NEW YORK CITY—Described by Trepp LLC Thursday as "the canary in the coal mine for CMBS" when it went into default seven years ago, Riverton Houses has sold for a reported $201 million. The de Blasio administration on Wednesday announced an agreement with the apartment complex's new owners to preserve 975 units as affordable for the next 30 years.
The apartments' affordability will be maintained through a full Article XI real estate tax exemption to A&E Real Estate, approved by the City Council. The project will also benefit from exemptions to the city's real property transfer tax and mortgage recording tax, valued at $8.8 million.
"It's been our mission to keep tenants in their homes and keep Riverton affordable for the next generation," Mayor Bill de Blasio said Wednesday. "This is preservation on a grand scale, and it is going to protect the kind of economic diversity that's always been part of Harlem."
In common with the Peter Cooper Village/Stuyvesant Town complex, which also traded recently after years in special servicing, the 1,228-unit Riverton was developed in the postwar years by MetLife, and traded at the peak of the previous cycle with the idea of converting rent-regulated units to market rate. The property sold to Stellar Management for $131 million in 2005, and was securitized with a pro forma value of $340 million in 2007. However, the market-rate conversions occurred more slowly than the new ownership had planned, and the property sold to CWCapital Asset Management in a 2010 foreclosure auction for $125 million.
"Our goal in starting A&E Real Estate has been to invest in real estate for the long term," says Douglas Eisenberg, founder of A&E Real Estate. "As a one-time campaign worker for former Riverton Square resident, NYC Mayor David Dinkins, I am deeply committed to the future of Harlem and this storied complex. Over the years Riverton has proven that a community with beautiful grounds, great access to public transportation, retail and neighborhood amenities can also be affordable for hardworking New Yorkers."
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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.
