Skip to content

102 Baltic Street, Brooklyn, NY

Case Studies

Speed and Certainty of Execution were Mission-Critical to an owner of a rent stabilized 8-Family in Cobble Hill Brooklyn. 102 Baltic Street is a perfect example of a property type whose buyer pool had recently shrunk. Of its eight residential units, six are rent-regulated apartments and one has a Section 8 tenancy. While the property had been well managed from a structural and systems point of view, the average rents for the property were under $1,500 per month–significantly below prevailing market rents in the area. The sale of rent stabilized assets poses unique challenges in today’s regulatory environment. Buyers have become reluctant to inherit legacy tenants who benefit from under market leases. Their low cost of living provides a strong incentive to stay in units long term. As a result, buyers of these assets have begun underwriting with much less potential upside in an asset’s future cash flows. Unfortunately for owners, prices and sales velocity for these properties have dipped dramatically. The seller of the subject property had arranged a reverse 1031 exchange that required him to sell the property within a six month window. He had attempted to sell to an off-market buyer who tied up the property in protracted contract negotiations and ultimately did not perform. After this broken contract, the seller recognized his need to act quickly to find a replacement buyer. By the time he approached The Nowak Group to market the property on his behalf, he had less than three months to arrange a closing.