100 Clark Street, Back in the Day.
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.
100 Clark Street – Land Value Estimate
100 Clark Street, Back in the Day.
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.
This entry was posted in Uncategorized and tagged 100 Clark Street, Brooklyn Heights, Land Value, LPC, Massey Knakal