Last updated: August 10, 2007 01:34pm
Private Equity Group Gets 90,000 SF in West Harlem
By Natalie Dolce
124 W. 114th St.(Read more on the multifamily market.)
NEW YORK CITY-Aaron Jungreis, president of investment sales at GFI Realty Services Inc. and Matthew Sparks, the firm's senior managing director, sold three, six-story elevator HUD, Section 8, buildings in the Morningside Heights section of Harlem for $16.5 million.
The three buildings, located at 1871-73 Adam Clayton Powell Blvd., 107-113 W. 109th St., and 124 W. 114th St., consist of 111 units in total, including one store and one office, and are located only two blocks from Central Park.
“Although this type of deal can often be difficult logistically, at GFI we have vast experience transacting properties with government subsidies,” says Aaron Jungreis. “We are knowledgeable of the stipulations involved, enabling us to complete these deals as quickly and efficiently as possible.”
A source close to the deal tells GlobeSt.com that the seller is a long time family ownership. The buyer is a private equity group, however they would not disclose further information. The HAP contracts on all three of the buildings will expire in two years, at which time the new building owner will apply for a new mark-up to market contract.
This type of deal can often be difficult logistically because HUD, Section 8 buildings require government approvals that are often very difficult to obtain according to the source. The approximate square footage of the buildings totals 90,000 sf.
“The mark-up to market programs are extremely attractive to investors,” says Matthew Sparks. “Despite the logistics of the deal, the building owner can obtain a rent increase on all apartments at the same time, an opportunity that does not exist with regular rent stabilized buildings.”
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