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October 6, 2008

Heights Brownstone Portfolio Changes Hands

182-190-State-Street-Brooklyn-1008.jpg
penson-sales-1008.jpgA five-building portfolio of brownstones in Brooklyn Heights was just sold off by a controversial landowner in the neighborhood for a combined price of $7,201,000, according to city records. The five multi-tenant properties at 182-190 State Street were sold by The Penson Companies, the real estate investment firm that made headlines last summer when its long-neglected rental property at 100 Clark Street collapsed. The sales prices were well below the asking prices--the original offering document had asking prices of $1,525,000 for #182, $1,200,000 for #186 and $1,660,000 for #188. The reason? Rent stabilized tenants! At #182, six out of seven units have rents under $1,000; at #186, four of six units rent for under $1,000; and at #188, seven of eight bring in less than $1,000 a month. No word on who the buyer is behind the nondescript LLC on the paperwork. Update: A reader in the comments i.d.'s the buyer as JG Capital of Manhattan.
Emergency Repair at 100 Clark While Court Fight Continues [Brownstoner]
Emergency Demo at 100 Clark Clears Tenants [Brownstoner]
'Dereliction of Duty' in Brooklyn Heights [Brownstoner]




Posted by Brownstoner at 11:05 AM | Comments (15)
Categories: Brooklyn Heights, Sales

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Comments

Almost one and a half a piece. Not a bad parachute for the seller.

Posted by: DOW8000SP800 at October 6, 2008 11:28 AM

"No word on who the buyer is behind the nondescript LLC on the paperwork."

Dermott?

Posted by: DOW8000SP800 at October 6, 2008 11:29 AM

Why do you think that, DOW?

Posted by: brownstoner at October 6, 2008 11:39 AM

http://www.extremerealtyllc.com/exclusive_deals.html

June 23, 2003 (BR-MBD)
Applicant(s)
James V. Guarino
As : JG Capital LLC
20 West 20th Street, Suite 703, New York, NY 10011

http://www.jgcapitalllc.com/about.html

Posted by: shchune at October 6, 2008 11:53 AM

Nice one, shchune!

Posted by: brownstoner at October 6, 2008 11:55 AM

"Why do you think that, DOW?"

Wild guess given their reputation with rent stabilized tenants.

Posted by: DOW8000SP800 at October 6, 2008 12:01 PM

These buildings are burdened with the worst of both worlds. They are rent-regulated on the inside and Landmarks- regulated on the outside.
I think they have negative net value.

Posted by: Inigo at October 6, 2008 1:40 PM

shchune
JG cap is a mortgage company they do not own real estate you were pretty close though it was not Guarino who bought those buildings but someone in his office did at the same address im just not going to say who but if someone else gets it right i will confirm it how i know is because i worked with these guys

Posted by: Local Broker at October 6, 2008 2:15 PM

and watch how tenants start to get moved around so a couple of buildings will be vacated renovated and rented for market rents this all will happen in the next few months
the buildings are are not fully occupied so they will move tenants into one building vacating the rest

Posted by: Local Broker at October 6, 2008 2:20 PM

Move protected tenants in Brooklyn Heights? They will need a crane and a court order. These are rent-regulated renters you are talking about. They are protected by the full power of the state and the courts and they know it. The only way to get them out is to have the DOB show up and start demolishing the building with no warning -as happened at 100 Clark Street. That building is now half-demolished, but vacant!

Posted by: Inigo at October 6, 2008 2:53 PM

its not like they have to move far they will move next door to a vacant renovated apartment which will give the owner a full vacant building thats not a bad deal

Posted by: Local Broker at October 6, 2008 4:05 PM

HA! you don't know old rent regulated tenants in BH do you? They will not move, especially if they think someone will benefit financially from it. They will want to be bought out in order to move to a nicer apartment. They love their 1957 kitchen and they have given their mice names. You are acting as if it is a rational business move to deal with these people....you have a lot to learn.

Posted by: Inigo at October 6, 2008 7:50 PM

like it has not been done a thousand times before
and your such a real estate pro

Posted by: Local Broker at October 6, 2008 9:42 PM

I've visited the three bad ones. Originally the idea was to get 4 or 5 of them in a row and demolish them; then put up a condo using the unused FAR (and possibly some sort of curb cut). They got the demo permits to do it; then Frank Farricker decided to run for office in 2006 and got beaten up on the issue.

The buildings are in pretty awful condition. Gut reno in the 1950s using the cheapest possible materials. Some apartments were cosmetically upgraded in the 90s. Rents were generally pretty low; there are some 60+ tenants in there and some that claim to be disabled. 'Stacking' them is likely to be really annoying.

Originally, they were for sale for something like 1400, possibly more. At one point the 182/6/8 portfolio was for sale for something like 5MM, but Eastern couldn't sell it.

At this point, the bank is probably forcing the issue, since they had a note that matured around this time. Penson had his equity wiped out on this one and then some.

Overall: it wouldn't be a bad purchase for an aggressive individual to try and pull an Economakis and kick everyone out. Renoed, they are probably worth 2-2.5 (184 and 190 were renoed quite nicely); brokers who think that these POS tenements are worth 3+ are crazy. So a lot of air has been let out of this particular bubble.


Posted by: thwackamole at October 6, 2008 11:41 PM

"Originally the idea was to get 4 or 5 of them in a row and demolish them; then put up a condo using the unused FAR (and possibly some sort of curb cut). They got the demo permits to do it...."

What are you talking about? This is a landmark district. You can even see the sign with the district outlines in the picture!

The rest of your post sounds right.

Posted by: NorthHeights at October 7, 2008 9:42 PM

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