325 W Broadway #2A — Acquisition Analysis

1. Properties at a glance

316 Eckford St, Brooklyn 11222 — currently owned

BBL

3-2576-46 (Class 1, single-family A9)

Title

"RUSSO, AS TRUSTEE, JOSEPH" on FY 2026/27 roll (held in trust)

Last sale

$4,800,000 on 2023-08-10 (listed $4.995M)

Current Zestimate

$6,690,100 (range $5.75M–$7.89M)

Size

4,133 sqft, 4 BR / 7 BA, built 1901

2024 property tax

$7,073/yr (Class 1 cap is doing the work — DOF "market" is only $3.13M)

Plan

Remodel and sell (per owner directive)

Implied unrealized gain

~$1.89M before §121 exclusion

325 W Broadway #2A, New York 10013 — under consideration

BBL

1-228-1403 (Class 2 condo, inferred from unit pattern)

Building

XOCO 325, 22-unit LEED-certified luxury condo built 2016, full-service

Asking

$5,380,000 ($2,545/sqft) · listed 2026-03-17 · 46 days on market

Size

2,114 sqft, 2 BR / 2.5 BA

Common charges

$3,931/mo ($47,172/yr)

Property tax

$3,556/mo ($42,672/yr)

Tax abatement

None (467-a requires primary residence + non-LLC)

Recent in-building sale comps

#4B sold $4.15M (2/2025, 1,555 sqft); Unit #2 sold $6.45M (8/2024, 2,871 sqft)

2. Hochul's pied-à-terre tax — does it apply?

The pied-à-terre tax announced by Gov. Hochul + Mayor Mamdani in April 2026 (still pending NY State Legislature approval, no legislative text released as of 2026-04-23) is an annual surcharge on NYC residential properties valued at $5M+ where the owner's primary residence is outside NYC. It targets ~13,000 ultrawealthy out-of-city owners and aims to raise ~$500M/yr.

• 316 Eckford: under the $5M DOF-value threshold and presumably primary — out twice over.
• 325 W Broadway #2A: clears the $5M threshold, but as long as Eckford (or any other Brooklyn home) remains primary, the tax does not apply. It would only trigger if the primary residence shifts outside NYC entirely (e.g., move to CT/NJ).

3. Available deductions

Federal numbers reflect 2026 rules under the One Big Beautiful Bill Act (OBBBA).

If 316 Eckford remains primary

• Mortgage interest on up to $750K of acquisition debt (permanent post-OBBBA).
• SALT: nominally raised to $40,400 in 2026, but phases down above $400K AGI and reverts to a $10K floor above ~$500K. Given the asset base, the floor is the operating assumption.
• STAR / Enhanced STAR: AGI-capped (~$250K Basic, ~$110K Enhanced), unlikely to apply.
• NYC Co-op/Condo abatement (467-a): does not apply to single-family Class 1.

If 325 W Broadway is bought as a second home (non-rental)

• Mortgage interest cap is shared across both homes ($750K combined).
• Property tax stacks into the same SALT cap — no new room.
• 467-a abatement does not apply (not primary residence, often LLC-titled).
• STAR stays on Eckford only.
• One-time mansion tax + RPTT on $5M+ purchase ≈ 3.5–3.9% (~$190K) — not a deduction; adds to basis.

If 325 W Broadway is operated as a rental

• Mortgage interest on the property fully deductible against rental income.
• Property tax fully deductible against rental income (not subject to SALT cap).
• All operating expenses deductible: common charges, insurance, repairs, management, vacancy.
• Depreciation: ~$4.16M building basis ÷ 27.5 yrs = ~$151K/yr non-cash deduction. Furniture (~$100K fit-out for furnished play) over 7 yrs = ~$14K/yr additional.
• Passive activity loss caveat: rental losses are passive. They cannot offset capital gains during ownership; they suspend and release on disposition.

4. Rental cash flow — confirmed numbers

Two scenarios at the realistic top-of-market rents extrapolated from in-building comps:

• Furnished comp: #3C (1BR, 1,055 sqft) currently asking $16,500/mo furnished = $15.64/sqft/mo.
• Unfurnished comp: #2B rented $12,500/mo in 7/2020 (1,555 sqft); escalating Manhattan luxury rents ~30–40% gives ~$22K/mo for #2A unfurnished today.

Subtract another 8–15% of gross if professionally managed. The structural rent-to-price ratio in this building is weak: #4B's $4.15M (2/2025) sale on its in-place $12,500/mo rent implies a 3.6% gross yield — typical of Manhattan luxury, but weak as an income asset.

5. Opportunity cost — what else $5.2M could do

SoHo loses to every passive alternative. The best-case furnished scenario underperforms T-bills by ~$33K/yr while requiring you to be a landlord, with a narrower tenant pool (NYC Local Law 18 forces 30+ day leases for furnished-without-host-present rentals) and the ongoing risk of board special assessments in a 22-unit building.

6. The tax-shelter argument — and why it doesn't rescue the deal

The plausible thesis: depreciation creates paper losses; if financed, mortgage interest deepens those into suspended passive activity losses (PALs); on eventual sale, suspended PALs fully release and become deductible against any income, including capital gains. A capital loss on the sale itself directly offsets LTCG at 23.8% federal.

What kills it given the Eckford remodel-and-sell context:

• Eckford sale will generate ~$1.5M of taxable LTCG ($6.7M sale − $4.8M basis − $250K/$500K §121). Combined fed + NY state ≈ ~$500K of tax owed.
• To shelter that gain with SoHo's mechanism, SoHo would have to be sold in or near the same tax year — but SoHo was just bought. The plan would require: buy SoHo, hold 5–8 yrs to bank suspended losses, then deliberately sell at or near a loss into a year matching another large gain realization. That's a long, complex, fragile setup.
• Friction over a 5–8 year hold:
  • ~$290K up-front (mansion tax + closing)
  • ~$300K eventual exit (5–6% broker + transfer tax)
  • ~$30–75K/yr opportunity-cost drag vs. T-bills
  Total friction: $700K–$1M to defer ~$500K of tax. Negative expected value.
• Cheaper shelter alternatives that don't require committing $5.2M to a low-yield asset:
  • Realize losses in your existing brokerage portfolio (you already have STCG, suggesting active positions — there are likely losers to harvest).
  • §1031 exchange: roll Eckford into another investment property, defer the entire gain. Requires structuring Eckford as investment property first, holding-period rules, etc. — not trivially compatible with a remodel-and-sell timeline, but worth a CPA conversation.
  • Qualified Opportunity Zone investment: defer + step-up basis after 10 yrs.

7. Where the case for buying still holds

• Lifestyle / primary residence: if you want to live in SoHo, this is a consumption decision, not an investment. The right question is whether the housing is worth ~$30–50K/yr more than your next-best housing alternative — not whether it beats T-bills.
• Portfolio diversification: hedge against something specific (e.g., sector concentration elsewhere) where Manhattan luxury exposure is the desired hedge.
• §1031 from Eckford: only if Eckford can be repositioned as investment property and the timing works — a long shot given the remodel-to-sell plan, but a CPA should weigh in.

8. Open items / things to confirm before any decision

• Pull the XOCO 325 offering plan — confirm minimum lease length (some condos require 12 months, which would block furnished/short-term plays).
• Verify HOA rental restrictions and any board approval requirements.
• Confirm a 2024–26 in-building 2BR rental comp (the 2020 #2B comp is the only confirmed direct datapoint).
• Run the §1031-from-Eckford scenario with a NY-licensed CPA before committing to remodel-and-sell on Eckford.
• Inventory existing brokerage positions for tax-loss harvesting opportunities to absorb the Eckford gain at much lower friction.
• Pied-à-terre tax legislative text release — monitor; could change the calculus if it ends up applying broadly.