Saturday, November 22, 2014

Closings of Note: Bargain and Frothy Prices Still Co-Exist, Pt. II

Investors from the Upper West Side had no problem wrapping their heads around 605 Vanderbilt Avenue in Prospect Heights last year for $995K.  It didn't need a gut renovation this year on the retail market for buyers from the Upper East Side to close on it in September for $1.899M.  When buyers from one side of Central Park sell Brooklyn to buyers from the other side of Central Park for double, you know this borough is for the ballers.

Around the corner, just off Vanderbilt Avenue, remember when the market was so dull we had the luxury of hating on a dinky flip like 678 Dean Street?  Well, it's still 3-stories, and the bus stop is still directly in front of it, and they didn't wanna muddle the listing down with an exterior photo, and 680 Dean Street closes for $2.47M this month to buyers from London.  "Short yard", "meh kitchens", and all!

Over in Park Slope, deals just off the park aren't easy to come by.  On since August, 461 15th Street was a 3-Family with rents that Crown Heights houses do better than.  A ton of upside potential as-is.  In very good shape with some nice details, as estate-type sales go...

The deal was being worked off-market for some $2.35M and closed for $2.23M last month with a reasonable 30% down.

Also on first, 2 weeks before it hit StreetEasy for $25K more, prime Crown Heights piece 695 Sterling Place sold last week.  Just off of Franklin, extra deep lot, chopped up inside for the taste of many buyers, and closer to the $1.4M asking price than many people are ready to pay - but all it takes is one buyer.

Don't look now, it's that Crown Heights property for under a million you've been waiting for!  Or not... 233 Rogers Avenue is a dinky mixed-use property that traded for under $300K this year and buyers from nearby picked it last month for $880K.  Even at almost 300% mark-up on the flip, when you're "4 blocks from 2,3,4,5 lines Frabklin av estation" (sic), it's hard to go wrong.  Or, also under a million, 903 Eastern Parkway closed last month, just past Albany.

Or also under a million, deep in Bed-Stuy at 227A Malcolm X, this relatively new construction sells for $995K to buyers from Manhattan.

Also in Bed-Stuy, 1234 Bedford Avenue closes for $1.35M last month.  Not a bad price considering 1191 Bedford closed for $1.9M.  No wonder 1238 Bedford Avenue wants $1.89M after closing for $1.2M in June.  Rentals are looking for $1,800-$2,150 on these units.

Back in Park Slope, this "Exquisite Eight Unit Brownstone in need of updating" with 3 vacancies and 5 rent controlled tenants lists for $2.99M and sells for $2.75M last month.  178 St. Johns Place got a big number for a townhouse with that much rent control.  But what does an unencumbered townhouse go for in the Slope these days anyways?

Just up the block, 190 St. Johns Place wanted as much as $4.395M this year, and had a few price drops until closing for $3.45M last month.  4,000 sqft 2-Families in Park Slope are no joke.

Park Slope prices are still a fraction of the Upper West Side, even though it feels more and more like it every day.  Don't forget that 577 5th Street sold for $3.975M in July.  But if this house went for half that in Crown Heights, people would lose their minds (and are!).

All this makes 272 Berkeley Place, listed at $3.8M, look like a steal closing earlier this year for $3.025M to buyers from CT.

But Bed-Stuy still has relative bargains, people!  439 Halsey Street is a 4-story 3-Fam that listed for $1.2M without a huge broker.  A buyer from Manhattan closed on it last month for $1.085M with less than $300K down.  Not everything goes to all-cash buyers.

Also in Bed-Stuy, the finished products with fancy pictures and big brokers command numbers far away from the train that would-be buyers are still clutching for in Clinton Hill.  358 Gates Avenue was no man's land by most accounts as recently as last year.  But this year it closes for $1.84M to a buyer from the East Village putting $1M down.  Generic, but with a few nifty touches.  You don't have to be the best in breed anymore in Bed-Stuy to command over $1.5M.  Platinum Members passed on an even worse flip than this on the same block for 35% less this year, and on two great contract flips for 45% less than this.

Speaking of $1.5M....  Available pre-market and on Platinum Member radar before it came out, the typical way to get top dollar is let the masses inside and see what cream rises to the top.  The top Bed-Stuy locations are no-brainers now, so it's no wonder that 101 Macon Street listed for $1.39M and sold for $1.5M on Halloween, even though it needs everything.  Platinum Members are spying one just like it around the corner that wants this price or higher.  That one won't hit the market 'til New Years, and it might not have to.

Friday, November 21, 2014

Closings of Note: Bargain and Frothy Prices Still Co-Exist

We tried to tell 'em that 556 Dean Street was the best 8-Family buy & hold in all of Brooklyn.  Closed for $3.75M last month.  Manhattan money strikes again, on one of Prospect Heights' best plays near Barclays.

Asking $2.4M, this mixed-use building at 1191 Bedford Avenue in Bed-Stuy closed in September way under asking price.  However, $1.9M is still frothy by many accounts, even if it's in line with a handful of comps nearby, especially since it's delivered vacant.

Okay, so maybe $3.3M didn't come home to roost on 99 Butler Street in Boerum Hill, but last month's closing price of $3.087M from Manhattan is pretty good for a block away from the projects.  That's right, BoCoCa's still got projects, y'all.

314 Clermont Avenue joins its neighbors 306 & 308 in under-market transactions on this prime Fort Greene block.  314 closed for $1.9M last month to buyers from Manhattan.  Even chopped up and full of tenants, this is a great buy that's worth way more on the open market.

Also on the Fort Greene side of Vanderbilt, 394 Vanderbilt Avenue closed this week.  100 people at the open house when the asking price dropped to $2M, but Platinum Members were the last man standing with the contract at $1.8M cash.  A great buy especially compared to the house next door in contract with an asking price $500K higher.

When folks spending $7M+ for a development site a block away from this Vanderbilt house are saying, "There is a tremendous demand for residential in this area," you figure there's a larger trend going on than just a few frothy townhome prices, no?  On Platinum Member radar for almost two years, back when folks were surprised it'd be worth $4M, the gas station at 840 Fulton Street sells for $5.8M and air rights puts the total purchase over $7M, or $185/bbsf.  38 more units in Clinton Hill, here we come!  Ironically, half the people doing these transactions couldn't even tell you what brownstone a block away is worth or why.

But what's a week in Brooklyn closings without a tiny 3-story single-family townhouse in Park Slope for over $3M?  Buyers dropped a million and closed for $3.3M last month at 475A 1st Street.

No wonder 3-stories in Bed-Stuy go over asking price and still feel like a deal.  Proximity to Atlantic Avenue be darned, 5 Verona Place goes for $1.357M last month.  Buyers from LIC won the deal.

Brooklyn's pound-for-pound most affordable 2BR apartment closed today, for $640K cash at 649 Vanderbilt Avenue, #2B.  When it listed, we said, "We're taking any and all bets that this goes over asking price".  We did, and it did.  So many more closings in & around Vanderbilt that put this number in context.  Much more to come tomorrow...

Sunday, November 16, 2014

Off-Market Bed-Stuy Fixer-Upper Sold: 109 Malcolm X Boulevard

As seen first on BK to the Fullest, available only on, 109 Malcolm X Boulevard in Bed-Stuy closed this week for $725K cash.  The original asking price of almost $900K was aggressive, but by the time the asking price dropped to $750K, it was within range for lots more buyers.  This legal 3-Family delivered vacant needed lots of work, but was a fixer-upper project that attracted end-users and investors alike.  Last year, a similar house across the street in live-able condition went for $860K cash at 104 Malcolm X Boulevard, but prices for finished products have ticked up since then. 

And, as we pointed out, "124 Malcolm X Boulevard got over asking price, closing for $999K in May of this year.  And another 3-story, 98A Malcolm X Boulevard got $1.079M 2 months earlier.  Could [109] be the next house to trade on this block?"  It appeared for a moment that Elliman would have the next house to move on the block, next door at 111 Macolm X Boulevard, a house in much better condition came out asking $800K. 

But the deal fell through, and by the time they were back on the market and reduced the price to $725K, it only took another month to get in contract.  But Elliman's required 6% commission on listings under $1M nets the seller much less than $700K at a purchase price of $725K, while the marketplace allows buyers and sellers to interact on their terms, and without big broker commissions getting in the way.  If Elliman's pictures, renderings, and marketing net the seller with a better house less than HomeCanvasr does for a worse house - who needs a big broker anyways?  And if the Elliman house goes for anything less than $725K, then it really begs the question of a broker's value-add.

Wednesday, November 12, 2014

Closings of Note: A Matter of Perspective

Bedford - Atlantic Intersection in 1896

Brooklyn Chicken Littles, remember the 1890's when all these amazing New York brownstones were built?  Ok, neither do we.  But remember the 1990's when 25' wide houses on the Upper West Side a block from Central Park could be picked up for under $2M?  Well, now those same houses sell for well over $10M.  But, as first reported on BKTTF, it turns out that the Upper West Side is precisely as many express stops from lower Manhattan as Prospect Heights.  So can we really be shocked that Prospect Heights houses have gone from $1.5M to $3M in the past 2-3 years?

And if you can bear the stigma (why'd you even have a stigma again?) of such perceived outer-reaches as ~Harlem~ (a mere 2-3 trains stops further from the Upper West Side) you'll find even TV stars dropping some serious coin for townhomes there.  Like your boy Neil Patrick Harris' "recording setting" $4M house on 126th Street in Harlem.  Listen to him tell ya Harlem's "more bang for your buck".  Crazy, we know...

Remember what $4M looked like in Park Slope 2-3 years ago?  At high profile house 178 Garfield Place, that was purchased for $1.3M back in 2004...

And celebrity homes in Brooklyn are commanding over $7M these days.  Like this one purchased for $3.6M in 2005...

So you don't have to like that 2011-2012's $1.5M's houses in Clinton Hill and Prospect Heights are among the $3M+ houses today, but you can't pretend there isn't a much bigger pond with much bigger fish in it that these numbers are all a part of.  As we've said, nobody promised you Brooklyn could or would stay your personal Discount Shoe Warehouse for brownstones forever.  And those numbers in those Brooklyn neighborhoods are precisely why the $800K-$900K houses from 2011-2012 in Bed-Stuy and Crown Heights are among the $1.6M+ houses today.  And $3M is knocking on Bed-Stuy's door now too. 

As it's always been, it is what it is.  Let's take a case-by-case look at a few of today's Brooklyn prices...

We tried to tolja that 368 Grand Avenue was one of the best buys under $1.5M in 2012, even if it's super narrow.  Owners asked us this year if it's worth over $2M, we said yes, and had 2 off-market Platinum Member examples of why.  The house listed for $2.1M and sold for over $2.3M last month.  This is exactly why all you jokers with $500K down and pre-approved up to $2M - while, god bless ya, that's a lot of money and earnings you've got going on there - can't find a turnkey 20'-wide 2-3 Family with an owner's duplex or triplex and rental income for $2M.  Or even, $2.3M, or even $2.5M.  Heck, 395 Grand is in contract pushing $3M, 102 Gates Avenue has turned down offers well over $3M, and 384 Vanderbilt Avenue is closing for $3.5M cash.  Are you keeping up?  The money simply has nowhere to run, nowhere to hide.  So when a few of the people who can play ball in & around $2M start seeing this activity and can't get in Clinton Hill anymore, that's when you start seeing the $2M+ head to Classon and beyond.  And now $3M is coming up on Classon.

With all this Clinton Hill activity, now even the narrow fixer-uppers can command over $2.3M.  No wonder investors were eager to pick up 331 Washington Avenue for $1.9M in June and try to flip it for some $2.5M.  The off-market flip didn't work, but the Corcoran approach did.  Closed for $2.55M to Manhattan buyers last month.  17' wide fixer-upper pricing is no joke!

What does $1M look like in Brooklyn these days?  How about an apartment by the highway on the edge of south Slope at 166 16th Street last month.  Manhattan buyers got #9A for almost $1,000/sqft.  556 State Street condos had another closing just under $1M last month too.

Since $1M condos in Park Slope are such slim pickings, you're seeing them make their way towards Bed-Stuy.  Take this sweet lil' loft at 317 Greene Avenue, #4B between Classon and Franklin.  Closed last month for $925K.  $700/sqft in Bed-Stuy, here we come!  No wonder larger condo conversion opportunities in Bed-Stuy are outpacing even those in Prospect Heights sometimes on the right blocks in the $300/sqft range.

All this makes 145 Jackson Street, #2B in Williamsburg - even at $1,000/sqft - sound tame.  Closed in September for $750K.  In 2008, these were all under $500/sqft.

What does $1.6M look like in Brooklyn these days?  How about a condo at 52 Dean Street, #2C?  Closed last month for $1.6M and available to rent for $6,500!

When $1.6M is consistently merely a condo in Boerum Hill, no wonder peeps are heading "deep" into Bed-Stuy for a townhouse like 178 Macdonough Street for $1.53M last month.  Buyers from downtown Brooklyn pulled it off with some ~$300K down.  Nobody's saying 178 Macdonough is the next 178 Garfield, but does it even have to be?

Sunday, November 9, 2014

Crown Heights Corner Buy & Hold Just Sold: 70 New York Avenue

One of the absolute best buy & hold properties available in all of Brooklyn this year has closed.  70 New York Avenue is a hefty little corner piece at Pacific Street, just off of Nostrand Avenue.  A 22' by 90' building with 8 apartments used as 3 bedrooms, this is 8,000 square feet of pre-war Crown Heights corner goodness.  All stabilized units grossing very little at the moment, but with massive potential.  People act like real estate is so complicated, but price per bedroom is one of the simplest, most important metrics in all of town.  And the Crown Heights area has seen a huge increase in that metric.  These real estate investment funds run around town with highfalutin categories like "value plus", which are really just fancy institutional ways of saying "raise the rent".  And based on all kinds of comps, including even the most generic modern renovation just down the street at 1329 Pacific Street, rents in these apartments have the capacity to triple:

That's right, 2 years ago someone paid $1.5M for a smaller property on this block that was an SRO in need of a gut at 1329 Pacific.

So, "investors" - if that is your real name! - please check your gripes at the door about the current rent roll on 70 New York Avenue.  This property sold a few weeks ago for $1.725M, or barely over $200/sqft.  People are paying $200 per buildable square foot over here, like 906 Prospect Place.  And that's just a vacant lot full of dirt!  Wouldn't you rather buy actual bones for $200 a foot than something you had to spend another hundreds of dollars a foot do develop?  Different strokes for different folks, we know - but if you claim to be a buy & hold investor and didn't take a stab at this one, it's more of a "Whatchu talkin' 'bout, Willis?!" situation.

We watched a few different folks who should've bought this property whiff.  However, someone did score big over here, and on another corner 8-Family right across the street.  Now people that hated on this one are calling us about smaller properties on way worse blocks for the same price.  SMH.

What makes the New York Avenue corner play so genius is the sweet spot between rental income potential that's super profitable for the owner, even at a relative market value for the tenants.  You Chicken Littles keep telling us, "It can't keep going up and up and up" - and it doesn't have to!  We're talking big upside at existing market rents.  Have you seen the price per bedroom rates one stop west on Franklin Avenue recently?  They can easily exceed $1,200 for the right product, and can often reach $1,600.  Whereas 70 New York Avenue is a 12-cap at $1,000/BR.  That is a great range to play with.  This is the next 706 Classon Avenue, and you ain't even know it!

Pro's:  hefty corner spot full of windows just off the next tree ring in Crown Heights growth, huge upside potential, extra-long floorplate, 3BR apartments, one of the best buy & holds in Brooklyn all year, wasn't even all cash

Con's:  gone already, work to be done, stabilized rents are low, crazy high GRM at existing rents, barely marketed, no pics inside, hard to finance and took non-contingent deal, another woulda/coulda/didn't notch on a lot of investors' belts 

Ideally:  this is a slam dunk anywhere under $2M.  We've received off-market offers higher than this on smaller 8-Families in way less preferable locations.

Friday, November 7, 2014

Crown Heights Gem Closes Under a Million: 1211 Dean Street

Yesterday we showed you a Crown Heights castle off of Nostrand that Platinum Members finally locked down off-market after months of stalking.  But you can't win 'em all.  Cue another beauty off of Nostrand that Platinum Members have been stalking for months, 1211 Dean Street.  This fully-occupied house on one of Crown Heights' favorite blocks was shopped to us off-market in the beginning of this year as an SRO for $1.2M.  Platinum Members immediately put in an all-cash offer, but the lead went cold.  The types of deals that don't hit the open market often have reasons behind it that the average retail buyer doesn't understand.  This one was no different.  If it was vacant and had fancy pictures and was easy to find and ready to sell ASAP, you bet the price would've soared over $1.2M anyways.  Heck, nearby, people have paid $1.3M-$1.7M cash for places in worse condition than this.  Like 843 Prospect Place, which was picked up for $800K and flipped for $1.385M within a year, without doing anything besides getting it empty...

So if we brought sight-unseen offers of $1.2M cash many months ago, no wonder local gobblers were eager to pick up 1211 Dean Street, even with estate feuding and a supposed-SRO full of tenants, for $800K a few weeks ago.  But when you see this closing price, don't get jealous, unless you really know what it takes to duplicate it.  And, word on the street is, there was some big money involved besides just the $800K recorded price.  20' x 50' on 4 stories with this kind of curb appeal, original details, on a block this nice, near the train, just off of Nostrand, regardless of condition, commands a much higher price than this.  And one of the niftiest parts of all is, it's actually not an SRO.  While the finders didn't do their homework, we're sure the buyers did.  If any work is done at all to it, the next time you see 1211 Dean Street, the house will have a 2 in front of the price tag.  And, no, peanut gallery, that's not called "touting", that's called "fair warning".  An owner on this block told us he's turned down an offer of $3M for his renovated beauty this same size.  We can't tell a ~$20B/year industry what to do, but we can tell you what it's doing.

Pro's:  full sized historic gem with tons of curb appeal on a flagship Crown Heights block, not an SRO, easily worth double what they paid for it with any significant work, a great project in the making

Con's:  no pics, no access inside, fuzzy access to the deal itself, supposed-SRO, full of potentially regulated tenants, downright impossible to finance, probably took more than the recorded price, could be dead money for years, we took 'no' for an answer

Ideally:  kind of kicking ourselves on this one.  Should've gone straight to the source.  An amazing buy for someone else though.

Thursday, November 6, 2014

Mansion in Contract in Crown Heights: 669 St. Marks Avenue

Wow, it doesn't get much more special than this as over-sized townhomes go.  After months of push & pull, Platinum Members finally locked down this unique Queen Anne style mansion from 1888 that our main man Morgan Munsey says was designed by architect E.G.W. Dietrick.  669 St. Marks Avenue won't be found on your StreetEasy or your NYTimes.  This Crown Heights gem was a Platinum Member exclusive.  What makes this house so special, besides its front porch and ionic columns?  Well, it's a monster 30-feet wide.  It's got a driveway and windows on the unattached side...

On an extra-deep 127' lot, the driveway leads back to a two-story carriage house turned garage...

Some of the interior is old-school grandeur.  Some of it has been updated to generic-but-serviceable condition, but the proportions are still grand...

What's the move on something like this?  If some of it's already blown-out modern, do you just go all the way 743 Dean Street with it??

Some people are talking condos, some say a roof deck over a studio over a garage in the carriage house, some say a massive 1 or 2-Family.  The possibilities are endless.  We already saw 27' wide rowhouse go in contract across the street with an asking price of $2.95M at 672 St. Marks Avenue.  We saw Platinum Members blow it out across the street at 660 St. Marks Avenue with a nice blend of materials and old & modern looks.  We're looking forward to putting some of Brooklyn's Finest on the case for restoration & reno on 669 St. Marks Avenue.

Pro's:  huge, unique size & proportions, not your typical rowhouse, driveway with carriage house, great block with a variety of nice architecture, ballin' like Brooklyn Heights at Crown Heights prices

Con's:  gone already, tough to tackle, wasn't cheap, lots of work to be done

Ideally:  an historic Crown Heights castle with the potential for an epic project in the making