Recent Transaction Proves NYC SRO Deals Aren't Dead
Despite the decline in popularity of single-room-occupancy buildings over the last few decades (from 200,000 units in the 1950s to as few as 15,000 today), Bisnow partner Besen & Associates recently completed the sale of two SRO buildings in Clinton.
The $17.7M, 22k SF deal was a collaborative effort between executive director Amit Doshi and director Jackie Himmelstein and was the first sale of the properties in over 40 years. Located at 351 West 44th and 360 West 45th St (pictured), the two buildings have 158 Class-B single rooms, two Class-A apartments and below-grade commercial units.
To make things more complicated, the seller was growing frustrated after many failed deals with potential buyers over the last two years, when they gave it to Jackie and Amit, with a timeline of 30 days to market and close, insisting the properties had to be purchased with the existing tenancies and no contingencies.
Jackie and Amit, who's sold over 18 SROs throughout his career, were able to sell the buildings for $800/SF, around the same value as a rent-stabilized multifamily building in Manhattan.
The buildings' high vacancy rates—just 40% occupied at time of sale—will hopefully give new ownership the ability to improve the assets. Amit says the purchasers—“seasoned owners of SROs citywide”—plan to continue to operate the properties as SROs.
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