CHALLENGE

Cobble Hill Brooklyn is known for its leafy side-streets where well-healed residents occupy 150-year-old brownstones and high-rent retail corridors resemble Manhattan as much as Brooklyn. In the heart of the neighborhood. 108 and 110 Baltic Street each offer eight residential units With an even mix of free-market and rent-regulated apartments. They are each 6.500 Sq Ft and have been well maintained and professionally managed over the years. Like many private investors. the owner's strategy has always been to use his property as his retirement fund. Given his intention to leave the workforce in the upcoming years. he scrutinized the financial performance of the buildings. He wondered if he could realize better equity returns by exchanging it into new properties. He sought our guidance.

ACTION

The owner 81 108-110 Baltic Street had regularly sought Jakob Nowak's assistance assessing and valuing his properties over the previous ten years. so he had Nowak+Partners analyze the Baltic Street return on his equity. With countless tax-free exchange transactions under his belt. Mr. Nowak was an experienced and knowledgeable source. Jakub's team knew his current holdings were delivering him approximately 3, return on equity. With his wide knowledge of alternative real estate investments. Jakub's team offered many scenarios where his client could more than double his return. The owner hired Jakub's team as a 1031 exchange broker and was not disappointed.

RESULT

Upon being exclusively hired to market 108-110 Baltic St. Nowak +Partners orchestrated a comprehensive marketing campaign designed to expose the asset to every possible buyer in the market. 12 written offers were presented in the first four weeks. Many of them were from 1031 exchange buyers and most were at record-setting numbers.

• After several rounds of bidding. an all-cash hard-contract was signed with a buyer who had just sold his own property in Upper Manhattan and needed to satisfy his 1031 exchange requirements.
• The purchase price. $6.400.000. translates to $492 per Sq Ft. and a going-in cap rate of 3.08./0. Both metrics reflect a high watermark and price record for a property in this sub-market with a significant portion of rent-regulated units
• The deal was structured to allow for the seller to purchase in a 1031 exchange over 200 units of multifamily properties in the Midwest. He was able to identify his exchange options and sign purchase agreements prior to closing this deal.