Living / Multi-housing

Instrata Brooklyn Heights

75 Clinton St Brooklyn, New York United States 11201-4298
Asking Price Contact for pricing
Area Size
NOI Net Operating Income N/A
NIY N/A

Documents

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Attributes

Year Built 1910
Building Area Gross
Number of units 74

Asset Description

Jones Lang LaSalle (“JLL”) has been exclusively retained to arrange the sale of Instrata Brooklyn Heights (the “Property” or “Instrata”), a 74-unit property located in the heart of Brooklyn Heights, one of the most coveted residential neighborhoods in New York City. The Property was converted from an office building to high-end residential in 2012 and has since remained one the premier residential buildings in the submarket.


The in-place average rents at the Property are approximately 20% below legal rents ($71 psf vs $85 psf), allowing for new ownership to drive growth in the coming years. Additionally, lease trade outs year-to-date in 2022 have averaged a 31% net effective increase. The unit mix is comprised of 17 studios, 35 one bedrooms, 16 two bedrooms, and 6 three bedrooms, which combined average 836 square feet. The large unit layouts are tailored to the heavily family-oriented demographic of the Brooklyn Heights neighborhood. 


The Property benefits from a 14-year J-51 tax abatement through June of 2032. The abatement provides an 80% exemption through June 2029 followed by a 60%, 40%, and 20% stepdown during the final three years, culminating in a net present tax savings value of approximately $6.6MM (~$107 PSF).

Investment Highlights

Rent Upside – Approximately 20% Below Legal Rents & 31% Lease Trade-Outs

96% of occupied units are leased below their legal rents. Furthermore, average in-place preferential rents are approximately 20% below legal rents, providing the potential for aggressive rent growth. Additionally, lease trade outs in 2022 have averaged a 31% net effective increase, further supporting the ability to push rents.


Irreplaceable Product 

Formerly an office building that was converted to residential in 2012, Instrata Brooklyn Heights has unique features that are difficult to replicate in the submarket due to costs and land scarcity.

• 10’-11’ ceilings

• Oversized windows

• Ample light and air

• Significant rooftop space

• Large units


Larger Units Yield Rent Premiums 

Larger unit offerings with best-in-class finishes in Brooklyn have out-performed smaller units since 2020, with net effective rents growing by 27%.


Most Desirable Neighborhood in Brooklyn

Brooklyn Heights is one of the most highly coveted Outer Borough neighborhoods due to its quiet, tree-lined streets, excellent transportation access, premier schools, and nearby living amenities. Known as “Americas, First Suburb” and Manhattan’s “First Commuter Suburb”, Brooklyn Heights is an urban oasis that attracts wealthy families looking to escape Manhattan.


Lack of New Competitive Rental Supply 

Boerum Hill is facing a drought of new, high-quality apartments. There is currently just one rental development in the pipeline largely due to 90% of the neighborhood being designated as a Historic District. Barriers to entry are high, which will substantially limit developments for the foreseeable future.


Accretive Tax Abatement

The property is a beneficiary of a 14-year J-51 tax abatement that expires at the end of June 2032, providing substantial tax savings to an incoming investor in the amount of $6.6MM, or $107 PSF.


Strong Tenant Demographics

Brooklyn Heights is one of the most affluent Outer Borough submarkets with an average household income of $156k. Tenants at Instrata earn an average of $268k annually, over $100k more than the submarket average. 


Unmatched Transportation Access

Instrata’s tenants are directly across the street from the Court Street Station (N,R,W) and just a two-minute walk away from the Borough Hall Subway Station (2,3,4,5). Additionally, Jay St-Metro-Tech station is under a ten-minute walk. Combined, these stations provide residents with convenient access to all of Brooklyn and Manhattan.

Last Updated Date: 11 Aug 2022

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Last Updated Date: 11 Aug 2022

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