Avison Young’s Tri-State Investment Sales group is marketing a portfolio of eight luxury apartment buildings whose rent regulations expire in just over a decade.
Called the North Brooklyn Luxury 8 portfolio, it includes eight boutique buildings spread across 234,243 s/f. The assets include 244 luxury residential units and three retail units. The price for the entire portfolio is $200,000,000.
“Avison Young is beyond pleased to market this rare combination of assets, which offers investors the chance to establish a massive footprint in one of the city’s most desirable neighborhoods and capitalize on future upside in locations that have previously led New York City in rent growth,” said James Nelson, principal and head of Tri-State Investment Sales, who is leading a sales team that includes Mitchell Levine, Brandon Polakoff, Fritz Richter, Sam Schertz and Alexandra Marolda.
“The North Brooklyn Luxury 8 assets were individually hand-selected over a nine year period. Recreating this portfolio in this location would be nearly impossible today. The portfolio’s 99 percent occupancy with strong in-place tenant retention makes this an incomparable investment for the right buyer.
“Based on all of the portfolio’s attributes, great location and strong regional market conditions, we expect tremendous interest in this unique opportunity.”
The Brooklyn properties, which were all built between 2006 and 2014, each benefit from 421-a tax-abatements with an average of 11 years remaining, offering near term reduced taxes and long-term free-market rent upside.
Additionally, each of the leases for the residential units in the portfolio have a 421-a lease rider that will allow the all units to be removed from rent regulation at the expiration of the 421-a benefit.
Further, there is immediate opportunity to raise the preferential rents to legal rents when the current tenancy vacates.
The properties are located close to each other in Williamsburg, Clinton Hill and Prospect Heights, allowing for management efficiency. The units include 24 studios, 99 one-bedroom, 98 two-bedroom, 21 three-bedroom and two four-bedroom apartments. It is currently 98.4 percent occupied.
The portfolio is being offered in full, or in any combination of buildings.