The Real Deal New York

Joe Sitt’s Thor pays $800M for massive rental portfolio

Deal with Caiola family positions retail tycoon as major resi landlord

January 05, 2015 10:20AM
By Hiten Samtani

From left: Joseph Sitt, Chelsea Court at 250 West 19th Street (Credit: CityRealty) and Jonathan Fishman

From left: Joseph Sitt, Chelsea Court at 250 West 19th Street (Credit: CityRealty) and Jonathan Fishman

UPDATED, 4:18 p.m., Jan. 5: Joseph Sitt’s Thor Equities Residential is in contract for the purchase of the Caiola family’s entire apartment building portfolio for nearly $800 million, The Real Deal has learned. The mammoth deal for Caiola’s 800,000-square-foot rental portfolio is the biggest yet for Thor’s nascent residential arm and positions the firm as a major apartment landlord with more than a billion dollars in holdings.

The portfolio, which took the family patriarch Benny Caiola a lifetime to acquire, includes 25 elevator buildings in neighborhoods such as the Upper East Side, the Upper West Side and Midtown.  A 200-unit Chelsea rental building at 250 West 19th Street is the pick of the litter, sources familiar with the transaction told TRD. The sources added that the deal was the biggest-ever trade of an elevator-building portfolio in Manhattan, but that claim could not be independently verified.

Representatives for Thor and Caiola couldn’t be reached for comment. No brokers are believed to be involved in the deal.

Thor, the city’s most aggressive retail player, started the firm’s residential arm in October with Stonehenge Partners alums Alan Klein and Jonathan Fishman. Last month, it paid $181 million for a 241-unit rental property at 30 Park Avenue in Murray Hill, as TRD reported.  Its other residential bets include an $85 million deal on Riverside Drive and a $37.4 million deal for the Upper West Side’s 840 West End Avenue.

Correction: A previous version of this story incorrectly identified two buildings in the portfolio and the status of the deal.

  • john

    Wow, this is going to give Town many rental, however at no fee or lower rents.

    • Marc

      It will give them listings but I feel they will be rented at full fees and as high a rent as possible. They’ll have the exclusive. In the past Caiola rented a great deal of their units “in house” and tenants didn’t pay a fee.

  • Coco Chanel

    Amazing deal. I am sure Kushner Cos. would’ve liked to jump on this if they knew about it. Long live the Dark Sitt.

  • NYguyNick

    A bit concerned as to what that means for current B&L residents. Good or bad? Will rents raise dramatically?

    • Marc

      Depends on current rents. In the past rents were aggressive and apartments are small making it tough to share but Mr. Caiola’s dead a while now and perhaps rents didn’t move enough lately and gives Sitt some upside?

      • REtoday

        850sf 1 beds, not luxury but a step down and nice. $3100 a month. Probably room to move.

        • NYguyNick

          No way. Over priced units as is. I used to live in the building and they are a dump.

          • Upside

            I am a former tenant in a few of their buildings. There is room in most of their units to increase the rents drastically. Many units are large with below market finishes. With renovated kitchens and bathrooms and new floors where needed their is future value. One of my apartments was a large 1 Bedroom loft that easily converted to 3 and had 16 foot ceilings and a large kitchen. We paid $1,200 to put the ‘T’ wall up and paid $2,250 in MIDTOWN SOUTH. Pretty sure it could rent for north of $4,500/mo. If that is not upside I don’t know what is.

        • Marc

          OK., there might be some at 850 s/f but I saw many and they were much smaller but I didn’t see them all. The ones I saw snugly fit a queen size bed and not much else. They had sliding glass door to really no outside space & tiny living rooms but if rents are low to the market………………..

  • Allan

    is this for B&L or Bettina Equities

  • richjew

    Heard they were looking to sell. Didn’t think they would actually go through with it.

    • WannaBeLandlord

      You always know the beat on the street for multifamily deals.

      • richjew

        Cant understand why they would sell.

        Estate taxes maybe?

        These buildings are likely completely depreciated, hope they have some type of exchange.

        • WannaBeLandlord

          Maybe the kids don’t care about Dad’s legacy/portfolio. Just see $$$. Benny died a while ago, but maybe probate & family took forever. Maybe their upside is worth taking the depreciation hit since they developed a lot of the buildings. Who knows, but the third generation could have become billionaires off working a lifetime of RE deals with that portfolio as a launchpad.

          • Marc

            If the entity changes because Benny died then depreciation gets restarted as it’s a new entity. If that happens and family keeps it then it gets revalued based on “date of death” value.
            As far as the kids seeing $, why not? It’s business. I wouldn’t know but perhaps after taking a big hit in value due to crushing estate taxes the run up in values the past few years likely made up for the estate taxes and it was time to run based on interests of the family. His buildings were well built, nothing fancy but attracted young women who didn’t have rich parents or a boyfriend to put them in a doorman building and Caiola’s buildings all usually have a gate first to electronically get through and then front door after and they all had video intercom that actually worked and that wasn’t normal when he was doing that. I’d never sell out but perhaps Joe Sitt overpaid? He can’t raise these rents like he does on 5th ave.

        • WannaBeLandlord

          Not bad for an immigrant that started out slapping plaster onto walls.

  • Mimi

    Correction to the article: The following properties listed are not included in the sale-169 East 91st Street and 225 East 85th Street, they belong to the other Caiola family NOT involved in the sale.

    • HitenSamtani

      Thanks Mimi, you’re right, I updated

  • Graveshift

    Congrats AA

  • Real Estate Perv

    $800MM is not even close to the biggest elevator resi trade. Nice try.

  • AntiSY

    The reason for the sale was that Benny’s 4 kids themselves have many kids and the pie had to get cut.

  • Smarter than Alan Klein

    THE DEAL: HAS NOT CLOSED. IT IS IN SOFT CONTRACT!!!!!!!!!!!!!!!!!!

  • lane9836

    Why would anybody feel entitled to guess/surmise/comment on this “sourced” story.
    The fact is that Benny Caiola built this company for his family, not to create a legacy.
    His legacy is his family…not the portfolio. Over the years Benny was constantly
    approached and was willing to consider smart options… and he did make any number
    of deals. To guess at the if/why/how without knowing what his plans and wishes were

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