The Real Deal New York

Madison Realty sells Upper Manhattan rental portfolio for $23M

Josh Zegen's firm paid $10.5M for properties in 2012
By Hiten Samtani | July 17, 2014 01:15PM

Madison Realty Capital sold a 125-unit Upper Manhattan residential portfolio for $23.4 million, the firm’s co-founder Josh Zegen told The Real Deal. The sale netted the firm more than twice the $10.5 million it paid for the portfolio in 2012.

Zegen declined to disclose the buyer. Sources familiar with the deal said only that it was an Israeli private investor. The properties are 528-538 West 159th Street, 220 West 149th Street and 2546-2548 Adam Clayton Powell Boulevard. In total, the 9 buildings have roughly 88,000 square feet, including two retail stores. About 70 percent of the units are rent-stabilized, and Zegen said that he was seeing an influx of young professionals and Columbia University students into the area.

GFI Realty Services’ Yosef Katz and and Roni Abudi brokered the deal, along with Marcus & Millichap’s Peter Von Der Ahe, Seth Glasser and Scott Edelstein. Von Der Ahe is also marketing a $25 million, 99-unit portfolio on West 145th Street on behalf of Israeli real estate investor Yoram Nissim.

Market-rent one-bedroom units in the portfolio were charging up to $1,400 per month, while two-bedroom units were renting for up to $1,800. Three-bedroom units were going for as much as $2,300 per month.

“We renovated and reconfigured the unit mix to be able to maximize the floor plates,” Zegen said.

An active player in the mid-sized multifamily market, Madison has acquired or is in contract to buy about $200 million worth of property so far this year, Zegen said. The firm is also active in the debt market.

Upper Manhattan was once the stronghold of major institutional capital-backed landlords, but they’ve since given way to a new guard of smaller private investors and high-net worth individuals, as TRD reported.