Scarsdale, N.Y.-based landlord Steve Finkelstein has made significant improvements to the dilapidated portfolio of Bronx apartments he bought last year from Milbank Real Estate, Crain’s reported, but he’s also taken on increased debt in a move reminiscent of that which caused the downfall of Milbank — and their units — in the first place.
The Finkelstein Timberger Real Estate head said he has spent $10 million to improve the nine Kingsbridge buildings and cut building violations by 80 percent. He said he expects a further reduction upon the Department of Building’s next inspection. The improvements have helped fill all but 12 of the 180 units that were vacant when he purchased them for $28 million last spring.
But Crain’s said Finkelstein recently refinanced the 546-unit portfolio and added an additional $15.5 million in debt, bringing the total to $45.5. That’s $10 million more than Milbank carried when it was forced into foreclosure. Tenant advocates fear that Finkelstein faces a similar fate, and that the $90,000 in debt he holds per unit will eventually force those units into disrepair.
Finkelstein countered that the debt was never the problem with the portfolio, rather, the problem was poorly maintained units that were left vacant. With the new tenants he expects to generate $6 million in rent from the buildings and pay out $5 million in debt and expenses. [Crain's]