A Building (425 East 13th Street)
1. BUILDING OVERVIEW (ANALYST FRAMING)
Building Type: Postwar Condo (Built 2007) – "A Building"
Scale: 8 Floors, ~96 Units (Transaction weighted)
Classification: Yield-Oriented
Justification: Post-sponsor data reveals a massive divergence between income generation and asset value retention. While the building demonstrates elite Rent Capture (consistently achieving $90–$115 PPSF in late 2025 rents), the Resale Appreciation pillar has collapsed. Long-term holders are exiting at nominal losses or flat returns after holding for nearly a decade (e.g., Unit PHA sold in 2025 for 17% less than its 2017 acquisition). The building functions as a high-velocity rental machine but a capital-depreciating asset for recent sellers.
2. UNIT MIX & COMPOSITION
Data Basis: Transaction-weighted inventory.
Composition:
Studios (~450–530 SF): High turnover, extreme rental density.
1-Beds (~650–870 SF): The core volume driver of the building.
2-Beds (~1,000–1,200 SF): Performance drag; liquidity struggles significantly here.
Impact: The building is heavily weighted toward transient, small-unit inventory. This mix supports the Yield-Oriented classification, as smaller units command higher rent-per-square-foot premiums but suffer from higher resale volatility when interest rates rise or investor demand cools.
3. LINE (STACK) PERFORMANCE — RESALE ONLY
Sponsor normalization applied: Excluded 2008–2009 initial offering sales from liquidity metrics to isolate secondary market friction.
A. Liquidity (Speed)
Rank 1 (Fastest): 1-Bedroom Lines (Historical).
Rank 2 (Slowest): Penthouse / 2-Bed Lines.
Recent Shift (2024–2026): Severe Deceleration.
Unit PHA (2-Bed): 222 Days (2025 Sale).
Unit 6P (1-Bed): 169 Days (2024 Sale).
Unit 1N (1-Bed): 117 Days (2024 Sale).
Contrast: In 2022, units like 7J cleared in 17 days.
Conclusion: Inventory is currently sticking.
B. Appreciation (Durability)
Penthouse Lines: Depreciating.
Significant value leakage observed in premium units.
Standard 1-Beds: Stagnant / Mean-Reverting.
Prices are struggling to break 2014–2015 highs.
Example: Unit 6P sold for $925k in 2024. It sold for $855k in 2020. Minimal real growth over 4 years.
4. BUILDING-WIDE PPSF TREND (NORMALIZED)
Growth Phase (2010–2015): Strong recovery from initial GFC launch. PPSF rose from ~$1,100 to ~$1,600.
Correction Phase (2017–2025):
2017 Peak: Units trading near $1,700–$2,000 PPSF (e.g., Unit PHA at $2,112 PPSF).
2025/2026 Reality:
Unit PHA: $1,746 PPSF.
Unit 3B: $1,641 PPSF.
Unit 4F: $878 PPSF (Distressed/Outlier signal, Jan 2026).
Unit 5L: $1,125 PPSF.
Trend: Cyclical Drawdown. The building is trading at a significant discount to its 2015–2017 pricing structure.
5. RENT CAPTURE ANALYSIS
A. Rent Capture by Unit Type (2025 Data)
Studios: Elite performance.
Unit 5E (Sep 2025): $4,500 ($116 PPSF). DOM: 12 Days.
Unit 4D (Dec 2025): $4,200 ($107 PPSF). DOM: 46 Days.
1-Beds: Strong.
Unit 6H (Jun 2025): $5,500 ($94 PPSF).
2-Beds: Good, but lower efficiency.
Unit 4A (Aug 2025): $9,500 ($108 PPSF).
B. Conclusion Rent Capture is the building's defining strength. Achieving $100–$115 PPSF is exceptional for a non-new-development building in the East Village. The Effective Annual Rent is high because vacancies are filled quickly (often <20 days).
6. B³ SCORING SYSTEM (0–100)
(Scores 0–100 based on Normalized Data)
A. Liquidity Score: 40/100
Penalty: Recent resale DOM averages >120 days (e.g., PHA 222 days, 6P 169 days).
Support: Rental liquidity remains high, preventing a total score collapse, but resale liquidity is frozen.
B. Rent Capture Score: 92/100
Strength: Elite PPSF ($100+).
Strength: Cap Rate potential is massive. (e.g., Unit 5L sold for ~$587k in 2024 but similar units rent for ~$4,500/mo. Gross yields approach ~8-9%).
C. Appreciation Score: 20/100
Penalty: Confirmed nominal losses on long-term holds (2015–2025).
Penalty: Underperformance against NYXRCSA benchmark (Index rose ~330 vs ~270 in 2017, while building prices dropped).
7. COMPOSITE SCORE & CLASSIFICATION
Composite Score: 55 (Liquidity 40 × 0.35) + (Rent 92 × 0.30) + (Appreciation 20 × 0.35)
Classification: Yield-Oriented
Definition: This asset is a cash-flow vehicle. It is dangerous for buyers seeking equity growth but highly efficient for investors seeking immediate rental yield.
8. TRANSACTION EXAMPLES
Resale Depreciation (The "Leakage"):
Unit PHA (Penthouse):
Bought Dec 2017: $2,600,000
Sold Jan 2025: $2,150,000
Result: -17% Loss over 7 years.
Driver: Market Regime Timing (Bought at peak) & Liquidity Shift (222 DOM).
Unit 3B (Studio):
Bought Oct 2015: $875,000
Sold Feb 2025: $865,000
Result: -1.1% Loss (Nominal) over 10 years.
Driver: Market Regime Timing (2015 was a local peak).
Unit 6K (1-Bed):
Bought Dec 2013: $1,280,000
Sold May 2024: $1,200,000
Result: -6% Loss over 11 years.
Driver: Line-level premium persistence (failed to hold value).
Unit 1K (1-Bed):
Bought Feb 2008 (Sponsor): ~$789k
Sold Oct 2022: $1,070,000
Result: +35% over 14 years (~2% CAGR).
Context: This underperforms inflation significantly.
Driver: Sponsor price normalization.
Resale Appreciation (Exceptions):
Unit 4F (1-Bed) - Warning:
Bought Feb 2008: $763,687
Sold Jan 2026: $895,000
Result: +17% over 18 years. (Appreciation exists but is negligible).
Driver: Sponsor price normalization.
9. RISKS & RED FLAGS
Red Flag: Negative 10-Year Returns. Multiple units (3B, 6K, PHA) have sold in 2024–2026 for less than they traded for in 2013–2017. The building has completely decoupled from the NYXRCSA Index, which reached all-time highs (~330) in late 2025.
Red Flag: Volatility in PPSF. The spread is chaotic. In Jan 2026, Unit 4F sold for $878 PPSF while Unit 3B sold for $1,641 PPSF. This suggests idiosyncratic distress or finish-level discrepancies that make valuation difficult.
Risk: Liquidity Trap. With inventory sitting for 170–220 days, you cannot exit this position quickly without taking a steep discount.
10. EXECUTIVE SUMMARY
425 East 13th Street is a classic Yield-Oriented asset that acts as a "rental powerhouse" but an "equity trap." Post-sponsor analysis shows that while the building commands top-tier rents ($100–$116 PPSF in 2025), resale values have mean-reverted to 2013 levels. Long-term holders of 7–10 years are realizing nominal losses (e.g., Unit PHA selling for $450k less in 2025 than 2017). Investors should treat this strictly as a high-yield instrument (Cap Rates ~7%+) and avoid banking on capital appreciation. The liquidity friction is high (170+ days to sell), meaning exit strategies must be patient.
DISCLOSURES & NORMALIZATION
Sponsor Normalization:
2008 sales (Inception) were treated as the baseline.
Note: 2008 sales had unusually long DOMs (Market launch coincided with GFC). They were excluded from "Resale Liquidity" calculations to prevent skewing the baseline, but used for pricing comparison.
Data Note: Unit 4F (Jan 2026 sale) traded at a severe discount ($878 PPSF). While included, it may represent a distressed sale or specific unit condition issue.