Thursday, February 6, 2014

Slim 8-Family in Fort Greene: 220 Cumberland Street

The next 8-Family we're covering is a narrow little slice of prime Fort Greene, asking under $1.5M.  220 Cumberland Street sold for $1M in August 2013, quickly listed for $1.275M with one commercial broker, and now wants $1.35M with another commercial broker.  This is a small 16' x 47' house chopped into two 320 square foot studios per floor.  If you didn't like it at $1.275M, the price increase certainly doesn't sweeten the pot.  However, we're not convinced everyone who might be interested in this property has even seen this property.  Much like 394 10th Street was in Park Slope, 220 Cumberland is a townhouse that's worth a lot more money if it weren't chopped into so many units.  394 10th Street's units were SRO's, 220 Cumberland's units are rent stabilized.  However, 3 of them will be delivered vacant.  Not sure where this expired rental listing for a 700 sqft. apartment fits into play...

The studios all rent for under $1,000/month according to the previous rent roll, which projected the free-market studios to fetch $1,950/month.  That would still put it at a 5-cap at current asking price.  But we haven't seen these places or handled Fort Greene studios in a while, but the last one we saw was able to command that much (for a much larger space though!).  Still, 220 Cumberland is another example of under $500/sqft in a prime location where good renovations without these encumbrances can achieve twice that.  With Fort Greene Park right on the corner, it turns out there's more to Fort Greene than just South Oxford and South Portland.  We think someone with a long time horizon takes down this tweener play at a nice discount to typical product in this area.

Pro's:  location, price point, 3 vacancies (some adjacent), upside, Fort Greene townhouse at condo prices

Con's:  narrow 16' wide, just about 3,000 sqft, not your typical townhouse, chopped into lots of below-market rent stabilized units, tweener play, might be hard to manage

Ideally:  too small for the big guys, too big for the little guys, and not right for the typical home buyers.  But there's a bound to be a buyer this tweener play is perfect for.

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