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A blog for breaking sales and neighborhood real estate news.

Featured Listing: 1 Portal Street, Brooklyn, NY

12/30/2008 12:55:04 PM/ Massey Knakal/ Listings

This unique 38,000 SF all brick warehouse in Crown Heights, Brooklyn has two floors.  A sloping street allows for access to both floors directly from the street level. The space is totally open other than columns that are down the middle. Totally sprinklered and ready for the a new owner. The first floor is about 18,000 SF which includes warehouse and office space. The second is 20,000 SF of open warehouse. There are 5 gates. Ceiling height is 16’.

Neighborhoods: Crown Heights

The subject property is two contiguous five-story new construction* residential and community facility buildings between 71st and 72nd Avenues one block East of Parsons Blvd.

The cement buildings are made with the highest grade construction including individually metered units and a tax abatement. These units have been approved for condominiums* and will be delivered vacant.

Click here for listing details.

Neighborhoods: Flushing/ Agents: Stephen Preuss

256-258 West 135th Street consists of two (2) contiguous 18.5’ wide walk-up buildings. While the buildings were once SRO townhouses, both have a certificate of non-harassment and will be delivered vacant thus presenting an excellent conversion opportunity.

The property is surrounded by several recent developments including One Striver’s Row, 50 West 127th & The Lenox. Quick transportation to all downtown and outer borough locations is provided by the B-C train located one block away at St. Nicholas and 135th Street & the 2-3 train located at Lenox and 135th Street.

Neighborhoods: Harlem

A 24.69' wide, 5 story walk-up mixed-use building located on the southwest corner of East 29th Street and Second Avenue.

The property is comprised of Paddy Reilly’s on the ground floor, the first and only all draft Guinness bar in the world, which will be delivered vacant. The second through fifth floors consist of 8 apartments (2 per floor) with 5 of the units being delivered vacant. This property represents a prime opportunity for a user or investor looking for a great corner location.

Neighborhoods: Gramercy Park, Murray Hill/ Agents: John Ciraulo

An 80-year leasehold for a ground floor, mezzanine, and finished basement space. The leasehold may be convertible to co-op ownership.

It benefits from both high ceilings and tremendous exposure on this strong retail block off the Seventh Avenue corridor. This would be ideal for both users and investors alike.

The space was formerly occupied by Man Ray, a famous bar and lounge.
The space has a C of O for commercial use group 6, but a liquor license was recently turned down. Thus, dry use is preferred. There may also be an opportunity to use as a live-work space if the DOB approves.

Neighborhoods: Chelsea/ Agents: Brock Emmetsberger

An 8,336 SF (approx.) single-story retail property located on the southeast corner of Queens Blvd. and 65th Rd. in Rego Park, NY.

The site is currently comprised of 7 retail tenants, 6 of which have demolition/cancellation clauses of 6 months or less, posing a prime development opportunity. All potential uses and square footage figures should be independently checked and verified.

Click here for listing details.

Neighborhoods: Rego Park/ Agents: Guthrie Garvin, Thomas Donovan

171-173 West Broadway is sold individually or as a package with 175 W. Broadway and 177 W. Broadway. Excellent TriBeCa location - Varick St. and W. Broadway merge practically in front of the properties. Excellent retail opportunity. Most tenants on month-to-month leases.

Click here for listing details.

Neighborhoods: TriBeCa

The subject property is a brick, 3-story 6-unit walk-up apartment building totaling approximately 5,712 SF, located on the east side 66th Street between 70th Avenue and Central Avenue in Glendale, Queens.

The entire building is occupied, making this an excellent opportunity for an investor.

Click here for listing details.

Neighborhoods: Glendale/ Agents: Thomas Donovan

761 St. Nicholas Avenue is a 20’ wide, five (5) story mixed-use building located on the west side of St. Nicholas Avenue between West 148th and 149th Streets.

Steps away from numerous landmarks and institutions, including Jackie Robinson Park, and Cuny City College, 761 St. Nicholas Avenue enjoys a prime Hamilton Heights location. Offering size, excellent condition, and a prime Hamilton Heights location, 761 St. Nicholas stands out as a premier opportunity for an owner user with income situation.

Click here for listing details.

Neighborhoods: Hamilton Heights

This property is a 6 story walkup mixed use corner building located in the Lower East Side. The building has 6 stores, 26 apartments, 2 antennas occupying the roof. The additional income comes from an appliance surcharge to some of the apartments. Tenancies include 21 RS apartments, 3 RC tenants, 1 super’s apartment and 1 vacant apartment. More vacancies are also expected. Basement ceiling heights are approximately 8’-9’ while apartment ceiling heights are approximately 10’ high. The property has great potential for increase in the rents as the average of the rent stabilized/controlled apartments are $11.62/SF while free market apartments can rent for approximately $45/SF. There are also two vacant store spaces that can add considerable value to the property. The boiler uses #2 oil and has a 4000 gallon tank. This could be a great value opportunity and a stable income provider to an investor’s portfolio.

Click here for listing details.

Neighborhoods: Lower East Side/ Agents: Michael DeCheser, Robert Burton

A 16-unit walk-up building located at 41-50 46th Street in Sunnyside, Queens was sold in an all cash transaction valued at $1,645,000.

Neighborhoods: Sunnyside/ Agents: Stephen Preuss

At least five times a day I receive calls from investors looking to buy distressed assets at good yields in New York City. The result of these conversations often leaves buyers frustrated with my answer that, to date, the distress that some over leveraged owners and extended lenders are experiencing is not being translated into buying opportunities at yields buyers would expect. The activity in the market has also been a pleasant surprise based upon the prices that we are achieving for income producing assets. As I have stated in many commentaries before, it is very important to differentiate the segment of the market that we are addressing. Clearly, larger institutional quality assets sales have ground to a halt which has created significant difficulty trying to determine value. Nine figure loans are extremely challenging to secure today which is the single biggest obstacle for larger property sales. In the under $50 million dollar market, activity continues to be relatively good as debt remains available from portfolio lenders.


This is particularly surprising given the unemployment data released by the Government last Friday. I remain very focused on unemployment as it is the single most important economic metric affecting the fundamentals of our real estate market. The U.S. lost 533,000 jobs in November, the largest one month drop since 1974. As employers brace for a continuing recession, job losses are expected to last through much of 2009. Thus far in 2008, we have lost over 1.9 million jobs signaling that the current downturn could be the worst since the years immediately following World War II. That being said, the unemployment rate of 6.7% is somewhat misleading in a positive way. While it is the highest rate we have experienced in the last 15 years, this jobless rate, which is based on the number of people looking for work, was muted by the ranks of discouraged job seekers who are no longer looking for work as these people are no longer considered “unemployed.” This is the result of a fundamental change in the calculation implemented during the Clinton administration to make the numbers look more benign. Because of this, during the last two decades the jobless rate has become a significantly less useful measure of the country’s economic health. A broader and more accurate government measure of unemployment, which includes those who want to work but are no longer actively seeking positions and part time workers who are seeking full time employment, jumped to 12.5% in November.


Most economists believe that payroll reductions will continue, at least, through mid 2009 and it is interesting to examine the total number of U.S. jobs lost from peak to trough during the last five recessions. This decline was approximately 2%. In this downturn, a loss of that scale would translate into a decline of about 2.8 million jobs or an additional 900,000 people that will lose their jobs. This is clearly having a significant impact on consumer spending and last Thursday, U.S. retailers reported the worst same store sales declines for November since at least 1969 when the data began being tracked. Our economy is contracting sharply in the current quarter and the latest job reports indicate that the decline in output could be worse than the expected annualized drop of 4%. Also last Friday, the Mortgage Bankers Association said that one in ten homeowners with a mortgages is either in foreclosure or is delinquent.


So with all this negative news, why are Manhattan’s small to midsized income producing properties still performing relatively well? Rent regulation, which artificially reduces average rent levels and is prevalent in many multifamily and mixed-use properties, is one reason. Interest rates hover around historic lows and it is expected that when the Fed meets on December 16th, they will cut the Federal Funds Rate to a quarter of a point or zero. This should have a positive impact on credit availability as it will widen spreads even further making loans even more profitable for the lender. Banks that have capital have tremendous incentive to lend the funds and while spreads are high, risk is relatively low as loan to value ratios are down to 60-65%.


We find, in many of the transactions that we are doing currently, buyers are financing only 50-60% of their acquisitions. We are using these signed contracts as a basis for determining value today as comparable sales do not provide nearly the insight that they historically have. The reason for this is that we see an inflection point in the market as of September 30th which can arguably be depicted as the point in the time when the credit markets were the most frozen. That was the day the overnight LIBOR rate jumped to 6.88% and the commercial paper market had completely evaporated. Any transactions that have closed through today had contracts which were, very likely, signed before this time period. (Subsequent to September 30th, the realignment of the implementation of the TARP Program and additional stimulus that the Fed and the Treasury have announced have gone into effect.) Therefore, we are looking very carefully at the contracts that we have signed since September 30th and while these transactions have not closed yet, they are more indicative of value today than those transactions which are closing with the pre-September 30th contract dates. Remarkably, the cap rates on the transactions which have gone to contract remain in the 5-6% range with some transactions in the below 5% cap rate range.


We have also seen a tangible shift in the type of buyer that we are seeing. Over the past few years, the majority of buyers in the marketplace were operators who had partnered with institutional capital. Today, we see the overwhelming majority of buyers are private individuals and families which invest their own equity and do not rely on external equity sources to complete their transactions. These are typically buyers with extensive portfolios who have been active in the market for decades and have remained active throughout the peaks and valleys of our market.


So the question is, “When will the buying opportunities come?” and we are defining buying opportunities as the ability to get returns on equity that are approaching the high single digits or double digits or at least a yield above the cost of debt. Clients will often tell me that they recall buying properties in the early ‘90s at 8% and 9% returns. What some don’t remember is that mortgage rates were 9% or 10% back in those days and even though cap rates had increased, they were still buying with negative leverage. Will the days of the 10% cap rate return? It is difficult to say “no” to that question based upon all the negative indicators in our marketplace, the state of our economy and the common prediction that the turmoil in 2009 will make 2008 look like a walk in the park. However, to date, we have not seen any evidence that this condition may return despite what “opportunistic investors” would like to think.

Have a great week,


Agents: Robert Knakal

Massey Knakal is pleased to offer a rare opportunity to purchase prime, South Riverdale retail space. 3718 Riverdale Avenue is a block-through property with 28’ of frontage on both Riverdale and Fieldstone Avenues, featuring a full basement, 12’ ceilings, 2 covered parking spaces (rear), and significant air rights.

The site will be delivered vacant and can be utilized as-is, or easily converted to 2 or 3 retail/commercial units. Located in close proximity to several new condo developments, private schools, and Manhattan College this site could be utilized and/or built out to service any number of retail or commercial uses. There is easy access to the Henry Hudson Parkway and MTA bus service along Riverdale Avenue.

Click here for listing details.

Neighborhoods: Riverdale/ Agents: Karl Brumback

Two rare contiguous 25' wide 5 story Upper West Side walk-up apartment buildings containing a total of 20 units, of which 12 are Free Market, 4 are Rent Stabilized, and 4 are Rent Controlled.

Tremendous opportunity exists to build two ground floor-basement duplexes which would create an additional 1600 net rentable square feet. In addition it may be possible to design penthouse duplexes for each building with set-backs. Outstanding natural light in both front and rear apartments.

Both properties lie within the Riverside-West End Historic District.

Click here for listing details.

Neighborhoods: Upper West Side

This well-maintained Bedford Stuyvesant building includes six large 3BR railroad apartments. Located near the very desirable Stuyvesant Heights Landmark District within Bed-Stuy. Recent improvements including a new roof, hot water heaters, entryway, and sidewalk. Great condition; turn-key investment opportunity with good returns. Serviced by the C train station at Kingston-Throop Ave.

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Neighborhoods: Bedford Stuyvesant/ Agents: Michael Amirkhanian

414 Myrtle Avenue is a 4 story, mixed-use building, located off the corner of Clinton Avenue, one of the busiest intersections in Fort Greene, Brooklyn.

The building measures 4,300 sq.ft. (approx.) & contains 1 store and 3 apartments. Nearly $100,000 in renovations have been invested into the building. Located between Chase Bank & Emigrant Savings Bank, the vacant retail space remains in a highly desirable location.

Click here for listing details.

Neighborhoods: Fort Greene/ Agents: Stephen Palmese

The subject East Village property is a 5-story, walk-up apartment building totaling 9,920 square feet. The property has eighteen (18) residential units. Of the eighteen (18) residential units, seven (7) are free market, eleven (11) are rent stabilized.

The rent stabilized apartments are renting for approximately $39/NSF or 44% of market. All of the free market apartments have been gut renovated featuring new hardwood floors, stainless steel appliances and granite countertops.

Click here for listing details.

Neighborhoods: East Village/ Agents: Robert Knakal