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.

At Cubed Advisory, we are sitting back and wondering what Sovereign Partners is planning for 28th Street.  As the Full Story below states, they just picked up 140-144 West 28th for $20.5M.  Currently an empty parking lot, there is nearly 76kSF available as of right.  That makes for a land price of $270/sf and a world of exciting development possibilities.

What the story doesn't mention is that Sovereign picked up the adjacent property at 146 West 28th back in September for $13.5M.  Sovereign swept the note on that building out from it's then owner Ben Shaoul at a significant discount to the $28M P&I in default at the time.  Shaoul went on to sue Sovereign with apparently no success.

This previous acquisition adds 46kSF buildable, bringing the assemblage total to 122kSF at a land price of $278/sf.  However, as they say on TV 'but wait, there's more...'.  Massey Knakal had previously been listing 140-144 and 146 West 28th as one package with mention of additional air rights available from 141-143 and 145-147 West 28th.  That's a possibly 48kSF of air rights.  Anyone curious enough to read the loan docs and look for that air?

At the low end Sovereign has large as of right space on a big lot.  At the high end, they have even more and guaranteed views over air rights to the north and east.  Given the zoning and the market, a fast hotel play would be the obvious choice.  However, it is more space than the current trend of boutique or discount hotel typically wants in one place.

We will be watching this site with interest.

Full Story

The Real Deal is once again the source of the Full Story link below, this time with news from Bob Knakal himself.  It would seem that the Sopher family empire is divesting itself of a very serious piece of real estate in the midst of the Hudson Yards redevelopment area for an as yet unannounced price.

The five lot assemblage has an area of 14810SF, but a potential FAR of 20 under the rezoning and development incentives which make up the Northern Blocks of the Hudson Yards area.   The site sits a mere half block from the Hudson Boulevard and unless the Javits Center really does go away, will also have guaranteed water views.

What isn't to love here?

Currently everything.  The site is in the midst of a wasteland of underutilized space next to a busy avenue.  But real estate is a long game and anyone with the pocket depth to float the likely $65M plus (which here at Cubed Advisory is our best guest at Mr. Knakal's minimum sale price) and the $200M+ expected construction cost, is going to reap the benefits of the biggest transformation of a section of Midtown Manhattan since Rock Center.  It's just going to take some time.

(for bonus points... does anyone want to guess what the two remaining lots on the avenue will go for to complete the assemblage?)

Full Story