As first reported by the good folks over on Brooklyn Heights Blog yesterday (via an announcement from the selling brokerage Massey Knakal Realty Services), 100 Clark Street has traded hands. I expressed an interest in this property at a lower price point than what is being reported as the sale price – $1,250,000. The reason I was comfortable at a lower dollar amount had to do with the number and type of encumbrances on the property and its current condition – half demolished and therefore effectively a land purchase. When the property was most recently being marketed for sale there were a number of liens from the city in place and the three tenants that had to move out prior to NYC DOB ordering a partial demolition still had open claims regarding their displacement and right to occupy their former apartments. So the total price to acquire may indeed be higher than $1.25M.
It is hard to determine the exact cost to remove these encumbrances but for illustrative purposes let’s say it will cost the new owner $400,000 to address these issues. That makes the price to acquire the half-demolished multi-family property $1,650,000, or $207 per buildable square foot (based on the reported available square footage of 7,976, which is the pre-existing building size, non-conforming). And while I understand the property is protected by a landmark designation I do believe it will need to be taken down in order to build new so another $50,000 for demolition needs to be folded into the price in order to establish a land price – $1,700,000, or $213 per buildable square foot.
$213 per buildable square foot is not a bad starting point. It is approximately 15% less than $250 per buildable square foot, the peak of land value pricing (to the extent it can be determined in such a thinly traded market) back in 2007. If the developer manages the permitting process (DOB and LPC) well then there is some room for profit after making the necessary investment in a new residential building of a quality the market demands. If not, then the going-in price doesn’t look so good for the new owner.





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