I just stumbled across the sale of #680 at 101 Warren St. http://streeteasy.com/nyc/sale/468898-condo-101-warren-street-tribeca-new-york It's advertised as an "investment opportunity" with a tenant in place through June 2011. According to Streeteasy record, unit went into contract after dropping the asking rent from $7,500 to $5,300 (who knows what they actually agreed upon). Owner paid $1.563... [more]
I just stumbled across the sale of #680 at 101 Warren St. http://streeteasy.com/nyc/sale/468898-condo-101-warren-street-tribeca-new-york
It's advertised as an "investment opportunity" with a tenant in place through June 2011. According to Streeteasy record, unit went into contract after dropping the asking rent from $7,500 to $5,300 (who knows what they actually agreed upon). Owner paid $1.563 plus closing costs.
Can someone explain to me how this is in "investment opportunity?" Granted, the lease was signed at the bottom of the rental market in June 2009, but $5,300 seems about market for a large 1br, 1.5ba apartment in a swank building like this. Taxes are going to tick up every year due to abatement, so CAP rate analysis is only going to get worse when analyzing cash flow, and hard to justify plunking down so much cash into a 1BR.
There are a ton of these "investor" units at 101 Warren, and I'm sure plenty of other high-end new constructions around the city.
Anyone else care to share some "smart investments?"
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Response by rb345
about 16 years ago
Posts: 1273
Member since: Jun 2009
Property yielding less than 7.5% to 8% cash-on-cash gross rental return is a poor investment in a "normal" low inflation market. Given the risks in today's economy that rents will decline and operating costs increase, for e.g., real estate taxes. water & sewer taxes, direct or indirect employee benefits of building personnnel or repairmen, I wouldn't start now woth less than 11-12& cash ROI.
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Response by zzzbuyer
about 16 years ago
Posts: 40
Member since: Aug 2010
why would anyone pay 1477 psf is beyond me.
I am looking at coops on nice UES block for 700 psf. This entire bldg could go up for sale or rent making your unit worthless. I think this is big downside despite the swankiness of neighborhood.
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Response by zzzbuyer
about 16 years ago
Posts: 40
Member since: Aug 2010
Also, you have to like the views of the low income housing buildings across the street
Property yielding less than 7.5% to 8% cash-on-cash gross rental return is a poor investment in a "normal" low inflation market. Given the risks in today's economy that rents will decline and operating costs increase, for e.g., real estate taxes. water & sewer taxes, direct or indirect employee benefits of building personnnel or repairmen, I wouldn't start now woth less than 11-12& cash ROI.
why would anyone pay 1477 psf is beyond me.
I am looking at coops on nice UES block for 700 psf. This entire bldg could go up for sale or rent making your unit worthless. I think this is big downside despite the swankiness of neighborhood.
Also, you have to like the views of the low income housing buildings across the street