The Eight Percenter: In 1H12, Massey Knakal’s Stephen Palmese Closed 8% Of All Brooklyn Sales Deals. How?
The sale of 204 Huntington Street, a 62,404-square-foot asset in south Brooklyn, was 10 years coming.
The investment sales firm Massey Knakal Realty Services had first noticed the property, a warehouse-turned-multifamily development, in 2003-2004. Later, Area Property Partners owned and managed it between 2009 and 2010, before its principals decided to place the asset on the market.
To market such a property, Massey Knakal tapped a Bay Ridge-born broker whose tenacity in the investment sales sector had already earned him a reputation as one of the borough’s most active up-and-coming agents.
“We were prepping for this in late 2011, and there naturally had not been many, if [any], multifamily transactions,” said Stephen Palmese, a 30-year-old director of sales at Massey Knakal.
This multifamily offering, however, had an “added value play.”
“This was something that, on a price per square foot [basis], was being offered for almost $400 a foot on a net number,” said Mr. Palmese.
Located near Carroll Gardens, the area had seen an influx of new restaurants and developments, while condominium prices and rental prices swelled to favorable highs.
“It was a perfect opportunity where somebody was going to sit on it, and then convert it and sell the balance of the units for who knows what number in the future,” he said.
The property was formerly a collection of industrial properties that had been converted into apartments in 2003, Mr. Palmese explained. At the time, there had been a J-51 tax benefit program put on the property, which kept the rents in place at a 20 percent discount from normal market rates. With rents at $36 per square foot, a developer could swoop in, convert the property and raise the rents to levels similar to 360 Smith Street, a neighboring new development that was renting out at $49 per square foot.