Related Puts 2,000-Unit Bronx Apartment Portfolio on Market

Related Cos. has put on the market an affordable housing portfolio with 2,021 units spread across 34 properties in the northern half of the Bronx, aiming to fetch at least $250M.

The multifamily properties are being offered as a package with 10 commercial units in the Kingsbridge, Norwood, Pelham Parkway, Wakefield and University Heights neighborhoods, according to Green Street.

Eastdil Secured is marketing the package, touting the portfolio’s eligibility for a regulatory benefit known as Article 11, a designation that would offer tax breaks to a buyer in exchange for preserving units for tenants who make 40% to 80% of the area’s median income.

In-place rents across the portfolio currently average 60% of AMI, Green Street’s alert said.

A buyer could boost rents by taking advantage of Section 610 of a new private housing finance law that allows owners of affordable-housing properties to charge higher rents on units that accept housing vouchers.

The whisper price of about $125K/unit is nearly 50% less than what similar properties would have fetched before a 2019 law made it more difficult to raise rents after renovating apartments.

Related has made $30M in improvements on the 34 apartment properties, which are said to be well occupied with little tenant turnover. All of the buildings have elevators, and many boast historic Art Deco facades and lobbies, as well as on-site parking, according to the marketing materials.

If Related hits its target, the deal will be one of the largest apartment trades recorded to date in the Bronx. Related currently has the top deal on that list, its $260M purchase of a 2,000-unit package from S.W. Management in 2014.

The second-largest Bronx multifamily deal closed in June, when Chicago-based Vistria Group acquired 1,290 units in a two-property package valued at $174M, or about $135K per unit.

Eastdil’s marketing campaign says the offering is likely to appeal to mission-driven investors, including those focused on environmental, social and governance guidelines.

Earlier this month, Related Cos. CEO Jeff Blau and Jeff Wilpon of Sterling Equities joined the NYC Economic Development Corp. in announcing the formal beginning of the Uniform Land Use Review Process for Willets Point Phase 2, a 23-acre project for the area adjacent to Citi Field.

The project plans include 2,500 units of affordable housing, a new public school and NYC’s first soccer-specific stadium, which will become home to the New York City Football Club.