Wednesday, March 12, 2014

Another Crown Heights Valentine Closes: 1020 Park Place

Before it listed for $1.955M on StreetEasy last spring, Platinum Members were in and out of what we billed at the time as "the best buy & hold in all of Crown Heights".  1020 Park Place is all that and then some.   Like we told em back then...

It's a 20' x 100' building on a 140' lot.  Named "Columbia".  Listed at 8,000 sqft, with an unattached side full of windows.  It does taper to some 17' wide in the back, so it's probably closer to 7,000 sqft, but well configured.  Delivered vacant.  The units are totally turnkey rental-grade 4BR/2Bath on each floor (except the first floor is 3BR 'cause of the hallway).  It would rent for $12K/month easily as-is.  The basement has 16' ceilings and is slightly above-grade.  There were talks about ways to turn it into an 8-Fam, but with 2 baths, 4BR rentals aren't a problem, and there may not be the ROI at this point.  Dunno.  There's risers for yet another bath on each floor.  Price per square foot is seriously nice.  On a killer block across the street from Brower Park.  In a valley of great townhouses.  The plaster embellishment in the entry way is soooo sick!  Amazing.  Lots of marble in there too.


The apartments themselves won't wow you with any particular details, but size and the location and the curb appeal make this another flagship Crown Heights gem for the long haul.  When we toured the property, cute hipster girls were unpacking their U-haul truck and moving into a rent stabilized 2BR apartment a few doors down for $1,600/month.  So $800/BR is in play, and could easily go higher.  This is $1,200/BR off the Franklin stop.  Just a few blocks east, the housing stock here is killer.

Go ahead and chop it up by cap rate, price per square foot, or gross rent multiple.  Bring your meanest, shrewdest, most conservative calculations to 1020 Park Place, and it's still a winner.  We were all in on this one.  Especially when a Crown Heights SRO gut that wasn't nearly as nice was already in contract for $1.5M cash at 1329 Pacific Street.  But we watched small developers bid $1.8M cash on 1020 Park Place in the face of a broker insisting on a full $2M.  We later watched the price fall as low as $1.65M, and medium developers pass on it.  You'd think the buyers who wanted it at $1.8M - but were bluffed into thinking that they were outbid - would swoop in and the save the deal at $1.65M.  But other buyers pulled off one of the sweetest 4-Family purchases you'll ever see.  The property closed on Valentine's Day for $1.65M with less than $500K down.  This is about as major a purchase as you could hope to make with 30% down in this market, in the face of cash buyers and bubbling prices.  Watch the neighbor at 1054 Park Place close for over $2M soon, and you'll start to get a picture of how nice 1020 Park Place really was.

Pro's:  fancy building on a great block along a park, enormous floorplate and unattached size full of windows, delivered vacant, rental income potential, totally turnkey condition, cosmetic upgrades take this to the next level

Con's:  generic interior, could use some work, not really a typical townhouse for an end-user

Ideally:  for a small buy & hold investor, this is the sweet spot.  A huge King Kong apartment building that's technically only a 4-Family, but will rent roll like an 8-Family.  Flagship block in an upcoming neighborhood.  30% down on a turnkey property with cash buyer competition?  Hands down, one of the best buys of the year.

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