Co-op of the Day: 62 Montague Street
A sponsor unit at 62 Montague Street in Brooklyn Heights has just hit the market. The 1,350-square-foot apartment has three bedrooms, two baths, a dining room and an eat-in kitchen. The sponsor has clearly just redone the kitchen and bathrooms—not particularly well, but not offensively either. While the listing wins big points for architecture and…
A sponsor unit at 62 Montague Street in Brooklyn Heights has just hit the market. The 1,350-square-foot apartment has three bedrooms, two baths, a dining room and an eat-in kitchen. The sponsor has clearly just redone the kitchen and bathrooms—not particularly well, but not offensively either. While the listing wins big points for architecture and location (steps to the promenade), some folks won’t be thrilled with the fact that it’s on the ground-floor on the street side. For $1,425,000, think that’ll be a sticking point?
62 Montague Street [Squarespace] GMAP
62 Montague Street [NY Times]
i’ll buy it.
for any amount the seller asks.
I think its competitive price and the building is quite handsome.
Will all the people blathering on about whether $1000psf is “the going rate” in Brooklyn Heights please pipe down. Just look at the recent comps in the building. The FSBO featured on this site a few months ago sold for $1.46M (below $1.55M ask), @1600sf (per owner’s own website). That’s only $900psf. That was on the 6th floor. Corcoran listing in the building on the 9th floor languished on the market with numerous price drops for 6+ months before selling in late summer at $1.3775M, @1650sf. That’s $835psf. A 2000sf listing by Elliman on the 7th floor was on the market last winter for a few months with a price drop ultimately to $1.645M ($825psf) and didn’t sell.
The building and location are nice, but the maintenance is high, this unit is on the ground floor, and it’s being listed in today’s more uncertain market. This unit will NOT get $1000psf.
2:14…
Over the past year, there have been recent 3BR sales at Two Montague Terrace, 35 Pierrepont, 128 Willow St., and another higher floor 3BR at 62 Montague. They were all in the 1.35m-1.7m range and approx $1000psf. This price and maintenance is in line with the neighborhood.
Whether or not maintenance is reasonable depends on a whole lot of factors, but for prospective buyers the biggest is WHAT DO YOU GET for the monthly maintenance costs? Did the NYT article break it down any more finely than the Manhattan “average”? I suspect that Brooklyn co-ops have fewer amenities on average than Manhattan co-ops. Certainly fewer have 24 hour doormen, which is a realtively expensive “amenity.” This building appears to not have a doorman at all, so yes, $1400/month seems like a lot.
Maintenance in a coop depends on two biggies:
1) underlying mortgage
2) real estate taxes
After that comes salary for the staff, fuel,
insurance, water and sewer, and management fees.
Keep in mind that mortgage interst and real estate taxes paid in your mainenance is tax deductible.
No board approval is a huge plus as it not only saves a ton of time and paperwork but it also eliminates the uncertainty of whether you will be accepted. Of course whoever you eventually sell to will need board approval.
I think this is a good deal. Maybe a tad inflated -room to bargain- but the basics are in place. It is a lovely building in a lovely neighborhood.
Question for those quibbling with the maintenance:
NYT recently ran an article stating that most current co-op maintenances in Manhattan fall into the $1.30-$1.80/sf range. This one is $1.10/sf.
Given that Brooklyn maintenances are slightly lower than Manhanttan maintenances, but how much lower can they be? Heating oil, water, etc. cost the same everywhere in the city, no? What do you think IS a realistic figure psf for maintenance, say assuming the building has neither paid off its underlying mortgage nor has an overly burdensome underlying mortgage?
Did the NYT get the current maintenance picture wrong? Because this number doesn’t seem way out of line to me, given all the recent increases in RE tax, energy, water, insurance, etc.
$1000/sq ft is most definitely NOT the going rate for high-end coops in BH. Do a perusal of the Corcoran listings (which are reliably asking about as much as a seller possibly get) and there are none that I see over $1000 per square foot. Granted, there aren’t a lot of three bedrooms, but the best comps I see there are two 4 bedrooms on Willow Place and Joralemon. The Willow Place apt. is $1.6m for 1800 sf and 2 parking spaces (on a much better block). Joralemon street is $2m for 2800 sf. Keep dreaming BH apartment owners, but our neighborhood isn’t officially part of Manhattan yet.
1.425m plus 1450 a month in maintenance?
Ok first, realistically, this is going to be a jumbo mortgage @ 7% because that is where jumbos are right now. Lets say the buyer brings the rest as cash. jumbos on more than 75% are difficult to get now, so you’ll need that nest egg.
Mortgage payment: 6600 a month 30/fixed. This is the max deductible only if you are married filing jointly – otherwise the deductible limit is half this. You “save” 24k of tax first year (this drops as you pay down the principal).
Now your 400k, well, if you’re rich enough to be buying 1.5m places your cash is surely doing better than 5% before tax. Lets say you’re getting 6% after tax on your 400k in some pretty average hedge fund. Thats foregone income of $2250 you just used as equity.
So this apartment is costing about $4600+$2250+$1500 = over $8000 in *after tax* money. Can you find the same place to rent for less than 8k a month? Of course. So to beat renting it needs to appreciate in value (widening further the poor comparison to renting), or rents need to shoot up.
On a pure cashflow basis, you’re spending $6600+$1450+$2250 = over $10,000 a month, so realistically you need a healthy $25k a month income before tax. That will leave you a little money for luxuries like your overseas trips and that summer house, but not a lot.
so to consider these 1300 square feet, you need a solid combined income of 300k – and savings of half a million (the mortgage lender wants to see a good cushion as well). And to hold onto that equity, prices have to appreciate another 10% before you come time to sell. If they go down 10%, you lose 30% of your paper equity.
What a deal.