475 4th Avenue Brooklyn NY, 11215
JOHN BRENNAN RICHARD SODEKE THE Vice President Investments Investment Associate BRENNAN [email protected] [email protected] License: NY: 10401237299 License: NY: 10401297095 JB TEAM 718.475. 4373 718.475.4365 [ ]
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TABLE OF CONTENTS
FINANCIAL ANALYSIS………………………………………….5 J-51 TAX ANALYSIS……………………………………………..8 PROPERTY OVERVIEW…………………………………………9 MARKET OVERVIEW……………………………………………16
FINANCIAL ANALYSIS
RENT ROLL
475 4TH AVENUE Unit Status Type Approx. Current Rent Current/SF Lease Pro-Forma Pro-Forma Square Expiration Rent /SF Feet 1R RS 2BR – 1,035 $3,595.00 $41.68 12.31.2018 $4,000.00 $46.38 Garden Access 1L RS 2BR – 1,035 $3,540.67 $41.05 8.31.2018 $3,800.00 44.06 Garden Access
2R RS 2BR 690 $3,110.84 $54.10 9.30.2018 $3,300.00 $57.39
2L RS 2BR 690 $2,800.00 $48.70 5.31.2018 $3,300.00 $57.39
3R RS 2BR 690 $3,307.50 $57.52 9.30.2018 $3,307.50 $57.52
3L RS 2BR 690 $2,850.00 $49.57 2.28.2019 $3,300.00 $57.39
4R RS 4BR – 1,325 $4,596.38 $41.63 7.31.2018 $5,000.00 $45.28 Duplex
4L RS 4BR – 1,325 $4,515.00 $40.89 3.31.2018 $5,000.00 $45.28 Duplex CURRENT MONTHLY $28,315.39 PRO-FORMA MONTHLY $31,007.50 CURRENT ANNUAL $339,784.68 PRO-FORMA ANNUAL $372,090.00
*Pro-forma numbers reflect a projected market rent of $44-$57/SF depending on unit type. *All rent-stabilized units in 475 4th Avenue have temporary preferential rent-riders and legal rents that are higher than pro- forma numbers.
PAGE 5 FINANCIAL ANALYSIS
OPERATING STATEMENT
CURRENT Year 1
Gross Scheduled Rent $339,784.68 $372,090.00
Less: Vacancy/ Deduction 3.00% ($10,193.54) 3.00% ($11,162.70)
Total Effective Rental Income $329,591.14 $360,927.30
Other Income $0 $0
Effective Gross Income $329,591.14 $360,927.30
Taxes $0.00* $0.00*
Fuel $0.00* $0.00*
Water & Sewer $3,503.11* $3,503.11*
Insurance $8,374.48* $8,374.48*
Electric $1,004.85* $1,004.85*
Repairs $4,000.00** $4,000.00*
Payroll $3,200.00** $3,200.00*
Management $9,887.73** $10,827.82**
Less: Total Expenses 9.09% ($29,970.17) 8.56% ($30,910.26)
Net Operating Income $299,620.97 $330,017.04
CAP Rate 4.99% 5.50%1
Debt Service $207,459.00 $207,459.00
Net Cash Flow After Debt Service 4.29% $92,161.97 5.70% $122,558.04
*Actual Expense Experienced by Owner ** Projected Expense 1 Year 1 cap rate factors in projected market rent of $44-$57/SF depending on unit type.
PAGE 6 FINANCIAL ANALYSIS
$6,000,000
8 Residential Units 9,665 Total Gross Square Feet 3,295 Square Feet of Available Air Rights
$750,000 Per Unit $620.80 Per Square Foot $462.96 Per Buildable Square Foot
CURRENT METRICS PRO-FORMA METRICS CAP RATE……………………… 4.99% CAP RATE……………………….…… 5.50%1 GRM …………………………….17.66 GRM ………………………………….16.13 CASH-ON-CASH ……………....4.29% CASH-ON-CASH …………………….5.70%
LTV FINANCING QUOTE
Loan Amount: $3,850,000 36% Term: 5 years Interest Rate 3.50% Monthly Payment $17,288 64% Amortization 30 Years
Non-Recourse Debt Equity Fixed- rate loans with terms of 7, 10, 15 and 20 years may also be available for this asset. Additionally, other non-standard terms may be available including reduced pre-payment costs, interest-only periods, and expedited funding timelines. *For Financing Inquiries, please contact Lior Goldberg of Marcus & Millichap Capital Corporation – 718.475.4375
1Year 1 cap rate factors in projected market rent of $44-$57/SF depending on unit type.
PAGE 7 J-51 TAX ANALYSIS
Tax Year Benefit Phase Taxable J-51 Taxable Tax rate Total Tax Tax Due Abatement Year Out Value Exemption Value Granted
(Before J-51)
2011-2012 N/A 0% $100,054 $0 $100,054 13.433% $13,440 $0 $0
2012-2013 Year 1 100% $102,653 $36,899 $65,754 13.181% $8,667 $0 $8,667
2013-2014 Year 2 100% $102,653 $38,943 $63,710 13.145% $8,375 $0 $8,375
2014-2015 Year 3 100% $109,187 $45,494 $63,693 12.855 % $8,188 $0 $8,188
2015-2016 Year 4 100% $117,921 $47,602 $70,319 12.883% $9,059 $0 $9,059
2016-2017 Year 5 100% $127,354 $52,003 $75,351 12.892% $9,714 $0 $9,714
2017-2018 Year 6 100% $133,448 $54,721 $78,727 12.892% $10,149 $0 $10,149
2018-2019 Year 7 100% $136,117 $55,542 $80,575 12.956% $10,440 $0 $10,440
2019-2020 Year 8 100% $138,839 $56,375 $82,464 13.021% $10,738 $0 $10,738
2020-2021 Year 9 100% $141,616 $57,221 $84,396 13.086% $11,044 $0 $11,044
2021-2022 Year 10 100% $144,448 $58,079 $86,370 13.152% $11,359 $0 $11,359
2022-2023 Year 11 80% $147,337 $58,950 $88,387 13.218% $11,683 $2,337 $9,346
2023-2024 Year 12 60% $150,284 $59,834 $90,450 13.284% $12,015 $4,806 $7,209
2024-2025 Year 13 40% $153,290 $60,732 $92,558 13.350% $12,357 $7,414 $4,943
2025-2026 Year 14 20% $156,356 $61,643 $94,713 13.417% $12,707 $10,166 $2,541
2026-2027 N/A 0% $159,483 $0 $159,483 13.484% $21,504 $21,504 N/A
Remaining Amount to Be Saved from J-51 $67,620
Assumptions: *J-51 exemption amount is expected to grow 1.5% per annum *Assessment Value is expected to grow at 2% per annum *Tax Rate is expected to increase at 0.50% per annum
PAGE 8 PROPERTY OVERVIEW
Marcus & Millichap has been exclusively engaged to represent ownership in the sale of 475 4th Avenue, a five-story apartment building located between 11th and 12th Streets in the Park Slope neighborhood of Brooklyn, NY (Block: 1022, Lots: 05). The property is comprised of 8 residential units of occupied high-quality residential apartments. 475 4th Avenue is completely rent-stabilized due to a J-51 tax abatement set to expire in 2027. The property generates a gross income of $339,784.68.
475 4th Avenue totals approximately 9,665 square feet, and measures 27 feet wide by 64 feet deep, on a lot that is 80 feet deep. This building totals approximately 9,665 gross square feet, with 3,295 of unused air rights based on current R8A zoning. Annual collected income for this property is $339,784.68, with a DHCR legal income of $458,574.48 as of 2017.
The subject offering is a rare opportunity to acquire a cash-flowing & highly financeable apartment building in one of New York City’s premier submarkets. The asset is turn-key with extensive upgrades throughout the building, allowing a new investor to attract high-quality housing demand for the foreseeable future. 475 4th Avenue offers a new investor multiple options to reposition this asset, or can simply be held at an attractive 4.99% cap rate with minimal management.
This is a section of Park Slope where condo units are achieving a sell-out scenario of $1100-$1300/SF. With numerous ongoing development projects in a few block radii, the properties also offer a new purchaser considerable unused air-rights to be developed.
The building is situated two blocks away from the 4th Avenue - 9th Street (F, G, R) train stations and five blocks away from the Prospect Avenue (R) train station, providing flexible commute options into Manhattan and other parts of Brooklyn.
PAGE 9 Investment Highlights
▪ Park Slope 8 Unit Trophy Offering ▪ Modern Luxury-Style Residential Units Generating Annual Gross Income: $339,784/Year ▪ 8 Rent-Stabilized Apartments (J-51 Tax Abatement) ▪ 5 Story Walk-Up Pre-War Apartment Buildings ▪ Total of 3,295 Additional Unused Air Rights Based on R8A Zoning ▪ Professionally Maintained Real Estate with 0 DOB Violations ▪ Turn-Key Assets with Absolutely No Capital Expenditure Needed ▪ Immediate 4.99% Capitalization Rate with Multiple Exit Strategies & Creative Upside Options ▪ Realistic Condo Conversion Candidate with High-End Condo Units Trading Upwards of $1200/SF ▪ Annual Current Tax Bill - $0 ▪ 9 Years Remaining on J-51 Abatement Resulting in $67,620 in Expected Savings ▪ Multiple Transit Options in Immediate Vicinity: 9th St. (F, G, R) Station
PROPERTY OVERVIEW
475 4th Avenue Zoning R8A, C2-4, EC-1 Block/Lot 1022-06 Building Dimensions 27 ft. x 64 ft. Building Gross Square 9,665 SF Feet Lot Dimensions 27 ft. x 80 ft. Residential FAR 6 Facility FAR 6 FAR as built 4.47 Additional Air Rights 3,295 SF Annual Tax Bill $0 Tax Class 2B Status Rent-Stabilized (due to J-51) Tax Abatement J-51 expiring in 2027
PAGE 11 INTERIOR PICTURES
INTERIOR PICTURES
MECHANICALS & COMMON AREAS
EXTERIOR PICTURES
PARK SLOPE
Park Slope is a popular middle to upper-middle income area of Brooklyn located in Western Brooklyn, southeast of Downtown Brooklyn. Park Slope is bounded by Prospect Park West to the east, Fourth Avenue to the West, Flatbush Avenue to the north, and 15th Street to the South. The neighborhood is located approximately 20 minutes from downtown Manhattan and 40 minutes from midtown Manhattan via subway
Park Slope is widely considered one of New York City’s most desirable neighborhoods. It was also named one of the “Greatest Neighborhoods in America” by the American Planning Association in 2007, “for its architectural and historical features and its diverse mix of residents and businesses.” A 33-block section of the neighborhood consisting of 1,802 buildings is known as the Park Slope Historic District and was added to the National Register of Historic Places in 1980.
The appeal of Park Slope is multi-faceted. Aside proximity and convenience to Manhattan and downtown Brooklyn, the area’s various cultural and recreational offerings, its proximity to local shopping, and its easy access to the area’s transportation network are also of tremendous appeal, as its 19th Century architectural setting. Young professionals and families have all been attracted to Park Slope for its treelined streets and housing stock which includes both 19th to early 20th Century brownstones, apartment houses and multifamily apartments buildings. Seventh Avenue, the area’s main shopping thoroughfare, offers a variety of popular shops, cafes and restaurants. Fifth Avenue offers a variety of retail stores and restaurants as well. Other retail offerings are available in nearby downtown Brooklyn. The Atlantic Center, located at the intersection of Flatbush and Atlantic Avenues, is anchored by Target, Best Buy, Old Navy, and other national retailers.
BROOKLYN OVERVIEW
Located across the East River from Manhattan, Brooklyn is the most populous of the five New York City boroughs. Brooklyn covers 71 square miles of the land mass shared with Queens. Brooklyn is bordered to the east and south by the Atlantic Ocean, to the west by the Upper New York Bay and the East River, and to the north by the borough of Queens. The borough of Brooklyn, with a population of more than 2.5 million, is located entirely within Kings County and is divided into 18 community districts, many of which have been made famous in movies, books and television. Some of the most well- known neighborhoods include Williamsburg, Brooklyn Heights, Park Slope and Coney Island.
METRO HIGHLIGHTS
COMPETITIVE BUSINESS COSTS Brooklyn has lower business costs than Manhattan and is easily accessible to the tri-state marketplace.
HIGH POPULATION DENSITY Were it to be counted as a standalone city, SPORTS Brooklyn would be the fourth largest in the nation.
CULTURALLY DIVERSE There are almost 100 different ethnic groups EDUCATION offering unparalleled diversity and access to the cultures of the world.
ARTS & ENTERTAINMENT
PAGE 17 BROOKLYN OVERVIEW
DEMOGRAPHICS
2016 Population by Age
8% 18% 7% 32% 23% 12% 0-4 YEARS 5-19 YEARS 20-24 YEARS 25-44 YEARS 45-64 YEARS 65+ YEARS
2016 2016 2016 2016 MEDIAN POPULATION: HOUSEHOLDS: MEDIAN AGE: HOUSEHOLD INCOME: 2.7M 995K 34.5 $47,100 Growth Growth U.S. Median: U.S. Median: 2016-2021*: 2016-2021*: 1.8% 2.6% 37.7 $54,500
QUALITY OF LIFE
Ongoing revitalization efforts boroughwide have spawned a modest rebirth of the local economy. As the maritime industry’s impact wanes, borough officials are developing creative ways to capitalize on the desirable waterfront location such as in the Brooklyn Navy Yard, Erie Basin/Sunset Park, Newtown Creek and the Red Hook Marine Terminal. Residents and visitors have a number of entertainment, sports and cultural venues to choose from. The Brooklyn Nets and New York Islanders play in the Barclays Center. Cultural and academic institutions include Brooklyn Academy of Music, the Brooklyn Museum, the New York Aquarium, Prospect Park and the Brooklyn Botanic Garden.
SHARE OF 2016 TOTAL EMPLOYMENT
3% 8% 14% 8% 5% MANUFACTURING PROFESSIONAL AND GOVERNMENT LEISURE AND HOSPITALITY FINANCIAL ACTIVITIES BUSINESS SERVICES
19% 4% + 33% 2% 5% TRADE, TRANSPORTATION CONSTRUCTION EDUCATION AND INFORMATION OTHER SERVICES AND UTILITIES HEALTH SERVICES
PAGE 18 EXCLUSIVE LISTING AGENTS
JOHN BRENNAN Vice President Investments 1 MetroTech Center Suite 2001 Brooklyn NY 11201 TEL: 718.475.4373 FAX: 718.475.4310 [email protected] License: NY 10401237299
RICHARD SODEKE Investment Associate 1 MetroTech Center Suite 2001 Brooklyn NY 11201 TEL: 718.475.4365 FAX: 718.475.4310 [email protected] License: NY 10401297095