Monday, February 28, 2011

Saint James is in the Place: 125 St. James Place

We don't usually cover the 8-Family game (and we're still not quite sure how you fit 8 units into buildings that usually barely fit 4 units), but 125 St. James Place has the look, the price, and the location we go for. Oh, and it's a real listing! From a real company! With pictures and decriptions and financial breakdowns and everything.

This here is a great block in Clinton Hill, and you can almost see why the two free market units are paying $1,375 and $1,475/month for just under 400 sqft. The other 6 units are rent stabilized (all the same size) with no unit paying less than $918/month. Compare that to rent controlled tenants in neighboring 234 St. James Place, some of which are paying less than $600/month for 1,300+ sqft 3BR places. A recent NYTimes piece on the rent controlled/rent stabilized debate shed some light on the matter. But given every anecdote we've ever heard, and the others in the article, we're astonished at how sour the founder of Property Shark turned on the process of destabilzation considering what a relatively easy time he had with it.

This listing frames the scenario at 125 St. James Place as such:

"There are 6 Rent Stabilized units and 2 Free Market units, which leaves the opportunity for an owner occupier to convert the building to a one-family."

Which is much easier said than done. The number at which these units supposedly automatically destabilize ($2,000/month) isn't a number even the free market units can get, so don't bank on destabilizing that way.

Pro's: curb appeal, nice block, close to the C train, rent controlled units aren't as below market as many neighbors

Con's: commercial loan needed (30-35% down), small units to owner occupy, expensive buyouts and renovations (and that's best-case scenario)

Ideally: If you know what you're doing and have lots of time and cash, even then there's no guarantee that this is worth taking on at this price. Why not take 26 St. James with just one tenant?

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