565 Broome Street

565 Broome Soho is a high-friction luxury asset that struggles with post-sponsor liquidity. While the building commands premium pricing ($2,500+ PPSF) and offers high nominal rents, it fails to efficiently capture that value due to chronic transaction delays—with resale units often sitting for 300+ days and rentals vacant for 200+ days. Appreciation is highly stratified: 2020 buyers secured nearly 20% gains, while 2019 buyers are facing flat or negative returns. This is not a yield play or a liquid safe haven; it is a long-term lifestyle purchase where the exit strategy requires patience and significant lead time.

Tony InJe Yeo

Mar 02, 2026

Contents

1. BUILDING OVERVIEW (ANALYST FRAMING)2. UNIT MIX & COMPOSITION 3. LINE (STACK) PERFORMANCE — RESALE ONLY 4. BUILDING-WIDE PPSF TREND (NORMALIZED)5. RENT CAPTURE ANALYSIS 6. B³ SCORING SYSTEM (0–100)7. TRANSACTION EXAMPLES 8. RISKS & RED FLAGS 9. EXECUTIVE SUMMARY B³ SCORECARD

1. BUILDING OVERVIEW (ANALYST FRAMING)

Building Type: Recent Development Condo (Built 2018).
Location: Hudson Square / Downtown.
Scale: 25 Floors, 115 Units.
Classification: Yield-Oriented (Defensive)
- Justification: 565 Broome Soho operates as an income-generating fortress that significantly outpaces its sub-neighborhood in absolute pricing ("Outperforms Hudson Square by 19.0%"), but lags the broader market in capital compounding post-sponsor. The building commands elite nominal rents (often exceeding $140–$166 PPSF [44–46]) and massive rent growth, securing its "Yield-Oriented" status. However, resale liquidity is severely bifurcated: while small units are liquid, larger units (>2 bedrooms) suffer from chronic friction, taking upwards of 6 to 12 months to clear [52–53]. Price appreciation from the 2019–2020 sponsor baseline is modest to flat, confirming it acts as a defensive store of value rather than an aggressive growth asset.

2. UNIT MIX & COMPOSITION

Based on the transaction-weighted insights (125 recorded sales) :

Studios / 1-Beds: 44 sales (~35% of activity).
2-Beds: 37 sales (~30% of activity).
3-Beds: 35 sales (~28% of activity).
4-Beds+: 7 sales (~7% of activity).
Analysis: The building has a relatively balanced mix, but performance heavily relies on layout. The Unit Size / Unit Mix Imbalance drives liquidity behavior: 1-bedroom units maintain a median DOM under 80 days, while 3- and 4-bedroom units experience severe friction, averaging 218 to 678 days on the market.

3. LINE (STACK) PERFORMANCE — RESALE ONLY

A. Liquidity (Resale Speed)

Status: Bifurcated (High Friction for Large Units).
Small Units: 1-Bed lines average an exceptional 0–77 Median DOM.
Large Units: 2-Beds range from 153 to 299 Median DOM. 3-Beds face extreme friction, ranging from 218 to 467 Median DOM.
Outlier: Unit N9E (3-Bed) required 843 days to sell in 2025.
Driver: Unit Size / Unit Mix Imbalance.

B. Appreciation (Basis vs. Current)

Line N24A (3 Bed / 2,512 SF):
- Sponsor (Dec 2020): $6.995M.
- Resale (Feb 2024): $8.250M.
- Result: +17.9% in 3.2 years (~5% CAGR).
Line S26A (3 Bed / 2,244 SF):
- Sponsor (Jul 2019): $7.716M.
- Resale (Sep 2025): $7.500M.
- Result: -2.8% Nominal Loss in 6 years.
Benchmark Comparison: Performance is highly line-dependent. While select lines compound reasonably well, others suffer nominal losses, lagging behind the aggressive growth of the NYXRCSA benchmark.

4. BUILDING-WIDE PPSF TREND (NORMALIZED)

2019-2020 (Sponsor Baseline): ~$2,100 – $2,500 PPSF (excluding Penthouses at $3,400–$5,400+) [34–43].
2022-2023 (Mid-Cycle): ~$2,400 – $2,800 PPSF [29–31].
2024-2025 (Current Resale): ~$2,100 – $3,300 PPSF (Line dependent) [26–28].
Trend: Flat to Modest Compounding. The building defends its initial sponsor pricing well, but value accretion is slow compared to broader indices.

5. RENT CAPTURE ANALYSIS

Rent Growth (Unit N10A Case Study):
- Jul 2019 Rent: $7,750 (35 DOM).
- Feb 2024 Rent: $12,000 (20 DOM).
- Result: +54.8% Nominal Growth.
- Effective Annual Rent (2024): $12,000 × (365 - 20) ÷ 365 = ~$11,342/mo.
Yield Leakage (Unit S12C Case Study):
- Dec 2024 Rent: $19,950.
- DOM: 210 Days.
- Effective Annual Rent: $19,950 × (365 - 210) ÷ 365 = ~$8,471/mo.

Conclusion:Liquidity Shift. Tenant demand supports exceptionally high PPSF, but timing the market is critical to prevent massive vacancy losses (like the 57% income leak seen on S12C).

6. B³ SCORING SYSTEM (0–100)

Category	Score (0-100)	Rationale
Liquidity	35	Slow / Bifurcated. While 1-bedrooms move reasonably well (0–77 Days), the Insights data shows severe friction for larger units: 2-Beds average 153–299 Days, and 3-Beds average 218–467 Days [28–29]. Recent resales like N9E took 843 days to clear.
Rent Capture	92	Elite. The building is an income powerhouse. Unit N10A rented for 7,750in2019andsurgedto∗∗12,000 by 2024 (+54% growth). Rents consistently clear at an exceptional 140–166 PPSF** [21–23].
Appreciation	55	Mixed / Stabilizing. Performance varies wildly by line. Unit N24A grew a healthy +18% from 2020 to 2024. Conversely, large units like S26A saw a slight -2.8% nominal loss from their 2019 sponsor basis.
COMPOSITE	60	Classification: Yield-Oriented (Defensive)<br>Note: The building explicitly outperforms Hudson Square by 19.0%, primarily driven by its elite rent capture and strong price floor, despite the slow resale velocity for 2+ bedroom units.

7. TRANSACTION EXAMPLES

Appreciation

Unit N24A (3 Bed): Bought Sponsor 2020 ($6.995M) → Sold Resale 2024 ($8.250M). +17.9% in 3.2 years. Driver: Market regime timing.
Unit N10C (2 Bed): Bought Sponsor 2019 ($3.792M) → Sold Resale 2025 ($4.200M). +10.7% in 6.3 years. Driver: Line-level premium persistence.

Stagnation / Depreciation

Unit S10A (1 Bed): Bought Resale 2022 ($2.437M) → Sold Resale 2025 ($2.575M). +5.6% in 2.1 years. Driver: Sponsor price normalization.
Unit S11E (3 Bed): Bought Resale 2023 ($4.995M) → Sold Resale 2025 ($4.995M). 0% Growth (Flat). Driver: Unit size / unit mix imbalance.
Unit S26A (3 Bed): Bought Sponsor 2019 ($7.716M) → Sold Resale 2025 ($7.500M). -2.8% Nominal Loss over 6 years. Driver: Liquidity shift.

8. RISKS & RED FLAGS

The "3-Bedroom Liquidity Trap": Avoid purchasing 3- or 4-bedroom units if you require a swift exit. Historical data proves these lines require 200 to 600+ days to sell (e.g., N9E took 843 days) [26, 52–53].
Vacancy Leakage: While nominal rents are sky-high, asking too much causes severe DOM bloat. Unit S12C sat empty for 210 days in 2024, destroying nearly a full year of yield.
Benchmark Lag: Owners are defending their capital but failing to capture the explosive alpha seen in broader market indices.

9. EXECUTIVE SUMMARY

565 Broome Soho is a Yield-Oriented (Defensive) new development that behaves as an elite income-generating fortress while lagging in resale liquidity and capital appreciation. The building fundamentally outperforms Hudson Square by 19%, driven by incredible rental strength—standard units have seen rent growth of 45% to 54% since 2019, consistently commanding top-tier PPSF. However, the sales market is severely restricted by a "Unit Size Imbalance"; while 1-bedrooms trade efficiently, 2- and 3-bedroom resales suffer from chronic friction, averaging 150 to 460+ days on market [51–53]. Consequently, capital appreciation from the 2019 sponsor baseline is mixed, with some lines gaining ~18% and others taking nominal losses, making this an ideal target for long-term income investors rather than short-term capital flippers.

B³ SCORECARD

B³ SCORECARD

Liquidity Score: 35

Rent Capture Score: 92

Appreciation Score: 55

Composite Score: 60.00

Category Label: Yield-Oriented (Defensive)

Unit Mix Summary: Transaction-weighted estimate of ~35% Studio/1BR, ~30% 2BR, ~28% 3BR, ~7% 4BR+.

Disclosures:

Sponsor Normalization: The building was built in 2018. Over 30 transactions from April 2019 through December 2020 show DOM values of zero or "No Listing" during the initial building sell-out. These transactions were reclassified as sponsor-driven and excluded from resale liquidity calculations.

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