Wednesday, March 25, 2015

5 Capping It in Crown Heights: 654-656 Nostrand Avenue




It says a lot about the real estate investment climate out there when 5% cap rates are happening not only in the most prime locations, or for the most prime product, but in "emerging" locations for uninspiring product.  We first heard about this 2-story corner mixed-use piece on our corner in Crown Heights last fall when it was being marketed for $3.5M off-market.  The price struck us as high for barely 5,500 sqft, but the broker insisted offers over $3M were already coming in.  Now Cpex has 654-656 Nostrand Avenue at the corner of Bergen & Nostrand asking $3.7M and insist it will trade at a 5-cap (over $3.5M).  The commercial tenants include our main-stay corner store Nas Deli, a serviceable 99-cent store that isn't exactly the posterchild of gentrification, and the newly-signed UPS Store.  3 medium sized apartments get a very at-market $2,000/month.  We don't see the appeal, but the with 5% cap rates sweeping the best of the borough, apparently they're coming over to Crown Heights too.


When we heard that offers were already over $3M before Halloween...




...it made us think one of the taller buildings across the street shopped to us in the mid-$2M's had to be worth closer to $3M too...




And indeed 619 Nostrand Avenue traded for $3.3M in December 2014.  Obviously pricing in the next leg up for residential and retail rents over here.  And while up & coming commercial additions are always welcome in these "emerging" commercial stretches, even the most successful and beloved ones couldn't make it through their second winter, including Chop Chop Grub Shop...




We were posted on this block so much this summer that Bing caught us on their street view on our way back from Nas Deli...




What this winter did bring us across the street is the completion of the Miami themed bar King Tai...






And down in Miami, signs of Brooklyn are everywhere too.  From South Beach...




To CVS....



And a Brooklyn style coffee shop in Miami isn't too unlike a Miami style bar in Brooklyn...




Back on Nostrand Avenue in Brooklyn, Two Saints got in on the action too this month...




When all the newest places on Nostrand look like this, no wonder there's a demand for exposure to that upside.  We're just surprised to see it as low as 5-cap on a piece so plain as 654-656 Nostrand Avenue.  Says a lot about the valuation for more attractive properties in this patch.


Pro's:  corner piece two blocks from Crown Heights ground zero, performing rents with a serious new tenant, exposure to a budding block

Con's:  maxed-out 5-cap, not much upside in as-is rents, uninspiring building, long way away from significant further development

Ideally:  molasses return for the right buyer.  To us it makes 5-caps in Boerum Hill start to look attractive, or corner 7-caps further down Nostrand into Lefferts and Flatbush.


Friday, March 20, 2015

Platinum Member Closing Yesterday in Park Slope: 111 Park Place




Platinum Members scooped another full-sized fixer-upper in prime Park Slope yesterday in an all cash transaction at $2.4M.  111 Park Place barely lasted a minute on the market at $2.3M before full-priced cash offers were coming in, and one buyer stepped up to seal the deal above asking price.  Forget tropes like "the spring buying season."  Yes, the savviest buyers operate like the famous Postal Service inscription, "Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds."



And, while the US Postal Service barely treads water from the brink of bankruptcy, Platinum Members are making decisive profitable moves with a measured take on the market.  If 111 Park Place reminds you of another Platinum pick-up last year on the same block at 101 Park Place - which was a deal at $2.6M cash at the time - you're not the only one.  Except, when Cousin John took a look at 111 Park Place, he announced it was a better house with better details than 101 Park Place.  So a better house for less money in a market that hasn't stopped going up, straight from the mouth of the guy whose renovations have gone for $4M+ twice?  Sounds like a win/win to us.

With high ceilings, original mantles, cool zig-zag original wood, you don't even need to have much "vision" to see what this house will be next...







If you let snow on the ground deter you, or an accelerated sale process, you may miss out on Brooklyn's next-best buy.  Heck, over in Bed-Stuy the finish products are already going for over $2.4M, like 101 Hancock Street.  And the unrenovated house next door in Bed-Stuy already had sight-unseen offers of $2M before anyone even walked through the door.  And the Park Slope caché still surpasses Bed-Stuy's, even while Bed-Stuy prices catch up to what Park Slope's were just 2-3 years ago.

The Park Slope market is among those "sky's the limit" neighborhoods, as evidenced by a $7.5M house nearby on Garfield Place lasting less than a month on the market.  That's a price previously reserved for only the likes of Brooklyn Heights.  So when a serial renovator who's brought $6M houses to the market in Brooklyn Heights gets his hands on bones like these in prime Park Slope, we can't wait to see what happens next...


Pro's:  curb appeal, prime Park Slope, "better house" than an off-market $2.6M deal last year, full of original details in good shape, full sized 20' wide 4-story house delivered vacant

Con's:  went over asking price all cash in a flash, plenty of work to be done, couldn't wait until the "spring buying season"

Ideally:  another amazing deal for great bones that will have a 4 in front of it the next time you see it


Wednesday, March 11, 2015

Another HomeCanvasr.com First Hits the Market: 1136 Bergen Street




As seen on HomeCanvasr.com over a month before it hit Zillow, 1136 Bergen Street is a 4-story limestone in Crown Heights listed at a very competitive $1.45M for the neighborhood.  This 3-Family has basically everything going for it that made us leap at 1134 Bergen Street without hesitation.  The details in 1136 aren't as stunning or intact as they are in 1134, but 1136 does have more renovations & updates to it than 1134 did at the time.  And given the fact that 3-story 2-Family buildings in Crown Heights further east than this are fetching $1.7M cash these days, any turnkey 4-story - but especially 1136 - looks like a steal anywhere under $1.5M.







Now, while these renovations may not quite be your style, and probably aren't the way you would've done them, they're still a ton of time, money, and hassle you don't have to spend on day 1.






We wouldn't go quite as far as to say that there's all "new plumbing, new electric, new mechanicals..." and it's certainly pesky that the boiler that is new is oil rather than gas.  However, a boiler in a house this size is not a huge expense to change over, and basically pays for itself in the first year.  But that boiler's emblematic of what's going on with this building overall.  Absentee owner, slowly-but-surely handyman renovation that's been going on for over a year, new additions but not always the best choices made.  And in exchange for the bootleggedness of it all, you can get it at a relative value for this market.  The asking price of $1.45M is totally reasonable, offers have come in higher, and we wouldn't be surprised to see a savvy buyer make it easy for the owner at a price lower than $1.5M, even if there'll be someone after the fact wishing they'd gotten it for more than $1.5M.  Besides, we wouldn't sell 1134 Bergen for a penny less than $1.85M.





And the much grimier 1070 Bergen Street has offers over $1.5M.  The floor that needs the most help on 1136 Bergen Street is the top floor.  We went through the same thing last year with 1134.  But with the help of our main-man Steve, we put in a brand new kitchen and mostly new bathroom for under $10K in under a month...







So "here's a tissue, stop ya blood-clot crying", because the glass is much more than half full for dozens of buyers on a property like 1136 Bergen Street at this price, despite all the Goldilocks gripes you could potentially launch at it.  For the right buyer, this is a great set-up.  A duplex with an extra-deep south facing yard and two rentals on top.  Mortgage-able, turnkey, and ready for modest to serious upgrades whenever the time & budget is right.  But 9 of out 10 people we spoke to this time last year weren't feeling the nicer 1134 at a quarter-million less than this, so why would it suddenly dawn on y'all now?


Pro's:  sick curb appeal limestone, extra-deep 127' lot, new updates, pricepoint, delivered with at least 3 floors vacant potential, some original details, over $8,000/month in rental income potential

Con's:  18' wide (not 20'), new boiler (not gas), missing lots of original details, wood has been painted over in many places, not everyone's taste on the upgrades, work yet to be done

Ideally:   this is a slam dunk for right buyer who knows what they're looking at


Monday, March 9, 2015

Crown Heights is Too Hot: 905 Lincoln Place



For years now we've been dragging ballers with more modest budgets (as Brooklyn goes) east of Classon Avenue into the "emerging neighborhoods" of Bed-Stuy, Lefferts, and Crown Heights.  Back then they came kicking and screaming.  Today is another story.  If it feels like every house in those nabes is over $1.5M these days, you're not the only one.  It's not a matter of what any given house in any given location is "supposed" to cost.  The $1.5M money simply has nowhere else to go.  So even while the temperatures in Brooklyn are ice cold...


(Photo courtesy of Celeste Moses)


The Brooklyn market itself is too hot!  Like, "Hot damn! - Make a dragon wanna retire, man!"




When buyers priced out everywhere else descend on an easy to find listing with pretty pictures on Corcoran.com like 905 Lincoln Place, asking $1.495M for a 3-story east of Nostrand, you can really see how hot the market is.   "Don't believe me just watch..."



Renovated kitchen cleaning up nicely...



Original wood floors & trim in great shape, nice windows on the barrel front...



And a renovated bathroom that's not as stylish as the kitchen, but certainly hits the high notes with the soaking tub, the stand-up shower, and plenty of light...




People come over here looking for 4-stories, but when you're renovated this nice, the 3-stories command $1.5M, even when you're heading further & further east.  We saw a 3-story like 798 Lincoln Place further west go for $1.42M in worse condition not long ago.  We saw the 3-story at 858 Lincoln Place go for $1.2M a while back with a local broker at the same time that Corcoran moved a few others on that block asking $1.3M and closing closer to $1.5M.  But in this cold weather and hot market, 905 Lincoln Place is heading to contract for $1.7M cash!  That is a "read 'em & weep" kind of figure for a 3-story in A-minus condition east of New York Avenue in the dead of winter.

This week we'll take a look at some more of the wild activity in Crown Heights...


Pro's:  great looking renovation, barrel front duplex with rental, easy income on the garden rental over here now, updated mechanicals

Con's: gone already, way over asking price, all cash, no C of O (which isn't that big of a deal with 2-Fams)

Ideally:  a scary harbinger for buyers and a great vote of confidence for values on the 4-stories that are west of here


Tuesday, March 3, 2015

Projects: Cobble Hill Rental Renovation



You've seen it a million times.  Drab pics of generic interiors that nobody wants...








And then other times you see amazing pics that feel out of a magazine and so out of reach.  Pics that make you say, "I want to go to there."  Well, sometimes those places are the same places.  Our pals Ruth & Bobby at Co Adaptive Architecture have done it again with a super-stylin' re-do of a previously-generic Cobble Hill rental.

They took a corner unit weighing in at only 675 sqft, open up the kitchen, and made a legit 2BR out of it by taking advantage of exposures on 3 sides...




The went with a raw industrial chic look at times.  Bobby and Ruth told us the exposed brick "added both some additional texture, and a couple to inches to the place".


 

And, "Because the client was adamant about not having chrome anywhere in the apartment, we designed custom faucets and a shower by using the copper piping that is usually hidden from view in the walls."







And our favorite part is the repurposed bowling alley floor turned into the modular kitchen island / dining table...










They told us, "All doors are re-claimed, and the flooring was re-finished a light grey to contrast to all of the wood in the kitchen, and blend all areas in which we had to patch flooring seamlessly."  With a budget that came in under $70K, this is pretty nifty stuff.  When you're after a look more unique than an outer-Brooklyn rental reno projects like ours, but you can't quite afford the level of Cousin John, it's nice to see there are stylish, custom alternatives.  There's actually a small co-op in prime Park Slope available under $400K that'd be perfect for a revamp like this.



Saturday, February 28, 2015

Closings of Note: Playing Catch Up, Pt. III




It took some time and some price dropping, but buyers from Gowanus closed on the styling Prospect Heights renovation at 743 Dean Street for $2.57M last month with well over a million down.  This is what many want their house to look like, but what few can afford to pay.  All & not, not bad for a unique 2-Family with 3 parking spaces.





When you've got a janky 25' x 60' building in a prime location that you picked up for $1.375M in the doldrums of 2011, it's time to blow it out modern and charge through the roof.  325 Degraw Street closed for $5.995M last month, with some $1.5M down, on what appear to be renderings alone.  No wonder Platinum Members were happy to chase off-market 25'-widers over here for $4M and higher.





Listed for $3.475M asking "NO BROKERS PLEASE!", 99 St. Marks Avenue was a prime Prospect Heights 5-story just out of reach of many eyes and many budgets.  It closed for $2.92M last month to buyers from Manhattan with over a million down.  No wonder we were so bullish on the adjacent & vacant 5-stories around the corner at 218-220 Park Place for $2.4M-$2.7M each.





An off-market deal in Crown Heights over $2M??  Not on StreetEasy??  This extra-large 4-Family at 686 St. Johns Place closes for $2.05M cash last month.  No wonder Platinum Members are psyched to take down basically the same building around the corner for much less at 711 Sterling Place.






A less than 15' wide million dollar condo in Crown Heights?  Oh, it's happening.  568 St. Marks Avenue, #1B with its finished rec room in the basement will tally up like a cheap price per square foot, but that's a lot of money for not that much space.  At least it's a 2BR/2 bath with a back yard.  Buyers from nearby closed for $999K last month.  No wonder other 2/2's in new buildings over here are crushing their own records, in contract "significantly over $1M" like 475 Sterling Place, #3C.





Speaking of Sterling Place, across the street at 500 Sterling Place it was news that they're now fully leased and broke neighborhood rental records with their studios over $2,200/month.  Even more newsworthy to us is Forest City buying it for just over $48M last month.  That's right.  We didn't stutter.  Nobody wanted to pay over $5M for this dirt (except one), but now it just sold for over $48M, or over $600K/unit.  We been watching it since day one, and still can't believe that number.






Over in Clinton Hill, north by Myrtle, another loft goes for almost $1.5M.  159 Carlton Avenue, #2B closed for $1.4M last month with about $750K down.  This isn't where people expected condos to poke north of $1,000/sqft, but what developers who robotically count condos ppsf down to the penny love to overlook is this:  condo buyers don't buy purely by the squarefoot.  They buy the dopest condo their money can buy.  Compare this to an even fancier condo that just sold for only slightly more at 105 Lexington Avenue.  And in Prospect Heights it's up to $1,140/sqft at 238 St. Marks Avenue, #5A to buyers from the West Village.





Speaking of buyers from the West Village snatching up Brooklyn condos around $1.4M, head on over to Park Slope where all the sales in 396 6th Avenue have exceeded $1.2M, including unit 4 for $1.37M last month.  Some $400K+ down got it done.







We clowned Fort Greene's 137 Adelphi Street back in 2011 when its asking price around $2M was a joke.  It later closed for $1.1M in 2013.  In this market, done properly, it lists for $2.75M last year and - after a price drop - cruises to $2.35M in December.  Buyers from London made it happen.





Once thought of as "no man's land" Clinton Hill, this mixed-use piece at 1082 Fulton Street sells for full asking price of $3.5M in December.  A totally performing asset, you'll see less than a 6-cap like this happening all day in Clinton Hill and beyond.  Nobody gave the building next door the time of day years ago at even a third this price.





Speaking of "no man's land" Clinton Hill... just a few years ago 184 Lefferts Place was a gem of a foreclosure pick-up under $500K.  Then it lists for the run-of-the-mill price for the neighborhood and closes for $2.325M last month.  What a different two years and a renovation makes!





Back in 2011-2012, it was easy for Platinum Members to hate on the barely-marketed 288 6th Avenue at its asking price of $2.35M.  Now it lists for $3M and cruises to $2.8M last month to buyers nearby in Park Slope.





Anything under $2M, though, in Park Slope is bound to be small and need work.  378 5th Street closing for $1.895M last month is no exception.  Buyers from nearby in the Slope picked it up with about $400K down.  Nobody said Bed-Stuy had to turn into Park Slope, but houses in Bed-Stuy sell for this much or more now!






Don't look now, but way deep into Crown Heights, new construction multi-fams are going over $1.1M.  1501 Dean Street was a vacant lot that traded for $120K in 2012.  Now it closes in December for $1.166M with over $350K down.