Camber Property Group Sells Rent-Stabilized Portfolio For $80M
Camber Property Group has sold a rent-stabilized Brooklyn portfolio for $79.9M, almost the same amount it bought it for nearly six years ago when it was largely free-market housing.
Camber founding principal Rick Gropper had bought the eight Flatbush buildings with 387 combined units in April 2020 for $81.5M, according to deed records.
Ariel Property Advisors’ Victor Sozio, Sean Kelly, Remi Mandell, Lawrence Sam, Nicole Daniggelis and Erik Moloney arranged the sale for Camber. The portfolio sold to an undisclosed private investor, and the deeds have not yet appeared in the city register.
The eight prewar properties total 387 units at 816, 682, 672 and 666 Ocean Ave., 280 E. 21st St., 95 and 91 E. 18th St. and 221 Linden Blvd. All are within a few blocks of Prospect Park.
The properties come with a New York state Section 610 amendment, which allows tenants to pay 30% of their rent while the landlord collects the remainder via government subsidy. They also have an Article XI tax abatement, which comes with a partial or full tax exemption for 40 years.
Camber, led by co-founders Gropper and Andrew Moelis, develops and renovates affordable housing and has preserved more than 10,000 units since its founding in 2016. The developer entered into the Article XI agreement when it acquired the properties and invested millions into upgrades, Sozio said.
The trade comes as rent-stabilized landlords are swallowing huge losses to sell properties. Landlords are now selling buildings with rent-stabilized units at around six times their rent rolls, compared to 2015 when they sold for as much as 15 times their revenues, Crain's New York Business previously reported.
“Large-scale affordable housing portfolios in prime Brooklyn locations continue to generate strong interest from institutional and private investors alike,” Sozio said.
The portfolio's sale price likely stems from two arrangements with the city and state government.
Landlords have increasingly turned to Article XI as they attempt to curb rapidly rising operating costs and stabilize building finances. The abatement means entering into a rent-stabilization agreement with the city and agreeing to fix up the properties. It requires the city council to approve the final deal.
“New York City has a very high tax burden on multiple dwellings, so that problem goes away,” Adler & Stachenfeld partner Alvin Schein told Bisnow in November about the Article XI process. “You're freezing the building in place so that it's no longer a really great economic asset, but it makes enough money to get by.”
