Yardeni’s Stonehenge to raise $1B fund and sell several properties

By Adam Pincus | September 21, 2010 05:30PM

From left: Laurence Gluck of Stellar Management, Neil Rubler of Vantage Properties, Kevin Davis of Area Property Partners and Ofer Yardeni of Stonehenge Partners

Ofer Yardeni of Stonehenge Partners gave the most optimistic assessment among a four-person panel today speaking about residential investment in real estate, saying his company was looking to open a $1 billion fund to make property purchases.

“We are hopefully going to raise a new fund. It will be $1 billion,” Yardeni, managing partner of the property owner and management firm, said. He added that as a way to begin putting equity in the fund, Stonehenge will sell a few buildings.

“As the managing partners we usually need to put in money. We are in the process of selling one or two of the assets,” he said.

He was speaking on an investor panel at the Massey Knakal Multi-family Summit that also included Laurence Gluck, president of Stellar Management, Neil Rubler, president and CEO of Vantage Properties, and Kevin Davis, partner with Area Property Partners. The session was moderated by Matthew Kasindorf, chair of the real estate department at law firm Meister Seelig & Fein.

In addition, Yardeni was confident about condominium conversions of rent-stabilized apartment buildings. He praised the state’s rent-regulation laws that allow investors to buy an entirely rent-regulated apartment building for about $500 per foot and then within five or six years “with a good lawyer” remove about half of those tenants, then sell the building for up to $1,400 per square foot as a condo.

“That you can do only in America,” he said. “The more rent-stabilized, the more we like it.”

Stonehenge Partners paid $67 million in July for St. Vincent’s Hospital , an 180,000-square-foot residential building in Greenwich Village at 555 Sixth Avenue.

Gluck, who lost the Riverton apartments in Harlem this year in a foreclosure sale, was more subdued.

“We underwrite more conservatively than in the past,” he said. He recently sold an Upper West Side building for $16 million, and sources say he is in contract to pay $72 million for another Upper West Side building.

Davis of Area Property Partners said there were positive aspects to the New York market. Although rents declined as much as 20 or 25 percent, occupancy stayed above 90 percent.

Rubler echoed that, saying that although expenses rose more than the 3 percent annual rate he had anticipated, cash flow remained strong.

“We have seen cash flow growth really throughout the duration of the recession,” he said.