Friday, April 13, 2012

How Far Off Can It Be?: 187 Gates Avenue

If you think you're pioneering in Clinton Hill, we think you're kidding yourself. The housing market has taken off like a rocket, and the commercial is finally catching up. We've been calling for the Clinton Hill commercial corridor on Fulton to catch up with Myrtle for about a year and a half now. And it was only a matter of time. Like clockwork, now there's a Bergen Bagel coming to Fulton. Which is funny because the only other Bergen Bagel not on Bergen is on Myrtle. So Fulton has officially arrived. Boy, it seems like just yesterday we were in the original Bergen Bagel in 2003, with the bagel, the coffee, and the schmear, overhearing people kvetching, "Do you have to have random tattoos to be white in this neighborhood?" And now certainly even those hipsters with barcode tattoos on their calfs might be priced out of Bergen Bagel III's locale.

187 Gates Avenue is another house you won't find on your StreetEasy or your NYTimes. It's been out for a while and, like yesterday's pick, we guarantee they get 10 calls this week they never otherwise would've gotten. 22' wide in this neighborhood for $1.1M ain't too shabby at all. We've seen SRO's fetch that, PRIOR to the price explosion of last Fall. Now we're told it's "being supported by one electric & one gas meter" even though it's "being run as a four family". We appreciate the honesty here. Speaking of honesty, if that rent roll of $7,500/month is real (and not Massey pro-forma), we might really have something on our hands here.

Don't let the lack of photos necessarily deter you. That's just how Palmese rolls. He's got bigger fish to fry, and he knows he's moving this building eventually regardless. So he doesn't need your NYTimes, or your StreetEasy, or your snarky Brownstoners nit-picking his interiors. He's got leases and rent rolls and dimensions. Take it or leave it. He rolled 338 Clinton Avenue out the door without barely a snap of a photo, and that thing had a gorgeous interior the Brownstoners had previously gushed over. Verify that rent roll and you've got a great investment. Or step a few blocks across Classon for finished mansions cheaper than this. But please don't pretend you're "pioneering". This is the second most populated county in the country behind Manhattan. The housing market might be as unregulated as the Wild West, but you ain't in Kansas anymore, Toto.

Pro's: price point, ever-improving location, potentially insane cap rate

Con's: no pics, questionable rent roll, 1 meter run as a 4-Family might be hard to finance, almost into Bed-Stuy where there's more value if you go a tad further

Ideally: this works for someone who probably didn't even know this place existed

No comments:

Post a Comment