NEW YORK CITY—Madison Realty Capital has been busy. On Tuesday the firm acquired two five-story mixed-use elevator buildings in Harlem while, just the day before, it sold a portfolio of several buildings uptown.
Madison Realty bought 2053 Frederick Douglass Blvd. and 300 W. 112th St., in partnership with RWN Real Estate Partners LLC, for $30 million in an off-market transaction. Together, the two adjacent buildings, situated between 111th and 112th streets, comprise 55,000 square feet. The properties include 50 residential units and two retail units totaling approximately 3,750 square feet, as well as 30,000 square feet of additional residential development rights.
Meanwhile, MRC has sold a portfolio comprised of 528-538 W. 159th St., 220 W. 149th St. and 2546-2548 7th Ave, to an undisclosed foreign buyer for $23.4 million. The portfolio collectively includes 125 apartment units and two retail stores.
On the former deal, NGKF Capital Markets—led by Steven Schultz and Josh Malka—represented both parties in both off-market transactions. On the latter transaction, Yosef Katz and Roni Abudi from GFI Realty Services and Peter Von Der Ahe from Marcus Millichap closed the deal.
MRC and RWN will seek to add value to both 2053 Frederick Douglass Blvd. and 300 W.112th St. through the renovation of existing apartments to maximize rents, lease-up of vacant units and the potential future development of the unused development rights. Just one block north, MRC acquired 2094-2104 Frederick Douglass Blvd. earlier this year. That property, which MRC purchased for $7.25 million, is an 11,254 square-foot retail condominium unit within the Gateway Tower luxury residential condominium development. The property is currently occupied by several long-term tenants, and offers strong in-place cash flow as well as significant upside potential.
“Frederick Douglass Boulevard has seen tremendous growth and revitalization over the past several years,” says Josh Zegen, co-founder and managing principal of MRC. “Redevelopment and expansion of the residential stock, combined with the growth of an appealing mix of restaurants and retail, has transformed the neighborhood. The area has seen an influx of families and young professionals seeking alternatives to the Upper West Side.”
Adds Ari Shalam, managing principal of RWN, “Given those dynamics, we see considerable untapped demand for high-quality residential projects on Frederick Douglass Boulevard, particularly at the southern end near Central Park. “The properties we acquired have significant unused development rights, which provide the opportunity for further residential development. The retail market in this neighborhood is also seeing strong growth.”
The uptown portfolio being sold was purchased by MRC for $10.5 million in December 2012. Over the past two years, the company says it executed an aggressive business plan for each property, which included renovating and maximizing the apartment unit layouts, enhancing the rent roll and leasing the retail portion.
“This sale illustrates our ability to once again maximize a property's value and generate investor interest by employing our vertically integrated platform," says Zegen. “Our comprehensive asset management capabilities enabled us to transform these properties quickly and enhance their appeal. Not surprisingly, demand was significant for the portfolio when we put it on the market and we were able to secure a deal that was a 'win-win' for both MRC and the buyer.”
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
