The partnership between the controversial apartment owner Pinnacle Group and private equity company Praedium Group sold four rent-stabilized apartment buildings in East Harlem for $12.5 million, or just over $100,000 per unit, to a private investor.
The sale of the 119 units at 169 to 175 East 101st Street to Midtown-based Latham Properties went into contract and closed on the same day, February 26, according to city property records published today.
Latham Properties President Ron Glazer said he bought the buildings as an investment, and did not plan to move tenants out to increase rents.
He owns several hundred apartment units on Manhattan’s Upper East Side and Lower East Side, as well as an office building in Midtown South, he said.
Robert Knakal, chairman of Massey Knakal Realty Services, which brokered the transaction, said the sale was an example of a trend away from institutional purchasers to private ones.
“Eighteen months ago, most buyers of this type [of property] were operators who had private equity or institutional capital. Today the buyer is a high net-worth individual and old-line families,” he said.
One of the sellers, Praedium Group, gave a $2 million mortgage to the buyer, Latham Properties, the records show.
Pinnacle Group was criticized by public officials and housing advocates for allegedly harassing tenants in various building, leading State Attorney General Andrew Cuomo to strike a deal in 2006 to have an independent investigator review the company’s records.
A loan made to Pinnacle and Praedium for a 36-building portfolio in Upper Manhattan that was securitized in 2007 was placed on a servicer watch list in December 2007, but the East 101st Street buildings were not part of that portfolio.
Praedium Group Principal and CFO Frank Patafio said the owners were not under pressure to sell.
“It was in the normal course of business,” he said.