Gut Renovations Ballparks

How is a <500sf space a "luxury rental"? Is this at Fifth and 62nd? Will there be an manned elevator?

I guess I'd say $1.5 million (6000 sf * $250/sf, which I know many on this board think is low, but I think it's reasonable in this case).

But I don't understand the end product: 2 rentals per floor, so each apartment is 20 by 30 minus the stairwell core? So you have 10 large studios/smallish one-BRs, presumably without even common laundry since you're renovating the basement?

Depending on location, this may not be highest and best use of this particular property.

Curious though to hear what others think.

ali r.
DG Neary Realty

What ali r. said, and mine was garbled by the dreaded less-than greater-than Bermuda Triangle. Should be:

How is a sub-500 sf apartment a "luxury rental"? Is this at Fifth and 62nd? Will there be an manned elevator?

2.5-3m is my vote.

I might add that brownstone renovations in the 1960s through 1980s often went this route, because families and money were fleeing the City at the time, and more so the combination of the two. But now mid-career high-earners with families do all they can to stay in the City, so you're much better off catering to them.

And do due diligence regarding differing real estate taxes for different configurations. I'm no expert, but I think you get shafted when you go more than 3 units.

Right. That house in today's paper pays $9,000: http://www.nytimes.com/2013/09/17/nyregion/once-an-18000-home-on-a-seedy-street-now-a-5-million-gem.html?smid=pl-share

The same-size house next door is Class 2B (7-10 family) and pays $36,000.

Oops, make that 4-6 family and $34,250.

Not fifth/62nd

Already class 2B so would require change to make it into less.

I figure 10 studio/1 BR can rent easy (under 5% vacancy). Would brownstone walk up 2 BRs have higher vacancy rate?

Ali -- what are you suggesting?

I'd have to know the address and run numbers on the computer -- which I'm sure your agent will do for you -- but I'm suggesting fewer and larger apartments will probably bring the greatest rent roll.

ali

if you're going studio/tiny 1 br, stay away from "luxury" and make it stylish and lasting. there will be turnover and you want to do least to get it rented again. when you go luxury, you need to have a lot of tile cabinets, etc saved for the times when things get damaged.

a) 1.8M

b) 2.1M

c) 2.15M

Hard to say; it could be as low as $100 sq ft to as high as $500 sq. ft. All depends on the scope of the work and the quality of the finishes.
given that this is mainly for rentals, I am guessing a total cost of 900k; shouldn't be over $150/sq ft if you shop for the right architect and GC.
Architects and GCs will spend all the money that you tell them you have. So my advice is to low ball your budget and the right architect and GC would have to work within your budget.

I don't think that a space that has "been vacant for a while" is going to get into good shape for anywhere around $150/sq.ft. If this is a worst case scenario, then rehab will include non-square-foot items like new roof, electrical throughout, possibly new connection to the electrical grid along with transformer or whatever you call the equipment, new plumbing and connections to sewers, new sidewalk vault maybe, new entrance/stoop, new windows, ADA and/or fire compliance upgrades.... That stuff can all add up quite fast. All these items may not be needed, but if the place is old and a wreck, brace yourself.

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