Dealmaker: $1.75B NYC Apartment Portfolio Largest Since Pandemic

New York investment firm Black Spruce Management LLC and residential developer Orbach Affordable Housing Solutions LLC purchased a six-property multifamily housing portfolio on Manhattan’s East Side for $1.75 billion, the largest such transaction post-pandemic.

The Wall Street Journal, which first reported the deal, said Black Spruce and Orbach were highest bidders for the portfolio. The six properties total 1,700 units and were developed by Solow Building Cos. Sheldon Solow, a longtime New York real estate developer, died in 2020; the company is now run by his son, Stefan Soloviev.

Only one property has been publicly identified: One East River Place, a 50-story, 414-unit building in the Lenox Hill neighborhood. However, the Journal reported all six properties are on the East Side, built between 1960 and 2018, featuring apartments with one-bedroom rents starting at $3,900 per month, up to $7,000 per month.

The Journal said 15 percent of the apartments within the portfolio are subject to rent regulation.

“People are still going to need apartments; there’s still a lot of demand,” John Pawlowski, residential-property sector head of real-estate analytics firm Green Street, told the Journal. “We’ll see what happens in the economy, but 2022 and 2023 should be very good years for apartment landlords in New York City.’

The transaction is expected to produce initial return rates between 3% and 5%, analysts said.