27.3.12
[Update] Praedium Buys Low to Sell Not Quite as Low?
At Cubed Advisory, we don't always like waiting on news.
The Praedium Group must feel the same way. After noting yesterdays
news of Praedium purchasing 109 Gold Street, our prediction was a quick
move away from condo into rental. Quick indeed. Today Praedium announced exactly that.
Labels: Condo to Rental, DUMBO. Vinegar Hill, Praedium Group
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
27.1.12
More Condo Goes Rental
It can be seen as a smart financial move or as an indicator that banks are getting through their large stack of unpaid notes that represent stalled projects. Either way, the Full Story below is good news as 75 Clinton Street in Brooklyn is shifting from condo to rental. As a project that started selling condos in June 2011, it was woefully late to the party. A sale to Invesco for an as yet unrecorded amount will surely yield good returns as a rental property.
We couldn't agree more with Marketing Directors' Angela Ferrara who says of the current climate "The rental market is booming."
At Cubed Advisory, we have advised clients on the money that can be made now by going rental rather than burning though capital sitting on an empty building waiting for the condo market to return. The models on the condo returns can certainly be appealing, but with the exception of truly unique product, the reality of the current market does not bear them out.
Labels: Brooklyn, Condo to Rental, Invesco