|The Q, Not Beholden To Ethics Rules, Says Scam Is In the Air|
Okay. This is now officially ridiculous. There is absolutely NO way you can make a profit paying $44 million for a 200 unit building at 805 St. Mark's, diagonal the Brooklyn Children's Museum. You gots to do upkeep, maintenance, you gotta run the building. The name of the company that bought it is Swedish, called Akelius. Plenty of people already don't like their "business model." Expect nothing new here.
But here's the nutty part. The building was purchased for half that just two years ago by Freddy Sayegh of Burke Leighton. It's doubled in price in two years. AND Burke Leighton bought it from their cross-town rivals (buddies?) Pinnacle. You know, Pinnacle, another ethically challenged buyer who's part of a small cadre of big real estate players who've invested heavily in Central Brooklyn.
What's going on? The Q says...Ponzi. Forget all the obvious morally reprehensible stuff they do to make their properties whiter and richer. These guys all know one another. What's to stop them from saying, mafia style, you buy mine if I buy yours? Then it looks to the world like the "smart money" is willing to pay these massive valuations. And then we sell ONE MORE TIME. To someone who's NOT in the cabal. And all that back and forth that we spent turns into one big payday. We split the profits. Or, to make it look more kosher, you take this one, I'll take the next.
Seems like an effortless way to make millions in an overcooked market.
At the very least, we're way past prices that make sense for the old-school model of buy a property, improve it, create steady returns. They used to call it rent roll. Now, who knows what metric they're using? Maybe one of you finance heads can explain this to me.