Nathan Benellahou, a 33-year-old broker-turned-real-estate investor, says now is a great time to buy a multifamily home in New York.
Mr. Benelhau's property management company, NJB Management, just acquired two linked rent-stabilized apartment buildings on the Upper West Side for $42.8 million, according to city property records made public Tuesday.
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That's about a 35% discount from the $66 million that Darran Management CEO Andrew Lovelin paid for the buildings at 226 West 97th Street and 2568 Broadway in June 2018, according to property records. Lovelin did not immediately respond to a request for comment.
According to Benelyahou and city building permits, Darran made a series of capital improvements that allowed it to deregulate most of the building's 65 units ahead of the state's 2019 Housing Stability and Tenant Protection Act.
About two dozen homes remain rent stabilized or controlled.
The property, which straddles two taxing zones and shares a lobby and three elevators, fetched about eight times the rental income in the deal with NJB, Veneriaou said.
“It's a turnkey asset,” Benelyahou says. “It's been profitable from day one, and that's a credit to Daran. They've done a fantastic job renovating and dividing up the units. They've handed me a really nice building.”
Still, since rent stabilization laws were changed in 2019, rent-stabilized landlords have seen their buildings fall sharply in value, with one agent previously telling Commercial Observer they have cut the assessed values of these properties by 30-50%.
“A lot of landlords are struggling right now,” Benelyahou said. “Upper Manhattan is in ruins. It's scary what's happening to property valuations in Harlem and Washington Heights.”
But Benelhau argued that interest rates were to blame for the low valuations of Upper West Side properties.
JLL's Hall Oster brokered the deal but did not immediately respond to a request for comment.
NJB financed the purchase with a $30.3 million commercial mortgage-backed securities loan through Bank of America, but Benelyahou said he plans to refinance it as soon as interest rates get back to around 5 percent.
“We're in it for the long term,” Benelhaou said. “We're happy with the purchase and intend to keep these buildings.”
NJB has acquired several other multifamily properties in recent years, including 2794 Broadway, just a few blocks away, which the company purchased last year for $9.5 million.
The bulk of the company's portfolio is in northern Manhattan, where NJB owns hundreds of units, according to Benellahou.
Abigail Nehring can be reached at anehring@commercialobserver.com.