121 EAST 22ND STREET

1. BUILDING OVERVIEW (ANALYST FRAMING)

• Building Type: Recent Development Condo (Vintage 2018)

• Scale: 140 Units / 18 Floors

• Classification: Yield-Oriented (Distressed Liquidity)

Justification: 121 East 22nd Street behaves as a high-performance income generator that is currently undergoing a severe "Sponsor Premium Burn-Off" phase. While the NYXRCSA benchmark has trended upward to record highs (~330 index in Nov 2025), resale pricing in this building has regressed. Recent 2024–2025 resales consistently trade at nominal losses or flat levels compared to 2019 and 2021 acquisition prices. Value is currently derived entirely from Rent Capture, where the building commands elite premiums ($93–$107/SF), whereas the sales market suffers from slow liquidity (high DOM) and negative capital compounding.

Sponsor Normalization Disclosure:

• Transactions Reclassified: ~35 transactions from 2019.

• Context: The building commenced sales in 2019. A significant volume of initial sales (e.g., N1005, N803, N705, N204) show 1 Day on Market (DOM).

• Impact: These are classified as Sponsor-driven transactions. They are used to establish the high baseline pricing (~$2,000–$2,200 PPSF) but are excluded from resale liquidity metrics to avoid artificially inflating velocity scores.

2. UNIT MIX & COMPOSITION

The inventory is transaction-weighted toward 2-Bedroom units, creating a specific liquidity profile that is currently sluggish.

• Studios: ~13 Sales recorded (~11% of activity).

• 1-Bedrooms: ~26 Sales recorded (~22% of activity).

• 2-Bedrooms: ~53 Sales recorded (~45% of activity). Dominant Inventory.

• 3-Bedrooms+: ~17 Sales recorded (~14% of activity).

Analysis:

• Liquidity Stability: The building is heavily reliant on the 2-Bedroom market. Current data shows this segment is experiencing significant drag, with resale DOMs frequently exceeding 150 days.

• Rent Capture: The unit sizes are efficient (Studios ~616 SF, 1-Beds ~780–933 SF), allowing for Rent/SF metrics to exceed $100/SF, driving the building's primary value proposition.

3. LINE (STACK) PERFORMANCE — RESALE ONLY

A. Liquidity (Speed) Resale liquidity is remarkably slow for a modern building, indicating a wide bid-ask spread between sellers (anchored to 2019 prices) and the market.

1. Studios/1-Beds: Median DOM ~56–111 Days. (Moderate/Slow).

2. 2-Bedrooms: Median DOM ~150–279+ Days. (Severe Drag).

   • Examples: Unit N501 (279 Days), Unit S901 (560 Days in 2022), Unit S801 (386 Days).

3. 3-Bedrooms+: Median DOM ~250+ Days.

   • Examples: Unit S902 (1,248 Days), S1101 (890 Days).

B. Price Strength & Dispersion

• Building Median PPSF: ~$1,700–$1,800 (Resale) vs ~$2,100 (Sponsor Baseline).

• Line Dispersion:

  • Premium: High-floor large units still command ~$2,399 PPSF (e.g., S901 in 2025).

  • Discount: Standard 1-2 bed inventory has compressed to ~$1,630–$1,760 PPSF (e.g., N307, N1504).

C. Appreciation Negative. The building is in a deflationary resale cycle.

• Performance: Multiple lines show nominal losses of -9% to -17% upon resale in 2024/2025. This divergence from the NYXRCSA benchmark confirms "New Development Premium" evaporation.

4. BUILDING-WIDE PPSF TREND (NORMALIZED)

• Phase 1 (Sponsor Peak): 2019–2020. Sales consistently cleared $2,000–$2,250 PPSF.

• Phase 2 (Volatility): 2021–2022. Mixed performance. Some units resold near par; others began sitting.

• Phase 3 (Correction): 2023–2025. Resale pricing has settled into the $1,700–$1,850 PPSF range.

• Current State: Deflationary. While the broader market (NYXRCSA) is at ~330 (All-Time High), this asset is trading below its 2019 inception pricing.

5. RENT CAPTURE ANALYSIS

A. Rent Capture by Unit Type This is the building's strongest pillar. It achieves top-tier rents with rapid absorption, confirming high utility value.

• Studios (approx. 616 SF):

  • Rent: ~$5,250–$5,500/mo.

  • Rent/SF: $102–$107/SF.

  • DOM: Very Fast (8–32 Days).

  • Capture: Elite.

• 1-Bedrooms (approx. 780–933 SF):

  • Rent: ~$8,000/mo.

  • Rent/SF: $102/SF.

  • DOM: Moderate (41 Days).

• 2-Bedrooms (approx. 1,600+ SF):

  • Rent: ~$13,250–$13,450/mo.

  • Rent/SF: $93–$97/SF.

  • DOM: Fast (11 Days for N408).

B. Effective Rent Calculation (Example)

• Unit N203 (Mar 2025):

  • Achieved Rent: $5,250/mo.

  • DOM: 32 Days.

  • Effective Annual Rent = $(5,250 \times 12) \times (365 - 32) \div 365 = $57,472$.

  • Efficiency: High retention of gross potential rent.

6. B³ SCORING SYSTEM (0–100)

A. Liquidity Score: 45

• Speed: Median resale DOM is poor. 2-Bedrooms (the core inventory) frequently sit for 200+ days.

• Depth: Transactions occur, but the "time cost" to sell is excessive.

B. Rent Capture Score: 94

• Efficiency: Rent/SF consistently breaks $100/SF, which is exceptional.

• Absorption: Rental DOM is significantly faster than sales DOM.

C. Appreciation Score: 20

• Magnitude: Proven nominal losses (-10% to -17%) in a rising macro market.

• Durability: The asset has failed to hold its sponsor pricing baseline.

7. COMPOSITE SCORE & CLASSIFICATION

Composite Score = 51

• $(45 \times 0.35) + (94 \times 0.30) + (20 \times 0.35) = 15.75 + 28.2 + 7.0 = 50.95 \approx 51$

Category Assignment: Yield-Oriented (Distressed Liquidity)

Criteria: Rent Capture is elite (>90), but Appreciation is failing (<30) and Liquidity is sluggish. The building functions as a "cash flow trap" where income is high, but exit values are impaired.

8. TRANSACTION EXAMPLES

Resale Depreciation (Sponsor Premium Burn-Off)

1. Unit N307 (Studio):

   • Buy: $1,350,000 (May 2019)

   • Sell: $1,200,000 (Dec 2025)

   • Result: -11.1% Loss (Nominal) in 6.5 years.

   • Driver: Sponsor Price Normalization.

2. Unit N501 (2-Bed):

   • Buy: $2,795,000 (Aug 2021)

   • Sell: $2,300,000 (Apr 2025)

   • Result: -17.7% Loss in 3.5 years.

   • Driver: Liquidity Shift / Market Regime. (Sold into a high-rate environment vs bought in low-rate).

3. Unit N1406 (2-Bed):

   • Ask History/Context: Traded for $3,075,000 in Mar 2023. Compare to similar lines trading higher in 2019 (e.g., N1302/N1206 range $5M+ for large units). Note: N1406 reflects the compression of the mid-tier market.

4. Unit N901 (2-Bed):

   • Buy: Similar unit N902 sold May 2022 for $4.95M (Wait, N902 is 3-bed in 2022? No, check size. S902 is 3-bed. N901 is 2-bed).

   • Correction: Unit N901 sold Jan 2023 for $2,400,000. Compare to Unit N907 (similar size) sold Dec 2022 for $2,975,000. Wide dispersion indicates volatility/downward pressure.

Resale Stagnation (Best Case)

1. Unit N1005 (1-Bed):

   • Buy: $1,745,000 (Apr 2019)

   • Sell: $1,800,000 (Jul 2024)

   • Result: +3.1% Total Gain over 5 years. (CAGR ~0.6%).

   • Context: After closing costs, this is a Real Loss.

   • Driver: Sponsor Price Normalization.

9. RISKS & RED FLAGS

• The "2019 Trap": 2019 sales prices ($2,000+ PPSF) are not a valid baseline for current value. Resales are clearing near $1,700 PPSF.

• Extreme Liquidity Drag: Sellers of 2-bedroom units face median DOMs of nearly 9 months (279 days for N501, 386 days for S801). This is not a liquid asset.

• Capital Erosion: Buyers from 2021 (Unit N501) have realized nearly 18% nominal losses.

10. EXECUTIVE SUMMARY

121 East 22nd Street is a Yield-Oriented asset that excels at generating rental income but is currently destroying capital value for resale vendors. While the building captures elite rents of $102/SF with rapid absorption, the sales market is suffering from a severe correction of "New Development" premiums. Resale data from 2024–2025 confirms that buyers from 2019 and 2021 are exiting at nominal losses of 11% to 17%, decoupling entirely from the record-breaking NYXRCSA benchmark. The building is an excellent vehicle for income generation but a dangerous trap for short-to-medium term capital appreciation.

B³ SCORECARD

• Building: 121 East 22nd Street

• Category: Yield-Oriented (Distressed Liquidity)

• Composite Score: 51

Unit Mix Summary:

• Studio/1-Bed: ~33% of Sales (Fast Rent, Flat Sale)

• 2-Bed+: ~67% of Sales (Severe Resale Drag)