The Real Deal New York

Aussie REIT buys Crown Heights multifamily portfolio for $25M

Dixon's US Masters Residential Property Fund makes another residential deal in borough

July 16, 2014 02:03PM
By Hiten Samtani

From left: Luke Sproviero, Alan Dixon, Derek Bestreich and 770 St. Marks Avenue

From left: Luke Sproviero, Alan Dixon, Derek Bestreich and 770 St. Marks Avenue

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.

Dixon Advisory, led by Alan Dixon, has also made several dozen acquisitions in Bushwick.

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.

25 Responses to “Aussie REIT buys Crown Heights multifamily portfolio for $25M”

  1. July 16, 2014 at 2:26 pm, SJ said:

    I heard they got 19x grm.

  2. July 16, 2014 at 3:49 pm, SoBrokeee said:

    u cudnt pay me 20 million to live in crown heights hahaha

  3. July 16, 2014 at 4:26 pm, Puma said:

    Dixon Advisory and US Masters are the same thing.

    • July 16, 2014 at 4:52 pm, HitenSamtani said:

      Thanks, I missed that! Updated

  4. July 16, 2014 at 5:49 pm, rental guy said:

    The brain and his bulldozer strike again…. word is that they are doing a lot of 1031 shopping in PLG

    • July 18, 2014 at 12:43 pm, WannaBeLandlord said:

      You seem to know whats up in BK. Is there any upside value left in buying rental buildings today? You like Redhook at all?

  5. July 16, 2014 at 6:15 pm, strangeone said:

    did anyone see 770 st marks back in the day? Jesus.
    Kudos to the seller job well done

  6. July 16, 2014 at 6:58 pm, kingmaker said:

    Marcus Mill did this deal ? Anyone else find that kinda strange?

    • July 17, 2014 at 9:21 am, richjew said:

      Yes. They could have gotten more money for st. Marks

      • July 17, 2014 at 11:18 am, rental guy said:

        More money? They set just set the ceiling for the whole neighborhood.
        Do your comps. they cleaned up.
        I got listing from rosewood for substantially less.

        • July 17, 2014 at 11:20 am, richjew said:

          Correct redid numbers I heard that st. Marks got an allocation of 250k a unit wow!!

          • July 17, 2014 at 11:24 am, rental guy said:

            Just made my property on the block more valuable.

          • July 17, 2014 at 11:25 am, richjew said:

            I don’t own anything on that block. But have a whole bunch in neighborhood. Going to have to redo my real estate schedule;)

          • July 17, 2014 at 11:37 am, rental guy said:

            Check brownstoner looks like Weinberger is selling out.
            Wonder why.

          • July 17, 2014 at 11:39 am, richjew said:

            Maybe miller had enough of him. He has better partners/mangers

          • July 17, 2014 at 11:43 am, rental guy said:

            With these kind of numbers he can partner with me anytime!
            BTW it looks like 270 a door on st marks. Insane.

          • July 17, 2014 at 11:54 am, richjew said:

            270k seems unlikely for 770 st. Marks. That would mean that 637 and rogers got under 150k a door. At these valuations I would expect them to get closer to 175k

          • July 17, 2014 at 12:08 pm, rental guy said:

            Went to look at this package about a year ago with Berger from rosewood (he couldn’t deliver deal). The rogers and st marks buildings were all studios. 770 had the big units but 10-12 rent control units plus housing issues.
            Don’t know why you seem so against Weinberger but Bravo.

          • July 17, 2014 at 1:07 pm, richjew said:

            Nothing against him at all.

      • July 18, 2014 at 12:43 pm, WannaBeLandlord said:

        You seem to know whats up in BK. Is there any upside value left in buying rental buildings today? You like Redhook?

        • July 18, 2014 at 12:52 pm, rental guy said:

          don’t know much about red hook I only own in Bushwick & crown heights good luck!

    • July 17, 2014 at 2:32 pm, DV said:

      Why strange?

      • July 18, 2014 at 3:48 am, richjew said:

        Bec. They dont do many deals neither do they have access to these types of sellers/operators

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