The Real Deal New York

Icon sells two East Village rentals for nearly 5 times what it paid

$31M deal values the buildings at more than $1M per unit

November 19, 2015 05:55PM
By Katherine Clarke

Marcus & Millichap's Joe Koicim and

Marcus & Millichap’s Joe Koicim and 326-328 East 4th Street

The New York City multifamily market is drawing interest from investors from all over the county. A South Carolina-based investor picked up a pair of East Village buildings from Icon Realty Management for $30.9 million.

One of the buildings, a six-unit property at 82 Second Avenue, traded for $10.9 million, or $2,200 per square foot, one of the highest per-square-foot prices paid for an existing building in the neighborhood, according to listing brokers Peter Von Der Ahe, Joe Koicim, Sean Lefkovits and David Lloyd of Marcus & Millichap.

The second building, a 20-unit property at 326-328 East 4th Street, sold for $20 million, or $1,025 per square foot. The buyers purchased the buildings, both of which are comprised of entirely free-market units, as part of a 1031 exchange deal.

The total price is nearly five times what Icon paid just a few years ago — $3.2 million and $3.4 million for the properties in 2012 and 2010, respectively.

The deals are just the latest in a string of high-priced East Village multifamily transactions in recent months amid rapidly rising rents. The median asking rent for a two-bedroom home in the East Village was $6,240 per month in October, up from $5,778 the same time last year.

Just last month, A.D. Real Estate Investors paid $17 million, or $800 a foot, for a 32-unit rental at 190 East 2nd Street and Slate Property Group paid $14.2 million, or $715 a foot, for a 22-unit rental at 112 Avenue C.

The Icon deal, which penciled out to more than $1 million per unit, is also further evidence of how quickly prices are escalating.

”The rental market has picked up tremendously,” Koicim said. “These buildings traded for a premium because buyers are looking for renovated properties that produce a solid return without too much management overhead.”