Picture's Worth a Thousand Words: 102 Pierrepont Street

[Editor's note (3/28/13):  The listing broker points out that we've overlooked how much of an encumbrance the occupied rent controlled unit in this building was.  "No user wanted to go near it," he says, adding that the sales price was "a lot of money, all things considered."]

When you're buying a house 2 blocks from the Promenade in prime Brooklyn Heights, listed for $3.8M, why would you wanna see any interior pics of that?  Or so assumed the listing broker of 102 Pierrepont Street.  The lack of pictures made everyone assume it was a gut, when actually it was a totally turnkey little gem.  The price dropped from $3.8M to $3.5M, and sold for $3M cash.  A total steal.  Yet, while everyone assumes agents don't market their properties because they don't know what they're doing, don't tell us this broker doesn't know what he's doing.  He closed over $200M in deals last year alone.  But, as we've seen over & over, people can't buy what they don't know is for sale.  Which means 102 Pierrepont sold for a big number, but not the biggest number possible, because it wasn't marketed in the traditional channels where townhome buyers stalk their prey.  All points back to the inefficiencies of the market.  Flippantly saying, "Dumb broker..." - as so many jaded buyers are quick to do - doesn't tell the story at all here.

Cue Corcoran swooping in and taking pictures on the rentals because they know what they're doing.  $3M cash purchase won't get you pics, but $2,600 - $8,000/month rentals sure will...

It ain't cheap, but there are certainly worse places all over town that rent for higher than $8,000/month.


Pro's:  pictures!, totally prime location, totally turnkey, the $2,600/month 1BR has value

Con's:  gone already, generic renovation, quirky space at times, pricey on the duplex

Ideally:  just another look at the nuances of the inefficient market

Price Drop in Brooklyn Heights: 102 Pierrepont Street

You know we barely cover Brooklyn Heights.  It's basically the Upper East Side in our book, and it's adorable how many folks treat it like it's deep Brooklyn - even people that live there.  But today's pick is too juicy not to cover.  102 Pierrepont Street just dropped from $3.8M to $3.5M this week.  That's still a ton of money, to be sure, but it's also $525/sqft in a neighborhood where fixer-uppers can easily command close to $1,000/sqft.  One developer even told us they'd underwrite a condo conversion over here at $680K a piece.  Maybe they haven't been following the $700K condo game in Gowanus-y Slope or 4th Avenue Park Slope or North Slope or neighboring Boerum Hill or anywhere in Brooklyn for that matter.  How many people do you think you'd have at the open house for a 20' x 55' condo in prime Brooklyn Heights for $680K a piece?

6 stories just a few blocks from the Promenade?  This is a screaming opportunity on a lot of levels, but you know how Brooklyn goes.  Whether you have $1M or $100M, since there's no one place where all the listings are, it's still needle-in-a-haystack time searching for properties.  And, as we've seen, how and where properties are marketed makes a HUGE difference on sales time and sales price.  Palmese & company aren't going to give you any interior pics or even market the thing in the traditional channels where properties like this are bought, and they probably could care less.  The property is in totally turnkey condition, not that you'd know it.  They openly call out the rent controlled tenant, to their credit.  There are lots of angles they could hype up about the place, but that's simply not their game.  The fact that it was the one-time home of Arthur Miller is a nifty detail worth geeking out about to some.  But these brokers don't care if it was Arthur Miller's or Brooklyn Heights neighbor Norman Mailer.  Mailer once said of Miller, "I can remember thinking, This guy's never going anywhere" - which is how some would-be buyers might feel about the rent controlled tenant at this house.

There's a funky little extension on the back of the house that some portrayed as a deal-breaker, but we think could make a really nifty rear kitchen with a little creative design and some added windows for light.

Any number of other things make this an adorable place to be.  Geek out about St. Ann's across the street for all you top-notch school connoisseurs, or cool off from this heat at the refreshing lemonade stand on your way to a Promenade stroll:

Pro's:  location, size, turnkey, versatile


Con's:  rent controlled tenant, no pics of the inside, listing living under a rock for some (which can be a plus)


Ideally:  whether as a condo conversion, an income rental property, or a single-family home - there are plays to be made here.  (especially compared to what else wants $3M+ in Brooklyn Heights)

Sold in Brooklyn Heights: Joralemon Street

We rarely cover Brooklyn Heights, but this deal has been asking to be swooped since the end of last summer. Listed for $2.85M - $3M for a while, this multi-family house on Joralemon recently closed "at full ask". We wish the agent would indicate that on their website, and in the other various places they're still promoting this listing as "Available!", but we all know how that goes.

While at prices certainly well above our paygrade, we'd been telling Platinum Members since August that this place was a good buy & hold in a prime location pushing a 6 cap, with further upside the market could still bear. While it requires deep pockets, the building also works as a condo conversion, whether now or down the road. With over 8 units, and only 2 of them rent stabilized, it's not the worst way to get into a 25' wide Brooklyn Heights property. Acquisition at $430/sqft ain't bad at all in a neighborhood where over 30+ condos traded in the past 6 months with a median price of $818/sqft. $870K was the median sales price of those condos. No wonder the $700K condo game is so tough in Boerum Hill and beyond.

Granted, the few looks we get of the interior are lame, but the apartments still command top dollar - as much as $2,100/month for a 1BR...

Imagine what they'd rent for if you made them really boutique-y and nice. It's not hard to imagine what they'd sell for either.

Pro's: location, size, mostly free-market, ripe for further repositioning

Con's: 2 of the apartments are rent stabilized, chopped into too many units for now, hefty renovation

Ideally: if you've got the funds to swing it, there's opportunity on blocks where some single-family fixer-uppers can command close to $1,000/sqft.

Relative Value in Brooklyn Heights: 16 Hunts Lane

If you're gonna drop just under a million for a tiny place all to yourself in a great neighborhood, make sure you're getting the best. 16 Hunts Lane is an adorable converted carriage house on one of the niftiest little alleys in Brooklyn Heights. We almost never cover Brooklyn Heights, but after seeing the quirky likes of the also-tiny 400 Bond Street go into contract on the edge of Carroll Gardens around its $999K, the tiny 643 Degraw on the edge of Park Slope trickle down to $935K, and the sale of Brooklyn Heights' most expensive townhouse ever for $11M - 16 Hunts Lane starts to look like an adorable condo alternative and a great entry to the neighborhood.

We ain't mad 'em for their tiny kitchen that doesn't even look as good as the kitchenette at the Mondrian hotel...



And not mad at them for the 99 cent store run for a 2nd light bulb they could've made (or even a run downstairs to unscrew one of the non-recessed light bulbs) they neglected to make before taking a picture bathroom...



Sure, we'd much rather spend this money on an entire mansion, like this one the agent tells us is back out on the market. But as tiny things in nice places go, even at a paltry 700 sqft, this is going to knock somebody's socks off. Why bother with the projects across from 291 Hoyt, when you can settle into this quaint little lane?

Pro's: curb appeal, adorable little lane, in Brooklyn Heights proper, great condo alternative, no absurd condo or co-op fees to fuss over

Con's: small, B+ interior, you could get a mansion a few miles east instead

Ideally: with an $11M neighbor, and $2M+ places flying off the shelves in Park Slope above asking price for all cash within the first month of listing... this is a compelling little play.