(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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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
