Eastern Consolidated's executive director Stuart Gross, withsenior director Deborah Gutoff, are marketing the fully occupied,completely renovated property. According to Eastern, the buildingwould serve as an ideal 1031 exchange candidate, since minimalmaintenance and management is required, providing significantfuture upside.

Gutoff tells GlobeSt.com that the seller is the Velum Corp., asingle asset entity owned by a local investment group. "The ownerbelieves the property's highest value will be realized in itscondominium conversion potential," she says, "but due to taxconsiderations, has decided to sell in order to receiveadvantageous long term capital gains treatment versus the ordinaryincome that it would derive from undertaking the conversion processitself.

Eastern also explains that offshore investors could find thisproperty enticing for the same reasons using the benefit of theirstrong currency. "All of the residential units were completelyrenovated in 2002," Gross explains. "The existing J-51 taxabatement was secured in connection with the renovation of theproperty in 2002 for a 15-year period which expires in 2017. Whilethe units are technically stabilized, there is no practicalrestriction imposed since the legal rents are substantially inexcess of the current preferential rents. Therefore, a new ownerwill enjoy the benefits of the J-51 tax abatement while raisingrents to the legal limit as fast as the market will bear."