260 Park Avenue South

1. BUILDING OVERVIEW (ANALYST FRAMING)

• Building Type: Condo Conversion (Vintage: 2004 Conversion / 1906 Construction)

• Scale: 12 Floors, 43 Units

• Classification: Yield-Oriented (Secondary: Defensive)

• Sponsor Normalization Disclosure:

  • Transactions Reclassified: Approximately 35 transactions between Nov 2004 and Jul 2005 were identified as Sponsor-driven ("No Listing" with close dates clustered).

  • Impact: The Sponsor baseline was established at ~$800–$900 PSF. Including these would inflate appreciation metrics artificially over 20 years. Normalized analysis focuses on the resale-to-resale behavior, which exposes a distinct "price ceiling" hit in 2016 that the building has not breached since.

Analyst Framing: 49 East 21st Street behaves as a classic Flatiron equity plateau. While early buyers (2004–2010) realized significant gains, the asset has effectively stopped compounding since the 2015–2016 market peak. Resale pairs from 2016, 2018, and 2023 show 0% nominal growth, lagging the NYXRCSA benchmark significantly. The building now functions as a high-occupancy rental anchor (~$75 PSF) rather than a growth vehicle.

2. UNIT MIX & COMPOSITION

Analysis based on recorded transaction history.

Impact: The building is heavily over-indexed on 2-bedroom units. This lack of scarcity creates "resale congestion," where sellers are forced to compete on price, driving values down during softer market regimes. The large units (3-4 beds) are statistically illiquid, often taking 300 to 500+ days to clear.

3. LINE (STACK) PERFORMANCE — RESALE ONLY

A. Liquidity (Ranked Fastest $\to$ Slowest)

1. 1-Bedrooms: Median DOM ~29–64 days. Generally clear within a quarter.

2. 2-Bedrooms: Median DOM ~75–82 days.

3. 3-Bedroom+: Median DOM 344–528 days.

   • Observation: The liquidity penalty for size is severe. 4-bedroom units average nearly 1.5 years on market.

B. Appreciation (Compound Growth)

• Benchmark Context: NYXRCSA Index Nov 2025: 330. Approx +20% since 2015/16.

• 260 PAS Performance:

  • Small Units (1 Bed): Modest Growth (~2.5% CAGR).

  • Large Units (2-4 Bed): Negative Nominal Returns. Multiple confirmed losses of -10% to -25% for holders exiting in 2023–2025.

4. RENT CAPTURE ANALYSIS

MANDATORY: Effective Annual Rent Calculation Note: High rental DOMs in 2023–2024 indicate resistance to asking rents.

A. Rent Capture by Line

• 2-Bedroom Premium (e.g., Unit 2B, 2025)

  • Achieved Rent: $16,500

  • Rent/SF: ~$105 PSF

  • Avg Rental DOM: 28 days

  • Efficiency: High.

  • Calculation: $16,500 $\times$ (337 $\div$ 365) = $15,234 Effective Monthly Rent.

• 2-Bedroom Standard (e.g., Unit 2C, 2023)

  • Achieved Rent: $11,000

  • Avg Rental DOM: 91 days

  • Efficiency: Leaking.

  • Calculation: $11,000 $\times$ (274 $\div$ 365) = $8,257 Effective Monthly Rent.

  • Insight: Nearly 3 months of vacancy destroys the yield, dropping the effective take well below the face value.

• 3-Bedroom+ Luxury (e.g., Unit 9B, 2020)

  • Achieved Rent: $28,000

  • Rental DOM: 160 days

  • Efficiency: Failure.

Insight: Large units sit vacant for nearly half the year when overpriced.

5. B³ SCORING SYSTEM (0–100)

A. Liquidity Score: 45

• Speed: 1-Bedrooms clear reasonably well (60 days), but the building's core (2-beds) drags (80 days) and large units freeze (300+ days).

• Consistency: Low. High DOM dispersion.

B. Rent Capture Score: 72

• Rent Efficiency: Strong nominal rents ($100+ PSF) save this score.

• Absorption: Inconsistent. Some units rent in 10 days, others sit for 90–160 days.

• Stability: High demand for location keeps it occupied eventually.

C. Appreciation Score: 15

• Magnitude: Critical Failure. Massive nominal losses (-25%) for 10-year holds on premium units.

• Durability: The building has not participated in the post-2020 market recovery observed in the NYXRCSA.

6. COMPOSITE SCORE & CLASSIFICATION

Composite Score: (45 $\times$ 0.35) + (72 $\times$ 0.30) + (15 $\times$ 0.35) 15.75 + 21.6 + 5.25 = 42.6

Category: Yield-Oriented (Distressed Equity) Note: This low score reflects the severe capital losses. It is a "renter's building" owned by investors who are currently underwater.

7. TRANSACTION EXAMPLES

Drivers: 1) Market regime timing, 4) Unit mix imbalance, 3) Liquidity shift.

Resale Depreciation / Wealth Destruction (Common Post-2015)

1. Unit 9D (3 Bed):

   • Buy: $5.50M (Sep 2015) $\to$ Sell: $4.13M (Oct 2025)

   • Hold: 10 years. Total: -24.9% Loss.

   • Driver: Market regime timing (Bought peak) & Unit mix imbalance (Illiquid large unit).

2. Unit 6B (2 Bed):

   • Buy: $5.03M (Mar 2016) $\to$ Sell: $4.125M (Oct 2024)

   • Hold: 8.5 years. Total: -18% Loss.

   • Driver: Market regime timing.

3. Unit 8G (2 Bed):

   • Buy: $2.67M (Aug 2015) $\to$ Sell: $2.25M (Apr 2021)

   • Hold: 5.5 years. Total: -15.7% Loss.

   • Driver: Liquidity shift.

4. Unit 5A (2 Bed):

   • Buy: $2.775M (Mar 2018) $\to$ Sell: $2.75M (Aug 2023)

   • Hold: 5.5 years. Total: -1% (Flat).

   • Real Return: Negative after inflation and costs.

Resale Appreciation (Long Holds Only)

1. Unit 4K (1 Bed):

   • Buy: $930K (Jul 2010) $\to$ Sell: $1.325M (Jan 2024)

   • Hold: 13.5 years. Total: +42%. CAGR: 2.6%.

   • Driver: Market regime timing (Bought near bottom).

2. Unit 4G (2 Bed):

   • Buy: $1.695M (Jul 2009) $\to$ Sell: $2.325M (Jul 2022)

   • Hold: 13 years. Total: +37%. CAGR: 2.4%.

   • Driver: Market regime timing.

8. RISKS & RED FLAGS

• The "Luxury" Trap (Unit 9D/6B): Paying a premium ($3M+) in this building is dangerous. History shows these units resell at massive discounts (-20%) a decade later.

• Liquidity Cliff: 3-Bedroom and 4-Bedroom units are effectively illiquid, with median DOMs exceeding one year (344–528 days).

• Vacancy Drag: Do not assume 100% occupancy. 2-Bedroom rentals frequently sit for 3 months (90+ days) before clearing.

9. EXECUTIVE SUMMARY

260 Park Avenue South is a Yield-Oriented / Distressed Equity asset that has structurally underperformed the NYC market for the last decade. Post-sponsor analysis reveals a "lost decade" for owners: while the NYXRCSA benchmark rose ~20% since 2015, premium units in this building have resold at 15% to 25% nominal losses (e.g., Unit 9D, 6B). The building is over-indexed on 2-bedroom units that suffer from resale congestion and variable rental vacancy (up to 90 days). It serves as a functional rental hold for existing owners, but new capital should view it strictly as a cash-flow play with negative equity growth expectations.

B³ SCORECARD

Unit Mix Summary:

• Core Inventory: 2-Bedroom / 2.5 Bath (Dominant).

• Opportunity: Rental yield on 1-Bedrooms (Lower risk).

• Avoid: Capital allocation to 3+ Bedroom units (Liquidity trap).