Landmarked Apartment Building for Sale for $3.2 Million in Bed Stuy

75 MacDonough Street_1

A striking 1902 Renaissance Revival apartment building at 75 Macdonough Street is for sale for $3,200,000. The four-story, eight-unit building, which is called The Raleigh, was designed by architect William Debus. A good amount of the interior detail seems to be intact. The apartments are four- and five-bedrooms, Marcus & Millichap, which is handling the sale, told us. It was a Building of the Day in 2010. Click through to see some interior shots.

75 Macdonough Street Listing [Marcus & Millichap]
Building of the Day: 75 Macdonough Street [Brownstoner]
Photos by Marcus & Millichap

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22 Comment

  • great potential here… DOB folder is a little messy–there are a few open violations and two active ECB liens against the property.

  • Not sure how you call a building NOI of less than 4% a total steal, unless the Stabilized tenants are planning on moving in the next couple of years (not likely considering the large apartments) you could wait a really really long time to make any money on this – beautiful building for sure

    • Exactly. I can get 4% yields in MANY securities in the market with instantaneous liquidity and none of the headaches of managing a building like this.

    • this isn’t a current yield play… it’s a beautiful building in a location that has excellent upside as either an income or conversion play. at $250/sft you’re getting a meaningful discount in exchange for headaches and the possibility you might have to negotiate some buyouts now or down the road…. and that’s assuming you have to pay full ask.

      • It’s an investment property. It needs to be evaluated on yield and potential for that yield to increase. You cannot make certain assumptions about price appreciation of the property.

        Like I said, I can construct a portfolio of stocks that have a current yield in this range with a PROVEN history of dividend growth. Price appreciation is not included but likely over the long term.

        • right, and I think there’s upside in the yield and likely a PROVEN history of that in the HPD filings. Price appreciation is not included, but likely over the long term.

          • Lamb -agreed – the question is HOW LONG. The tenants protected by rent stabilization, these are large apartments and with succession rights, experience says that these tenants (or their successors) can be expected to remain in place for potentially decades and With Deblasio now appointing to the RS Board, it is unclear how much % increase on the rentals you really can expect. However, you can be sure Water, Fuel and taxes will increase at least as fast a RS increases. Therefore, without more information (like that 1/2 the RS tenants live in the Hamptons, or are elderly with no heirs), it is difficult/impossible to call this a “steal” – it might prove to be, or it might prove to be one big headache.
            I will agree however, this does at least hold out more promise than alot of similar listings that have a cap rate of 5% and can only work out based on pure asset appreciation/speculation

      • brklnmind, we’re pretty much on the same page… I would definitely stop short of calling this a steal. I totally agree that there’s risk this administration’s rent board will make it harder to keep pace with rising costs. that said, I think the free market units can more than make up for it. I look at it this way: expenses are around $50k currently, while gross rents are over $180k (with an increasing proportion of gross rent coming from the free market units). even if expense growth on a percentage basis is outpacing growth in regulated rents, the gross rent basis is over 3x the expense basis. layer on top of that the fact that your levered cash on cash yield would be significantly higher than the cap rate and I think somebody is going to pounce on this.

        • I think a mortgage for this sort of building would come in at a rate quite a bit higher than the current yield or cap rate. Even at 4.5%, the mortgage payments on a $2.5 Million 30year mortgage (if obtainable) would be $152,000. There goes your cash flow.

          • fair point… a traditional mortgage almost certainly wouldn’t be obtainable today at either that rate or LTV. I suppose most if not all available fixed rate financing options (available to me anyway) would have negative cash on cash yield impacts in the short run. would be interesting to find out what their pro-forma assumptions are…

  • Given that half of the building is RS or RC and the building is subject to landmarks, I am not sure if this is a “steal” but it’s beautiful and probably not outrageously over-priced. Plus next door is the mansion owned by the secret United Order of Tents that was the subject of one of my favorite Walkabout reports filed by MM. http://www.brownstoner.com/blog/2011/02/walkabout-under-2/

    The interesting thing (from a zoning perspective) about the mansion lot next door is that it extends from MacDonough to Macon, but the landmark district (according to the map at least) only covers the southern half of the lot facting MacDonough.

  • I have always loved this building, and am happy to get a hint of what at least some of the apartments look like. This building was built for middle class folk who could afford higher quality interior details, not just the basics. My favorite part of the building has always been those wonderful French windows. I hope the building is purchased by someone who appreciates the details, inside and out, and is happy to be a good steward of a fine historic building, not someone who is only looking for a cash cow.

    Thanks, BoerumResident. BTW, I believe the Tent Ladies sold the back part of their lot, facing Macon Street, and it will be developed soon. It’s not landmarked, and I think that was purposefully done. Their once magnificent building needs a lot of work, structural as well as otherwise, and I hope they can now afford to get that done. There are a lot of interested parties – a descendant of James McMahon, among them. I know they have been offered help by the Landmarks Conservancy, and the LPC in doing right by the building.

  • Such a shame that they are selling…building has been in the same family for generations.

  • Combine the vacant apartments for one 6000 sq ft super apartment. The rent stabilized income from the rest will pay for the heat.

    • If you’re doing that, you might as well evict them all and convert the whole building to a gigantic one-family, since RS tenants can be evicted to allow for self-occupancy. I doubt the vacant apartments are continguous in a way that would make combining them feasible to begin with.

  • Seems a bit rich, Building has a ton of open violations and is more than half stableized. If you walk by it, which I do every day, it is poor condition, trashed windows and cornice, big signs of water damage so I can only imagine what the inside looks like. Beautiful building though with great potential managed by the right hands. Here is hoping someone gives it a good polish!

  • just walked by building, the listing picture is out of date, one of the balconies is missing, and they must have run it through a filter because the facade and windows look a lot worse for wear than represented….