115 Ocean Goes for a Boatload: What's Next?

115 Ocean and Yankelovich: Article/Photo - Claire Moses

An eagle-eyed reader noted the sale of 115 Ocean in The Real Deal, and while the sale of a big apartment building is hardly news in these heady times, the price paid is a real eye-popper - $26 million. You coulda bought a building like this a decade ago at $5 million or even less. Especially one like this, called the "worst in the City" due to violations like roaches and mold and peeling paint. The apartments are all stabilized of course.

So stick with me here. At that price, each apartment is worth nearly $300K. If you bought this building, wouldn't you want to take it coop/condo eventually? Even if you got market rate of (say) $2,500 per apartment, at 89 apartments, that's about $2.67 million a year. Strangely close to a 10% return. But then you got lots of money going into renovations and upkeep. Can you clear 5% at those market prices? I suppose so.

Now, I don't know the first thing about running a 90 unit apartment building. But something tells me you gotta up the rent substantially from its current rent-stabilized state. Maybe you buy everyone out and sell the units? How do you do that without being accused of "warehousing?" I'm being serious here. How do you DO this without being a d-i-c-k?

Note the final sentence in this post from TRD:

A 87,000-square-foot multifamily building in the heart of Prospect Lefferts Garden traded for $25.7 million, The Real Deal has learned. Owner Lincoln Prospect Associates sold the building in an off-market deal to a local investor. Lincoln bought the 89-unit building in 2010 for $9.8 million, property records show. GFI Realty’s Erik Yankelovich was the sole broker on the off-market transaction.

The unnamed buyer is a local family “that has been investing in Brooklyn for multiple years,” the broker said. The apartments in the building are all rent stabilized. In February, the city reportedly named the building the borough’s worst building, due to violations that included peeling lead paint, mold and roaches. According to the most recent records on the Department of Buildings’ website, there are currently 12 open violations on the building, a dramatic decrease from the hundreds of open violations that were reported earlier in the year. The $25.7 million sale price works out to $290,000 per apartment or $295 per square foot.

The price for the building is one of the highest in the area, said Yankelovich. With a lot of money coming into the area and a lack of supply in multifamily buildings, he said, more properties in the neighborhood will likely be sold for similarly high prices.

A 87,000-square-foot multifamily building in the heart of Prospect Lefferts Garden traded for $25.7 million, The Real Deal has learned.
Owner Lincoln Prospect Associates sold the building in an off-market deal to a local investor. Lincoln bought the 89-unit building in 2010 for $9.8 million, property records show.
GFI Realty’s Erik Yankelovich was the sole broker on the off-market transaction.
The unnamed buyer is a local family “that has been investing in Brooklyn for multiple years,” the broker said.
The apartments in the building are all rent stabilized. In February, the city reportedly named the building the borough’s worst building, due to violations that included peeling lead paint, mold and roaches. According to the most recent records on the Department of Buildings’ website, there are currently 12 open violations on the building, a dramatic decrease from the hundreds of open violations that were reported earlier in the year.
The $25.7 million sale price works out to $290,000 per apartment or $295 per square foot.
The price for the building is one of the highest in the area, said Yankelovich. With a lot of money coming into the area and a lack of supply in multifamily buildings, he said, more properties in the neighborhood will likely be sold for similarly high prices.
- See more at: http://therealdeal.com/blog/2014/12/17/brooklyn-building-bought-for-10m-sells-for-26m/?utm_source=feedly&utm_reader=feedly&utm_medium=rss&utm_campaign=brooklyn-building-bought-for-10m-sells-for-26m#sthash.3lWVXeNX.dpuf

A 87,000-square-foot multifamily building in the heart of Prospect Lefferts Garden traded for $25.7 million, The Real Deal has learned.
Owner Lincoln Prospect Associates sold the building in an off-market deal to a local investor. Lincoln bought the 89-unit building in 2010 for $9.8 million, property records show.
GFI Realty’s Erik Yankelovich was the sole broker on the off-market transaction.
The unnamed buyer is a local family “that has been investing in Brooklyn for multiple years,” the broker said.
The apartments in the building are all rent stabilized. In February, the city reportedly named the building the borough’s worst building, due to violations that included peeling lead paint, mold and roaches. According to the most recent records on the Department of Buildings’ website, there are currently 12 open violations on the building, a dramatic decrease from the hundreds of open violations that were reported earlier in the year.
The $25.7 million sale price works out to $290,000 per apartment or $295 per square foot.
The price for the building is one of the highest in the area, said Yankelovich. With a lot of money coming into the area and a lack of supply in multifamily buildings, he said, more properties in the neighborhood will likely be sold for similarly high prices.
- See more at: http://therealdeal.com/blog/2014/12/17/brooklyn-building-bought-for-10m-sells-for-26m/?utm_source=feedly&utm_reader=feedly&utm_medium=rss&utm_campaign=brooklyn-building-bought-for-10m-sells-for-26m#sthash.3lWVXeNX.dpuf