Friday, February 14, 2014

Closings of Note: Can't Buy What You Don't Know is For Sale, Pt II

It's a jungle out there.  The inefficient market that is Brooklyn real estate works in its own nuanced ways for reasons that aren't always apparent to outsiders looking in.  Sometimes even the industry's top insiders don't always know why properties sell the way they do.  There are lots of reasons why property doesn't get listed on the open market, or is undermarketed.  Some sellers won't list because they don't want their business all around town.  Some don't want their high-paying tenants in the building knowing how little the low-paying tenants are paying.  Sometimes a property never hits the market because pre-market pocket buyers are all it takes to get the price the seller wants.  Some brokers prefer to work with their own buyers, don't want to "waste time with unproven buyers", and/or would prefer a direct deal.  Some local brokers who take a listing for a "discounted" 3-4% commission won't even show a property when big brokers call them, because the local broker doesn't want to co-broke.  Some sellers will take less money if it's a cash deal, others hold out for more money financed.  Some sellers would rather net less money on an off-market sale to their buyer than see a broker making six-figures on the transaction with the broker's buyer.  It takes all kinds.

It's a jungle out there.  There are all kinds of reasons why properties sell the way they do.  And, as we like to say, "You can't buy what you don't know is for sale."

226 Carlton Avenue didn't even need to hit the market again since 2010 for buyers looking for a long time throughout Fort Greene to close on it last month for $1.9M.  With great originals details in place, this looks like a great off-market buy from where we're sitting.

It doesn't take a StreetEasy or New York Times listing to get $1.2M cash this month for this huge gem in Crown Heights at 1245 Dean Street.  On Platinum Member radar for some time, by the time they came up to that number, it was already too late.  Don't expect to get a piece this great this cheap unless it's an SRO with tenants like this one.  And 5 stories is even more rare!  A broker just pitched us a nicer building on this stretch of Dean for $1.7M pre-market.  If you don't think they'll get it, maybe you missed 1261 Dean Street.

659 Washington Avenue is a mixed-use building with 2 apartments above the sushi spot that trades for $1.4M off-market.  It all went down in what was described to us as an almost overnight transaction put together by folks who work up and down this stretch of the Prospect Heights and Crown Heights border.

Barely on the market, the 6-Family at 1047 Rogers Avenue closes this week for $765K.  Just over a 5% cap rate in East Flatbush, the buyer's broker Kirill Galperin says the buyer "sees things changing" in the area and plans to hold.  At that same 5% cap rate, another Platinum Member buy & hold in this area like 245 Martense Street would be worth over $2M!

Speaking of worth over $2M, two adjacent 8-Family buildings in prime Windsor Terrace (one of which grosses less than 245 Martense Street) close off-market for a much-rumored $2M each.  Less than a 5% cap rate, but the upside is tremendous.  We think these go for even more on market.

As you can imagine, on-market property doesn't always trade at the same discount as off-market property...

Buyers from Smith Street in BoCoCa purchase Fort Greene's 305 Vanderbilt Avenue for its asking price of $2.395M.  In a climate where shells this size can command $2M+, this is the true market price for a quintessential 3-Family like this these days.  Great details, healthy size, and decent upgrades.  Off-market they'd try to steal it for $1.5M cash, on-market it doesn't even take the snazziest listing to easily exceed $2M.

A nice house and really nice pictures made 207 Midwood Street in Lefferts Garden attractive to buyers from Fort Greene.  Asking $1.3M, the house closed for just over $1.2M last month.  Now, that's not THAT big of a number at first glance, but it's not that big of a house either.  Breaks down to $666/sqft, y'all.  Devilishly high number by that metric.  If a not-that-impressive Crown Heights house like 1062 Dean Street traded at that ppsf, that house would be up beyond $2.5M (instead of the $1.7M number that alreadyblew everyone away).  Not an apples to apples comparison, but certainly food for thought.

When sellers say, "List," Corcoran says, "How high?"  If Fort Greene buyers go to Lefferts and pay $1.2M, how much do Brooklyn Heights buyers pay when they show up?  After asking $1.425M, 176 Lefferts Avenue closed for $1.6M last month.  That's - gulp! - $746/sqft, people.  That would put 1062 Dean Street at almost $3M!  176 Lefferts Avenue's price activity is even more impressive when you consider it already traded earlier last year for $830K.  Nice flip for sure!

Barely marketed at times, and barely 13' wide, 32 Cambridge Place on one of the cutest stretches of Clinton Hill looked much better inside than we'd expected.  The first list price of $1.6M wasn't happening, then the price drop to $1.495M led the way to closing for a recorded $1.35M last month.  All you Clinton Hill buyers pre-approved up to $1.5M, if you missed this one, it's pretty slim pickings from here on out...

No comments:

Post a Comment