PLAINVIEW, NY-Locally based Eagle Rock Management has acquired the five-property, 1,666-unit Fairhaven Garden Apartments portfolio for $229.7 million. It’s one of the biggest multifamily deals in Long Island history, and Select Investment Realty Advisors’ John Thomas tells GlobeSt.com it provides evidence that investment sales on the island are picking up again.
“It’s not like three or four years ago, but it’s not like last year, either,” Thomas says of the current climate. “Even though the lending environment was pretty tight last year, we were still able to get transactions completed, some with new financing and some with existing financing and loan assumptions. This year, the environment is much better from the viewpoint of lending.”
As a result, Thomas, who arranged the off-market sale, Eagle Rock was able to obtain “pretty competitive rates and very attractive financing” for the deal. He declines to identify the lender specifically, but says the transaction entailed “all-new financing through a New York-based bank.”
Managing director of Select Realty, Thomas does not identify the sellers by name, citing confidentiality. However, the Fairhaven garden apartment portfolio was developed by the Nelkin family, a presence in Long Island commercial real estate for half a century and also the owners of the historic Garden City Hotel.
Thomas says the sellers were motivated both by an unsolicited offer and by their decision to sell the portfolio following the deaths of the family patriarch and matriarch in 2007 and 2008, respectively. Having conducted a previous portfolio transaction with Eagle Rock, he was confident that the company would be able to execute on the Fairhaven deal.
According to published reports, the deal has been in the works for about a year. Thomas introduced seller and buyer, and represented Eagle Rock in the Fairhaven transaction.
Owned by brothers Mark and Adam Seelig, chief executive and president, respectively, Eagle Rock already owns and manages 11 apartment communities throughout both Nassau and Suffolk counties. The Fairhaven properties, located in Carle Place, Hicksville, Mineola, Nesconset and Woodbury, enlarge Eagle Rock’s portfolio “pretty substantially,” says Thomas.
On a per-unit basis, the purchase price works out to about $139,700 per unit. Monthly rents throughout the Fairhaven portfolio range from $1,275 for a studio apartment in Carle Place to $2,700 for a two-bedroom unit in Woodbury.
“For the quality of the locations, it was very fairly priced,” says Thomas. “All sides seemed to be pretty pleased with the transaction. The sellers were pleased with their pricing, and the buyers were pleased that they’ll be able to create some value through efficiencies of management in their operation.”
In a statement announcing the Fairhaven acquisition, Mark Seelig says, “My brother and I operate on a simple philosophy: ‘Work hard, limit risk and do not overreach.’ We buy properties based upon the strength of each individual property and its tenants. It sounds old-fashioned, but we have always believed slow and steady wins the race.”
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
