|TerraCRG listing; click to enlarge|
A modest four-story apartment building in Prospect Heights hit the market this week for $3.4M, advertised as a great investment in a neighborhood where “in just a few years, rents have risen from $25/SF to $50/SF,” according to a release by the property’s brokerage firm TerraCRG, which added that the prices “are poised to reach $55/SF and above within the next two years.”While DNAinfo's Rachel Holliday Smith rightly warned that the 497 Dean Street property is next to a construction site for B15, a 27-story tower that will include a school, she missed a couple of key issues, notably that this rent-regulated building has been sold two times, with escalating prices.
Three of the eight apartments are free market with average rent for the building at $27 per square foot, providing significant upside with market rents in the area achieving above $50 per square foot.
And the new owner has to bet on that. There's history here. StreetEasy shows that the entire building sold for $970,000 in 2011 and then $1,660,000 in 2013.