Case Study: 155 Evergreen Avenue
The Sale of 155 Evergreen Avenue in Brooklyn, NY
The Deal
We are pleased to announce the successful sale of 155 Evergreen Avenue in Bushwick, Brooklyn. At the time of contract, 5 of 6 units were occupied, allowing and an immediate owner-user opportunity. The asset ultimately traded at 95% of our final asking price—a result achieved through our shared services platform, strategic marketing approach, and by awarding the deal to a highly motivated end-user.
The final sale price reflects a 7.49% cap rate, making it a competitive outlier in today’s market. For context, 21 rentstabilized buildings have traded in Bushwick over the past 18 months, averaging an 8.08% cap rate and $156 per square foot. Evergreen not only closed nearly 60 basis points below the average cap rate, but also commanded a 30% premium on a per-square-foot basis at $217/SF.
What set this transaction apart was our targeted marketing process, my deep focus on the North Brooklyn multifamily market, and Matthews’ proprietary investor database and network, all of which allowed us to drive strong interest, secure favorable terms, and ultimately deliver top-of-market pricing for our client.
Seller Profile
A value-add investor who acquired the asset prior to the 2019 rent law reform (HSTPA), which significantly impacted the viability of their investment strategy.
Buyer Profile
A private investor and commercial real estate owner from Arizona, relocating to New York with the goal of expanding their portfolio in one of the most sought-after real estate markets in the country.
Challenges Faced
Establishing a Premium
Achieving premium pricing for rent-stabilized assets post-HSTPA has become increasingly difficult. With reduced upside and additional regulation, fewer investors are willing to assume the risks associated with reduced upside and additional regulation, fewer investors are willing to assume the risks associated with this asset class, leading these assets to not only be less desirable and ultimately trade at a significant discount from there value pre-HSTPA. Identifying the right buyer—someone who understands and is positioned to manage those risks—was critical.
Lender Complication
Obtaining a bank commitment came with an extensive list of lender requirements. These included everything from architectural and engineering reports to GC bids for scope of work, and even fund holdbacks contingent on post-closing remediation. These hurdles had to be carefully navigated to keep the deal on track.
Solution & Strategy
Strategic Marketing & Network Reach
By leveraging Matthews’ extensive investor network and cross-listing strategies, we generated a competitive marketplace for the asset. This created both momentum and leverage, allowing us to dictate terms and maximize value.
Market Saturation
To ensure a strong and efficient sales process, we engaged as many qualified investors and end-users as possible. Creating urgency and maintaining backup interest ensured the lead buyer stayed motivated and minimized the risk of delays or retrades.
DHCR Due Diligence
Selling a rent-stabilized building demands the right team. We engaged consultants who specialize in DHCR due diligence—professionals who solve problems rather than create them. As brokers, we understand rent regulation and are equipped to guide buyers through the process while deferring legal interpretations to the proper experts.
Outcome
Our collective efforts culminated in the successful sale of 155 Evergreen Avenue for $850,000 to a private buyer from Arizona. This deal marked their first acquisition in Brooklyn. Backup offers came from local private owners looking to expand their neighborhood holdings.
The sale exceeded our client’s expectations. As a result, they were able to divest from a non-core asset that no longer aligned with their business plan. The buyer plans to continue acquiring similar properties in the area throughout the year.
If you’re interested in learning more about this transaction—or would like to discuss similar opportunities currently on the market—reach out to the lead listing agent for more.
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