Luxury Housing by the Boardwalk

THE NEW YORK TIMES
March 10, 2000
Metro Section

By Rachelle Garbarine

A condominium community that will eventually have 850 apartments in 16 midrise buildings is beginning to take root on 15 acres at the edge of the Atlantic Ocean in Brighton Beach.

The first two structures at the $325 million gated community, called Oceana, are under construction and 81 of their 104 two- to four-bedroom apartments have been sold since October. This week the sales campaign expanded to 100 more units in two more buildings arising directly alongside the Boardwalk at the Brooklyn site. Once home to the Brighton Beach Baths, the site is bounded by Brighton Beach Avenue and the Boardwalk and Coney Island Avenue and Seacoast Terrace.

The units in the initial buildings range in size from 871 to 1,973 square feet and sold for $267,990 to $750,000, though a few units are still available in the $250,000 range. Prices for the oceanside apartments, which will be similar in size, will be 10 to 50 percent higher, with the penthouses costing more than $1.2 million, said Diana W. Jabber. She is Senior Vice President at the Muss Development Company of Forest Hills, Queens, which is developing the project with the Carlyle Group of Washington, D.C.

Two acres at the core of the site are to be reserved for recreational use, including a one-acre park, a health club and indoor and outdoor pools. A 1,200-car parking garage is also planned.

Oceana is among the largest luxury housing projects to be developed in Brooklyn in decades. It will replace the collections of pools and lounges that made up the old bath complex, which, hurt by declining membership, closed in 1997 after more than 90 years.

"We're adding a community that is an alternative to the suburbs and that until now has been unavailable," said Joshua L. Muss, president of Muss Development. He acquired the site last year from his cousin, Stephen Muss, who tried unsuccessfully from 1986 through the early 1990's to develop 1,500 condos in four towers as high as 32 stories. Then the recession hit and the project never proceeded.

Joshua Muss said he and his partner modified the project to have fewer but larger units, because "it would be difficult to finance buildings as large as the ones proposed, and the market today is for spacious apartments." The buildings were restricted to heights of 5 to 12 stories to meet waterfront zoning regulations put in place in 1993.

Real estate brokers said the pace of sales of Oceana reflected the continuing strength of New York City's residential market, where demand still outstrips supply. "We are at a point of having buyers, but no inventory to sell," said Jeffrey J. Ferretti, who is the president of National Brokerage in Mill Basin, as well as of the Brooklyn Board of Realtors.

In neighborhoods in the central and south shore areas of Brooklyn, which includes Brighton Beach, prices over the last year for all housing types increased 10 to 20 percent on average, Mr. Ferretti said. His office put the average sale price for condominiums in and around Brighton Beach at about $250,000.

Buyers, he continued, include second-generation members of immigrant families, primarily from Russia, who want to invest in real estate, as well as empty nesters who want to sell their large houses and "reinvest in a home in the area with less upkeep." But, he said, the production of new luxury units in the area is limited.

Christopher D. Thomas, a senior vice president at the Brooklyn office of William B. May, a Manhattan-based brokerage, added that new developments that offer "services and a waterfront location can command a premium above the market." They can also attract buyers from outside the area, who are willing "to compromise a longer commute for the amenities," he said. He added that "the farther out the development is the developer has to offer a better value."

Those are the buyers that Muss Development has drawn or expects to draw. "We have the advantage of offering people the opportunity to stay in or move back to the area," Mr. Muss said. "With the housing market hot, there is always a spill-over from Manhattan."

Ms. Jabber added that the apartments, with nine-foot-high ceilings, cost "30 to 40 percent less than comparable size units on Manhattan's East Side."

Alex and Diana Klurfeld, who have two daughters, are trading their two-bedroom rental in a nearby Brooklyn neighborhood for a three-bedroom, fifth-floor unit with an ocean view they are buying for $426,000 at Oceana.

"We wanted to stay close to our parents yet be even closer to the ocean," said Mr. Klurfeld, a physical therapist in Williamsburg. "We think we are getting good value for the money and living there will be something like being on vacation all year round."

In addition to the planned recreational complex, other amenities at Oceana, designed in a classic style with gabled roofs and balconies, include 24-hour security and high-speed Internet connections. Monthly maintenance charges will range from $211 to $968 for the apartments and higher for the penthouses.

The development has also received a 15-year tax abatement, with taxes fully abated for the first 11 years and rising 20 percent a year for the next four years. With the abatement, monthly taxes on the apartments will range from $9 to $41; without the abatement they would be $207 to $946.

Occupancy of the initial four buildings is slated for this fall and winter. Mr. Muss said the entire project, depending on the pace of sales, could take three years to complete.