Sky House (11 East 29th Street)

1. BUILDING OVERVIEW (ANALYST FRAMING)

• Building Type: Post-war Condo (Vintage: 2005)

• Scale: 55 Floors, ~138 Units

• Classification: Yield-Oriented (Secondary: Defensive)

• Sponsor Normalization Disclosure:

  • Transactions Reclassified: Approximately 45 transactions from 2008–2010 were identified as sponsor-driven (DOM ≤ 30 days or "No Listing" within 5 years of inception).

  • Impact: Excluding these reveals a significantly slower resale velocity and removes the artificial pricing floor set during the 2008 closing cycle.

Analyst Framing: Sky House behaves as a capital preservation and yield vehicle rather than a growth asset. Post-sponsor data indicates extreme appreciation drag in the larger units (A/B Lines), which have remained essentially flat in nominal value for 15 years. The building’s performance is anchored entirely by the smaller 1-bedroom units, which provide the only measurable liquidity and modest capital growth.

2. UNIT MIX & COMPOSITION

Analysis inferred from transaction history.

Impact: The building is top-heavy with generic 2-bedroom product that struggles to differentiate in the Nomad market, leading to resale congestion.

3. LINE (STACK) PERFORMANCE — RESALE ONLY

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

1. Small B/C Lines (1 Bed): Median DOM ~40–50 days. Consistent clearing.

2. Large C Lines (2 Bed): Median DOM ~60–90 days.

3. A Lines (Lg 2/3 Bed): Median DOM 100+ days. Chronic "stale listing" risk (e.g., Unit 16A sat for 314 days; Unit 35B sat for 341 days).

B. Appreciation (Compound Growth)

• Benchmark Context: NYXRCSA Index rose from ~215 (2008) to ~330 (2025), a +53% market move.

• Sky House Performance:

  • 1-Bedrooms: Modest capture. ~2% CAGR.

  • 2-Bedrooms (A Lines): 0% to <1% CAGR. Prices have essentially flatlined since 2008.

4. BUILDING-WIDE PPSF TREND (NORMALIZED)

MANDATORY: Effective Annual Rent Calculation Note: High rental DOM significantly erodes captured income.

A. Rent Capture by Line

• 1-Bedroom (e.g., Unit 7B, 39C)

  • Achieved Rent: ~$5,200 – $7,350

  • Rent/SF: ~$80 – $90

  • Avg Rental DOM: ~50 days

  • Efficiency: Leaking. 14% of first-year income is lost to vacancy.

• 2-Bedroom Large (e.g., Unit 21A, 29B)

  • Achieved Rent: ~$7,700 – $10,500

  • Rent/SF: ~$75 – $80

  • Avg Rental DOM: 110+ days (Unit 21A: 201 days; Unit 29B: 111 days).

  • Efficiency: Severe Leakage.

  • Calculation (Unit 29B): $7,700 $\times$ (365 - 111) $\div$ 365 = $5,358 Effective Monthly Rent.

  • Insight: Owners are holding out for face rents ($80 PSF) but taking massive vacancy hits, reducing real yield to ~$55 PSF.

5. RENT CAPTURE ANALYSIS

Drivers: 1) Market regime timing, 2) Unit mix imbalance, 4) Unit size.

Resale Appreciation (Modest/Flat - Mostly Smaller Units)

1. Unit 21B (1 Bed):

   • Buy: $911K (Jan 08 Sponsor) $\to$ Sell: $1.255M (Dec 24)

   • Hold: 16 years. Total: +37%. CAGR: 1.9%.

   • Driver: Market regime timing.

2. Unit 45B (2 Bed):

   • Buy: $1.49M (May 08) $\to$ Sell: $1.735M (Jul 11 - likely wrong data, referencing listing history, let's use resale to resale).

   • Correction: Unit 40C (1 Bed): Buy $1.51M (Jun 08) $\to$ Sell $1.53M (Dec 23). CAGR: 0.1%.

   • Driver: Unit mix imbalance.

3. Unit 50C (1 Bed):

   • Buy: $1.41M (Aug 08) $\to$ Sell: $1.80M (May 24).

   • Hold: 15 years. Total: +27%. CAGR: 1.6%.

   • Driver: Market regime timing.

4. Unit 10C (2 Bed):

   • Buy: $1.45M (Jun 08) $\to$ Sell: $1.645M (Jun 23).

   • Hold: 15 years. Total: +13%. CAGR: 0.8%.

   • Driver: Line-level premium persistence (lack thereof).

Resale Depreciation / Stagnation (Larger Units)

1. Unit 11A (2 Bed):

   • Buy: $1.95M (Dec 09) $\to$ Sell: $2.25M (Sep 21).

   • Hold: 12 years. Total: +15%. CAGR: 1.1%. (Underperforms inflation).

   • Driver: Unit size.

2. Unit 35B (2 Bed):

   • Buy: $1.585M (Jun 08) $\to$ Sell: $1.530M (Jul 21).

   • Hold: 13 years. Total: -3.5% Loss.

   • Driver: Market regime timing.

3. Unit 16A (2 Bed):

   • Buy: $1.72M (Feb 08) $\to$ Sell: $2.30M (May 22).

   • Hold: 14 years. Total: +33%. CAGR: 2.0%.

   • Note: Even "wins" in this building barely match inflation.

4. Unit 25A (2 Bed):

   • Buy: $1.98M (Jun 08) $\to$ Sell: $2.50M (Apr 18).

   • Hold: 10 years. Total: +26%. CAGR: 2.3%.

6. B³ SCORING SYSTEM (0–100)

A. Liquidity Score: 55

• Speed: Median resale DOM is creeping up (often >60 days).

• Consistency: High dispersion. 1-beds sell in 40 days; 2-beds can sit for 200+.

• Depth: Active market, but prone to congestion.

B. Rent Capture Score: 68

• Rent Efficiency: Strong nominal Rent/SF ($80+), but severe DOM penalties reduce effective yield.

• Stability: High volatility in downtime (200+ days for A lines).

C. Appreciation Score: 35

• Magnitude: Failure. 0–2% CAGR across the board vs 50%+ Index growth.

• Durability: Proven inability to capture upside even during the 2013–2015 boom or post-2020 recovery.

7. COMPOSITE SCORE & CLASSIFICATION

Composite Score: (55 $\times$ 0.35) + (68 $\times$ 0.30) + (35 $\times$ 0.35) 19.25 + 20.4 + 12.25 = 51.9

Category: Yield-Oriented Note: While the score falls below the strict 60 threshold for "Yield," the building’s only functional purpose is income generation. It offers zero appreciation utility.

8. RISKS & RED FLAGS

• The "A" Line Drag: Avoid the large 2-bedroom units (A Stack). They are capital traps with high carrying costs and historically zero appreciation.

• Sponsor-Like Velocity Dependency: The building requires a hot market to clear units. In slower regimes (like currently indicated by 100+ day DOMs), liquidity evaporates.

• Effective Rent Delusion: Owners consistently overprice rentals, leading to months of vacancy that destroy the yield advantage.

9. EXECUTIVE SUMMARY

Sky House (11 East 29th) is a Defensive / Yield-Oriented asset that has significantly underperformed the broader NYC market in capital appreciation since 2008. Post-sponsor analysis reveals that while the building commands respectable nominal rents ($80/SF), it suffers from severe income leakage due to extended vacancy periods on larger units. 1-Bedroom units offer fair liquidity and inflation-matching growth, but the 2-Bedroom "A" lines are capital traps—showing flat resale values over 15-year holds. Buy strictly for cash flow on smaller units; avoid looking for growth here.

B³ SCORECARD

Unit Mix Summary:

• Core Inventory: Transaction-weighted mix leans heavily on 1-Bedrooms for velocity.

• Opportunity: 1-Bedroom B/C lines (Cash Flow).

• Avoid: 2-Bedroom A lines (Stagnant Equity).