(Read more on the multifamily market.)
NEW YORK CITY-Ten residential and retail properties, which total 253,000 sf, are on the market. The properties are located on and around Second Avenue in the East Village and are priced at an asking rate of $157.5 million.
Eastern Consolidated's vice chairman Brian Ezratty, together with Scott Ellard of financial services, is marketing the portfolio. Although Ezratty tells GlobeSt.com that he would prefer not to name the seller, he does say that "it is a consortium of a half dozen New York owner operators who are selling after buying and upgrading the properties a few years ago," he says. "They have upgraded it, improved its financial performance, made several capital improvements and now they want to take advantage of strong market fundamentals."
The city remains the strongest real estate market in the US, Ezratty explains. "Property values in Manhattan are continuing to remain strong, and developers still compete to be in this market because the demand for new housing has not abated."
Ezratty continues that "this offering represents a unique opportunity to purchase a large package of New York City residential and retail assets with below market rents, containing a prime retail component." Ezratty tells GlobeSt.com that Fred Wilpon used to own the portfolio and gave it the name Clearwater. The Clearwater Portfolio consists of the following addresses on Second Avenue including: 141-143; 145; 147-149; 151-153; 156-158, 157, as well as 24 St. Mark's Pl., 111-115 E. 7th St., 213-215 E. 4th St., and 244 E. 21st St.
The properties comprise of 224 residential units in three elevatored buildings and seven walk-up buildings. Compared to most East Village apartments, those in the portfolio are relatively large, ranging in size from studios to four-bedrooms. In addition to the residences, the properties include 20 stores totaling 26,000 sf, not including more than 16,000 sf of basement space, currently leased to established retailers and restaurateurs, mostly along Second Avenue. Among well-known retailers occupying some of the spaces are, JP Morgan Chase Bank, Coldstone Creamery, Max Brenner Chocolate, and Pinkberry Yogurt.
Roughly 42% of the residential units are rent stabilized and 9% are rent controlled with the remaining 49% classified free market units. The average monthly rental rate for the entire portfolio of apartments is $2,181, which is well below market rate according to Eastern Consolidated. Ezratty says that the residential average in today's market could be $3,500 per month. Commercial rents average just under $90 per sf, also beneath the current market rate, which Ezratty tells GlobeSt.com could reach $150 per sf.
According to Ezratty, "current ownership has improved the portfolio's overall financial performance by significantly upgrading its retail component, but further upside potential is definitely achievable. One or more of the buildings in the package offer ideal condominium conversion possibilities and one already has an offering plan in place that has been accepted by the attorney general's office."
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, 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.
