The Real Deal New York

Praedium, Pinnacle end Crown Heights headache with $22M building sale

UPDATED , 1.15 p.m., Aug. 22: A partnership between the Praedium Group and Pinnacle Group, both long-term investors in multi-family walk ups in Manhattan and Brooklyn, has offloaded a 200-unit Crown Heights rental building for $22 million, according to public records filed with the city today.

The 171,995-square-foot property, at 805 St. Mark’s Avenue between Brooklyn and New York avenues near the Norstrand subway stop, sold to Burke Leighton Asset Management, an owner and manager of residential apartment buildings in Brooklyn.

A representative from Praedium did not immediately respond to a request for comment.

Aaron Jungreis of Rosewood Realty represented the seller in the deal.

Praedium and Pinnacle acquired the building during a major buying spree in 2005, public records show. They paid $13.35 million for the property.

The former landlords were heavily criticized by some tenants of the partially rent-stabilized apartment complex, who claimed that they had skimped on repairs and had unfairly targeted tenants for rent increases.

In March, tenants held a rally at the complex and released a statement to the press saying they would no longer stand for “harassment, shoddy repairs, or the displacement of [their] community.”

“I’ve lived in the building over thirty years and since Pinnacle has taken over, the conditions have deteriorated rapidly,” said resident Natherlene Bolden in the statement. “The repairs – sometimes even when you go to court and the judge orders it – are not getting done. We are fighting back for our rights as tenants.”

A spokesperson for Pinnacle called the claims by tenants “demonstrably untrue,” and said they were an attempt by a small number of residents to “advance their own leadership positions [within the resident community.]” Violations actually went down during Pinnacle’s stint as owner of the property, he said.

When Pinnacle attempted to meet with the tenants, it was clear they were unwilling to work together with the company to resolve any issues, the spokesperson alleged.

Freddy Sayegh, principle of Burke Leighton, said the company was attracted to the investment primarily because of its location.

It’s not the first time Pinnacle has been targeted by the tenants of its buildings. In 2010, residents of buildings in some of the company’s Upper Manhattan portfolio filed a class action suit against the landlord claiming that company executives had harassed them and evaded New York’s rent regulation laws. That dispute is ongoing.

In a deal announced by Praedium earlier this week, the company also sold a leasehold interest in an office building at 16 West 36th Street to Kiamie Industries for $12.9 million.