In one of the biggest tri-state multifamily trades so far this year, investor Joseph Kazarnovsky has paid $232.5 million for a 915-unit development in Long Island.
CBRE announced that its Jeffrey Dunne, Jeremy Neuer, Gene Pride, Steven Bardsley, David Gavin and Eric Apfel brokered the sale of La Bonne Viein Patchogue, on behalf of the seller, an undisclosed consortium of partnerships, and the buyer, Kazarnovsky’s New Jersey-based Renaissance Management.
The sale comprised of 626 market-rate apartments and 289 age-restricted (55+) apartments. According to CBRE, the units haven’t been updated since they were first built 40 years ago.
“Due in part to its extraordinary scale, low cost basis and abundant amenities, the purchaser will be planning to invest substantial funds to enable the property to thrive in the 21st Century and provide quality housing to its tenants,” said the brokerage in a press release.
“We are honored to have represented ownership in this rare, generational sale. With their long-term vision and experience, Renaissance will do exceptionally well here with the planned renovation program,” said Dunne, Vice Chairman at CBRE.
“Workforce housing is one of the strongest performing asset classes within the multifamily space, and Long Island is an incredible market due it its substantial supply constraints and strong rent growth. Workforce housing is coveted because there is simply no way to effectively compete with it. The cost to develop new product is so much higher than the cost basis of workforce housing so developers of new product are forced to target higher income renters.”
Built in the mid-1970’s and 1980’s, the properties represented the cutting edge of multifamily apartment-living at the time with their multiple clubhouses, indoor and outdoor pool facilities, gym, libraries and tennis courts. At the time, such extensive amenity packages were reserved for hotels and country clubs and represented the future of what would become a defining trend of amenity arms races for multifamily developments for decades to come.
This sale follows several other notable Long Island workforce housing sales that Dunne’s CBRE team completed in 2019 including the Home Properties Portfolio ($472.5 million), Hawthorne Court ($94.25 million), Mid-Island Apartments ($58.5) and The Preserve at Coram ($30.9 million).
Kazarnovsky owns thousands of apartments in the tri-state area under various company names. As well as Renaissance, he operates Fieldstone Properties, Clinton Hudson Associates, Mount Ivy LLC, among others.