Rector Square (225 Rector Place)

1. BUILDING OVERVIEW (ANALYST FRAMING)

Rector Square (225 Rector Place) is a mature postwar resale condo built in 1986 in Battery Park City. Standing 24 floors with 304 total units, it is a large-scale development that has transitioned through significant sponsor-driven cycles. Based on post-sponsor behavior, the building is classified as a Hybrid asset. It exhibits high-depth liquidity with 373 recorded sales (exceeding total inventory count) and 314 rentals, while notably outperforming the Battery Park City sub-neighborhood by 7.0%. Its profile is defined by steady compounding PPSF—moving from a sponsor-influenced 2013 floor of ~$900–$1,000 to resale peaks exceeding $1,400—and a rental market that achieves high yearly efficiency but is prone to extreme "income leakage" in specific underperforming stacks.

2. UNIT MIX & COMPOSITION

The unit mix is transaction-weighted based on the 373 recorded sales.

• Studio: 56 sales (~15.0%). Median PPSF: $1,026. Median DOM: 61 days.

• 1BR: 161 sales (~43.2%). Median PPSF: $1,114. Median DOM: 79 days.

• 2BR: 55 sales (~14.7%). Median PPSF: $1,295–$1,467. Median DOM: 58–160 days.

• 3BR+: 13 sales (~3.5%). Median PPSF: $1,180–$1,442. Median DOM: 58–65 days.

Liquidity stability is anchored by the Studio and 1-bedroom segments, which account for nearly 60% of all transaction volume. Volatility is concentrated in the larger 2BR/4BA configurations, which act as illiquidity agents with median marketing periods reaching 160 days. The 2BR/2BA segment acts as a premium driver, consistently commanding higher PPSF ($1,384 median) than standard core inventory.

3. LINE (STACK) PERFORMANCE — RESALE ONLY

A. Liquidity Fastest-clearing resale lines include the 'C' and 'N' stacks. Unit 6C cleared in 29 days and 14N in 30 days. Slowest-clearing lines include the 'S', 'J', and 'C' (higher-floor) stacks, with unit 5S languishing for 470 days, 21J for 460 days, and 8C for 335 days.

B. Price Strength The high-floor 'H' and 'G' lines command structural premiums. Unit 15H reached $1,596 PPSF, 21G hit $1,482, and 17H reached $1,562 PPSF. Structural discounts are found in lower-floor 'E' and 'A' lines, with unit 10E clearing at $1,048 PPSF and 20A dropping contextually lower during cyclical shifts.

C. Appreciation The building is Compounding. Line 'A' (1BR) moved from $1,000 PPSF in 2013 to $1,294 PPSF in 2018. Line 'H' (1BR) moved from $935 PPSF in 2013 to $1,251 PPSF in 2023.

4. BUILDING-WIDE PPSF TREND (NORMALIZED)

• 2008–2013 (Sponsor Baseline): Median PPSF established primarily in the $400–$1,000 band, heavily distorted by mass "No Listing" bulk and sponsor conversions.

• 2016–2019 (Growth Period): Pricing stepped aggressively into the $1,100–$1,400+ band.

• 2021–2025 (Maturity): Resale values stabilized with a building median of $1,096 and premium units consistently clearing $1,200–$1,400+.

• Conclusion: Compounding. The building has effectively raised its valuation floor significantly since its 2008–2013 sponsor cycle, tracking the long-term upward trajectory of the NYXRCSA Oct 2025 index (331.14) and outperforming the local BPC neighborhood.

5. RENT CAPTURE ANALYSIS

• Effective Annual Rent = Achieved Rent × (365 − Rental DOM) ÷ 365.

  • High-Capture (Unit 14J): Rent $5,200, DOM 5. Effective Rent = $5,128.

  • Mid-Capture (Unit 12A): Rent $3,795, DOM 87. Effective Rent = $2,890.

  • Leaky (Unit 10E): Rent $2,495, DOM 185. Effective Rent = $1,264.

  • Extreme Leakage (Unit 11J): Rent $3,500, DOM 323. Effective Rent = $402.

  Rent efficiency is robust in high-velocity units (often clearing at $80–$89 Yearly PPSF), but the building is prone to severe income leakage in lines where DOM exceeds 150 days (e.g., 'E', 'J', and 'T' stacks), which effectively erases the majority of the targeted annual yield.

6. B³ SCORING SYSTEM (0–100)

• Liquidity Score: 70. High transaction depth (373 sales) is offset by an elevated 79-day median for 1BRs and extreme 400+ day dispersion outliers in specific lines.

• Rent Capture Score: 72. Elite baseline PPSF efficiency is degraded by severe vacancy leakage in non-standard units and poorly absorbed lines.

• Appreciation Score: 78. Durable capital compounding is proven at the line level, outperforming the sub-neighborhood by 7.0%.

7. COMPOSITE SCORE & CLASSIFICATION

• Composite Score: (70 × 0.35) + (72 × 0.30) + (78 × 0.35) = 73.4.

• Category Label: Hybrid (All three pillars ≥ 65).

8. TRANSACTION EXAMPLES

Resale Appreciation:

• Unit 10A (1BR): $1,000 PPSF (2013) → $1,294 PPSF (2018). Held 4.4 yrs, +29.4%. Drivers: (1) Market regime timing, (5) Sponsor price normalization.

• Unit 10H (1BR): $935 PPSF (2013) → $1,251 PPSF (2023). Held 10.6 yrs, +33.8%. Drivers: (1) Market regime timing, (5) Sponsor price normalization.

• Unit 8C (1BR): $1,090 PPSF (2013) → $1,229 PPSF (2022). Held 8.8 yrs, +12.7%. Drivers: (1) Market regime timing, (2) Line-level premium persistence.

• Unit 4E (Studio): $1,121 PPSF (2019) → $1,162 PPSF (2024). Held 5.1 yrs, +3.6%. Drivers: (1) Market regime timing.

Resale Depreciation / Drawdown:

• Unit 18H (2BR): $1,696 PPSF (2020) → $1,347 PPSF (2025). Held 4.6 yrs, -20.5%. Drivers: (1) Market regime timing.

• Unit 21H (2BR): $1,796 PPSF (2018) → $1,467 PPSF (2021). Held 3.2 yrs, -18.3%. Drivers: (1) Market regime timing, (3) Liquidity shift (305 DOM).

• Unit 8B (Studio): $1,232 PPSF (2015) → $1,102 PPSF (2021). Held 5.8 yrs, -10.5%. Drivers: (1) Market regime timing.

• Unit 20C (2BR): $1,570,000 Orig Ask → $1,360,000 Sale (2024). -13.3% relative. Drivers: (3) Liquidity shift (230 DOM).

9. RISKS & RED FLAGS

• Chronic long resale DOM: The 'S', 'J', and lower-floor 'C' lines are liquidity bottlenecks, with DOM frequently exceeding 230–470 days.

• Income Leakage: The 'J' and 'T' rental lines show extreme vacancy risks (e.g., 214 to 323 days), potentially erasing up to 88% of annual income.

• What NOT to buy: Oversized 2BR/4BA configurations and mid-floor 'C/J' line units during market peaks. These units exhibit the highest risk of unit mix imbalance and chronic market lag, suffering severe drawdowns during corrections.

10. EXECUTIVE SUMMARY

Rector Square is a high-volume Hybrid asset that serves as a performance leader in Battery Park City, outperforming the sub-neighborhood by 7.0%. The building’s health is anchored by its 1BR segment, which maintains steady resale volume, and its 2BR units, which command structural premiums and elite rent efficiency up to $102/SF. While the building has demonstrated robust compounding appreciation since its 2013 sponsor cycle, investors face significant "income leakage" in the rental market for specific stacks ('J' and 'T') and severe liquidity risk in segments where marketing periods can exceed 400 days. Opportunity lies in high-floor 'H' and 'G' lines for capital growth, while risk is concentrated in lower-floor units with chronic market lag.

B³ SCORECARD

• Liquidity Score: 70

• Rent Capture Score: 72

• Appreciation Score: 78

• Composite Score: 73.4

• Category Label: Hybrid

• Unit Mix Summary: Transaction-weighted estimate of ~43.2% 1BR, ~15.0% Studio, ~14.7% 2BR, ~3.5% 3BR+

Sponsor Normalization Impact: Approximately 112 transactions (late 2008 through 2013) were reclassified as SPONSOR-DRIVEN due to "No Listing" status or DOM ≤ 30 days within the 5-year initial mass-sales window following the building's conversion/restart.

Normalized Impact: Normalization excludes these zero-day bulk closings from resale calculations, bringing the true median resale DOM up from an artificially low baseline to the accurate 61–79 day median seen in true resales.

Benchmark: Analysis utilizes the NYXRCSA Oct 2025 index of 331.14 for temporal context.