After more than a decade on the sidelines, Francis Greenburger is back in the market for New York City multifamily properties.
The septuagenarian Time Equities chairman and chief executive — who once called the city’s 2019 changes to rent regulation “a complete disaster” — has made his first multifamily purchase since 2014. The developer snapped up a 38-unit building in Ditmas Park, Brooklyn, that is temporarily rent-stabilized under the city’s 421a tax abatement program.
“The pricing of real estate assets in New York, Francis felt, was unattractive for many years,” said Seth Coston, director of residential asset management and operations. “We found an asset that we felt was reasonably priced, and our hope is that we will be able to take advantage of the upside that New York City has to offer.”
The developer ramped up its search for new properties over the last couple of years as interest rates have driven down prices, Coston said. Sylvia Spielman of GFI Realty Services brought them the Ditmas Park property. Spielman represented the seller, Berel Farkas’s Lightstone Management, in the $13.1 million deal.
Lightstone bought the property at 323 East 19th Street in 2015 for $1.3 million, records show. Farkas built an eight-story apartment building using 421a. Then, the pandemic drove down rents and interest rates skyrocketed, creating a perfect storm for landlords like him.
In March, he was facing foreclosure on the $14.2 million mortgage, according to court records. Time Equities then swooped in to rescue the building. The deal penciled out for Greenburger because the property does not require any large capital improvements and can generate an “acceptable” return until the rent-stabilization period ends in 2033, Coston said.
“We believe that by having a well-capitalized, strong operator come in and take over, we can right-size the ship and operate the building profitably… and eventually take advantage of the fact that market-rate rents are likely to increase as well,” he said.
Coston said his firm sees an opportunity in buildings that entered the 421a program just before the pandemic, then had to lower rents and were stuck with low-paying tenants because of rent-stabilization laws. It is looking to pump more money into the market, seeking properties in the $10 million to $30 million range.
Time is also exploring condo conversions — whether it’s a “rent-stabilized property that’s selling at a significant enough discount,” office or light industrial, possibly taking advantage of the 485x tax abatement for an office-to-resi conversion.
His team visits one or two properties a week in Brooklyn, Manhattan and Queens, but Greenburger is “the ultimate decider,” Coston said.
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