The Daily Dirt: Why this tiny deal story went viral

Normally we don’t cover investment sales of just $3.8 million, or even deals 10 times larger.

But we made an exception for the purchase of this Inwood rental building because it showed how much rent stabilization has limited the value of such properties. Most New Yorkers would be shocked to hear of Manhattan apartments in good condition selling for just $79,000 apiece.

The brokerage on the sale of 610 West 204th Street noted that the cap rate — essentially the annual return on investment — for the acquisition was a healthy 8.9 percent, despite rents averaging about $1,060. The low acquisition price made for a higher cap rate. Much of that return, however, is likely eroded by the interest the buyer is undoubtedly paying on the mortgage.

But if interest rates fall, and lending to rent-stabilized buildings picks up as the market recovers from Signature Bank’s collapse, the Inwood buyer will be able to refinance and increase the property’s returns.

The downside of such buildings is they require a lot of work — they’re old and have low-income tenants — and have limited financial upside. The Rent Guidelines Board doesn’t allow rents to keep pace with operating expenses and the state legislature is unlikely to restore paths to deregulation.

In any case, readers seemed to appreciate the article, written by Suzannah Cavanaugh. It’s among The Real Deal’s 10 most-read stories in the past week. More than a few people who achieved success in New York City real estate got started with unwanted rent-stabilized properties.

Given the sector’s low prices, and the frustration and desperation of longtime owners, young strivers who can’t borrow large sums but do have the energy and courage to be landlords could see this as a buying opportunity.

What we’re thinking about: A plan to build apartments over a rail line in Borough Park is sailing through the city’s public review process, Ulurp, despite a pocket of local opposition. Meir David Tabak and Meyer Lebovitz are the developers, Studio V is the architect and Ken Fisher is the land-use lawyer. Almost all of the objections have come from NIMBY residents of a neighboring condo called Maple Lane. Maple Lane was also opposed by NIMBYs when it was built.

A thing we’ve learned: A Yale study of Philadelphia neighborhoods found that retrofitting homes for energy efficiency also reduced rodent infestations. They also made it easier for predators to catch rats by denying the rodents access to buildings. But the effects were limited in areas with lots of open trash containers, which Mayor Eric Adams is systematically banning in New York City.

Elsewhere…

— The Chera family and Joe Cayre, along with casino magnate Steve Wynn, are hosting a fundraiser this Sunday for Donald Trump in Deal, New Jersey, a favorite summer community for the Syrian Jewish community. Other real estate players are co-hosting, meaning they are contributing a smaller (but still substantial) amount of money. Among them: Harry Adjmi, Ben Ashkenazy, John Catsimatidis, Charlie Kushner, Joe Moinian and Steve Witkoff.

Steve Ross, then the chairman of the Related Companies, hosted a fundraiser for Trump in the Hamptons in 2016, triggering a backlash that included a brief boycott of Equinox fitness centers, in which Related executives are major investors.

— Public Housing Finance Law 610 allows the city’s Department of Housing Preservation and Development to pay the full amount of rental vouchers, even if it exceeds the legal rent for a stabilized unit — but only in buildings with regulatory agreements such as Article XI.

As a result, many owners are fighting to get a regulatory agreement, according to the Community Housing Improvement Program. But HPD has limited capacity, and even if the agency signs off, the local City Council member has to do so as well. One irony is that buildings with lots of violations are given priority for Article XI, creating an incentive for landlords to let their properties deteriorate.

Closing time

Residential: The priciest residential sale Wednesday was $6.4 million for a 3,000-square-foot  landmarked townhouse at 23-25 Wooster Street in Soho. Serhant’s Christopher Prokop was last on the listing, but the transaction appears to have been off-market.

Commercial: The largest commercial sale of the day was $6 million for a six-unit, mixed-use rental building at 98 Rivington Street on the Lower East Side.

New to the Market: The highest price for a residential property hitting the market was $16.5 million for the 4,730-square-foot Unit 42A of 20 West 53rd Street, a condominium. Charlie Attias, Brooke Winsness and Connor Ramage of Compass have the listing. — Joseph Jungermann