Thursday, February 5, 2009

Botanical Square Building for Sale... Again

2985 and 2995 Botanical Square are for sale once again. These two buildings are connected by a central courtyard and house 183 rent stabilized residential units, as well as five commercial units on the ground floor. The asking price for this property? A mere $14.5 million (down from $15.5 million). Massey Knakal has the listing here.

According to NYC Department of Finance records, the two buildings were sold just about six months ago (6/28/08) for a little over $17 million. I guess the collapse of the real estate market as we know it has forced the owner to do a quick turnaround with this place, even though he's getting hit with a pretty major loss.

This property in a complete enigma to BoogieDowner... Situated a stone's throw away from the New York Botanical Garden and directly across the street from the Botanical Garden Metro North station, this building has all the potential in the world. There's even a cute community garden right across the street (which is maintained by NYBG), as well as a playing field directly across the street to the North. The courtyard and architecture of the building are quite gorgeous, but yet... to call the building desirable would be a major stretch of the imagination. There's quite a litter problem surrounding the building, and there are frequently shady characters lurking outside.

The potential for this to become a desirable address is certainly there though. Hopefully some well-meaning developer (ha!) will come along and snap it up and finish whatever project the current owner intended to undertake when they set up scaffolding around the place at least six months ago. The place clearly is not in the best shape and needs a major facelift to be restored to its previous glory.

Little fun fact for the real estate geeks out there... In researching Botanical Square on the mighty interweb, we came across a New York Times report from 1954 siting the sale of the property for $482,500. Holy good Lord how times have changed...



Gregory Lobo Jost said...

Thanks for picking up this listing. It's very intriguing for us since the last sale was one private equity group (Hudson Realty Capital) taking out another (Praedium), keeping the manager (Pinnacle) in place.

It is amazing that they are trying to sell the property so soon, and at such a loss.

While of course it's great to have a buildng brought up to its former condidtion, the worry is always that much higher rents will come along with improvements and the current residents won't be able to enjoy those improvements as they've been priced out.

Anonymous said...

So should we NOT want to see improvements? Nobody will put money into anything if they can't make a profit. What's the motivation to invest? This isn't Cuba.

Should we hope that this building doesn't get sold and continues to be crappy (and cheap)? Or should we hope that this building gets a facelift and an overhaul and becomes a nice place to live (even if rents go up)? Rents are cheap in certain areas because the quality of life is lacking. If the quality of life goes up, shouldn't the rent?

~El Feo

Gregory Lobo Jost said...

El Feo,

Scenario 1: a landlord does a decent job of keeping up apartments, doing what he/she is supposed to do (e.g., painting, basic repairs) and takes the allotted rent increases. Tenants are basically happy and stay a long time, the building is in good condition, and the rents go up slowly.

Scenario 2: a landlord doesn't make repairs, and the building starts to go down the tubes. The building is sold for a huge price tag (since Bronx multifamily real estate is all about speculation) and the new owner continues to to not make repairs, hoping more and more tenants move out. Each time a tenant moves out, the rent goes up the allotted amount plus 20% (vacancy allowance), plus the 1/40 increase if they do major repairs (these are warranted since the apartment was in such horrible shape). The new owner is now able to rent the renovated apartment for significantly more than what it was going for previously. This is done on a large scale, and the owner takes other measure to get lower rent paying tenants out (like not making repairs, paying them off, or sending them dispossess notices for frivilous reasons). In the end the building will be brought up into good condition, but the rents will be significantly higher than in the building in scenario 1.

In many cases, the tenants don't move out at the rate that the new owner expects, and rents don't go up as quickly. Since the new owner paid so much money for the building, they are unable to make their mortgage payments and the building goes into foreclosure. This is already happening in Harlem where the level of speculation has been much higher.

I don't know what's going on with Botanical Square, but if the current owner is trying to sell at a loss, they may be in other financial trouble. Needless to say, foreclosure would be much worse for these buildings than their current state.

Finally, when rents become unaffordable in the Bronx, there will be no where left in NYC for working class folks to live, unless they are lucky enough to live in subsidized housing. That's not the type of City I want to live in.

bsquarelover said...

i've lived on botanical square for 25 yrs. i love living here but yes, it does need fixing. they renovated the elevator, put in video cameras everywhere but if u want something fixed in your apartment, good luck! so many of the tenants who have been here for many yrs, have gotten tired of pinnacle not fixing the apts. some have left. it makes me sad. my hope is that if someone does buy the building, that they'll b willing to do the repairs. i love b-square. its always been a special place to me because of the good, honest, hard-working families that i've known since i was 16. we're a family here.

Anonymous said...

You have a resident at 2995 apt 5B who is getting over on the system by having her boyfriend who is not on the lease and the apartment isnt even under her name,uses different social security numbers and receives mail at her family's home in queens.One Lucia Quinones and Carlos Santos.People like them run us to bankrupt. Anonymous