Fort Greene's Golden Opportunity: How the 240 Willoughby Street Acquisition Signals a New Era in NYC Multifamily Investing

The $209.5 million acquisition of 240 Willoughby Street by a joint venture (JV) of Fetner Properties, MCB Real Estate, and Farallon Capital Management marks a bold bet on Brooklyn's high-growth Fort Greene submarket. This 30-story, 463-unit mixed-income rental property—30% of which is affordable housing—epitomizes a winning formula in today's NYC real estate landscape: strategic partnerships, low-cost capital, and a focus on undersupplied multifamily markets. For investors, this deal is a blueprint for value creation in an era where demand for transit-accessible, amenity-rich housing outpaces supply.

The JV Advantage: Combining Local Expertise with Institutional Scale

The Fetner-led JV structure is designed to maximize operational and financial synergies. Fetner Properties, a NYC-focused developer with 1,500+ units delivered across Brooklyn, Manhattan, and Queens in the last two years, brings deep market knowledge and a track record of pre-leasing success—25% of units were leased within weeks of the April 2025 closing. MCB Real Estate and Farallon Capital, with their institutional capital and investment expertise, provide the liquidity to scale while mitigating risk. This partnership reflects a broader trend: smaller, agile operators are teaming with larger firms to access capital and navigate complex urban markets.

Financial Engineering at Work: Low-Cost Debt and Tax Incentives

The transaction's $141.5 million senior loan from M&T Realty Capital Corporation (MTRCC) is a critical enabler. With interest rates likely below 6% (a conservative estimate given 2025's rate environment), this low-cost debt reduces carrying costs and boosts cash flow. Meanwhile, the property's inclusion of 147 affordable housing units secures a 421a tax abatement, shaving 20–30% off annual property taxes for up to 25 years. These twin advantages—cheap debt and tax breaks—create a margin of safety even if occupancy dips below projections.

Why Fort Greene? A Submarket on the Rise

Fort Greene's appeal is undeniable. Nestled between Downtown Brooklyn and Williamsburg, it offers transit access (Brooklyn Bridge subway stop), proximity to Manhattan, and a walkable vibe anchored by Fort Greene Park. The submarket's vacancy rate has hovered below 3% for years, with rents climbing at a 5% annual clip since 2020. The 240 Willoughby Street asset leverages this demand by offering:
- Mixed-income stability: Affordable units (priced at 130% of area median income) attract long-term tenants, while market-rate units command premium rents.
- Amenities as competitive weapons: Over 30,000 sq. ft. of amenities—fitness centers, pet-friendly spaces, and a rooftop deck—appeal to millennials and families fleeing cramped downtown Manhattan.
- Institutional-grade management: Fetner's hands-on approach, including pre-lease marketing and resident retention programs, ensures the property stays full.

The Long-Term Play: Supply Constraints and Urban Density

Brooklyn's multifamily market is starved for new supply. Zoning changes and community pushback have stifled high-rise development, while gentrification continues to draw renters to areas like Fort Greene. The 240 Willoughby Street JV is positioned to capitalize on this imbalance:
- Upside from rent growth: With 75% of units still available as of July 2025, Fetner can gradually raise rents as demand tightens.
- Appreciation potential: As the area's tech and creative sectors expand—Fort Greene is now home to Amazon's second NYC campus—the property's value could rise alongside corporate relocations.
- Diversification for investors: The asset's blend of affordability and luxury caters to a broad tenant base, reducing exposure to single-income bracket volatility.

Investment Takeaways: A Must-Watch Deal

For NYC real estate investors, 240 Willoughby Street is a canary in the coal mine. Its success hinges on three replicable strategies:
1. JV partnerships that marry local know-how with institutional capital.
2. Low-cost debt and tax incentives that buffer against economic cycles.
3. Submarket selection in transit-rich, undersupplied neighborhoods.

Investors should monitor Fetner's ability to push occupancy to 90%+ within two years—a milestone that would justify a potential recapitalization or sale at a 6–7% cap rate, up from the 5.5% implied by the acquisition. Meanwhile, consider exposure to NYC-focused REITs like SLG Realty (SLG) or Essential Asset Management (ESNT), which mirror the submarket-focused strategy here.

In a city where multifamily occupancy rates remain stubbornly high, 240 Willoughby Street isn't just a property—it's a thesis. For those willing to bet on Brooklyn's enduring appeal, this deal could be the next chapter in NYC's ongoing rental boom.