PREI Grabs Hot Asset in NYC

The big institutional investor snapped up a Manhattan property, providing quite a return for a conversion specialist and longtime Dallas family firm.

Prudential Real Estate Investors has acquired both Gramercy West and Gramercy Central, a 207-unit, two-building residential portfolio in the heart of Gramercy Park for $123 million, from a joint venture between Broad Street Development and Crow Holdings.

David Israni

David Israni, Broad Street Development

The deal also included the assumption of existing debt, which was provided by Nationwide Insurance and arranged by HFF.

“We loved this asset. It’s an ideal location and great makeup in Gramercy, which is ridiculously hot right now,” David Israni, Broad Street Development’s senior managing director, told Commercial Property Executive. “In addition to traditional tenants, the area appeals to lots of financial tenants—high-income employees who need nice real estate to walk to work and the nightlife.”

Located at 210 E. 22nd St., and 220 E. 22nd St., the BSD joint venture originally acquired the mid-rise, loft-style multi-family properties in 2012 for $85 million. Both properties are mainly comprised of studio and one-bedroom units with multiple floor plans that attract a broad range of tenants.

“We had a seven-year plan and implemented it our way, putting about $4 million in improvements renovating the units and adding amenities,” Israni said. “We were able to realize returns very quickly and exceeded our plans. We did the value add we planned and now we have funds to repeat the cycle with new acquisitions.”

Among the value adds to the units were the installation of hardwood floors, renovation of balconies/patios and additions of walk-in closets. Upgrades were also done to the lobbies, roofs, windows, doors and HVAC systems in both.

The buildings boast modern lobbies, laundry on each floor, elevators and doormen. Additionally, they installed landscaped private gardens that fully maximized the assets’ rental value.

Gramercy West and Gramercy Central are conveniently located to the 4, 5, 6, L, N, R, and Q trains, and some of the finest dining, shopping and entertainment. Gramercy Park’s quiet, residential blocks offer a mixture of brownstones, walk-ups and high-rise buildings.

The HFF investment sales team led by senior managing director Andrew Scandalios, along with managing director Jeffrey Julien and director Rob Hinckley marketed the assets and arranged the sale on behalf of BSD and Crow Holdings.