|Current Ann. Return||–|
|Accrued Ann. Return||+
|Gross Ann. Return*|
|Current Ann. Return||–|
|Accrued Ann. Return||–|
|Gross Ann. Return*||17.4%|
|Term Remaining||– of –|
NYC allows 3-4% annual increases on rent stabilized units however the major rent increases will come from vacating tenant, destabilizing the units and increasing rent up to 3x.
|Capital Senior to Fundrise||50-59%||2|
|Capital Junior to Fundrise||30-39%||2|
|Sponsor’s Track Record||Less than $50 million||3|
The information contained in the Fundrise Rating is for informational purposes only. It is impersonal and not individualized for any specific investor's financial situation and is not investment advice. These ratings are not intended to be, nor should you interpret them to be, a prediction of how a particular investment will actually perform. You should always carefully consider investments in any security and be comfortable with your understanding of the investment. You may also consider consulting investment professionals.
|Type||Source||% of Total||Amount|
|Common Equity||Sponsor & Private Investors||33.3%||$800,000|
|Common Equity||Fundrise Offering||12.5%||$300,000|
|Senior Debt||Country Bank||54.2%||$1,300,000|
151 Dupont (“Dupont”) offers the opportunity to buy a cash flow positive asset in the heart of one of the fastest gentrifying neighborhoods in the five boroughs. It is an 8-unit wood frame multifamily building. Dupont consists of 4 floors with 2 railroad style units per floor.
Given the artificially low rents created by stabilization an arbitrage exists that renters cannot capture. A properly renovated unit is worth significantly more than the cost of vacating and renovating that unit. Because the units rent at such a discount there is an opportunity for substantial returns if we are able to vacate and renovate units.
Pre-closing we have been able to vacate 3 (Units 1L, 1R & 2L) of the 8 units and will begin gut renovations immediately upon closing the property. The renovations will transform the units from unkept railroad rent stabilized units to brand new “winged” 2 bedrooms. We will be moving the kitchen and bathroom from the rear of the units to the center and placing the two bedrooms at either end. This will allow us to attract high rents from the ever growing population of Brooklynite renters that look for newly renovated units in the Greenpoint area.
This property offers an extremely unique risk/reward profile. Dupont provides downside protection through rent stabilization and offer upside through our active improvements to the property. Fundamentally, we are simply purchasing an under valued real estate asset that will appreciate in all financial market conditions. Ultimately, we like this investment for its safety but the true merit of this opportunity is that safety does not come at the cost of upside.
|Address||151 Dupont Street|
|City & State||Brooklyn, NY|
|Product Type||Multi-Family / 4-Story Walkup|
|Project Phase||Value-Add / Rehabilitation|
We have identified areas of Brooklyn on the cusp of gentrification where we expect to see dramatic growth in rents and land value. Within these areas, we look to purchase under managed rental buildings that will provide 5% to 6% returns upon purchase (if we are unable to add any value). Low risk buildings that are profitable in all macroeconomic environments because all of our tenants live in below market value rent stabilized apartments where rents cannot go lower. Upon purchase, we have an easily executable plan of vacating and then renovating apartments in order to charge market rent for our area and achieve a +15% IRR.
All of our models (bear, base and bull) assume that the areas of Brooklyn that we have identified rental income will grow at 4% a year (the legal year over year amount we're allowed to increase rent) when in reality the areas we are purchasing have seen and are continuing to see robust growth, from 6% to 15% a year, that will allow us to achieve excellent returns.
The Greenpoint Lumber Yard is being redeveloped by the Park Tower Group who are working with Handel Architects to create a vision for the revitalized neighborhood. The plan includes 4.2 million square feet of mixed-use development and provides over 4,000 new units of housing in addition to a mix of retail and public parks across 11 new buildings. The development was approved by the city in late 2013 and will completely transform not only the Greenpoint neighborhood but also the New York skyline.
Greenpoint has not only proven to be a stable neighborhood but with the upcoming Greenpoint Landing project set to break ground in 2014, we believe Greenpoint is rapidly approaching the elite status reserved for Brooklyn neighborhoods such as Williamsburg and DUMBO.
Brooklyn Standard Properties was founded in 2013 by partners David Manheimer and Benji Kohn to invest in and renovate “value add” properties throughout Brooklyn. Over the past 18 months Benji and David have successfully identified, contracted andclosed on 3 properties (22 units) totaling ~$8m in project value.View full profile