26.3.12
Praedium Buys Low to Sell Not Quite as Low?
Long suffering Brooklyn development 109 Gold Street has been scooped up by Praedium. As we are told in the Full Story below, Praedium's $14.5M purchase got them 33 empty condos. But will Praedium stick with the condo plan? Massey Knakal brokered the sale and touted in their set up that the area was commanding prices of upwards of $1000/SF. With Praedium buying at $392/SF, the deal seems like easy money.
Located several blocks from the DUMBO core (this is Vinegar Hill afterall) and directly across the street from the Farragut Houses, $1000/SF seems unlikely. A slow $600/SF seems possible. With that kind of margin, the money is less easy.
At Cubed Advisory, we will be watching 109 Gold Street closely to see if Praedium wants to wait for the likely 2 year absorption time for their $208/SF margin. Our expectation is that they will pick up $45/SF as a rental and start making money now on a longer play.
Labels: Condo to Rental, DUMBO. Vinegar Hill, Farragut Houses, Massey Knakal, Praedium Group
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