Property Grunt

Sunday, July 08, 2007

Face Value: Cooling off in Queens

Entrepreneurs are simply those who understand that there is little difference between obstacle and opportunity and are able to turn both to their advantage.

Nicolo Machiavelli

Greetings good people, I hope all of you had a most excellent 4th of July week. Seeing that we are all melting right now, I have decided to cool things off with some Face Value photos that I took last winter.

Awhile ago, I visited 66-17 Woodhaven Boulevard in Rego Park. This is a mixed use property that is a Massey Knakal listing. I want to make it clear that I took a tour of the area, I never stepped foot into the property, nor did I ever meet the broker of this exclusive.

Here’s the description.

Great opportunity in the heart of Queens, on Woodhaven Blvd. to get an excellent investment property with solid tenants - ground floor leased to National Nextel Service Center until 4/2012 (plus 5 yr. renewal option); same residential tenants for 10 years. Ground floor and one apartment remodeled in 2002. The subject property is located on Woodhaven Boulevard between 66th Rd. and 66th Avenue in close proximity to major transportation arteries as the Long Island Expressway and Yellowstone Boulevard. Buses #53 and #11 stop in front of the property, which is conveniently located a block away from a World Gym, an Eckerd's store and a small retail strip with a Seven Eleven, a West Coast Video and a restaurant. Close to The Shops at Atlas Park and Metropolitan Avenue. Perfect property for an investor. Approx. 3% annual increases built into the Nextel Store lease. Asking Price: $985,000

Great description right? Except they forget to mention one thing.

IT’S RIGHT ACROSS FROM A FRAKKING CEMETERY! Specifically, the St. John’s Cemetery.


Now before we write this property off, there are actually some positive attributes to the location. Since it is on the doorstep Long Island Expressway and Yellowstone Boulevard it makes it ideal for business that are centered on the automobile industry, like this hotel, car wash and gas station.

So it is an ideal place for a Nextel store because of it is an accessible place for people on the go to fix their phones or to purchase cellular phone related products.

Now I bet a lot of you can’t get the idea of the cemetery across the street from this property out of your head. In fact it seems like a deal breaker. After all who the hell wants to come home in the middle of the night knowing that the dead are laid to rest across the street?

Remember that quote I posted from Machiavelli about utilizing an obstacle as an opportunity? Well, there is one property on that block that is example of an obstacle being turned into an opportunity.

It is the ideal location for a florist since visitors can easily pick up flowers and pay their respects to their loved ones. It even has a bus stop in front of the florist so visitors can easily purchase their flowers.

My guess is that the business owners own the building and it would be highly unlikely that they would sell anytime soon. They pretty much have a built in customer base guaranteeing the cash flow for the business and I suspect that they plan on keeping this property and the business in the family as long as possible.

If the opportunity came up where someone offers an enormous check to purchase both, I would be surprised if they utilized the services of a broker. The property pretty much sells itself.

In real estate investing, it is imperative to be to have that mindset to look at a property in different angles. It is not just about finding a good deal but to be able to recognize a bad deal.

Now is 66-17 Woodhaven Boulevard a good deal? When I saw this listing several months ago the original asking price was $1,150.000 and the cellar was being rented out for $300 a month. Considering the location and what the property offered, I wasn’t to keen on it. Now the asking price has been reduced to $985,000 and there is no tenant in the cellar so it appears the owners are beginning to realize that they need to be more flexible. Will it help? Let’s check in the next couple of months. As for it being a good deal, the price reduction has definitely helped. But this particularly property's profitability is relies heavily on a specific commercial tenant base. If they can pull that off, then they are golden.