The Miles at 1990 Lexington Ave. in East Harlem is part of the L+M, Invesco portfolio
NEW YORK CITY— L+M Development and Investco Real Estate are purchasing and renovating a $1.2 billion, 2,800-unit apartment portfolio and returning 1,800 apartments to rent regulation. Although the real estate industry has often complained that affordable housing doesn’t pencil, the developers in this deal are receiving governmental tax breaks, to financially keep tenants in place and expand the affordable housing stock.
Brookfield Asset Management and Urban American are selling the five former Mitchell-Lama developments. Rent regulatory agreements will cover all of the units under the New York City Department of Housing Preservation & Development and New York State Home & Community Renewal.
In 2019, L+M Workforce Housing Fund completed fundraising for investment in workforce housing in the New York City metropolitan area. L+M raised approximately $500 million with the fund and will invest the capital over the next several years. The Wall Street Journal reported that the developers will pay a fraction of taxes, with three of the four projects (for which information was available) which would have totaled $11.2 million this year. “The city put the cost of the lost tax revenue at $235 million over the next 40 years,” the WSJ stated.
Built between 1975 and 1980, the former Mitchell-Lama properties cover 2.2 million square feet. They include River Crossing, the Heritage, the Miles and the Parker in East and Central Harlem, and Roosevelt Landings on Roosevelt Island. In 2005, the properties left the Mitchell Lama program.
The deal will preserve the long-term regulation under L+M and Invesco, and future owners. It also requires any future new development on the sites to be 100% affordable housing. L+M and Invesco will immediately begin $50 million in renovations across all the property including measures for energy savings, structural upgrades and new amenities in communal spaces.
Cushman & Wakefield’s Doug Harmon and Adam Spies led their team with Josh King, Adam Doneger, Michael Collins and Marcella Fasulo in representing the sellers.
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Betsy Kim
Betsy Kim was the bureau chief, East Coast, and New York City reporter for Real Estate Forum and GlobeSt.com. As a lawyer and journalist, Betsy has worked as the director of editorial and content for LexisNexis Lawyers.com, a TV/multi-media journalist for NBC and CBS affiliated TV stations in the Midwest, and an associate producer at Court TV.
