The slated price tag for these six Upper East Side buildings is higher than any in New York since pre-pandemic.
An investment firm and developer have agreed to shell out $1.75 billion for a selection of market-rate residential buildings, people familiar with the matter told the Wall Street Journal.
The deal notches a new record for pandemic-era purchases of New York multifamily portfolio properties. It also indicates that — despite rising inflation, fears of a recession and the ongoing crypto crash — demand for rental real estate is still strong in the city.
The anticipated, well over $1 billion sum Black Spruce Management LLC and Orbach Affordable Housing Solutions LLC are set to pay for the six Manhattan towers was reached after an intense bidding war, insiders told the Journal. As the winning bidders, the companies look to make 3 to 5 percent initial return rates on the buildings, a relatively low rate compared to other commercial properties.
The six addresses are united in all being dorman buildings, but otherwise vary widely: They were varyingly built between 1960 and 2018, feature one-bedroom rents ranging from $3,900 a month to almost $7,000 a month, and approximately 1,700 units, or 15 percent of the apartments within them are subject to rent regulation. The only specific address named by the Journal is One East River Place, an amenity-rich, 414-unit, 50-story structure in the Lenox Hill area.
The planned sale is a good sign for the residential real estate market, experts say, and shows that, even as other sectors suffer, rental properties are standing steady.
“People are still going to need apartments; there’s still a lot of demand,” John Pawlowski, residential-property sector head of real-estate analytics firm Green Street commented to the Journal. “We’ll see what happens in the economy, but 2022 and 2023 should be very good years for apartment landlords in New York City.’