Ralf Spann, the CEO of Akelius Real Estate Management, is orchestrating the rapid expansion of his firm’s reach.
Spann, whose company is just two years removed from making its first New York City acquisition, is looking to initiate a growth spurt over the next two years.
“I would love to double the number of units between the next 18 to 24 months,” he said, referring to his firm’s 2,600-unit apartment portfolio across the Northeast.
The firm’s planned expansion will add to what has proven to be an active year for its New York City business.
Akelius Real Estate Management, the US subsidiary of Swedish firm Akelius, bought 185 Prospect Park, a ten-unit apartment building in Brooklyn, last July. It also acquired 90 Clinton Avenue, a five-story walk-up in Clinton Hill. The firm plans to hold its New York City residential properties for the long term.
Spann said that his firm’s entry to New York City was not based solely on economics. “New York is a fantastic city. It has soul. It has a good reputation. Who doesn’t want to be in New York? There are few cities in the world with the same charisma,” he said.
Akelius is an anomaly in a market with an increasing number of investors straddling the sidelines.
According to an August REBNY report, the city’s investment sales market posted declines in every major metric during the first half of 2017. For the period, the total value of investment sales deals across New York City dropped 39 percent to $18 billion. The number of transactions also decreased by six percent to 2,419.
According to Spann, his firm is chasing a certain type of asset. “We like to buy properties with huge potential in terms of maintenance. Maybe the property was neglected and decaying under the previous owner,” he said.
This fits into a wider philosophy for their acquisitions. “We do cherry-picking. Meaning it doesn’t matter the size of the building. It is more important to find the right properties in a good location. So we buy quality before quantity,” Spann said.
“Manhattan and Brooklyn are our main focus at the moment. In Manhattan, I would say Gramercy. In Brooklyn, we are focusing on Clinton Hill, Prospect Park, Bed-Stuy, Brooklyn Heights, Red Hook and Park Slope.”
The firm’s “cherry-pickingˮ isn’t limited to small purchases. “We buy from 10 units up to 400 to 500 units,” Spann said. “The size of the property does not matter. We can buy almost everything, as long as it fits our strategy.”
Akelius recently added to its New York City holdings through large transactions. Late last month, the firm acquired 225 West 23rd Street and 220 West 24th Street for $100 million. The Chelsea properties contain 245 apartments, some of which are rent-stabilized. The firm also bought 321 East 22nd Street, a 117-unit rental building in Gramercy, for $60.9 million.
Akelius’ parent company is the largest listed real estate firm in Sweden. It owns 50,000 apartment units in Sweden, Germany, France, Canada, the UK and the US. Most of its properties are in major metropolitan areas such as London, Paris, Berlin and New York City.