80 Hudson Vinegar Hill-DUMBO Brooklyn Harvard Case Solution & Analysis


80 Hudson is a seven-story loft building situated in the Hudson Avenue, in the Vinegar Hill which is adjacent to DUMBO, Brooklyn. The neighborhood is one of NYC’s most popular neighborhoods to live, work and play.

80 Hudson is the only large, available and freestanding commercially-zoned building of it size situated in the highly desirable area. The building area is 76700 gross SF which is ideal for most businesses who wants to enter the neighborhood or expand their already developed business.

Primary Investment Strategy:

The primary investment strategy for the 80 Hudson, Vinegar Hill-Dumbo is to renovate the building and reposition it into a mix of retail and office uses. The market in Vinegar Hill will be very lucrative for this strategy and many other businesses have thrived in these repositioned commercial buildings.

This strategy will help the investors in making more return out of their investment through higher rent rates and less vacancy and will be able to utilize all the floors of the building effectively.Alternative Strategy:

80 Hudson Vinegar Hill-DUMBO Brooklyn Case Solution

Alternative Strategy:

There are many opportunities available to the investors because 80 Hudson is in a very desirable area and most companies will look to enter the Vinegar Hill market. 80 Hudson can also be renovated to rent the basement and ground floor as retail floors for restaurants while the other floors can be used as a residential place which will also attract many people, from 1st floor to the pent house will be an attractive investment for residential area.

Cost and Benefits of Renovations:

The cost for the primary strategy and making the basement and ground floor a commercial area will be around $70,000 while the cost for the renovation to make the rest of the floors available as an office space will be $120,000. The rental income for the offices that can be rented to the tech companies, creative companies and the boutique finance companies will be $60 per SF and the offices space on the top floor will be $80 which is a little higher than DUMBO because 80 Hudson is the only building which is empty in the neighborhood which will give advantage to the investors in getting more rents from the offices because it’s an opportunity for the companies to create their corporate headquarters in 80 Hudson. The Ground floor (Cellar) rental will be $80 per SF. The expenses of the company will comprise at least 40% of the Total income. The target purchase price for Hudson is $40 million......................

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