Jackson Heights Life

Perhaps the zoning is the asset here. What are the uses allowed under commercial zoning?

Hi all,

I looked it up, the way I am reading this is that the building class and use must have been grandfathered in. The ZONING is R5 - Low Density RESIDENTIAL, building CLASS however is an O9 - Misc Office Use. One other thing that looks odd is that according to the current ZONING maximum FAR (the maximum building size) is capped at 1.25 but the actual size of the building is 1.38 - HIGHER than the zoning actually allows - the size may be grandfathered in as well.

So if let's say a developer wanted to buy this building and build up they would have the difficult task of changing the zoning including the max FAR in order to build a larger structure. If someone were to rebuild a building on this property they would have to put up something even smaller according to the current zoning, and it would have to be something residential, not commercial without getting special permission from the city.

If this is being priced for an investor interested in collecting rents, then the rent roll should produce a minimum 3% capitalization rate to make any sense to an investor. Now presuming that this is a 4 unit income producing property that has an annual rent roll of say $80,000 max and expenses of a minimum of 40,000 considering taxes alone are 23k annually. the max return per year on this property is $40,000 to 50,000 max. It won't yield more than 1.7-2%. This will be a tough sell to an investor in my opinion also. Even if they except the zoning issues, they would submit offers based strictly on the rent roll, most likely in the 1.8-1.9mm range at best.

Considering this property was purchased for 1.6mm plus closing costs in 2005 (at the height of the market) I can see why the seller needs to price high. Then again, if the target is the commercial market listing price is arbitrary as it is always ignored by investors, and offers are made according to the math I listed in the above paragraph.

In case you guys are interested in seeing the public records on this building, see below:

Building Information
Building Class (View List)   O9
(MISC. OFFICE BUILDINGS   )
Buildings   1
Total Units   4
Residential Units   0
Year Built   1925
Abandoned   
Fire Damage   
Extension   EXTENSION
Basement   FULL BELOW
    
Lot/Building Size
Lot Dimensions   40'x100'
Building Dimensions   26'x50'
Height (Stories)   3
Calculated Sq Ft   3,900
(Building Dimensions x Height)
NYC Sq Ft   5,534
Acres   0.09
Land Area (Sq Ft)   4,000
FAR (Actual)   1.38
    
Zoning
Zoning Code   R5
(LOW DENSITY RESIDENTIAL)
FAR (Maximum)   1.25
    
Parcel Information
Tax Class   4
Corner   NO
Lot Shape   REGULAR
Proximity   DETACHED
Lot Type   INSIDE
Tract   0287.00
Census   36081028700 
Carrier Route   C007
    
Flood Information
Zone   X
Panel   0207
Panel Date   9/5/2007
FIPS   36081
Community   360497
    
Square Footage Details
Office Sq Ft   5,534
    
Tax History
Tax Year   Taxes   Rate
2011-2012   $22,691   10.312
2010-2011   $22,097   10.426
2009-2010   $21,705   10.241
2008-2009   $25,822   09.870
2007-2008   $26,317   10.059
2006-2007   $21,908   11.000
2005-2006   $22,518   11.306
2004-2005   $22,999   11.558
2003-2004   $20,884   11.431
2002-2003   $10,578   11.580
2001-2002   $20,541   9.712
2000-2001   $20,659    9.768
1999-2000   $21,127    9.989
1998-1999   $21,649   10.236
1997-1998   $21,497   10.164
1996-1997   $21,683   10.252
1995-1996   $22,000   10.402
1994-1995      
  (Q3, Q4)   $22,436   10.608
1994-1995      
  (Q1, Q2)   $21,954   10.380
1993-1994   $22,681   10.724