When the Upper West Side’s Hermitage rental building turned condo in 2001, not all of its residents moved on without complaint. Eleven years later, 40 units at the building, which overlooks Central Park, are still occupied by rent-stabilized and rent-controlled tenants. Now, one plucky young company is betting it can negotiate with the existing tenants to finally turn the remaining units into luxury condominiums.
Manhattan Residential earlier this week purchased the remaining 40 units from Goldfein for $11.6 million, its co-founder Shia Shustik told The Real Deal yesterday. Shustik said the company estimates the market value of the units to be between $36 million and $38 million. There were no brokers involved in the deal.
“We have a very successful track record. We’ll go in and speak to these people and really negotiate with them,” Shustik told The Real Deal of the company’s strategy to turn over the units.
The 17-story Hermitage, at 41 West 72nd Street, has 128 units. According to Streeteasy.com, it is one of the only Upper West Side pre-war condominiums. Shustik said Manhattan Residential plans to renovate and combine a number of the one- and two-bedroom units it purchased to form larger, family-style properties to appeal to Upper West Side families. But selling the units quickly is not guaranteed: “This is a long-term position,” Shustik said. “We’re not expecting to recoup our entire investment overnight.”
The units are the last remaining sponsor-owned properties in the building, meaning Manhattan Residential will be able to sell them without condo board approval. The company, which has purchased units in bulk from Goldfein both in Bronxville and Manhattan previously, saw the value in the location, Shustik said.
“It’s not like we’re buying into an area and hoping it’s going to get better over time. Unless they sell the park to Donald Trump to build a golf course, I think we’re going to be fine,” he joked.
Doug Goldfein, managing partner of Goldfein Properties, told The Real Deal that the company had decided to shift the remaining inventory in order to allocate its resources to other projects. “It was just time,” he said.
In addition to the 40 units at the Hermitage, Goldfein sold an additional five units at 300 East 71st Street to Manhattan Residential, Shustik said.