Madison Realty pays $22M for Williamsburg rental

Six-story building at 385 Union Avenue was originally planned as a condo

TRD NEW YORK /
May.May 16, 2012 12:00 PM

Midtown-based investment firm Madison Realty Capital paid $21.55 million for a 47-unit apartment building at 385 Union Avenue in Williamsburg. It is the firm’s second acquisition of a residential property in the neighborhood this year.

Madison Realty bought the defaulted note on the six-story, 53,000-square-foot building from City National Bank, according to Joshua Zegen, managing member of Madison Realty. At the same time, Madison Realty negotiated to buy the deed from the building’s developers: Anshel Friedman, Pincus Freund and Joseph Freund. The entire transaction closed on May 10, but has not yet appeared in public records.

Friedman and the Freunds had originally planned to sell the units as condominiums. But they defaulted on their loan in 2009, and the bank filed to foreclose the next year.

City National had taken over the loan from the original lender, a failed bank, through the Federal Deposit Insurance Corporation, city records show.

Madison Realty paid a total of $21.55 million for the discounted note and the deed, less than the cost of constructing a new ground-up building on the site, Zegen said.

Nearly all of the building’s 23 one-bedrooms and 24 two-bedrooms have since been rented out, Zegen said, but average rents there are in the “high $30s” per square foot, below the market rate of about $48 per foot.

“Rents in the building are below market,” he said, because “the property had a cloud over it for the last couple of years.”

Madison Realty plans to operate the property as a rental and raise rents to market rates as leases expire, Zegen said.

The building, between Ainslie and Powers streets, is two blocks from a vacant lot where the Chetrit Group filed plans in March to build a 14-story rental at 502 Metropolitan Avenue.

The first building Madison Realty purchased in Williamsburg was the 20-unit 409-413 Broadway, where they purchased the debt in December and took title to the property in February, city records show.

Friedman and the Freunds could not immediately be reached for comment.


Related Articles

arrow_forward_ios
Madison makes $157M loan on Santa Monica rental projects

Madison makes $157M loan on Santa Monica rental projects

From left: Raphael Toledano and Madison Realty Capital managing principals Adam Tantleff, Josh Zegen and Brian Shatz (Illustration by Kevin Rebong for The Real Deal)

Raphael Toledano’s “ghostly” East Village portfolio

Union Crossing at 825 East 141st Street with The Bluestone Group's Eli Tabak and Madison Realty Capital's Josh Zegen (Credit: Union Crossing Bronx)

South Bronx office building lands $85M refi

Brian Shatz and Josh Zegen of Madison Realty Capital (Credit: Angela Pham @BFA)

Madison Realty Capital throws merry bash

14-16 Fifth Avenue along Madison Square Park and Madison Realty Capital's Josh Zegen (Credit: Google Maps)

Madison Realty Capital planning condo by Washington Square Park

Rendering of the Staybridge Suites at 38-59 11th Street

Long Island City hotel project moves forward with construction loan

Madison Realty Capital's Josh Zegen and the Broadway Triangle (Credit: Google Maps)

Abraham Brach, Parkview Management land $50M loan for Williamsburg condo project

Tishman Speyer's Rob Speyer and Madison Realty Capital's Josh Zegen with 520 Madison Avenue (Credit: Google Maps)

Madison Realty Capital moves HQ to
520 Madison Avenue

arrow_forward_ios
Loading...