The commercial real estate listing strategy of many firms in Brooklyn is pretty standard. Slap a 6% cap on it, throw a set-up together, and call it a day. 629 Classon Avenue is a pretty nice-sized piece at the corner of Pacific and Classon in the industrial corridor of the Prospect Heights to Crown Heights border. This looks like a well-executed use of a 22' x 70' commercial space with three 1,100 sqft. apartments above. You get nice finishes commanding pretty high rents and a stylish wine bar/restaurant on the ground floor Thirstbaràvin.
All a few doors down from where T & S Live Poultry shares a wall with a neighboring tire mechanic...
You get a little bit of everything in this area from junk yards and bus stations to bougie glass condos. Nearby Franklin Avenue, Clinton Hill, and Prospect Heights keeps things interesting over here. You know we like what these guys did up the hill at Sterling Place and Classon. Crosby Coffee just stepped in on Bergen and Classon with a stylish build-out:
The homeless shelter at the Bedford-Atlantic Armory was a deal-breaker for some interested in one of the best residential buys of the year at 1142 Dean Street, but it wasn't enough to stop Brownstoner and Goldman Sachs from pouring $30M into 1000 Dean Street. As they say, and as he's proven in Brooklyn, "If you build it, they will come."
629 Classon Avenue is a standard 6.05% cap rate at its asking price of $1.65M. Not too much upside at these prices they've achieved, but it is a performing asset that's out-of-the-box ready to go. It has better cashflow than a residential play like 447 Classon Avenue at $1.35M. And, beyond the numbers, it's a stylish corner play in a slightly undercover patch of Brooklyn that's poised for another leg up in the near term. We see more value in repositioning a place we toured today that's 30% cheaper just 2 avenues over, but this is definitely interesting as finished products go.
Pro's: corner, decent size, stylish, turnkey, big investments going on around it, set it & forget it asset
Con's: not particularly cheap either, already pretty top of market so not much upside left in the rents for the near-term,
Ideally: not our favorite $1.65M in town, but will someone pay up for the style & quality?
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