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New York

Troubled Fort Greene condo-turned-rental building finds buyer

The sale of a beleaguered seven-unit rental building at 90 Clermont Avenue in Fort Greene has closed for $2.6 million, according to TerraCRG, the firm which was marketing the building on behalf of Eastern Capital, the bank that foreclosed on the property in 2008.

The building was purchased by a private developer operating via an LLC named Abraham Equities. His identity was not immediately clear.

Developed originally by a another private developer, Andy Oluwole Alege, who bought the 7,560-square-foot building in 2004 for $210,000, and designed it as a seven-unit condo project, 90 Clermont was finished as a condo building in 2007, but sales were slow.

The development, dubbed Das Haus, was initially priced at $600 per square foot in early 2007 but eight months after coming on the market, only one of the seven units were in contract. After several unsuccessful price cuts, the building eventually went rental.

The property has been operating as a rental building for the last few years, according to TerraCRG, and has a 421-a tax abatement in place until 2024. It is currently fully occupied.

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The contract on the property was signed at the beginning of January and closed within 30 days.

Brokers for the seller were Ofer Cohen, Melissa DiBella, Peter Matheos and Mike Hernandez of TerraCRG, while Josh Rahmani of Venture Capital Properties represented the buyer,

“We definitely see a trend of these buildings trading at lower cap rates,” DiBella said. “The continued strength of the rental market of new construction buildings in Downtown Brooklyn and an increased general optimism about the local market and the economy, coupled with low levels of inventory in Brooklyn and low interest rates, are causing investors to compete aggressively on these buildings when they come to market.”

Rahmani, who declined to comment on the identity of the buyer, said he sees these types of deals as being great opportunities for buyers, especially in Brooklyn.

“There are so many of the deals where the developer built a condo [and it later went rental,]” he said. “The quality of the build is great, it’s a great cash flow situation and there’s always room for upside in the rents or if the condo market gets better. There’s also good attractive debt on these types of properties.”