1400 On Fifth - 1400 Fifth Avenue

1. BUILDING OVERVIEW (ANALYST FRAMING)

• Building Type: Postwar Resale Condo (Built 2004).

• Scale: 8 Floors, 129 Units.

• Primary Category: Hybrid.

Justification: Post-sponsor data indicates a building that offers a unique blend of historical structural compounding and modern yield capture. Initial sponsor sales cleared at deeply discounted baselines ($250–$400/SF) in 2004–2005. This allowed early holders to capture immense equity as the building matured, peaking heavily in the 2016–2018 mid-cycle ($850–$1,180/SF). However, the mature resale market (2023–2026) demonstrates mean-reversion, with values cooling back to an $750–$880/SF baseline. This recent drawdown decouples the asset from the NYXRCSA benchmark, which pushed to historic highs of 330–333 in late 2025 and early 2026. Because it securely compounded early capital while continuing to process functional rental yield, it meets the criteria for a Hybrid asset, albeit one leaning heavily on cyclical timing for recent buyers.

2. UNIT MIX & COMPOSITION Based on summary sales data and historic transaction weighting across 116 sized sales:

• Studio / 1BR: ~8% of sales volume (9 transactions).

• 2BR: ~66% of sales volume (77 transactions).

• 3BR: ~16% of sales volume (19 transactions).

• 4BR+: ~10% of sales volume (11 transactions).

Influence on Liquidity & Rent Behavior: The building is extraordinarily top-heavy, completely anchored by 2BR units. The relative lack of smaller units means the 2BR lines dictate the building's core liquidity and rental baseline. While standard 2BRs process efficiently, the oversized townhome and 4BR/5BR penthouse units suffer from a severe unit mix imbalance, frequently sitting for catastrophic durations (e.g., 283 to 336 days) on the sales market and suffering massive vacancy downtime on the rental market.

3. LINE (STACK) PERFORMANCE — RESALE ONLY

A. Liquidity

• Fastest Resale Velocity: Standard 2BR layouts (e.g., lines 7D, 2J, 4H) clear the market most efficiently when priced accurately, transacting in 4 to 35 days during favorable regimes.

• Slowest Resale Velocity: The building's massive townhome (TH) and oversized layouts routinely sit for chronic, destructive durations. Recent examples include THE2 at 336 days, 6K at 283 days, and older clears like 7F at 614 days and 5A at 505 days.

B. Price Strength

• Mid-cycle premium stacks have entirely broken down. Units that successfully commanded $900–$1,188/SF between 2016 and 2018 have corrected to a volatile baseline of roughly $750–$880/SF today. Large 4BR/5BR footprints suffer severe bulk discounts, recently clearing as low as $361–$565/SF.

C. Appreciation

• Lines are deeply cyclical. Holders from the 2004–2005 sponsor baseline realized massive structural compounding (+150% or more). Conversely, buyers who entered during the 2016–2018 mid-cycle peak exhibit negative compounding and widespread equity loss.

4. BUILDING-WIDE PPSF TREND (NORMALIZED)

• 2004–2007 (Sponsor Clearance): Deeply discounted initial volume at $250–$400/SF.

• 2010–2015 (Growth): Rapid expansion and maturation, moving from $450/SF to $750/SF.

• 2016–2019 (Mid-Cycle Peak): The asset hits maximum pricing power, averaging $850–$1,100+/SF.

• 2021–2026 (Drawdown / Normalization): A distinct cyclical reset back to $750–$880/SF. Conclusion: Cyclical. Value is currently adjusting steeply downward from the 2018 mid-cycle peak, completely failing to track the macro growth proven by the NYXRCSA index moving toward 333 from 2024 to 2026.

5. RENT CAPTURE ANALYSIS

A. Rent Capture by Line & Unit Type

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

• Example 1 (High Efficiency): Unit 4A (1BR). Achieved $3,500/mo. DOM 13. Effective Rent = $3,500 × (365 - 13) ÷ 365 = $3,375/mo.

• Example 2 (Moderate Leakage): Unit 5C (2BR). Achieved $4,200/mo. DOM 30. Effective Rent = $4,200 × (365 - 30) ÷ 365 = $3,854/mo.

• Example 3 (Severe Leakage): Unit PH7C/8C (3BR). Achieved $6,100/mo. DOM 180. Effective Rent = $6,100 × (365 - 180) ÷ 365 = $3,091/mo.

B. Rent Appreciation Nominal rent per SF functions adequately, yielding $40 to $50/SF. The building captures yield highly efficiently on standard 1BR and 2BR units, but the massive DOM drag on luxury/penthouse rentals (e.g., 142 days, 180 days) creates devastating localized cash flow leakage.

6. B³ SCORING SYSTEM (0–100)

• Liquidity Score: 60

  • Speed: Moderate. Standard 2BRs clear adequately, but dragged heavily by the 150-300+ day waits on larger units.

  • Consistency: Low. High variance across unit sizes.

• Rent Capture Score: 75

  • Efficiency: Strong ($40–$50/SF).

  • Absorption: Volatile. Exceptional clears on 1BRs offset by massive leakage on PHs.

• Appreciation Score: 70

  • Durability: Cyclical. Widespread equity loss for peak buyers (2016-2018), but excellent historical compounding for initial 2004–2005 sponsors pushes the baseline score higher.

7. COMPOSITE SCORE & CLASSIFICATION

Composite Score = (60 × 0.35) + (75 × 0.30) + (70 × 0.35) = 68.00 Category Assignment: Hybrid. The asset satisfies the minimum thresholds across all three pillars, heavily buoyed by its massive historic appreciation and functional core rental yields, despite recent cyclical headwinds.

8. TRANSACTION EXAMPLES (REQUIRED)

Resale Appreciation (Early Cycle Timing):

1. Unit 5A (2BR): Dec 2004 Buy ($294/SF) → Jan 2020 Sell ($838/SF). Held 15.1 years. +185% change (CAGR ~7.2%). Driver: Market regime timing.

2. Unit 6A (2BR): Dec 2004 Buy ($246/SF) → Jun 2013 Sell ($616/SF). Held 8.5 years. +150% change (CAGR ~11.4%). Driver: Market regime timing.

3. Unit 4H (2BR): Dec 2004 Buy ($304/SF) → May 2023 Sell ($769/SF). Held 18.4 years. +152% change (CAGR ~5.1%). Driver: Market regime timing.

4. Unit 6K (2BR): Dec 2004 Buy ($290/SF) → Mar 2026 Sell ($810/SF). Held 21.3 years. +179% change (CAGR ~4.9%). Driver: Market regime timing.

Resale Depreciation (Late Cycle / Structural Baseline Shifts): (Note: Because mid-cycle peak buyers struggle to exit without taking a loss, the following compares original peak clearing prices against mature resale attempts within equivalent lines/layouts to map capital decay).

1. 2BR Line Normalization: Unit 5C Peak Trade (Jul 2018 at $1,188/SF) vs Unit 3N Resale (Nov 2024 at $767/SF with 60 DOM). -35% baseline shift. Driver: Market regime timing + Liquidity shift (DOM change).

2. Large Unit Normalization (Deep Friction): Unit 7BDU Peak Trade (Nov 2016 at $688/SF) vs Unit THE2 Resale (Sep 2024 at $565/SF with 336 DOM). -18% baseline shift. Driver: Market regime timing + Unit size / unit mix imbalance.

3. 2BR Line Normalization: Unit 7A Peak Trade (Nov 2021 at $925/SF) vs Unit 6K Resale (Mar 2026 at $810/SF with 283 DOM). -12% baseline shift. Driver: Market regime timing + Liquidity shift (DOM change).

4. 3BR Line Normalization: Unit 3B Peak Trade (Jul 2016 at $904/SF) vs Unit 6F Resale (Apr 2024 at $821/SF with 116 DOM). -9% baseline shift. Driver: Market regime timing.

9. RISKS & RED FLAGS

• Late-Stage Mean Reversion: Buyers who purchased during the 2016–2018 peak have seen their equity structurally destroyed, wholly missing the recent macro upswings of the broader NYC index which hit ~333 in late 2025/2026.

• Catastrophic Illiquidity on Large Layouts: The building's oversized units and townhomes routinely sit for massive intervals on both the sales (336 days) and rental markets (180 days), representing deep friction.

• Avoid: Do not buy Townhome, 4BR, or 5BR units expecting a quick exit. The cost of time completely destroys capital efficiency on these outsized footprints.

10. EXECUTIVE SUMMARY

1400 Fifth Avenue operates as a mature, Hybrid asset that generated immense historic wealth for its initial 2004–2005 buyers while currently transitioning into a Yield-Oriented baseline. The building is overwhelmingly anchored by 2BR layouts, which dictate the property's operational rhythm, clearing functionally in both sales and rentals. However, buyers entering at the 2016–2018 mid-cycle peak have been punished by severe structural mean-reversion, watching asset values draw down to an $750–$880/SF baseline completely untethered from the all-time highs of the NYXRCSA benchmark. Investors should avoid the oversized townhome and 4BR/5BR units—which suffer devastating DOM drag—and utilize this building strictly to farm yield on standardized 2BR units at their newly discounted cost bases.

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