UPDATED, 4:46 p.m., July 16: Australian real estate investment trust Dixon Advisory’s US Masters Residential Property Fund is making a splash in Brooklyn’s multifamily market, paying $25 million for a 124-unit rent-stabilized portfolio in Crown Heights, The Real Deal has learned.
The sellers were Yechiel Weinberger and Bernard Miller, who together own a large multifamily portfolio in several Brooklyn neighborhoods, including Flatbush and Crown Heights. The four properties in the transaction are 770 St. Marks Avenue, a 54-unit elevator building; 637 St. Marks Avenue, a 30-unit walk-up building; and 24-30 Rogers Avenue, two contiguous five story walk-ups with a total of 40 units.
Marcus & Millichap’s Derek Bestreich and Luke Sproviero brokered the off-market transaction. The brokers declined to name or confirm the buyer. But sources active in the area and investor documents indicate the buyer to be the US Masters Residential Property Fund, which aims to make direct investments in the New York metropolitan area residential market, according to its website.
In June, the fund partnered up with Union City, N.J.-based Excelsior Equities to buy a 202-unit multifamily portfolio in Bedford-Stuyvesant and Crown Heights, according to investor documents. Since its inception, the fund has acquired more than $400 million worth of freestanding and multifamily properties in its target market, according to the documents.
In August, Freddy Sayegh, the founder of Burke Leighton Asset Management, paid Praedium Group and Pinnacle Group $22 million for a 200-unit rental building at nearby 805 St. Mark’s Avenue, as TRD reported.
For several years, rental brokers, including some from the Corcoran Group, would bill properties as being part of Prospect Heights, though they were actually located in Crown Heights, to avoid any association with a neighborhood that once evoked concerns about crime.
The area’s rapid gentrification, however, has put an end to this strategy in recent months. Crown Heights saw the highest increase in pricing in Brooklyn this year, according to a June MNS report, with average monthly rents for one-bedroom units in the area now standing at $2,125.
And as development heats up in the neighborhood, so do land prices, which have vaulted from around $100 per buildable foot in 2012 to more than $200 in 2014, according to Brooklyn-based brokerage TerraCRG.