Monday, July 28, 2014

Prospect Heights Package Supposedly Sold: 218-220 Park Place

Platinum Members have been scheming on this huge, prime Prospect Heights estate sale package "off-market" since we got the call on it last Thanksgiving from a local broker in the area.  It's not everyday that you get two adjacent 5-story townhomes on a prime block, delivered vacant...

Each building 20' wide, with extensions on the rear, and both on extra-extra deep 162' lots.  The buildings are SRO's by some accounts, but have basically been vacant for a long time.  The play is either "throw-away the calculator" end-user townhomes or condos.  Investors griped to us about how ya can't make enough money on them at the asking price that wavered between $2.4M-$2.7M each for months.   Brooklyn doesn't owe ya anything.  So they took their ball and went home.

Many clowns tried to tell us these can't sell for ~$1M per floor as condos.  But look no further than directly across the street where 215 Park Place just did just that:

Roof deck?  No-brainer!

Not a year or two from now, not speculation, but now.  In present times.  These get $1M/floor.  Which isn't a surprise if you've been hunting in Brooklyn since the days of 96 St. Marks Avenue, when you could still get 4 floors for a million and sell each one for basically a million a piece.

Can you build an extension on the back of 218-220 Park Place?  Maybe, maybe not - just ask 115 Lincoln Place, which has spooked many people about the likelihood of extensions.  An extension would just be bonus, not a deal-breaker, and there's plenty of bonus in the extra-extra deep lot and the existing extensions.

So while the glass was more than half full, people were looking the gift horse in the mouth.  Platinum Member end-users were willing to go up to $2.7M for just one of them, but it would take an investor/developer to take on both of them.

That's until a 3rd property in Harlem was thrown in the mix, also delivered vacant...

So a 2 building package for ~$5M became a 3 building package for ~$8M in the space of an afternoon.  An accepted offer of $7.75M for the package dilly-dallied too long.  There were deals brewing later for $7.9M-$8M, then we heard multiple accounts of a deal at $8.6M, and the broker tells us this weekend that's where the deal landed.  $2.86M each might look and sound like a super lofty price, but there's still a lot of meat on the bone in this market, even if some of it got chewed up on the march to this higher price.

Maybe you missed neighbors like 181 Park Place, which was a steal in retrospect even when $2M felt lofty at the time.  Or there was 204 Park Place earlier this year for $3.6M in way-generic condition.  Or 206 Park Place for $4.3M last year.

218-220 Park Place, even in estate condition had a ton to offer.  Tall ceilings, original details, a sick location, a great block, great trains a block away...

If you want a unique townhouse with grand proportions in a prime neighborhood, it doesn't get much better than this.  Investors still griped about the price a million dollars cheaper, that just shows you how hot property is right now.  Platinum Members who wanted one of these at $2.7M got an even better opportunity a block away for less that we'll take a look at tomorrow.  All's well that ends well, and this estate certainly cashed in large.  Won't believe it 'til we see it close with our own eyes, but with $3M-$4M properties going on all around, will they look back and think this "lofty" price is cheap some day?

Pro's:  two adjacent 5-story historic townhomes in different styles, with original details, delivered vacant, in a great location, not on everyone's radar, huge lot, existing extensions

Con's:  gone already, takes a ton of cash to acquire & renovate, package couldn't be broken up, with landmarks these days extension is iffy, SRO status is another rub, price bubbled up over time

Ideally:  someone with deep pockets is making a solid move on flagship pieces for the long-haul, or maybe just dividing and flipping.  Only time will tell...

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