The Eight Percenter: In 1H12, Massey Knakal’s Stephen Palmese Closed 8% Of All Brooklyn Sales Deals. How?
His selling point was simple: “Take this property, turn it into a Class A property by way of a rental or by way of a condo,” said Mr. Palmese.
Aided by low interest rates and flush with cash, developer Doug Steiner of Steiner Studios closed on the 60-unit property for $24.5 million in May.
“This was a very rare property in that everyone is looking for a conversion or a vacant building,” said Mr. Palmese.
His intimate knowledge of the market has helped position him as one of the most prolific brokers in Brooklyn. Of the $1.5 billion in building sales in Brooklyn recorded in the first half of 2012, Mr. Palmese and his team of three full-time salesmen have accounted for approximately 8 percent.
He sold 313 Gold Street for $19 million, 109 Gold Street for $14.5 million and 131-137 Emerson Place for $13 million, among several of his most notable deals so far in 2012.
What’s attracting buyers to Brooklyn is the potential for transforming these buildings into market-rate rentals or condos.
“To a degree, Manhattan is an island, and a lot of pension money and a lot of hedge fund money is now looking at Brooklyn,” he said. “In Manhattan, 1 million [square] feet is big. In Brooklyn, it’s 100,000 [square] feet. So you have a lot of developers competing for sites that are 100,000 to 200,000 square feet, and there aren’t that many of them.”
The youngest of four siblings, the Bay Ridge native was educated in Staten Island and followed his two brothers to Georgetown University. When he graduated in 2004, he reached out to Jonathan Hageman, a friend of his sister’s who was a longtime employee at Massey Knakal.
“I applied for a bunch of finance jobs, [but] I knew I wanted to be in real estate. It was what my friends were doing, and they went on to do banking, private equity or hedge fund work,” said Mr. Palmese.
He was told that if he wanted to learn real estate, he should join Massey Knakal, where he would receive his “real estate 101” education before eventually moving on to work for a REIT or a major developer.
That landed him back in Bay Ridge, the Brooklyn neighborhood of his youth, to sell 447 86th Street for a Greek family.
“I’ve focused in that market for a period of time, and then in 2008 I shifted to this downtown Brooklyn market,” he said.