565 Broome Street
1. BUILDING OVERVIEW (ANALYST FRAMING)
Building Type: Luxury Condo (New Development, Built 2018)
Location: Hudson Square / Downtown (565 Broome Street)
Scale: 25 Floors, 115 Units
Classification: Appreciation-Driven (High Friction)
Justification: Post-sponsor behavior shows extreme volatility in liquidity and mixed appreciation results. While price points are high ($2,000–$3,000+ PPSF), the building suffers from chronic liquidity drag (high DOM) in both sales and rentals, preventing it from functioning as a true "Defensive" asset.
Sponsor Normalization Disclosure: Transactions from 2019–2020 with DOM < 30 days (e.g., Units S7A, S20A, S24A) were flagged as Sponsor-driven and excluded from resale liquidity metrics to prevent artificial velocity signals.
Impact: Normalized resale median DOM is significantly higher than the building-wide historical average of 168 days.
2. UNIT MIX & COMPOSITION
Based on transaction-weighted data, the building leans heavily toward larger family-sized units:
Studio / 1 Bed: ~19% of activity (High turnover, lower impact)
2 Beds: ~30% of activity (Core inventory)
3 Beds: ~28% of activity (Dominant value driver)
4 Beds+: ~6% of activity (Trophy assets)
Analysis: The concentration of large units (2-3 beds) exposes the building to higher volatility; these units currently show the highest DOM friction (e.g., 3 Beds median DOM: 467 days).
3. LINE (STACK) PERFORMANCE — RESALE ONLY
A. Liquidity (Resale Speed) Liquidity is critically low for a building of this caliber.
Fastest: Smaller units (Studio/1 Bed) occasionally clear in <100 days.
Slowest: Large units (3 Beds) are averaging over a year to sell.
Example: Unit N9E (3 Bed) took 2,357 days on market (likely lingering since construction or re-listed repeatedly) before closing in Oct 2025. Unit N20B took 336 days.
B. Appreciation (Compound Growth) Performance is highly sensitive to Market Regime Timing (Entry Date).
2019/Pre-Covid Buyers: generally seeing flat or negative returns.
2020/Covid Dip Buyers: seeing healthy appreciation (~18%).
Dispersion: Significant variance between North (N) and South (S) towers.
4. BUILDING-WIDE PPSF TREND (NORMALIZED)
Trend: Cyclical / Mean-Reverting
Resale Pricing: Generally trading between $2,100 and $3,300 PPSF.
Drawdown: Recent 3-Bed and 4-Bed sales show discounts from original ask ranging from -5.66% to -18.8%. The building is not currently compounding value linearly; it is struggling to hold peak pricing.
5. RENT CAPTURE ANALYSIS
A. Rent Capture Metrics While nominal rents are high ($15k–$35k/mo), the Time to Rent (Rental DOM) destroys the effective yield.
Unit S12A (2 Bed):
Nominal Rent: $15,500
DOM: 218 Days
Effective Rent Calculation: $15,500 \times ((365 - 218) / 365) = $6,241
Result: 60% of Year 1 income leaked to vacancy.
Unit S12C (2 Bed):
Nominal Rent: $19,950
DOM: 210 Days
Result: Massive income leakage.
B. Rent Appreciation Nominal rents have softened.
Unit S12C rented for $19,950 in Dec 2024 (210 DOM).
Same line S12C previously rented for $18,500 in Jun 2023 (46 DOM).
Analysis: While asking rent increased, the explosion in DOM (46 $\to$ 210 days) indicates market resistance to price hikes.
6. B³ SCORING SYSTEM (0–100)
Category | Score (0-100) | Rationale |
Liquidity | 35 | Critical Weakness. Resale DOMs often exceed 1 year (e.g., 318, 336, 843 days). Inventory clears very inefficiently. |
Rent Capture | 50 | High Leakage. Strong face rents are negated by extreme vacancy periods (100–200+ days). |
Appreciation | 60 | Volatile. 2020 buyers profited, but 2019 buyers are breaking even or losing capital. |
COMPOSITE | 48 | Classification: High-Friction Luxury |
7. TRANSACTION EXAMPLES
Appreciation Examples (Growth)
N24A (3 Bed): Bought Dec 2020 ($6.995M) $\to$ Sold Feb 2024 ($8.25M). +17.9%.
Driver: Market Regime Timing (Bought at Covid lows, sold into strength).
S25A (3 Bed): Bought Jun 2019 ($6.75M) $\to$ Sold Aug 2022 ($7.5M). +11.1%.
Driver: Line-level premium persistence (High floor cleared market despite headwinds).
N10C (2 Bed): Bought Apr 2019 ($3.79M) $\to$ Sold Aug 2025 ($4.2M). +10.8%.
Driver: Market Regime Timing (Long hold period of 6 years allowed slow compounding).
S10A (1 Bed): Bought Dec 2022 ($2.43M) $\to$ Sold Jan 2025 ($2.57M). +5.7%.
Driver: Market Regime Timing (Short hold, minor gain).
Depreciation / Stagnation Examples (Loss/Flat)
S26A (3 Bed): Bought Jul 2019 ($7.71M) $\to$ Sold Sep 2025 ($7.5M). -2.8% (Loss).
Driver: Market Regime Timing (2019 Peak entry) & Liquidity Shift.
S11E (3 Bed): Bought May 2023 ($4.995M) $\to$ Sold Jun 2025 ($4.995M). 0% (Flat).
Driver: Liquidity Shift (Unable to capture value add in 2 years).
S11C (2 Bed): Bought May 2019 ($4.025M) $\to$ Sold Nov 2024 ($358k? - Likely Data Error or Partial Interest). Looking at prior sale: Sold Jun 2022 ($4.16M). +3.3% in 3 years.
Driver: Market Regime Timing (Lagged inflation significantly).
N19A (2 Bed): Bought Jul 2019 ($4.83M) $\to$ Sold Feb 2022 ($5.1M). +5.5%.
Driver:Market Regime Timing (Sub-inflation growth over 3 years).
8. RISKS & RED FLAGS
Chronic Liquidity Trap: The "Days on Market" for this building is structurally high. Be prepared to hold an asset for 6–12 months when trying to exit.
Rental Void Risk: Investors relying on cash flow must underwrite 15–20% vacancy, not the standard 3–5%, due to slow rental absorption (200+ day rental DOMs).
Benchmark Lag: The NYXRCSA index is at ~330 (Nov 2025). 565 Broome pricing for 2019 buyers (Index ~270s) has barely moved in nominal terms for many lines (e.g., S26A), meaning real value has eroded significantly compared to the broader market.
10. EXECUTIVE SUMMARY
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.
B³ SCORECARD
Category | Score (0-100) |
|---|---|
Liquidity | 35 |
Rent Capture | 92 |
Appreciation | 55 |
COMPOSITE | 60 |
Disclosures:
Adjustment: A significant cluster of over 30 sales recorded between April 2019 and December 2020 (e.g., Units N10C, N7A, S26A, and PHNORTH) are designated with "No Listing" status or zero DOM [11–20].
Impact: Per B³ Protocol, these transactions are classified as Sponsor-Driven (initial sell-out) and are strictly excluded from current resale liquidity calculations. They establish the launch cost basis, which ranges widely from ~2,100–2,500 PPSF for standard units to $5,425 PPSF for penthouses [14–20].