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Former New York City Economic Development Corp. President James Patchett is moving into the private sector.
Patchett was named CEO of A&E Real Estate, the firm announced Monday, as the large New York affordable housing developer doubles down on residential investments in the city.
“As this past year has made abundantly clear, New York’s success is dependent upon the daily contributions of our nurses, teachers, first responders, service workers and public employees,” Patchett said in a statement. "I was immediately drawn to A&E given its commitment and track record when it comes to enhancing communities and providing residents with the best in workforce housing."
He left his role at NYCEDC, where he oversaw a 60M SF portfolio, last month. He had previously served as chief of staff for New York City's Deputy Mayor for Housing and Economic Development.
“We see the same opportunity in the city’s recovery, and we want to be a part of investing in the future of the middle class and the neighborhoods in which they live and work,” Patchett said.
A&E Real Estate, co-founded by Douglas Eisenberg, John Arrillaga and Wendy Eisenberg, is a 10-year-old company with more than 15,000 residential units in the city, most of which are workforce housing. The company reportedly lobbied against the state’s rent reform laws in 2019, and that same year bought the Kestenbaum family portfolio, which featured 539 mainly rent-stabilized units. The deal, for $129.5M, marked a steep discount from what the seller was hoping to achieve before the tougher regulations came in.
Now the company, which started with a 49-unit building in Fort Greene, is looking to expand its presence in the city even further. The company has launched a $1B fund, per its release, with a particular focus on multifamily properties that need fixing up.
The company is also looking to “leverage” Patchett’s background in city government to assess other assets and make use of the company’s development rites. Eisenberg said that Patchett was the ideal choice to lead the firm at what he described as an "inflection point."
Investment sales in the city totaled $1.4B in the first quarter of this year, 41% below the average of the previous three quarters. Apartment rents across the city have plummeted, and are now 14% down on their average this time a year ago.
Lease signings have picked up, however, as renters have moved to ink deals to make use of the discounts. The multifamily market is still significantly weakened, as higher taxes have also raised concerns that investors and residents will leave the city.
Still, A&E is not the only firm to look to deploy more capital in New York. Barone Management launched a fund last month with a $40M target raise to invest in commercial and residential real estate assets in the Tri-State area.
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