|15 Crooke & 620 Flatbush, from Real Deal|
The Q's discussed Jonas Equities before, a relative newcomer to the scene that seems willing to pay crazy prices for rent stabilized apartments - like 620 Flatbush, the building that not incidentally happens to lease to local Ital destination sensation Scoops. Jonas also scooped up 15 Crooke Ave over in Caledonia for about the same , and for that price Real Deal calls it $265,000 per apartment. 15 Crooke, for you northerners, is over by the Parade Ground, and the Q is confident that all of Caledonia will one day fetch a pretty penny. Maybe that one day is...tomorrow?
Think about it. Were it coops or condos, 15 Crooke would be $265,000 per apartment. But they're NOT coops or condos. They're stabilized apartments, perhaps fetching (currently) on average $1,000 a month, in Brooklyn's densest sub-neighborhood (Caledonia) that until oh so recently wasn't on any investor's map. All this money! I mean, the math don't figure. I know something is happening here, but I'm simply not clue in enough to understand it. Yes, yes, they'll force or buy out as many tenants as they can. We've seen that strategy many times before. But will another buyer actually top $15 million bucks for either of these modest sized buildings? On what valuation is this sort of price warranted? And remember, this is the same company that bought longtime slumlord hellhole 115 Ocean Avenue for TWENTY SEVEN MILLION DOLLARS, or $290,000 per apartment. Hey, it's on the park, but...what the HELL GIVES?
Are we witnessing the influx of "sheltered money" from someplace else, or has the whole world gone absolutely mad and started buying hamburgers for fifty bucks without batting a french fry? Actually, an article in the Old Gray Lady about how hedge fund Blackstone has accumulated an enormous portfolio of real estate seems well-timed to provide one possible answer. With the world's deepest pockets putting their largesse into big ticket houses, buildings etc. one wonders whether it's all a Ponzi Scheme in process. God knows we've been through it before, and Big Finance has short memories. Musical chairs, and the last one with their pants down loses. Actually, that's not how musical chairs is played, nor in my opinion should it be. Pants stay on. Mixed metaphor, sorry.
All the details of the above from Real Deal.