Eastern Consolidated Facilitates Sale of NYC’s ‘Kings Portfolio’

Coney Realty Group and Malek Management have jumped on the acquisition of a diamond-in-the-rough portfolio in New York City.
David Schechtman

David Schechtman, Eastern Consolidated

Coney Realty Group and Malek Management L.L.C. have acquired “The Kings Portfolio,” a 15-property, 1.5-million-square-foot rental portfolio spanning Central Brooklyn and Staten Island from Urban America for $263 million.

Eastern Consolidated arranged the sale.

“It is rare that a portfolio of this quality and size ever comes to market in New York City and especially rare during a time when abundant debt and equity financing exists,” David Schechtman, Eastern Consolidated’s principal and executive managing director, said in a company release. “This is an incredibly large, stable portfolio with high occupancy and strong in-place income with units across a broad cross-section of the most ascendant New York City borough.”

Overall, the portfolio consists of 1,434 apartments among 15 multi-family rental properties, 99 percent of which are rent stabilized. Seven residential properties are located in the East Flatbush/Remsen Village neighborhoods of North Central Brooklyn, seven are located in the Midwood/Flatlands neighborhoods of South Central Brooklyn, and one garden apartment complex is located in the Oakwood neighborhood in Staten Island.

The two largest buildings in the portfolio are a 178-unit property at 2425 Nostrand Ave. in Midwood, and a 176-unit complex at 2838-2868 Hylan Boulevard in Staten Island’s Oakwood neighborhood.

Since 2007, Urban American has invested more than $13 million in major capital improvements across the portfolio.

According to Lipa Lieberman, Eastern Consolidated’s managing director, rents remain materially below market by roughly 25 to 30 percent or greater in much of the portfolio and as a whole represents tremendous upside.

“There is staggering demand for these units,” he said in the release. “Coney Realty Group and Malek Management are well positioned to populate all of the units at full legal rents, maximizing on their investment.”

According to a recent market report by Ariel Property Advisors, multi-family sales in New York had a strong first month of 2015 with year-over-year increases in sales volume and strong pricing throughout the city.

Sales of multi-family buildings from 65 transactions grossed $739 million in January, compared to 57 transactions and $683 million in gross sales from the same period last year. That marks an improvement of 14 percent. In Brooklyn, the average price per square foot rose 22 percent to $289 from $237 year over year.

Eastern Consolidated has been very active in New York, having arranged the sale of the $107 million Lee Estate Portfolio earlier this week for a joint venture between L3 Capital L.L.C. and ASB Real Estate Investments.