environmental review, and what it finds can change the price or the deal structure.

• Phase I and Phase II. A Phase I reviews records and site history. If it flags concerns, a Phase II takes soil, groundwater or soil vapor samples. Former industrial sites near the Gowanus Canal and Newtown Creek in Greenpoint often need both.
• Remediation and excavation. Contaminated soil has to be handled and disposed of properly, which raises excavation costs, especially for projects with cellars.
• State cleanup programs. Some sites enter the New York State Brownfield Cleanup Program or a city voluntary cleanup program. Eligibility and benefits depend on the site and current law, so confirm with environmental counsel.
• Flood zones. Waterfront and low-lying areas such as Red Hook, parts of Gowanus and the Greenpoint and Williamsburg waterfront can fall within FEMA flood zones. The NYC Building Code has flood-resistant construction requirements that affect ground-floor use, mechanical equipment placement and design elevation.

None of this makes a site undevelopable. It makes it a different deal. We get these issues on the table early so a buyer can price them honestly and a seller does not get retraded at the end.

Building next to neighbors: the construction side of a site deal

Brooklyn lots are tight. Most new buildings go up against an existing row house or a party wall. Sal is a licensed general contractor who has done development work in Brooklyn, and these practical issues are part of how we value a site.

Assembling a Brooklyn site lot by lot

Many good Brooklyn sites are two or three small lots owned by different people. Putting them together can create a building that none of the lots could support alone. It also creates the risk that the last owner holds out for a price that wrecks the numbers.

We approach assemblages quietly and in a planned order. We often start with the lot that matters least, so a deal on the key parcel is not the first public signal. Each contract is structured so the buyer is not stuck with a single lot that does not work alone, using options, contingencies or staggered closings where owners will agree. Confidentiality agreements and careful communication help. Owners talk to each other, and in Brooklyn, everybody knows somebody on the block.

For landowners who suspect a developer is buying up their block, we can help you understand what your lot is worth as part of the larger site, which is often more than its value on its own.

Deal structures for Brooklyn land

Each structure has tax, legal and financing consequences. We model the numbers; your attorney and CPA confirm how it works for you.

What drives a Brooklyn development timeline

Landowners often ask how long it will take a buyer to close. Developers ask how long until they can build. The honest answer is that it depends on a few specific things.

• Approvals. As of right with DOB only is the quickest path. Variances, special permits or a rezoning add many months or more.
• Tenants. A vacant site moves faster. Occupied buildings, especially with regulated apartments, can take a long time to deliver vacant, and some cannot be emptied at all.
• Environmental review. A Phase II, an E-designation or a cleanup program adds steps before construction.
• Financing. Construction lenders want permits, a budget and, for rental projects using 485-x, a clear plan for affordability and any wage requirements.
• Neighbors. Access agreements and underpinning can delay the start of foundation work.

Site notes by Brooklyn submarket

In Gowanus, the 2021 rezoning opened many former industrial lots to mixed-use housing, but the canal’s Superfund cleanup, flood design and affordable housing rules all affect feasibility. Downtown Brooklyn allows taller buildings, and sites there trade on a different scale. In Bushwick and Sunset Park, smaller sites and industrial lots attract builders who want lower land costs, though manufacturing zoning limits residential uses on many blocks. Williamsburg and Greenpoint have seen years of waterfront and infill building, so remaining sites tend to be smaller or more complicated. In Red Hook, industrial zoning, flood exposure and limited transit shape what makes sense.

A hypothetical example: two garages on one block

For example, a hypothetical owner holds a one-story garage on a mid-block lot in a residential district. Next door is a second garage owned by another family. Alone, each lot supports a small walk-up. Together, they could support an elevator building with more efficient floors.

In this scenario we would model the building on each lot alone and then on the combined site. If the combined site is worth meaningfully more, we would approach the neighbor with a proposal, either a joint sale with a split of proceeds or an offer for their lot. If the neighbor will not sell, we might look at a zoning lot merger to move unused floor area instead. This is an illustration only, not a real client or deal.

How we are paid on Brooklyn site deals

When we represent a landowner, the commission is typically paid by the seller at closing under a listing agreement. When we represent a developer searching for sites, compensation is agreed in writing up front and may be paid by the seller, the buyer or both, depending on the deal. Joint ventures and ground leases are often priced differently from a straight sale. We discuss it before we start.

Once a site is under contract, many of our developer clients keep us on as owner’s representative through design and construction. To talk about a lot or a site search, call or text 239-256-5005, email info@diberealestate.com, or visit our contact page.

Mistakes Brooklyn landowners make when a developer calls

• Taking the first unsolicited offer. A letter in the mailbox usually means a developer already sees value. That is the moment to find out what the site is worth to the wider market, not to sign.
• Pricing off a neighbor’s sale. A lot down the street may have a different zoning district, a wider frontage or a corner. Price per square foot of land can be misleading.
• Signing a long, cheap option. Some buyers tie up a site for a year or more with a small deposit while they shop it or wait for approvals. Option terms should be short, with meaningful deposits that become nonrefundable on a schedule.
• Ignoring the tenants. If the building has occupied apartments, a buyer will discount heavily. Know who lives there, under what kind of lease, before you talk price.
• Forgetting taxes. A large gain on long-held land can carry a big tax bill. Talk to a CPA before you agree to a structure.

What developers should send us to start a site search

1. Target product: rental, condo, commercial, industrial or mixed use, and whether you plan to use 485-x or another program.
2. Building size range in buildable square feet or units.
3. Neighborhoods you want and ones you will not consider.
4. Appetite for occupied buildings, environmental cleanup, flood zones or rezoning.
5. Your target land basis and how you will fund the purchase.
6. How fast you can close, and what due diligence you need first.

With that, we can screen sites quickly and spend our time on the owners whose land actually fits your plan.

Brooklyn development terms

Industrial land is its own market

Not every Brooklyn site buyer wants to build apartments. Manufacturing-zoned lots in Sunset Park, Red Hook, East Williamsburg and along Newtown Creek attract last-mile logistics operators, contractors who need yard space, film and production users, and investors who plan to hold land for future rezoning. These buyers value things a residential developer ignores: curb cuts, truck turning room, outdoor storage, power capacity and how quickly they can reach the BQE or the Gowanus Expressway. Some industrial owners are surprised to learn that a user buyer can outbid a developer, because the user is comparing the price against years of rising warehouse rent. When we market an industrial lot, we test both groups so the owner sees the full range of value.

Title, survey and soil: the quiet problems on Brooklyn lots

Zoning tells you what can be built. Title, survey and soil tell you whether you can actually build it on this particular lot, and at what cost. Brooklyn’s blocks were subdivided generations ago, many lots have changed hands within families without much paperwork, and a lot of the borough sits on fill. Those facts show up in site deals more often than people expect.

Title and survey issues we see

• Lot lines that do not match. The deed description, the tax map and the fence line can all disagree by a few feet. On a narrow lot, a few feet can change the building envelope.
• Encroachments. A neighbor’s extension, a shared driveway or an old garage wall may sit over the line, or yours may sit over theirs.
• Easements and covenants. Old rights of way, recorded light and air agreements and restrictive covenants can limit what goes on a site regardless of zoning.
• Mapped streets and street widenings. Parts of some lots fall within a street the city has mapped but never built, which affects what can go there.
• Estate and ownership gaps. Family-held lots sometimes carry unresolved estates or missing signatures that a title company will not insure around.

We order a current survey and a title report early in contract, or before contract when the seller allows it, and walk the lot with the survey in hand. Your attorney and the title company resolve what they find.

Soil and groundwater

Geotechnical borings tell the structural engineer what the foundation will need. Sites near the waterfront, on former industrial land or along the Gowanus and Newtown Creek corridors can have soft fill, high groundwater or both, which can push a project toward piles or extensive dewatering. Those costs can change land value. We encourage buyers to get borings during due diligence where the contract allows access, and we read the results with our construction background to rough out what the foundation will involve before price is final. For larger questions about feasibility, see our Brooklyn consulting page, our notes on Gowanus, or contact us.