Multifamily Monday: Three Most Popular Places to Invest
New York City’s multifamily market is the market, the one city and singular property type in which investors and lenders worldwide most want to park money. That’s why Bisnow is hosting a major event, the NYC Multifamily Summit, on Thursday at 4 WTC. Here, three local investors share why they focus where they do.
1) Core-market luxury condos
West Village, Flatiron, Tribeca, Battery Park. These are the markets to be in, but to invest in such top-of-the-line places, an investor has to throw out the playbook, The Witkoff Group CEO Steve Witkoff told us Friday. He's flanked above by Time Equities CEO Francis Greenburger, who, like Steve, is speaking at our event (you can register here), and REBNY president Steve Spinola. Witkoff has no quota for investments, and while watching for opportunities as land prices rise, Steve is happy working on what he's got in the Manhattan multifamily segment of his portfolio. His 150 Charles St in the West Village just sold out in 12 weeks, Flatiron’s 10 Madison Square Park West is 95% sold, he and Fisher Brothers are shopping for a construction loan for Tribeca’s 101 Murray St, and 22 Thames south of the WTC is following close behind.
2) Brooklyn apartments
Silvershore Properties wants apartment buildings in those neighborhoods where gentrification is taking solid hold. We snapped basketball fanatic Jason Silverstein (above, with Michael Jordan) and co-founder David Shorenstein (below) in their office on Friday. They’re willing to buy in Manhattan and Queens (they’re closing on a Gramercy Park building this week), but Northern Brooklyn checks all their boxes. The company’s first acquisition was $290k for Clinton Hill’s 1038 Bedford Ave four years ago, and it just closed a $9M acquisition for a 60-unit elevator building in Crown Heights.
Silvershore looks at properties with all kinds of life cycles. It still owns 1038 Bedford. Other times, it’ll add value and then get right back out (like Ricki Lake's makeover episodes). Last week, it sold SoHo’s 63 Spring St for $15M after buying it for just $6M a year ago. Jason says he and David had a long-term vision but unexpectedly were able to buy out the retail tenant. And in SoHo, a vacant corner retail spot draws retailers and thus buyers. Jason and David bought 20 properties last year and aim for 30 in 2014 (they’ve already closed or have contracts on 15); they own 44 properties now and are working toward a 100-property critical mass.
3) Just off Main and Main
Daten Group founder David Ennis, whom we snapped in his office on Thursday, tells us his firm isn’t a multifamily-only investor; that’s just where the returns are now. Commercial buildings can have good returns if an investor buys big buildings that then trade, say, to a Saudi investor looking for a place to park money. But residential development of all sizes has a longer horizon, he says. Daten seeks complicated development sites a block or two off “Main and Main” in established submarkets rather than cheaper sites in out-of-the-way neighborhoods. It bought a vacant police station at 72 Poplar in Brooklyn Heights, for instance, and converted it to condos. The idea is that doing so in a landmarked district is complicated, but immediate demand exists for the finished product.
David and acquisitions director Craig Rosenman (above) started with ground-up condos at 48 Laight St in Tribeca and were going to convert an office building at 63 W 38th when a hotel developer made an offer not to be refused. Now they’re trying to assemble more parcels around a site they recently bought in Prospect Lefferts Gardens near Kings County Hospital (an exception to the company’s established-market credo). They’ve got a contract for a site in Hoboken, too. And in White Plains, they’re working with Lighthouse Enterprises to build 103 apartments at 10 Dekalb Ave, 40 Waller Ave, and 115 N Broadway, which will launch their lifestyle apartment brand Vibe Living.