No takers yet for Domino Sugar condos?

another victim of Ozempic?

Is the rental building going to be a Condominium unit ? I'm curious what the deal structure looks like

@30 - exactly, many questions on the structure
It also appears the condo & rental towers share amenities (there is a central low-rise that both towers connect to)..

Lots of fun for future boards to manage and budget

Back in the day, I showed a client 388 Bridge, and I really liked it. It seemed to be decently built at a time when the competition wasn't necessarily, and I thought for a hot minute about buying a condo. But the part I couldn't get around was, how do you rent out something when there's all that rental product right next to you?

steve123,
This is pure conjecture, but it wouldn't surprise me if it were all one parcel, and the costs were shifted as much as possible to the condo owners while at the same time it would be impossible for them ever to be fairly heard regarding running the property.

@30 - that's my concern, plus Ali's re: good luck renting out your unit when theres an entire rental tower sharing same common areas & amenities

From the developer's perspective, if they are holding 1 tower as a rental while they sell units in the other tower as a condo, why would they allow themselves to become the junior partner?

Rentals and sales have been successful at 388 bridge.

Looking back, it seems like I would have been able to buy a high floor ~700 sf apartment for around $1200/sf, and then rent it for $70/sf - $13/sf ( common charges). So around a 4.7% yield, before accounting for transaction costs, taxes (which are low), vacancy allowance, repairs, utilities, value of landlord attention, tax deductibility (YMMV), depreciation, and the fact that if I wanted to sell it 10 years later, I could get $1270/sf.

I might call that "acceptable" but I don't know if I'd use the word "success."

Brooklyn Tower also has condo and rental

Personally, I would never buy an individual condo in NYC and consider it an investment. But that's just me, I think I can find more effective ways to make my money work for me.

@keith: Agree. If you're looking to maximize returns over shorter time periods (let's say < 10 years), real estate may not be the right asset class. Within the asset class though, individual deals may work out as f_p notes above, but it's on a case by case basis. The current economic cycle doesn't currently favor r.e., but we may be starting to enter a period of depressed prices where bargains may abound. I've always thought of r.e. as a long-term hold proposition, and one that works well for intragenerational wealth transfer. The Goelet, LeFrak, and Tishman families seem to have done pretty well by their r.e. investments (and by some smart marriages).

It depends on where you start. Holding one individual condo is great if 1) you don't make that much money (because you can show a small loss which helps you on your taxes, and you defer the day of reckoning off into the future, when you pay the capital gains off your depreciated basis and 2) if you need to get your money out of a non-U.S. currency and into dollars. But most people on this board aren't in either of those two buckets.

Over the years I've made a tidy sum buying and selling individual coop and condo units (along with other Real Estate).

@aaron2 are you a real estate agent or in the biz? Just curious.... Also, I'm not sure if you can compare the real estate family's listed above, to someone buying an individual condo at 388 bridge Street ; ) but I guess you have to start somewhere.

And anyway, I was just pointing out that 388 bridge Street did well selling and renting. I wasn't referencing individuals who may have purchased there.

Owning a condo or two and having to deal with tenants etc. Just not my cup of tea. I did it on a few properties here in Florida, happily post covid prices exploded upwards and I just sold everything. I like index funds.

Keith Burkhardt
TBG

I try not to judge others' choices. Some look at me and ask "why aren't you still in the game?" I respond that I am playing my own game, the tewards of which suit me. It is not all about maximizing ROI; maybe the labor is rewarding and how I like to spend my time. In other words, if someone is making a living and enjoying their lfe off as a small landlord and/or a real estate agent, I say "More power to them!" I don't spend any time asking them why or judging them for not doing something else that would return a higher yield.

*Apologies for typos; they are the bane of my existence, which is an embarrassingly first world problem statement. I have been spending a lot of time around nieces and nephews lately (all seven between ages 17-23), and I love how they think.

Oh, one more thought: I do openly judge the choices of those with my background who are Trump supporters. I do not judge those who are not of my same background who support Trump.

So, my point is that sometimes I do consciously jdge others' choices. I am nothing if not self aware. And, for those of you who find me annoying, maybe you can take some comfort in the fact that I find myself annoying, but I have thoughts that must be expressed, even if nobody is listening/reading.

And, again, apologies for the typos.

>I do openly judge the choices of those with my background who are Trump supporters

People who reside in multiple cities?

If only I could vote in all of them . . .

@keith: I'm in finance, not the r.e. business, though I pay (probably too much) attention to NYC real estate, partly because I toy with moving to a larger place, partly because I'm interested in how it works as an asset class, and partly because I find the history of NYC land, and what's built on it, fascinating. My finance bias is toward the long term -- I'm not fully a 'buy and hold' person, but I've done well by it, and I believe that many people don't think very hard about matching up asset types with specific investment timelines (median length of time people are in a home is around 13 years -- so much for 'forever home'. In nearly 40 years in NYC, I've only lived in 2 apartments (but slept around a bit...)

All of the NY real estate dynasty families started somewhere, though it definitely wasn't with a 1 BR condo (illegal at the time!). I find their stories interesting, as investment stories, as wealth-building activities, for the psychology of family relations, and facets of New York history.

Fundamentally that seems to be the problem with a lot of New York City purchases since the city went into full gentrification mode, for lack of a better word. I moved into Manhattan in 1982, knew a lot of people like my girlfriend's family that had been in the city, essentially their whole lives. Many of our friends throughout the city lived in large rent controlled apartments, owned apartments or brownstones that future generations would live in. There just seemed to be a lot more people like this, I had a handful of family friends that had been living in London terrace since the '60s.... Anyway, my point being, it seems most owners are short-term these days. As teenager I was going to dinner parties at people's homes that had been here for 30 plus years in many cases, with no plans to leave. Maybe they had a summer place in Westport or Lakeville...

I was at a wedding of a friend in the early '90s, it took place on the Honey Fitz, Sam Lefrak was the best man. I remember him holding court as we circled around the battery, pointing to the skyline all lit up and saying to everyone very emphatically "does this city look dead?" Lol...

Keith Burkhardt
TBG

On being a landlord for retirement:
https://webview.wsj.com/webview/WP-WSJ-0001849704?adobe_mc=TS%3D1719123747%7CMCMID%3D83642741639699690056000510144642464610%7CMCORGID%3DCB68E4BA55144CAA0A4C98A5%40AdobeOrg&wsj_native_webview=android&ace_environment=androidphone%2Cwebview&ace_config=%7B%22wsj%22%3A%7B%22djcmp%22%3A%7B%22propertyHref%22%3A%22https%3A%2F%2Fwsj.android.app%22%7D%7D%7D&ns=prod/accounts-wsj

The idea of being a landlord for income in retirement seems pretty insane to me. At least one guy has a huge stock portfolio and the one woman has $0 mortgage debut.

But some of the others.. wow.
The guy living off being a landlord and also making bridge loans to home flippers? LOL. This is what we call in the business a "Texas hedge". Guy really wants to maximize his RE exposure? Or the guy who is semi-retired working in a RE-adjacent biz (shower parts) while also developing properties to operate as a landlord?

Watching my retired parents & in-laws age and steadily reduce the level of upkeep of their personal homes, I can't imagine being responsible for multiple properties in retirement.

Nor can I imagine having millions of debt into your 70s. If the housing market takes a serious turn and they need to liquidate properties due to cashflow, all that deferred tax suddenly comes due and the $5M properties against $2M debt may actually be pretty tight. Precisely when cashflow becomes an issue as rents go down / vacancies go up, your assets you can sell also devalue and become illiquid.

A lot of people also confuse quantity of RE holdings for diversification. We were friends with a couple that owned ~10 units in the same vacation area going into the GFC and they went thru a lot of pain. Similarly we have friends who own 5+ NYC apartments but all new devs in the same hood.

RE investment is inherently leveraged and a lot of people make good trades early and then keep plowing their profits into more leverage purchases. So your overall RE holdings keep growing, but you are always leveraged 1:4 or 1:3 on the way up. This is akin to trading stocks on margin, and why it is possible to amass a $10M portfolio across 20 years and then have your equity flip to 0 in a downturn. If you just had some boring SP500 fund worth $10M, the worst thats gonna happen is a GFC-sized downturn that brings you down to $6M for 6 months or so before it turns back around.

@Steve: Agreed. I don't think any of the people in the WSJ story are really "retired" -- seems like they're all working pretty hard at keeping properties running, and thinking about the next steps -- it just doesn't look like the office-based 9-5 they were doing. It's definitely not my investing theory: I'd like to be reasonably land-rich but debt free by retirement. I remember years ago finding out that my barber bought a brownstone that had been divided into 2 units (triplex up, garden apartment down), partly as a hedge against his own employment prospects as he aged. He said: "In the good years you live upstairs, in the other years you live downstairs."

mcr, you're not annoying!!

Steve, That guy seems to be on solid footing with more than $4.8mm in stocks + call it 25% down fix or flip loans (he seems to have experience to finish the project if the borrower defaults) and an estimated $8mm in real estate equity and only $1.3mm mortgage debt. The guy can easily afford a 30% haircut in property prices. He is not spending much compared to his net-worth and cash flows.

"The guy living off being a landlord and also making bridge loans to home flippers? LOL. This is what we call in the business a "Texas hedge". Guy really wants to maximize his RE exposure? "

Still nothing?

Rent for approx $10K or buy for $11K?
https://streeteasy.com/building/one-domino-square-condos/20a

oops

or buy for $2.8M

Given relative rent & sale prices, its hard to justify buying.
Further this dev has both a condo & a rental tower.
So the value of your condo for future rental income if you decide to move out will be suppressed competing with an entire tower of developer operated rental units.

So are developers who build rental buildings not maximizing the value of their efforts?