clipper equity A sprawling Flatbush apartment complex is on the market and could fetch up to $425 million, sources said.
Brooklyn developer has 2,494 units on 21 acres Flatbush Gardens After 15+ years of ownership, the development has been put up for sale. Marketing materials show that apartments are rent-stable, with 38% renting at preferential rents, which are on average 25% lower than legal rents.
The sale could be the largest multifamily deal in Brooklyn in recent years, reflecting the size of the portfolio and the growing interest in real estate away from the city center. With high rents and limited supply in recent years leaving tenants with few affordable options, some developers are betting on Flatbush as the next frontier for new developments.
The downside to rent-stabilized buildings is that the 2019 legislative changes have made significant rent increases nearly impossible. preferential rent — and ruled out the sunset of the law. Last week, state agencies proposed regulations. narrow or eliminate A few remaining ways to raise rents for these buildings.
One of the key features of Flatbush Gardens is its 1.7 million square feet of usable floor area. This allows buyers to almost double the leasable area of the property. According to reports filed with the Securities and Exchange Commission, annual base rental income totaled $40.3 million in 2021, with a net effective rent of $25.12 per square foot.
Adam Spies, Doug Harmon and Adam Doneger of Cuhman & Wakefield are marketing the property.
In May 2020, Clipper Equity will $329 million Loan from New York Community Bank to Flatbush Gardens. The loan has a maturity of 2032 and an interest rate as low as his 3.1%.
The Flatbush property is approximately 97% occupied. According to marketing materials, Clipper has invested $43 million in the last four years.
Clipper Equity, founded by David Bistrcer, purchased the housing project in 2005 from a California pension fund for $138.2 million.At the time of sale, the complex had thousands of home violations, a problem that has plagued the property for years. This summer, residents protested the state of the complex, claiming it was unsanitary and poorly maintained.
But the listing didn’t put an end to Bystriser’s ambitions in Flatbush.Clipper Equity Recently Filed schedule To build two homes on the landmark former Sears site. The two buildings have a combined area of 456,000 square feet and 650 units.